The Federal Government’s big ticket Budget offering for small to medium businesses (SMBs) of a generous tax write-off has fallen on deaf ears, with most unaware it exists.
The finding comes from independent research commissioned by Telstra Business and the Council of Small Business of Australia (COSBOA) to gauge issues of importance to small business ahead of the return of Federal Parliament.
The third annual Telstra-COSBOA Back to Business Study found most SMBs were dissatisfied with the performance of politicians in general and confidence had dropped over the past year.
The Government scored an approval rating of 38 of 100, down one point from a year ago. Confidence in the Opposition (46 percent) had also fallen one point. Approval for the Greens was at 43 percent and independents at 40 percent.
The research also found only 24 per cent of SMB owners and operators knew about last year’s announcement of an instant write-off on the first $5000 of outlay on any capital asset from July.
The tax break was among measures for SMBs that included a write-off on all other assets (except buildings) above $5000 in a single depreciation pool at 30 per cent and a reduction in the company tax rate to 29 per cent.
Telstra Business Group Managing Director Will Irving said the tax write-off could make it easier for small business operators to upgrade their technology and improve cash flow.
“The research shows almost a quarter (23 per cent) plan to invest in technology this year to lift productivity while 36 per cent intend to boost their online presence,” Mr Irving said.
COSBOA CEO Peter Strong said: “With cost pressures such a concern to small business, it’s surprising so many are unaware of a tax write-off that could provide a real stimulus.
“There’s a clear message that the Government needs to do more to sell its initiatives, while the low approval rating for all MPs shows they could be doing more to focus on the needs of small business,” Mr Strong said.
SMBs rated the European financial crisis as the biggest issue they would face in the next 12 months, with more than a quarter (27 per cent) nominating it as the key issue of concern, ahead of a carbon tax on 24 per cent.
While 73 per cent were “very concerned” or “somewhat concerned” about the carbon tax, a significant number (26 per cent) said they were not.
Mr Strong said the appointment of a Federal Small Business Commissioner would help the government better communicate with the sector and also assist MPs.
“Over the years I have had many MPs ask how to communicate more effectively with the small business people and a Commissioner will assist the government, the bureaucracy and the elected members achieve that outcome,” he said.
SMBs are telling the Gillard Government that tax reform is its biggest area for improvement, scoring it at 38 per cent, with its performance in financial management (39 per cent) rating only one point higher.
Labor was rated evenly on a range of other areas including climate change (43 per cent), superannuation (42 per cent), infrastructure (41 per cent) and industrial relations (40 per cent.)
Mr Irving said small business was finding the going tough but the sector was adjusting to counter the difficult environment.
“Thirty five percent plan on reducing their debt while 27 per cent intend to put more time into networking with other businesses,” he said.
In other findings:
- The number of small businesses that think the Australian economy has worsened in the last six months is 35 per cent, an increase of 13 per cent from six months ago.
- Thirteen per cent predict it will worsen before the end of the financial year;
- Adding new customers as a business priority in the next year has slumped from 72 per cent to 66 per cent, a fall of six per cent in 12 months;
- Four-in-ten SMBs (41 per cent) want a separate industrial relations system for small business but almost as many (40 per cent) are unsure;
- More than a third (36 per cent) support the Superannuation Guarantee rising from nine per cent but one-in-three is opposed (29 per cent.) Significant numbers are unsure (18 per cent) or unaware (18 per cent.)
About the research
The Telstra SMB survey by StollzNow Research included owners of 321 businesses from self-employed to 200 staff. This sample size gives a confidence level of ± 6% at the 95% confidence level. Field methodology was a permission-based online panel. Quotas were set for State / Territory and region within each State / Territory so that the combined total produces a representative sample that can be projected to the full population of businesses in this category.