The federal government has an opportunity in next month’s budget to invest in the digital capabilities of the nation’s small businesses, and help those businesses catch up to their Asia-Pacific counterparts, according to CPA Australia.
The peak accounting body is calling on the government to provide “significant funding” to help more SMEs go digital and to look towards countries like Singapore for inspiration.
Speaking to SmartCompany, CPA’s senior manager of business policy Gavan Ord says Australia has “under-invested in helping small businesses to improve their digital capability and it shows”.
Ord was responding to an announcement by Attorney-General Michaelia Cash last week that the government will be spending $2.8 million on efforts to digitise legal documents.
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Cash said the funding will be spent over 18 months to “make it simpler for individuals and businesses to complete legal documents”.
It follows a recent change that allows Australians to digitally execute Commonwealth statutory declarations and a consultation completed last year on how to modernise business communications.
Ord says the initiative could reach a substantial number of businesses, as executing legal documents is a regular business activity, and any programs that “make it easier for businesses to do business, especially in the digital economy” are welcome.
However, he says CPA research shows there is a gap in levels of digital literacy among small business owners, and the government’s announcement may “do little to assist those with low levels of digital literacy”.
The organisation’s research last year also shows Australian small businesses are not keeping up with digital technology in the same way that small businesses in other Asia-Pacific countries are.
According to CPA Australia’s Asia-Pacific Small Business Survey released in March 2021, which surveyed more than 4200 businesses, Australian businesses were less likely than their counterparts in other Asia-Pacific nations to invest in, use, earn from, or offer customers the use of digital technologies.
Countries like Singapore could provide inspiration for government investments in this area, says Ord, who highlights a recent announcement by the Singapore government to spend an additional S$600 million ($620 million) on its Productivity Solutions Grants program.
“This grant provides SMEs with up to 80% of the cost of implementing digital and automation solutions, with an annual cap of S$30,000 ($31,000),” explains Ord.
While some would argue improving digital literacy in business is not the responsibility of government, Ord argues “it’s not good enough to dismiss this as a private sector problem”.
“Small businesses account for around 97-98% of all businesses in Australia and employ a significant chunk of our population,” he says.
“It’s in the public interest and Australia’s economic interests to support small businesses to improve their digital capability.”