SMEs overwhelmed with red tape
- While 71% of SMEs still believe Australia is a great place to have a business, just under half feel overwhelmed by the complexity of running a business.
- 57% feel they spend too much time working “in” the business instead of “on” the business
- 44% don’t fully understand the tax system that applies to their business.
- 49% say that dealing with bigger companies makes it tough for their business to succeed.
Multi-layered regulations on business and a complex tax system are key challenges for Australian Small to Medium Businesses (SMEs), according to new research released by NAB.
Part two of NAB’s whitepaper, Moments that Matter: Understanding Australian SMEs, explores what matters most for Australian SMEs and how they are approaching business in 2017 and beyond. The research reveals that while 65% are confident Australia will continue to be a great place to operate a business, the burden of red tape and taxation is holding them back.
Angela Mentis, Chief Customer Officer of Business and Private Banking, said the research affirms that while running a business can be very satisfying, day-to-day administrative and regulatory challenges can take its toll on business owners.
“As the nation’s biggest business bank we believe a simpler tax system is important so that our SMEs can free up capacity to spend more time on innovating and growing.”
“Anyone who runs a small business understands only too well the pressure of complying with monthly BAS, annual income tax returns and a host of other paperwork. It’s no surprise to me that 69% of SMEs still cite dealing with red tape as taking a lot of effort,” said Ms Mentis.
“And we will continue to challenge all levels of government and business community to come together and advocate for one clear definition for small business. I hear from business owners they are dealing with multiple layers of government and industry who all have different ideas of what constitutes a small business. It makes the job of the small business that much harder.”
“But let’s not underestimate the size of the challenge. Freeing up capacity for small businesses requires simplification at all levels.”
While 84% stated that the government should provide even better tax breaks to small business, big business was also identified as a key impediment to SME success.
“Recent announcements this year, including tax cuts for businesses up to $50 million were a positive step in rebooting Australia’s competitiveness and prosperity. Just under half of the SMEs that we surveyed also told us dealing with big companies makes it tough for their business to succeed- taxation isn’t the only problem here,” Ms Mentis said.
“As a bank and a major employer in Australia, this is something we’re leading with simpler contracts, fast access to credit online and we’re one of the first big companies to sign the Australian Supplier Code, providing greater certainty around payments times. We take seriously our commitment to the timely payment of more than 1700 contracted suppliers which provide NAB with over $4.8 billion worth of goods and services each year.”
“We are absolutely driven to simplify across all parts of our business model- be it through our digital innovation, the way we communicate with our customers, the way we lend to customers, and how our contracts are written. We put the customer front and centre in everything we do – and simplification for our SMEs in particular is a key focus.”
“This is where we all need to be – to have the commitment and desire to turn the optimism and confidence we see today in SMEs into lasting activity that will move Australia forward.”
SMEs are optimistic about the future
The research reveals Australian SMEs are confident about the future of their business, with 71% believing Australia is a great place to have a business and be successful.
More than 6 in 10 (63%) are confident that Australia will continue to be a great place to have a business in the future.
Australia is a great place to have a business but…government can provide more support
84% of SMEs surveyed said that government should provide better tax breaks/incentives to small business.
The pressures of red tape and regulation are holding our SMEs back, with 69% identifying that dealing with red tape takes a lot of effort.
Feeling overwhelmed as a business owner? You aren’t alone
48% of business owners feel overwhelmed by the complexity of running a business and wearing too many ‘hats’ at one once.
In fact, 57% of Australian SMEs spend too much time working “in” the business instead of “on” the business, on things like business development and planning.