Daily Bulletin


Business News

  • Written by Red Havas - Melbourne


Wednesday, 20 November 2019 – The November 2019 Sensis Business Index has revealed more than one in four (26%) Australian small and medium businesses (SMBs) think current Federal Government policies are working against them – an increase of 3% from last quarter.

 

Sensis CEO John Allan said this is the first time the Index has seen an upward trend in the number of SMB owners who believe Federal Government policies are working against them.

 

“Over the years we have seen a growing perception among SMBs that Federal Government policies do not affect them. This change in sentiment may be small but is a significant trend,” he said.

 

The sentiment comes as SMB confidence in the Australian economy drops 5% quarter on quarter, with 39% of SMB owners now believing the economy is in slowdown compared to 34% in the last period. Compared to the previous quarter, fewer SMB owners now believe the economy is growing (3% drop to 13%).

 

Thirty six percent of SMBs also believe the nation’s economy will be worse in 12 months’ time, compared to 30% last quarter. Only 16% said it would be better a year from now, compared to 22% last quarter.

 

This quarter’s results continue a clear downward trend in SMB economic confidence since March 2018 (see Graph 1 below).

 

SMB support for Federal Government

 

The national drop in support for Federal Government policies is led by South Australian (30%), Tasmanian (29%) and Victorian (28%) SMBs.

 

Conversely, support from Queensland SMBs has seen the most positive change, growing 5% from last quarter to 36%. Positive sentiment across all other states held steady quarter on quarter except for Western Australia which dropped by 5%.

 

At a state and territory level, the majority (37%) of small businesses think their state government policies have no impact.

 

Mr Allan said this showed that a significant proportion of small business owners believe their state and territory government policies could be more effective.

 

“Whether this belief is right or wrong, the figures show a clear need for improvement in how state and territory governments are engaging with the small business community and communicating their efforts to support local small business owners through policy,” he said.


Access to finance increasingly difficult

 

SMB owners also believe it has become harder to access finance, with 35% saying it is now more difficult – a 5% increase from the previous period.

 

Western Australian (42%) and South Australian (41%) SMBs are the most likely to say that finance is more difficult to access than six months ago.

 

Conversely, SMB owners in Victoria (18%) are most likely to think finance is now easier to access, with NSW coming second (14%).

 

“Small businesses nationally are facing a worsening credit squeeze as banks continue to react to the intense scrutiny and criticism of the Royal Commission. Lenders are becoming increasingly risk averse and introducing more onerous checks on borrowers, which means SMBs are being unfairly caught in the fallout from disciplinary action on the banks,” said Mr Allan.

 

Nationally, 17% of SMBs tried to access finance in the past six months – a jump of 5% compared to last quarter.

 

Of these, only 63% were successful compared to 73% in the previous period. More than one in four (26%) were rejected, compared to a rejection rate of fewer than one in five (19%) last quarter.

 

Bank loans remain the preferred finance option for small businesses nationally, holding steady at 39% quarter on quarter. Interestingly, consideration of equity capital raising for finance saw a rise of 3% from last quarter to 15%.

 

Most SMBs still confident in prospects, but slipping post-election

 

The majority of SMBs (55%) are still confident about their business prospects over the next 12 months despite this measure of confidence falling every quarter in 2019. This period saw the trend continue with a 2% drop in confidence compared to last quarter.

 

SMBs are anticipating strong profitability and workforce growth in the next three months, with 34% expecting an increase in profitability (29% in previous period) and 19% expecting the size of their workforce to grow (16% in previous period).

 

“SMB owners are by nature optimistic. We know they have can-do attitudes that give them the drive to tackle a challenge even in the face of trying conditions. It’s this same entrepreneurial spirit that is now shoring up SMB confidence in business prospects despite their growing scepticism in the state of the national economy,” said Mr Allan.

 

Forty two percent of SMBs nationally expect to grow moderately over the next year.

 

More than half of SMB owners (53%) believe the recent Reserve Bank of Australia interest rate cuts will have little impact on their business. However, almost one in five (19%) SMBs think the rate cuts will encourage consumers to spend more. Fifteen percent believe it will lower the cost of doing business.

 

Export no exception to current trends

 

SMBs that export goods and services say they have been exporting less in the last three months and that it has become more difficult to export in this period.

 

Reflecting on the last quarter, more SMB owners have seen a decrease (23%) in the amount of goods exported, than an increase (18%).

 

Seven percent of SMBs believe that it has become more difficult to export goods out of Australia over the last three months.

 

“Global growth continues to be sluggish, particularly as China’s trade war with the US has slowed Chinese growth and this in turn has delivered a blow to the global economy. Unfortunately, we’re now starting to see the trickledown effects of this among Australian SMBs,” said Mr Allan.

Writers Wanted

'War in space' would be a catastrophe. A return to rules-based cooperation is the only way to keep space peaceful

arrow_forward

Australia's world-first repository of 'modern slavery statements' a step in the right direction

arrow_forward

Nisbets’ Collab with The Lobby is Showing the Sexy Side of Hospitality Supply

Hospitality supply services might not immediately make you think ‘sexy’. But when a barkeep in a moodily lit bar holds up the perfectly formed juniper gin balloon or catches the light in the edg...

The Atticism - avatar The Atticism

Buy Instagram Followers And Likes Now

Do you like to buy followers on Instagram? Just give a simple Google search on the internet, and there will be an abounding of seeking outcomes full of businesses offering such services. But, th...

News Co - avatar News Co

Cybersecurity data means nothing to business leaders without context

Top business leaders are starting to realise the widespread impact a cyberattack can have on a business. Unfortunately, according to a study by Forrester Consulting commissioned by Tenable, some...

Scott McKinnel, ANZ Country Manager, Tenable - avatar Scott McKinnel, ANZ Country Manager, Tenable

InteliCare triple winner at prestigious national technology awards

InteliCare triple winner at prestigious national technology awards Intelicare wins each nominated category and takes out overall category at national technology 2020 iAwards. Company wins overal...

Media Release - avatar Media Release

Arriba Group Founder, Marcella Romero, wins CEO Magazine’s Managing Director of the Year

Founder and Managing Director of the Arriba Group, Marcella Romero, has won Managing Director of the Year at last night’s The CEO Magazine’s Executive of the Year Awards. The CEO Magazine's Ex...

Lanham Media - avatar Lanham Media

5 Tips For A Successful Blog Layout

There’s far more that goes into making a blog successful than simply having a way with words. How you display your content will have a huge impact on how easy it is to read, and whether people a...

Wayne Burden - avatar Wayne Burden


The Conversation
INTERWEBS DIGITAL AGENCY

Politics

Prime Minister Interview with Ben Fordham, 2GB

BEN FORDHAM: Scott Morrison, good morning to you.    PRIME MINISTER: Good morning, Ben. How are you?    FORDHAM: Good. How many days have you got to go?   PRIME MINISTER: I've got another we...

Scott Morrison - avatar Scott Morrison

Prime Minister Interview with Kieran Gilbert, Sky News

KIERAN GILBERT: Kieran Gilbert here with you and the Prime Minister joins me. Prime Minister, thanks so much for your time.  PRIME MINISTER: G'day Kieran.  GILBERT: An assumption a vaccine is ...

Daily Bulletin - avatar Daily Bulletin

Did BLM Really Change the US Police Work?

The Black Lives Matter (BLM) movement has proven that the power of the state rests in the hands of the people it governs. Following the death of 46-year-old black American George Floyd in a case of ...

a Guest Writer - avatar a Guest Writer



News Co Media Group

Content & Technology Connecting Global Audiences

More Information - Less Opinion