A new survey reveals small businesses are concerned about the impact of political instability as a result of the hung Parliament, with fears it could add to the economic uncertainty currently facing many companies.
According to the latest quarterly survey of 531 businesses by accountancy firm WHK, two thirds of SMEs believe the Federal Government will be ineffective as a hung Parliament.
The survey also reveals 88% of these businesses believe a hung Parliament will have a detrimental impact on the economy.
Only 8% of SMEs believe the Federal Government can be effective as a hung Parliament.
Peter Strong, executive director of the Small Business Council of Australia, says small businesses are in a constant state of uncertainty due to the Government’s limited ability to resolve major economic issues.
“A hung Parliament is an issue for retail, transport, hospitality and small manufacturers, particularly in relation to the internet,” Strong says.
“The internet is changing the way people behave around small business but there are no policies to address that issue and take us forward.”
“This state of indecision is not good for small business. We need leadership, decisions and a clear understanding of what the future holds, which is very difficult to achieve with a hung Parliament.”
WHK chief executive Carl Walsh told The Australian Financial Review both sides of federal politics continually overlook SMEs, particularly the impact of interest rate rises.
According to the survey, 5% of SMEs face higher interest rates on existing loans compared with the last quarter.
The report says half of Australia’s SME businesses have received an increase to the interest rate rises on their loans from the banks in the past six months.”
Walsh says the Government focuses too heavily on the financial pressures felt by consumers due to “the inability to differentiate between consumers and SMEs.”
“No one is talking to the sector that employs two billion people and contributes almost 60% of Australia’s gross domestic product.”
According to Walsh, one reason SMEs are not being heard is because they lack a strong representative organisation.
“People struggle to get their head around the sector and find it easier to move on to other areas,” he says.