The Australian Chamber of Commerce and Industry is urging government leaders to adopt a four-point action plan to support SMEs, as business confidence hits a three-year low.
Speaking at this week’s Commonwealth Heads of Government Meeting in Perth, ACCI chief executive Peter Anderson said SMEs risk becoming the “poor relation” in economic debate.
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Anderson urged political and business leaders from the Commonwealth nations to get “down and dirty” in local economies, which are “the sum of individual investors and entrepreneurs”.
He also unveiled a four-point small business action plan, consisting of the following proposals:
- Remove SME barriers to market access and lower business entry criteria.
- Introduce more alternatives to the provision of cost-effective SME business finance.
- Improve the quality of regulation and the removal of red tape.
- Introduce mentoring programs aimed at building self-employment capacity.
According to Anderson, CHOGM can demonstrate its relevance to local business communities by including a small business action plan in its economic discussions.
“[We are] still learning how to best support SMEs at a time of uneven trading conditions,” Anderson said.
The news comes on the back of a report by Newport Consulting, which shows business confidence is at a three-year low, causing companies to reduce staff and downgrade forecasts.
The report, Managing in a multi-speed economy: Current State of Play is based on a survey of 242 Australian and New Zealand businesses, representing SMEs in addition to large companies.
The report reveals a heightened sense of unease in the business community, with 28% of the companies surveyed expecting difficult conditions in 2011-12, up 11% on last year.
A total of 14% expect no growth at all this financial year, up from only 6% last year. Meanwhile, only 15% are highly optimistic about their growth expectations, compared to 39% last year.
“Companies are far less optimistic about the prospects for the economy, as well as their individual business, this year,” Newport Consulting managing director David Hand says.
“This year, Australian companies plan to reduce staff – a strategy which has been missing from the management agenda for the last two years.”
“Companies are also demonstrating great caution through their management strategies, with operational performance, cost control and productivity rated as top priorities.”
According to the report, business leaders are most worried about the state of the economy (53%), followed by cost management (51%) and recruitment and retention (44%).
One encouraging finding that emerged from the report is that innovation is back on the agenda, with business leaders planning to grow through the development of new services or products.
The top three opportunities identified by business leaders, for the financial year ahead, are skills development (58%), customer satisfaction (58%) and productivity (51%).