Technology and the impact of automation on their business is not at the top of the list of challenges for Australia’s small business owners, according to a new survey which shows that SMBs, however, are lacking confidence in the government’s management of the economy and the negative effect this is having on their businesses.
The survey, by accounting provider Reckon, reveals that only 1 in 10 (10%) of SMBs are anticipating that technology will be a main business challenge for their operations this year.
Despite the rising focus on artificial intelligence (AI) amongst the largest technology vendors in the world, Reckon says that Australian small businesses do not seem “too concerned with the growing automation on their operations”.
In fact, the survey showed that just 15% believe AI and automation will have a high impact on their business, according to the survey.
But, there’s no lack of confidence in the National Broadband Network, according to the survey, which revealed that more than one in three small business owners believe the continued rollout of the NBN is essential.
In addition, one in four (25% ) of SMBs agree there is a need to focus on delivering the National Innovation and Science Agenda launched in late 2015.
“The results are consistent with what we are seeing in the market. High company tax rates and the red tape associated with GST compliance continue to be major roadblocks impeding small business growth and the main issues keeping small business owners up at night,” Dan Rabie, chief operating officer of Reckon said.
“While there’s been incremental progress since the launch of (Prime Minister Malcolm) Turnbull’s National Innovation and Science Agenda, how much have we really advanced over the past year? The desired results on innovation are just not there and business owners are starting to take notice.
“There is a need for the government to focus on establishing a longer-term strategy for change, as opposed to a plan that only lasts four years.”
And, the report by Reckon reveals that three in four (75%) of small business owners do not feel optimistic about 2017, following the December Budget update.
Reckon says that of more than 600 small business owners across the country surveyed, one in two (50%) respondents are not satisfied with the government’s management of the Australian economy, despite a clear majority (77% ) believing the Coalition is better at running the nation in comparison to the Labor Party.
“This lack of certainty over local governance is creating a direct knock-on effect on small business confidence, with many owners not anticipating a great deal of growth this year,” the report says.
According to the report, more than half (53%) of respondents are not planning any new investment in the next 12 months, while 28% remain unsure.
And, projected headcount was dismal as well, the report notes, with 66% not looking to hire any new staff this year – and only 19% of respondents forecasting an expansion of their team in 2017.
Reckon says the survey findings are in line with the government’s Mid-Year Economic and Fiscal Outlook released last year, which estimates that business investment will fall by 6% through to June 2017, and with employment expected to see subdued growth at 1.25% to the same period.
“As the engine room of the Australian economy, small businesses play a critical role in the progress of our country by creating jobs and driving growth. So it’s imperative that business confidence remains healthy amongst them,” Rabie notes.
“While the Coalition has made a commitment to deliver for small businesses now and into the future, more needs to be done to instil faith and importantly, encourage investment and expansion.”
Rabie says the findings show that the key to renewed small business confidence could lie in making changes to public sector initiatives.
And, the top three policies respondents would like the government to prioritise over the next 12 months to help them succeed are:
1. Simplify tax and GST compliance.
2. Boost infrastructure spending.
3. Reduce overall Commonwealth debt.
The survey also found that growing business pressures are taking a toll on the personal lives of small business owners, with one in five of those surveyed saying they have less than an hour of leisure time each day.
Looking ahead, the top five business challenges small business owners expect to face in the next 12 months are unsurprisingly related to growth, says Reckon.
“Again, this is comparable to the government’s midyear forecast, which projects real Gross Domestic Product (GDP) to grow by only 2% in 2016-2017, weaker than the initial forecast in the Pre-election Economic and Fiscal Outlook,” Reckon notes.
The top five challenges noted by SMBs were:
1. Attracting new customers.
2. Current economic climate.
3. Increasing operating costs.
4. Achieving and/or managing growth.
5. Red tape and/or compliance burden.