The weaker dollar has very different outcomes for SMEs, with export-based businesses celebrating while those who import products or raw materials struggling
The weakening Aussie dollar has very different ramifications for SMEs, depending on the type of business they are running. Treasurer Scott Morrison says the weaker dollar is a positive for the national economy – the currency was trading at 69.44 US cents at 1200 AEDT on Thursday – and this is certainly the case for small businesses who export their products and local retailers who lose custom to overseas online competitors when the dollar is higher.
‘It (a lower dollar) is obviously very good for our tourism industries … but equally with our export industries, feeding into these new trade agreements that we have, it also makes us far more competitive,’ Mr Morrison told Bloomberg TV.
SMEs that import their products, or that import raw materials, however, invariably have to put their prices up when the dollar is low to cover their costs, making them less competitive.
The dollar is at one of its lowest points since the GFC, although the overall economic outlook is far less bleak than it was in 2008. This is a time for exporting and retailing SMEs to make hay, for those on the other side of the coin steps have to be taken to ensure their business prevails – measures such as protecting cashflow by focusing on the debtors’ list and keeping a tight lid on expenditure can help see them through.
Inside Small Business and AAP
