Economy

Economic fears and payroll red tape: Why SMEs are losing faith in the Morrison government

Matthew Elmas /

Morrison

Prime Minister Scott Morrison. Source: AAP/Daniel Leal-Olivas.

Aussie SME owners worried about the health of the economy and frustrated with payroll red tape are increasingly directing their blame at the Morrison government.

That’s the finding from the latest edition of Sensis’ quarterly business index, which has tracked a rise in perception that federal government policies are “actively working against” SMEs, for the first time in its 26-year history.

Released today, the recently digitised survey parsed the views of 1,011 SMEs over the second half of October, amid headlines about historically low interest rates and whether the Morrison government was doing enough to support the economy.

One-in-four (26%) SMEs say current federal government policies are working against them, up 3% on last quarter, a shift which turns around a longstanding trend for the survey which had previously tracked growing apathy about federal policy among business owners.

Sensis chief executive John Allan says qualitative feedback indicates SME owners are increasingly looking to the Morrison government for answers as fears about the economy grow.

“Small businesses want to see the federal government do more to stimulate the economy,” Allan tells SmartCompany.

SME confidence in the economy dropped 5% on the July quarter survey, with more than a third (39%) of business owners saying economic activity is slowing, while 36% expect the economy to be worse in a year, up from 6% last quarter.

SME confidence in the economy is falling. Source: supplied.

Just 17% said they believe conditions will improve over the next year.

Allan says business owners are also expressing frustration about the rollout of single touch payroll (STP), which is partly being directed at the federal government.

“Anything where a small business has to change their processes, and this is a pretty significant change, can be quite burdensome,” Allan says.

All employers in Australia were technically required to sign up for STP reporting by July 1 this year, with about 540,000 firms working under the scheme to date.

Hundreds of thousands of small businesses have been rushing to implement STP reporting over the last 12 months ahead of the deadline.

While the Sensis survey tracked increased pessimism about the economy, the majority of SMEs (55%) still said they were confident about their own business prospects over the next 12 months, although this number fell on last quarter, as it has throughout 2019.

More than a third (34%) said they expect an increase in profitability, up from 29% last quarter. 

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Matthew Elmas

Matthew is the news editor at SmartCompany. You can contact him at [email protected].