New research from Westpac shows small business confidence has significantly improved following the Federal Election last month; with 55% of businesses saying they were ‘optimistic’ and 44% saying they were ‘confident’.
Business sentiment is up from March when small businesses were asked to think about the implications of the election on their business, 19% of businesses said they were ‘optimistic’ and 14% of businesses said they were ‘confident’.
Ganesh Chandrasekkar, General Manager of SME Banking at Westpac said that a strong sign that small business confidence is returning is an expedient rise in equipment finance enquiries in the post-election period.
“This presents an opportunity for industry, government and banks to all work together to support small businesses.
“The government can continue to take positive steps to encourage small business growth through tax reform, making energy more affordable for businesses, providing more incentives for job creation and reducing red tape,” Mr Chandrasekkar said.
Key research findings
Other findings and commentary include:
- Supporting a rise in small business confidence, one fifth (19%) of small businesses said they are more likely to buy equipment post-election. This is in direct contrast to sentiment pre-election in which 20% of small businesses said they would delay buying equipment
- The data shows an increase in the number of small businesses wanting to expand post-election with 19% stating they are more likely to expand into a new market (cf. 16% in March) and 14% more likely to expand their business premises (cf. 12% in March)
- For the most part, businesses do not think that the new government will have a big impact on their business across key metrics with around two in three SMEs stating that the Federal Government’s policies will have neutral to no impact. However, a third (31%) of businesses believe the Morrison Government will have a positive impact on business growth (cf. 16% negative). A small change in business actions matter due to the sheer number of companies that fall into this bracket and its contribution to Australian’s employment rate and GDP.
- 85% of SMEs believe there will be a negative or no impact on the regulatory compliance burden, despite a $300 million package for states and territories to undertake red tape reduction.
- One in five (22%) SMEs believe the Morrison Government will have a positive impact on the ability to innovate.
- More can be done to help small businesses become more environmentally sustainable, with 85% believing the Morrison Government policies will not help them to improve measures on this front.