SMEs back Coalition, anticipate weak economy: SME Directions Survey
Thursday, December 6, 2012/
The looming federal election is already shaping as the key news event for Australia’s political and business sectors in 2013, and the SME community has given a blunt verdict on who it’s backing ahead of the poll.
The third bi-annual SME Direction survey, sponsored by Australia’s top SME accounting and financial services firm WHK Group & Crowe Horwath, polled 520 business owners and managers.
It found that 57.3% would back the Coalition if the poll was held now, compared to just 11.2% supporting Labor and only 5.6% backing the Greens.
However, more than 25% of respondents were undecided, suggesting that Labor could claw back some of the gap as 2013 starts.
Interestingly, the Coalition’s support was much higher with men (60.9%) than with women (49.3%), giving weight to suggestions Opposition Leader Tony Abbott still has work to do to win over female voters.
One issue where both parties will need to convince SME voters is tax reform. The Government’s decision to abandon its company tax cut in the Federal Budget back in May still clearly rankles with SMEs. Survey respondents nominated company tax cuts as the single biggest tax change that would help their business, ahead of income tax cuts, increased R&D subsidies and payroll tax cuts.
Concerns about the negative effect that an election has on economic activity may have also played into concerns about the outlook for the economy in 2013, with 47% of respondents saying they expect no economic growth in the next 12 months, with just 12% expect any sort of growth.
Looking at the responses on an industry basis, technology and services-focused sectors are the most bullish heading into the New Year.
In the IT sector, 37.5% of respondents are expecting growth and a further 12.5% expect strong growth. The internet sector had 50% of respondents expecting growth or strong growth, while the health sector had 36% expecting improved conditions.
Surprisingly, the mining sector was one of the least optimistic, with 80% of respondents tipping negative growth as the mining boom slows over 2013.
Drilling down to an individual company level, the survey suggests SMEs are remaining relatively upbeat, with forecasts of sales and profit growth remaining steady from the mid-year edition of the survey. Respondents expect both sales and profits to grow by 10%, which would be an excellent result given the patchy nature of the economy.
John Lombard, chief executive of WHK Group & Crowe Horwath, says the results mirror what his firm is seeing with clients throughout both metropolitan and regional Australia.
“Structural changes in industries, a mixed speed Australian economy, and an uncertain global outlook all place pressure on business. More than ever, now is the time to get good advice,” Lombard says.
“It is heartening to note so many comments in the survey about the importance of getting personal finances in order, not just focusing on the business. Helping business owners protect and grow their assets they work so hard to build is at the cornerstone of our business. As we get to the end of another year it is important to ensure you take the time to sit back and reflect on what you’re trying to achieve in the context of your whole life.”
One way for SMEs to get some great insights into what is on the minds of their customers, suppliers and competitors is by studying the Worry List that emerges from every SME Directions Survey.
The state of the domestic economy and cashflow are the biggest concerns for respondents, but the big mover on the list was the carbon tax, which fell from fifth on the list in June to 10th spot in the new survey.
This suggests the impact of the tax has been much smaller than expected. When asked how the carbon tax had affected their business, almost 45% of respondents said it was still too early to tell.
Respondents to the survey were given the chance to win a free investment strategy review from WHK. This prize was won by Nik from Rock IT. Congratulations!
You can download a copy of our free eBook, Get set for 2013: 10 insights from the SmartCompany–WHK SME Directions Survey. It’s an invaluable tool for business owners to start planning for what promises to be a big year ahead.
This story first appeared on SmartCompany.