Small business owners are key to Australia’s prosperity

TimReed

Australia Day is a fantastic celebration of our community, our country and our culture. It’s a day to celebrate what it is to be Australian, and be grateful for the wonderful place we call home.

For many, Australia Day is the first day of the new business year. But many other Australian small to medium business owners have worked hard right through the holidays – which are often their busiest times of the year.

So today, whether you are at out enjoying the Australia vs India cricket game, soaking up the sun at a family BBQ or watching a spectacular fireworks show, take a minute to appreciate and celebrate our Australian small business owners – they’re the key to our prosperity as a nation.

Australian SMEs heavily rely on a strong local economy. There is no greater force for good or bad on the welfare of small business overall than the aggregate economic conditions. It is hard to avoid reading the negatives about our economy at the moment – the mining boom has gone bust, China is slowing down, the share-market is tanking, the list goes on.

I believe, however, that there is another side to the Australian economy which is not being spoken about as loudly, but is equally important.

The lower Australian dollar means many export industries are doing better. This includes some high employment industries like tourism and education.

Overall, employment is strong. This is in part due to the lower dollar, but also due to the fact even in challenged industries while prices are down, output is up, meaning profits are down but jobs are being retained.

We know that SMEs rise and sink with the broader tides. Over the past couple of months, there has been a steady increase in general business confidence. According to a National Australia Bank survey in September 2015, business confidence jumped from 1 point in August – its lowest level since mid-2013 – to 5 points in September.

SMEs live off consumer spending and big business, and with the steady improvement of business conditions and confidence, this has had a positive multiplier effect on small business owners. With low interest rates and low oil prices, it also means consumers generally have more funds available.  Therefore many small businesses that tend to rely on the discretionary portion of the consumer wallet are finding trading is not the disaster we read about for the overall economic picture.

Perhaps one of the most exciting developments for this year is the increased support and action for innovation within small businesses. We have political leadership that believes in the role of small business and entrepreneurs, and is happy to make creative policies to encourage both. This includes the $20,000 immediate asset write-off that is just starting to get traction and the various components of the government’s innovation strategy.

We know this has made a huge impact on small business perceptions of the government. In our MYOB SME Snapshot research late last year, the overall impact of the change in prime minister was seen as positive to SMEs, with 35 percent noting their impressions of the government had improved since Turnbull came to office.

So, we can stand strong and recognise that we have political leadership which the polls say is respected across the business and the broader Australia community.

We enter 2016 in the crosswinds of global forces that make it a tricky time for all in business, but the positives of being in business in Australia by far outweigh the negatives. While 2016 might be a year of hard work for many (when hasn’t it been for small business!), I’m optimistic that it will be a year where real progress is made to strengthen the local economy and create a vibrant business environment.

Happy Australia Day!