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.
AUTHOR
Staff Writer
Recommended for you
With HNW investors representing the largest market for alternative assets, Praemium and CoreData research underscores why this presents a compelling opportunity for advisers.
Having completed the successful integration of Diverger, Count has upgraded its forecast for expected synergy benefits achieved by the acquisition by a third.
Australia’s largest licensee has seen the biggest number of adviser losses over the past week, while the expected wave of new entrants has boosted overall adviser numbers.
Iress has increased its forecast adjusted EBITDA by $5 million for the 2023/24 financial year in light of the sale of its platform business to Praemium and hinted at a return to dividend payments.
