Job growth and investments are suffering as small businesses delay critical business decisions until after the federal election, new Westpac research has revealed.
The report said half of small businesses are worried or uncertain about the impact election policies would have on their operations, and they are choosing to delay decisions around hiring staff and investments.
With small businesses accounting for an average of $530 million in investments each month, a delay in some proportion of small business investments over the election period could see overall investments decline.
“This is coming at a delicate moment for the wider economy with growth already slowing and drags from the housing downturn expected to intensify,” Westpac said.
While some businesses are exercising caution, the most profitable businesses are less likely to delay decision-making, with 56 per cent of these businesses stating the election does not affect their timing for hiring staff compared to 41 per cent of other businesses.
According to the bank’s report, the Government could help small businesses regain confidence in decision-making by decreasing energy costs, reducing regulation and red tape, and increasing small business grants.
“Our customers tell us that small business tax cuts, less regulation and red tape, and energy policy are a top priority in the upcoming election,” said Ganesh Chandrasekkar, general manager of SME banking at Westpac.
“The recently announced plans to fast track tax cuts for small business will offer some support; but more can be done to help particularly with grant funding.”
Chandrasekkar also said there was a significant number of government grants available, but over 40 per cent of small businesses were unaware of what’s available, and almost 80 per cent said the government grant process was too difficult to navigate.
“If there is one area which we could boost confidence it is in the areas of grants – both government and corporate – by easing the burden of compliance and complexity so that businesses receive the benefits,” he said.