Over the past year, Australian businesses have been through many ups and downs. From managing new COVID-19 variants and the associated lockdowns and restrictions, to tragic natural disasters. Now, we’re seeing big shifts as international travel reopens and the economy starts to bounce back. With small businesses now facing new challenges too, like rising costs and talent shortages, they may be looking to this year’s federal budget for support to navigate the year ahead.
So, what exactly do they want to see in this year’s budget on Tuesday 29 March? We surveyed over 500 Australian small businesses to find out just that. Here’s what’s on the top of their lists this time around.
Ongoing COVID-19 support
While the economy is showing positive signs of recovery, many Australian small businesses are still feeling the impact of years of lockdowns and other restrictions. A quarter (25%) would like to see relief packages for industries still being impacted by COVID-19 in the budget and half (49%) of those surveyed see recovering from the impacts of the pandemic as a top priority for this year.
Meanwhile, many say their biggest concern (38%) is not being able to recover from these broad-reaching effects at all. Others are also worried about future COVID-19 related challenges, with a quarter (25%) concerned about a lack of future support packages – for any new strains or outbreaks to come.
Help with digital tools and processes
The vast majority (70%) of those surveyed believe a budget that prioritises small business digitisation is important. Some even identified setting up new digital systems as being a top priority (16%) for this year. This indicates there’s room to support more small businesses in seeing the benefits of digital tools and processes.
Interestingly, despite wanting to see support for digitisation in the budget, four in five (79%) have concerns about, or do not consider technology important in, the success of their business. Considering past Xero research found highly digitalised small businesses fared better throughout the pandemic, there’s opportunity to help more get on board. So what will make a difference? A third of respondents (33%) believe a cash rebate or grant to spend on technology would help them use more digital tools (like eInvoicing) in their business.
Tax cuts, incentives and other direct financial support
It’s no surprise that small businesses want help with their bottom line after the financial challenges of the past year. Four in 10 want this year’s budget to focus on tax cuts or incentives, while a quarter (26%) would also like to see wage subsidies. In particular, when reflecting on past budgets, corporate tax rate reduction (13%) and instant asset write off extension (13%) have been two key budget measures that small businesses say helped in previous years.
These financial breaks could go a long way in supporting staff or business growth, according to the survey. Nearly a third of small business owners (30%) say they’d like to increase wages if tax cuts were introduced again, while a quarter (27%) would be able to increase their services/products. A further quarter (25%) would be able to hire more staff and 26 per cent would upgrade their equipment.
Measures to help hire and manage employees
Staff shortages have hit many Australian employers hard over the past year. Two in five (40%) believe their business has suffered from a skills shortage in the last 18 months while one in five have prominent concerns around staff shortages (21%) and the cost of wages (23%).
To help manage this, small business owners want this year’s budget to include free or low cost training to upskill and reskill for workers (25%) and incentives to hire staff (23%).
With the upcoming election this year, small businesses may be looking more closely at the federal budget and opposition reply for an indication of what’s to come. They’ll also be turning to their advisors for help decoding how both budgets could impact them. Many respondents (37%) use their accountant or bookkeeper’s expertise to understand what government policies mean for their business.
What do you want to see in this year’s federal budget and opposition response? Let us know in the comments what measures you think will help your business as we navigate 2022.