The August 2019 Sensis Business Index has revealed that Australia’s small-business confidence is strong, with 57 per cent of businesses now confident in their prospects over the next 12 months.
The report surveyed 1019 SME and managers across metropolitan and non-metropolitan regions throughout Australia between 23 and 31 July 2019.
Tasmania, with 63 per cent of businesses expressing confidence in their prospects, remains the most confident state followed by Queensland at 60 per cent and Victoria at 58 per cent.
Commenting on findings of the latest index, Sensis CEO, John Allan, said, “It’s great to see more than half of small and medium businesses across the nation feeling upbeat about their business outlook post-election, despite their concerns about the current state of the economy.”
One in three business owners and managers believe the economy is slowing and one in two believe it is at a standstill. Overall, 22 per cent of businesses expect an improvement in the economy over the next 12 months and 30 per cent believe the situation will get worse.
South Australian businesses are the most concerned, with 24 per cent expressing fears about the economic slowdown, while 21 per cent of businesses in both New South Wales and Western Australia are worried about their prospects.
Metropolitan businesses (58 per cent) are feeling more confident than their regional counterparts (52 per cent), with half of metro SME owners and managers (52 per cent) expecting significant or moderate expansion in the coming 12 months, seven per cent higher than the regional average. Regional businesses are 13 per cent less likely to increase headcount of their current operations than metro businesses.
One in three Australian small businesses (36 per cent) said that the current Federal Government policies for small business are having no impact.
“Over the years we have seen a growing perception among SMEs that Federal Government policies do not affect them and our latest index further cements this,” said Allan.
Less than one in three Australian small businesses applied for the $30,000 instant asset write-off introduced by the Federal Government this year, citing lack of funds and spending as a deterrent. At the state level, only one in five Australian small businesses believe that state policies are supportive of small business with ACT leading the pack, followed by Tasmania and NSW.
Across the country, 37 per cent of businesses believe excessive ‘red tape’ is holding back their growth. This was highest in Victoria with 41 per cent of businesses quoting red tape as an issue. In NSW, 35 per cent of businesses view insurance as the second highest hindrance after red tape (36 per cent), while 37 per cent of South Australian and Tasmanian businesses believe insurance is putting the brakes on their growth. Interestingly, when pressed further as to what red tape specifically, few business owners and managers could name specific examples.
Access to finance is still a significant issue for Australia’s small and medium businesses. The index found that 30 per cent of business owners and managers believe it is harder to access finance than it was six months ago, while 57 per cent believe there has been no change.
Access is most difficult in regional areas with 37 per cent reporting it is harder than it was six months ago to access finance and 52 per cent reporting there has been no change.
A quarter of businesses are using credit cards to access finance, and more than one in five are increasing their overdraft facilities.