Budget 2024: What’s on the SME wishlist? (Part 2)

Please note that this is a continuation from our previous edition of the Budget Wishlist. 

With the Australian Budget announcement just around the corner, small and medium-sized enterprises (SMEs) are eagerly waiting to see what the government has in store for them. 

This year’s budget holds the potential to significantly impact their growth and ability to navigate current economic challenges. 

What will the government unveil to support the backbone of the Australian economy – SMEs? Our experts reveal their wishlish for the upcoming budget.

Chris Dahl, CEO, Pin Payments

“This Tuesday’s Federal Budget is a pivotal moment for Australia’s 2.6 million small businesses. SMEs, the backbone of our economy, have been disproportionately impacted by rising costs and inflation. The budget must deliver substantial economic relief, including energy bill relief and targeted measures to alleviate financial burdens. SMEs are also looking for support in navigating the AI revolution. Funding for training programs and innovation grants will be crucial to ensure businesses can harness AI’s potential while mitigating job displacement concerns. Cybersecurity is another pressing issue, with cyberattacks costing small businesses millions each year. We need to see concrete measures to protect SMEs from these threats, including training and financial assistance for fraud prevention. 

Additionally, fostering innovation is essential for Australia’s economic future. The budget should incentivise SME innovation through investment in digital skills, literacy, and technology. Finally, we cannot overlook the persistent disparities in access to capital for women-led and Indigenous businesses. The budget must prioritise initiatives to bridge this gap and unlock the full potential of these underrepresented entrepreneurs.”

Adam Boote, Director of Growth at Localsearch

“We’ve seen on-the-ground from tens of thousands of our small business clients that the cost-of-business is greater than before. From utility bills, insurance, overheads, fuel, and labour costs, it’s undeniably an extremely stressful period for small businesses.”

“The Mum-and-Dad businesses that keep the heart of Australia’s local economies beating need Government assistance and they need it now – not in weeks, months or years down the track. For one, implementing caps to reduce overheads would go a long way for small businesses. The energy bill relief is an example of reducing these costs in the first instance. However exciting ‘asset write-offs’ may sound, the reality is that it requires businesses to purchase the asset first. 

“Secondly, the Government needs to put pressure on offshore companies and conglomerates so that they don’t leave small businesses in the dirt when things go wrong, draining them of their limited resources to fix issues like a Facebook hacking by themselves. “Thirdly, rebates on a range of expenses like mileage would be great, however, small businesses don’t have the time or resources to educate themselves on new policies. The Government can’t just make announcements in next week’s Budget and expect them to automatically help. They must increase training and succinct communications to every single small business across Australia to help them understand what they are eligible for. After all, small business owners can’t become accountants overnight.

“It’s essential that we don’t overlook the great value and impact small businesses make on our local and national economy – they are the lifeblood of Australia, and we need to start treating them like it.”

Beau Bertoli, co-founder and chief revenue officer at Prospa

“To pre-empt the sentiment of business owners and decision makers ahead of the announcement, Prospa has commissioned new research from YouGov, which revealed that one in five (22%) say their SMEs don’t have any cash reserves. As SMEs struggle to keep their head above water, 57 per cent are hopeful for tax cuts, while 46 per cent would like to see more rebates or subsidies on business expenses, including energy.   

With SME owners and decision makers feeling the pinch, the cost-of-living pressures are further exacerbated by the tightening purse strings of their customers. Nearly three in four (73%) Australian SME owners and decision makers noticed behavioural changes in their clients or customers over the past year as a result, with 41 per cent now spending less frequently. This has led to 38 per cent of SME owners and decision makers indicating higher prices are already top-of-mind to manage the impact of rising costs over the next year.   

As Australian SMEs emerge from the highest month on record for business insolvencies, support measures from the upcoming Budget will be critical to their survival.” 

Matthew Dickason, CEO Asia Pacific, Hays

“We applaud the government’s growing commitment to creating new jobs for Australians through the Future Made in Australia Fund. As a country we must continue to grow our sovereign capability for future generations.  

“However, many of our country’s SMEs are struggling to stay afloat in our current economic conditions where spending is down, but the cost of doing business is high.

SMEs are the engine room of the Australian economy, employing more than five million Australians and contributing more than 50 per cent to Australia’s GDP. The Federal Budget should look to create opportunities for struggling businesses and their employees to navigate this high inflationary environment to preserve this important business ecosystem. 

Additionally, when times are tough, it can be hard for this cohort of businesses to continue to support DE&I initiatives. It would be great to see measures to support our SMEs when hiring Australian workers from under-represented and disadvantaged groups to unlock economic success for all. 

“While the Albanese government has continued to focus on the Future Made in Australia Skills plan, we would welcome additional initiatives to help Australian SMEs to upskill their workforces to be future fit.”

Ben Thompson, CEO and Co-Founder of Employment Hero

“As we approach the Federal Budget announcement, it’s crucial to remember the challenges that SMEs face when navigating complex compliance changes. These businesses are the backbone of our economy, and their ability to adapt directly impacts our nation’s economic health. This is not a case of hand holding, but rather about providing clear, accessible information and resources to support our SMEs.”

“SMEs often work with tight budgets, making it costly to hire employment lawyers or HR and payroll professionals for compliance guidance. Yet, without this expertise, they risk making unintentional errors with significant consequences. The ongoing implementation of IR changes and the introduction of new wage theft laws, carrying potential jail time, further heightens the compliance burden on business owners.”

“It’s clear that the government has a critical role to play in ensuring these businesses have the support they need to navigate compliance changes effectively. This could include providing better access to reliable information, offering financial assistance, or even looking at ways to simplify the regulatory environment.”

“Staff shortages are a serious issue for SMEs right now, and what the government needs to address in the Federal Budget is how SMEs can put their best foot forward to compete for talent against multinationals and larger businesses. As the cost of doing business increases, SMEs have fewer resources on hand to hire and retain talent. 

“Despite the fact that there are plenty of advantages to working for an SME, such as greater flexibility in working arrangements and a more hands-on working culture, without the appropriate support, and the resources that larger businesses may have, Australia’s smaller businesses will continue to struggle to obtain equitable talent to support growth.

“Finding skilled talent is becoming an increasingly expensive endeavour. Our recent State of Recruitment Report found that job advertisements cost on average up to $5000, which is an unaffordable price for most smaller businesses. Many small business owners find hiring a costly exercise that takes up an unreasonable amount of time too. In fact, most hiring leaders will spend 39 hours per week on hiring activities. Because of these factors, we recently launched SmartMatch, which we hope will help businesses to more quickly find talent without having to regularly spend thousands of dollars. 

“Likewise, having a smaller number of employees not only reduces employment opportunities but also means many business owners take on a lot of the day-to-day operations themselves, leaving little time for them to grow their business. As the Federal Budget approaches, it’s important that policymakers integrate robust support systems for SMEs to stabilise employment and encourage fuller workforce engagement. Strategies could include investing in training and development programs to grow the number of skilled workers available. It could also include examining some of the red tape around employment to reduce administrative burdens for businesses, making for smoother hiring processes. The upcoming Federal Budget mustn’t overlook SMEs bearing the brunt of rising wages and operational costs. The collective health of SMEs is incredibly important to our economy as they account for 98% of businesses. While larger businesses show signs of resilience and recovery, small businesses are at a very real risk of going under.”

“Wage adjustments have been a double-edged sword. According to our latest SME Index data, the medium hourly rate has increased by 8.4% in the last year to $38.39, outpacing inflation for the first time in a couple of years. While wage changes are necessary to ensure a fair living standard for all Australians, they have inevitably impacted the bottom line of many SMEs. Coupled with the increasing cost of running a business, SMEs are feeling the pinch now more than ever.”

“SMEs can only do so much to help their workers through this current cost-of-living crisis. The reduced margins that increased wages create risk the viability of Australia’s SME sector, which is the centre point of innovation and economic growth. We advocate for a balanced approach to the Federal Budget that supports both wage growth and business viability, especially for SMEs.”

“Providing targeted support in the Federal Budget could go a long way towards protecting these businesses from these harsh realities. This could be in the form of grants, tax incentives, subsidies, or even support for adopting technology to streamline processes and improve efficiency.”

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