Nearly one in four small suppliers say they won’t benefit from the incentives offered in the 2024-2025 federal budget, according to new research from comparison website Small Business Loans Australia.
The survey of 204 small business directors and decision makers asked which budget incentives will help this financial year, listing the extension of the instant asset write off, the Energy Relief Fund, and the Small Business Debt Helpline and free financial counselling services.
In an environment of rising costs, with small businesses struggling to stay afloat, a staggering 94 percent of respondents said they would support other incentives such as tax cuts, lower-rate loans and wage subsidies.
Older business owners and decision makers are least in favour of the budget measures, while the proportion of over-55s (35 percent) who don’t support any of the budget incentives is double that of under-55s (16 percent).
The survey found that the Energy Bill Relief will help the largest proportion of businesses (52 percent), while almost half (49 percent) report that they will benefit from the instant asset write off.
Receiving minimal support, the debt helpline and financial counselling services will only benefit 11 percent of small suppliers.
Across the country, South Australians were the most sceptical respondents, with more than half (53 percent) saying none of the benefits would help them, followed closely by ACT (50 percent) and Queensland (30 percent).
On the other hand, 86 percent of business owners in NSW reported that the budget incentives will assist them.
Of the preferred incentives, a drop in the 25 per cent company tax rate garnered the largest support among respondents at 52 per cent, with this support jumping to 65 per cent in the over-55 group.
In second place was financial help, such as wage subsidies to alleviate pressures associated with meeting the increasing minimum wage requirement (41 percent).
Surprisingly, respondents were divided on interest rates, with one third (34 percent) supporting the Reserve Bank and government in their fight against inflation by maintaining or increasing the cash rate, while 39 percent said they would benefit from reduced interest rates on loans.
The survey also revealed over a quarter (27 percent) of respondents would welcome the return of SME loan guarantees, which offered SMEs secured and unsecured loans of up to $5 million in 2021 and 2022, with capped interest rates and extended repayment periods.
Alon Rajic, Founder and Managing Director of Small Business Loans Australia, said the figures could indicate that businesses are looking for immediate financial relief from their debts, as opposed to assistance in just managing them.
“In the last tax year, nearly half (43 percent) of small businesses were not profitable. Business owners need money back in their bank accounts to help alleviate or minimise their debts, not just manage them. This is reflected in our survey, with strong support for measures such as interest rate cuts to business loans and cuts to company tax rates.”
In the nine-month period from July 2023 to March 2024, rising costs, weaker customer demand, staff shortages and higher interest rates saw 7742 companies enter into external administration, which was a significant increase of 36 percent from the previous corresponding nine-month period.
The full results can be viewed here.
