SMEs pessimistic about outlook for 2017

Three in four Australian SMEs are pessimistic about their prospects for 2017 in the wake of the December budget update, according to a survey from cloud software provider Reckon.

A significant percentage of SMEs believe that technology is the key to renewed business confidence — one in three small business owners believe that the continued rollout of the NBN is essential, while 25% agree there is a need on delivering the government’s National Innovation and Science Agenda.

But only one in 10 respondents anticipate that technology will be a main business challenge for their business.

In addition, despite the growing focus on AI among the world’s top tech vendors, only 15% of small business owners believe that automation will have a high impact on their business.

The survey found that one in two respondents are dissatisfied with the government’s management of the economy. This and a gloomy economic outlook has left business confidence shaken.

As a result, more than half (53%) of respondents are not planning any new investment in the next 12 months, and a further 28% are unsure whether they will invest. In addition, 66% are not looking to increase staff this year, with only 19% forecasting an expansion in their employee base.

The government has forecast that business investment will fall by 6% over the first six months of 2017, and employment is expected to see subdued growth at 1.25%.

“The results are consistent with what we are seeing in the market. High company tax rates and the red tape associated with GST compliance continue to be major roadblocks impeding small business growth and the main issues keeping small business owners up at night,” Reckon COO Dan Rabie said.

“While there’s been incremental progress since the launch of Turnbull’s National Innovation and Science Agenda, how much have we really advanced over the past year? The desired results on innovation are just not there and business owners are starting to take notice.”

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