Call to give small businesses a chance
National sales manager for Bibby Financial Services Gary Green has called on the Federal Government to provide tax relief for the small business sector in light of recent research that shows decreasing sales and profit expectations.
Despite budget measures for small businesses announced by Treasurer Wayne Swan, including tax loss carry-back measures and immediate write-off of assets, Green said the case for small business tax cuts is strong.
"Research is painting a consistent picture of small business stress," he said.
According to the latest Bibby Barometer Small Business Survey, local and global economic conditions will cause further cash flow problems on small and medium-sized businesses (SMEs), with an expected flow-on effect for sales and profits.
Currently, 26 per cent of SMEs have had difficulty meeting liabilities to suppliers on time, and 24 per cent have had difficulty making their tax payments, according to the survey.
Green said Dun & Bradstreet's Business Expectations Survey backed the claim and showed declining expectations for Australian businesses in the September quarter, while executives foresaw significant reductions in future sales and profits.
He said ASIC statistics for February showed the number of companies placed in receivership hit its highest mark since the statistics began in 1999. Green said of the 1123 companies, the majority were SMEs with less than five employees.
Green said the Reserve Bank's decision not to pass on the full 50 basis points interest rate reduction to small businesses and consumers represented a missed opportunity to "help reinvigorate the economy by encouraging small business optimism for the future".
"The SMEs' challenges are exacerbated by issues such as conservative lending terms and the need to secure loans against collateral when obtaining traditional bank financing. Given the tough economic conditions in which SMEs are currently operating, the recent growth in debtor finance funding is not surprising," Green said.
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
