While the government has trumpeted its efforts to cut regulations with biannual red tape repeal days, Australian SMEs continue to be hampered by red tape.
The fifth SME Directions Survey, sponsored by SME accounting and financial services firm Crowe Horwath, polled 437 business owners and managers.
The biggest challenge cited for 2015 was cash flow, with 66% of respondents saying this was their top threat, followed by red tape and administration issues at 45%.
Last year’s SME Directions Survey, conducted immediately after the federal election, found red tape was by far the number-one issue respondents wanted the new Coalition government to address, with 70.3% responding this was their prime hope for change.
In fact, 80% were hopeful it would be reduced under the new government, in line with Tony Abbott’s pre-election promises to act on it.
But red tape has shot up SME’s list of worries with “tax and business regulation” ranking second on the list, an increase from fourth spot in 2013.
This is despite the Abbott government pledging to erase more $1 billion worth of red tape during its tenure.
Respondents were critical of the government’s failure to live up to its promise to cut red tape, with 69% saying the Coalition is falling short of its goal and only 8% believing the Coalition is living up to the pledge.
“As a new business I’m just trying to find my feet and way through the legal red tape,” one respondent said.
“Government are still not listening to small business. We are still dealing with a lack of access to finance and stupid tax rules,” another said.
Of those surveyed, 48% say they are less optimistic after the budget was revealed and only 15% say they are more optimistic.
Only 20% say they will see a benefit from the carbon tax repeal, with 65% saying they don’t expect to see any difference.
Jeremy McPhail, head of research at Crowe Horwath, says the results reflect what the firm is seeing SMEs experiencing throughout metropolitan and regional Australia.
“Looking at the political environment, there hasn’t been a lot of the budget that has been successfully implemented,” McPhail says.
“There’s also the rhetoric of the currency being too high and that being an impediment as well. There’s a very big feeling of ‘wait and see’ among consumers and businesses – waiting and seeing if things improve.”
Other insights from the survey included views on cash flow, self-managed super funds, social media and using the cloud.
For the full survey results, download the free SME Directions Survey e-book published today.