Australia’s small businesses are cutting their traditional end of financial year spend, with fresh research showing those that normally splash out at tax time are reducing their expenditure by an average of 15 per cent.
 
The independent research among 1000 small to medium businesses, conducted this week for Telstra Business and the Council of Australian Small Business (COSBOA), shows of the one-in-three small companies normally making outlays immediately before June 30, some 55 per cent will cut back. 
 
Plant and equipment is the biggest area of belt-tightening nominated by 59 per cent of respondents. 
 
It is followed by information and communications technology (48 per cent), marketing and sales support (35 per cent), administration (34 per cent) and staff (31 per cent.)
 
Only 14 per cent of small businesses say they would spend more before June 30, with plant and equipment (57 per cent) and information and communications technology (45 per cent) the bright spots.
 
“These results aren’t surprising given slow retail sales, our multi-speed economy and the number of unresolved policy issues on the political agenda,” says COSBOA executive director Peter Strong.
 
“Expectations of interest rate rises and lingering questions about the impact of an emissions trading scheme are translating to insecurity in the economy’s engine room.”
 
Group managing director Telstra Business Deena Shiff said it was notable that those who were spending are investing in plant and information and communications technology (ICT).
 
“Forty-five percent of the businesses that are spending before the end of the financial year say that ICT is a key investment priority,” Shiff says.
 
“While replacing or upgrading old IT and telecommunications equipment is the biggest driver (90 per cent) of that, a large number (76 per cent) are making this investment to increase productivity.
 
“This suggests that small businesses are acknowledging that they still need to keep ahead of the technology curve even in unsure economic times.”
 
The Back to Business II study was conducted by StollzNow Research with an online panel of 1000 self-employed businesspeople and owners of businesses with less than 200 full-time equivalent employees between June 17 and 21.