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Small business owners are looking to policymakers and the government for support as they struggle to maintain resilience in the “two-speed” economy.
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Australian economy needs SMEs to succeed, says COSBOA
15 August 2024
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SMEs and micro businesses are uncertain in their current positions, as highlighted in the new State of Small Business Data Report by Square and the Council of Small Business Organisations of Australia (COSBOA).
The report was based on millions of transactions processed on Square between January 2023 and June 2024.
Square is a financial services platform for small and medium-sized businesses and enables credit card payments via smartphones to facilitate business operations.
Current business conditions for SMEs in Australia remain significantly tough.
Results from a survey of small business owners across the country showed 49 per cent are feeling less optimistic about the economy in the next 12 months.
Fifty-three per cent said their optimism levels have remained stagnant over the last 12 months and only 22 per cent said they are more optimistic.
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Small business owners have outlined government policy would make operating their business in the current conditions easier.
Results highlighted “46 per cent of SME owners are keen to see certainty around the future of the Instant Asset Write Off, 42 per cent would like more incentives to encourage technology adoption to support their efforts in areas including AI and 44 per cent are looking for greater access to low interest loans and grants which support sustainability and innovation.”
Square Australia executive director Marco Lamantia said SMEs constantly face economic hurdles.
“There’s no doubt that small businesses have been navigating an incredibly difficult period, but what cannot be underestimated is their adaptability and resilience in the face of adversity and utilising technology to overcome economic hurdles,” he said.
The Square data revealed a “two-speed” economy, with local micro and small businesses recovering slower than their mid-market peers in the first half of 2024 compared to the same period in 2023.
It also showed that businesses are growing at different rates depending on their location, sector and size.
“For example, mid-market businesses dipped slightly into negative territory in the July and October 2023 year-on-year quarters before recovering to positive growth, whereas SMBs navigated a longer and deeper period of negative growth.”
Spending across all sectors fluctuated in line with consumer behaviours during the period, while pending through the December to January holiday period pushed small retailers into positive growth after spending most of 2023 in the negatives.
Healthcare and fitness exhibited steady spending patterns in comparison to the variation shown in the beauty and professional services industries.
The report said: “Interestingly, hospitality businesses using Square saw a steady increase in spending, peaking in the April 2024 Quarter, despite well-publicised weakness in the sector more broadly.”
Sydney businesses experienced the weakest growth at 5.03 per cent year-on-year while Brisbane-based businesses experienced the strongest at 10.49 per cent year-on-year.
COSBOA CEO Luke Achterstraat said this recent report highlights the need for policy solutions to positively impact SMEs, as small business isn’t one “homogenous mass.”
“Every small business owner faces a unique situation- a distinct set of challenges and opportunities,” he said.
“The individual experiences and voices of small businesses should also be routinely sought out, heard in policy discussions and reflected in initiatives from all levels of government.”
Achterstraat said Australia’s macroeconomic environment this year has been tough for SMEs and that it should be a national interest to ensure that they don’t just survive but thrive.
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