SME satisfaction with federal government on the rise as $20,000 asset write-off tops policy wish list for business owners

SME satisfaction with federal government on the rise as $20,000 asset write-off tops policy wish list for business owners

 

Dissatisfaction with the federal government among small and medium size business owners is at the lowest level in six years, according to the latest instalment of MYOB’s Business Monitor.

The level of dissatisfaction with politicians in Canberra among the SMEs has fallen 6 percentage points since March 2015, when 33% of SMEs told MYOB they were dissatisfied with the federal government.

The October survey showed that figure now at 26%.

The survey of more than 1000 SMEs found SMEs are also less dissatisfied with the state governments, with dissatisfaction levels having fallen to 30% across most of the states and territories.

The exceptions are Queensland, where 41% of SMEs indicated they are dissatisfied with the state government, and in the other direction New South Wales, where 20% of SMEs owners reported being dissatisfied with the state government.

John Moss, chief strategy officer at MYOB, told SmartCompany this is the first time in the six years MYOB has been surveying SME attitudes to government that satisfaction levels among business owners have exceeded the dissatisfaction levels.

“One thing we ask about is how much pressure they are feeling in the business,” Moss says.

 Business owners are asked about the pressure they feel in a range of areas including cash flow and investment in plants and equipment.

“All those [pressure] factors are down across the board,” Moss says.

“They are feeling less pressure.”

Moss believes the change in the leadership of the federal Liberal Party is contributing to the uptick in satisfaction among business owners, along with a “better feeling around the economy”.

Another contributing factor is the small business package the government unveiled in its May budget, according to Moss.

He pointed out that the $20,000 instant asset write-off scheme has topped the list of policies or initiatives the survey respondents said they would vote for in an election.

Sixty three per cent of survey respondents said they would vote for the scheme to be retained, while 62% said they would vote for policies that significantly simplify the reporting processes for the goods and services tax and Business Activity Statements.

Also 58% said they would vote for a reduction in the corporate tax rate of 1.5%.

But while the survey found a majority of SME owners are in favour of the $20,000 instant asset write-off scheme, only a quarter of survey respondents said they have opted to use the measure.

The most common reason for not having used the scheme was businesses not needing to purchase anything (38%), followed by businesses not having available cash to make the purchase (19%).

However, Moss says even though a large proportion of SMEs are yet to take advantage of the scheme, it doesn’t mean that they would like to see the government abandon it.

“They don’t want it taken away or modified,” he says.

“It is definitely a boost to have it place.”

Moss says it is no surprise to see tax and compliance issues also high on the policy wish list for SMEs, saying Australian business owners currently face a “fair amount of compliance burden”, especially when it comes to GST reporting.

“These things go to the time spent on small businesses doing things other than working on their business, which affects their level of profitability and the ability to invest,” he says.

Moss says the survey also reveals another key area where the federal government has room for improvement in light of its current innovation agenda, with 25% of business owners reporting they are dissatisfied with the speed of their internet connection and 21% dissatisfied with the cost of internet services.

This is more pronounced for businesses in rural areas, with 37% saying they are dissatisfied with available internet speeds.

“When we asked about websites, businesses in rural areas are more likely not to have a website,” Moss says.

“And it is partly because of the available internet connection.

“There is something there to think about with the National Broadband Network.”

 

The top 10 policies or initiatives SMEs would vote for, according to MYOB:

  1. Keeping the $20,000 instant asset tax write-off for businesses under $2m revenue (63%)
  2. Policies that significantly simplify the GST/BAS reporting process (62%)
  3. Reducing the company tax rate from 30% to 28.5% (58%)
  4. Assigning a proportion of government procurement contracts to small businesses (57%)
  5. Increased federal government funding for skills, training and apprenticeship programs (57%)
  6. The establishment of an incentive bonus for businesses employing people over age 50 (56%)
  7. More federal government investment in transport infrastructure in our major states and cities (55%)
  8. Increased government funding for innovation, research and development by Australian businesses (53%)
  9. Offering a wage subsidy for employing young Australians (51%)
  10. Exempting FBT on the purchase of work-related portable electronic devices (50%)

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