Almost one in four small-to-medium-sized businesses (23%) won’t benefit from the new Federal Government incentives offered in the 2024-2025 Budget – but a significant 94% would have liked incentives such as tax cuts, lower-rate loans, and wage subsidies, a new survey from Small Business Loan Australia shows.
The 2024-2025 Federal Budget introduced some relief measures to help small businesses tackle current economic challenges. In an environment of rising costs, weaker demand, labour shortages, and higher interest rates, 7,742 companies went into external administration from July 2023 to March 2024 – a 36% rise from the previous year.
The survey found that the Energy Bill Relief will help the largest proportion (52%) of businesses. Almost half (49%) of respondents said they will benefit from the instant asset write off.
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) saw a 20% increase in requests from small businesses struggling to manage their debts in the quarter from January to March this year. Despite this, the Debt Helpline and financial counselling services received minimal support with only 11% of respondents believing this would assist them.
A significant 23% will not benefit from any of the Budget measures. Older business owners and decision-makers are least in favour of the Budget. The proportion of over-55s (35%) who don’t support any of the Budget measures is double that of under-55s (16%).
A drop in the 25% company tax rate garnered the largest support among respondents – at 52%. This support jumped to 65% among over-55-year-old business respondents.
Financial help such as wage subsidies are the second-most supported measure, with 41% advocating for it to alleviate the pressure to meet minimum wage requirements. The minimum wage in Australia was increased on 1 July this financial year by 3.75%.
Respondents were divided on interest rates. Surprisingly, one third (34%) support the Reserve Bank and the government in fighting inflation by maintaining or increasing the cash rate, while 39% would benefit from reduced interest rates on loans. The survey also showed around a quarter (27%) of respondents would like the Government to bring back SME loan guarantees.
Small Business Loans Australia founder and managing director, Alon Rajic says these 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%) of small businesses were not profitable5. 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.”