Carbon tax affects SME’s

According to the recent Bibby barometer small business survey only 20% of small and medium businesses (SMEs) plan to invest in their businesses in the coming year, down from 30% in February 2012 and 33% in July 2011. 

The Bibby barometer Index declined from 100 to 94 to 87 respectively over that time period.

The downturn is linked to the perceived impact of the carbon tax. 

Although the tax has been in effect for a short time, the barometer found that 72 % of respondents said they were impacted by the tax, 33% confirmed that it had already had a major impact on their businesses, and 81% believed that it will have a long-term impact on their businesses.

The third of its kind, the Bibby barometer small business survey is a national study run twice yearly, surveying primary decision makers at more than 200 non-retail SMEs, and conducted in mid-August 2012.

Bibby Financial Services Australia’s national sales director, Gary Green, said “at a time when big businesses have by and large had a good reporting season, small businesses are struggling. 83% of SMEs experienced cash flow issues in the past year most commonly because of slow payments.  The majority (77%) of SMEs are concerned about their customers becoming insolvent in the year ahead.”

“We are seeing a continued downturn of SME sentiment, with the result that 57% has reduced their headcount, including 28% that have cut down the number of full-time positions in their business, 25% replaced full-time with part-time positions, and 16% substituted full-time staff with casual employees,” Green said.

He went on to say that “it speaks to the extraordinary resilience of the SME business owners that despite their expectations of a tough time ahead on many fronts, 71% remain optimistic regarding their business prospects for the next 12 months.  SME business owners are working hard to overcome their challenges with 48% now working even longer hours than in the past”.

According to Green “some circuit breakers are needed to help SMEs break through their negative sentiments and begin to invest in growth and productivity for the future".

“71% of SME business owners do not think the Government is doing enough to help small businesses in the current economic climate,” Green added.

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