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Owners face an operating environment “tougher than ever before”, a recent survey finds.
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Taxes, cash flow top small business worries
09 January 2024
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Two-thirds of small business owners are concerned for the future and plagued by tax bills and cash flow problems, according to a recent survey.
Three-quarters of business owners surveyed by Precedent Productions in November said they faced too many taxes and regulations while only 40 per cent felt supported by the government.
Managing director Steve Loe said red tape and rising costs meant that small businesses were operating in an environment that was “tougher than ever before”.
“From high inflation and steep increases in operating costs, to challenges associated with staff hire, productivity and the overall ongoing high cost of living, there’s no disputing that Australian small businesses are currently doing it very tough,” he said.
As a result, 40 per cent of the hundreds of small business owners surveyed said profits took a hit in 2023 and almost half (48 per cent) said cash flow and profitability issues were their top concern.
Two-thirds (65 per cent) said that they were worried about the future of their small business and most (57 per cent) had a second job or side hustle to supplement their income.
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It was also harder to meet delivery deadlines compared to pre-Covid times for 45 per cent of respondents.
“The economic challenges of 2023 have spilled over into at least the start of 2024 and too many it seems are hanging on by a thread,” Mr Loe said.
Additionally, just under three-quarters of respondents (71 per cent) said they paid too much tax and were subject to too much regulation.
This comes despite the ATO calls on small businesses to pay up on tax debts, with the tax gap for small businesses standing at 12.8 per cent, compared to 7.2 per cent for medium businesses and 4.2 per cent for large companies.
It estimated small businesses owed $33 billion of the $50.2 billion pool of total collectable debt, which grew during the pandemic.
The government’s policies aimed at providing small business relief from cost pressures have also faced criticism from the Coalition and advocates.
The Coalition has argued for the government’s small business write-off scheme to be increased to $30,000 while Robyn Jacobson of the Tax Institute said the scheme’s “constant tinkering” has made it difficult for small businesses to keep on top of legislative changes.
Industrial relations reforms passed in December have also been described as “unworkable” for small businesses.
The BCA said amendments to labour hire laws would “hit many small businesses and drive up prices, risk jobs and comes at a time when there are already many pressures on the economy”.
The survey found that 61 per cent of small businesses said they did not get enough government support to act on matters such as climate change, cyber security, innovation and local manufacturing.
Mr Loe emphasised the importance of adequate support measures for small businesses that generated one-third of GDP and employed around half of the private sector workforce.
“Now more than ever is the time to shine a spotlight on Australia’s small business operators to praise their resilience and their invaluable economic, social and cultural contributions to the nation,” he said.
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