Whatever the outcome of this weekend’s election, Australia’s two million owner-operators want a simplified system, and relief from rising costs.
Emma Nguyen owns a busy Vietnamese restaurant in Crows Nest, Sydney. She’s a qualified accountant, yet still struggles to keep up with the burden of tax, super and payroll.
“I just don’t sleep, paperwork keeps me up at night,” Ms Nguyen told SBS Small Business Secrets.
“When we shut the door at 10pm, then I start looking at sales, expenses and schedules.”
“And we still have to pay for someone else on a weekly basis to get it into system.”
Bureaucratic administration requirements are costing small businesses more than $20 billion each year, according to accounting software provider Reckon.
Emma Nguyen owns I love Pho, and is a chartered accountant. Source: SBS
Its survey of 1,300 Australian small business owners found that many run on less than five hours sleep each night, with a range of health impacts.
Endless paperwork
Long-time owner-operator Angela Vithoulkas is leading the Small Business Party and is one of two Senate candidates running in NSW, with two more standing in Victoria.
She knows first-hand how hard the burden of administration compliance can be.
“It’s always been a huge issue for small business. The cost is 14 hours of unpaid work a week, which is roughly two days spent on just sorting through paperwork," she said.
Small Business Party leader Angela Vithoulkas is running for the Senate in NSW. Source: Supplied
“That adds up to $58,000 lost wages, or time lost that’s not going into their business.”
“Small business overheads have risen by almost 45 per cent over past five years, much of that cost linked with government policy.”
Wage increases
Wages are another rising cost, and a key election issue.
Kirribilli florist Louise Rosser said: “We pay our staff first before we pay ourselves in some instances, and if wages increase then it’s even less that were getting in our pocket to run a business, so for me personally that’s significant.”
“If small business is impacted by unreal wages, and remember we employ half the workforce in Australia, that’ll push us to the wall, and it’ll see [some businesses] close down and people losing jobs,” Ms Vithoulkas said.
Florist Louise Rosser says her business Flowers at Kirribilli operates on low margins. Source: SBS
Retailers want wages left to the Fair Work Commission, and oppose any sector-specific rises, such as child-care workers.
“The Fair work Commission is an independent body and should remain that way,” said Retail Traders Association’s Russell Zimmerman.
“And if the government of the day changes the rules and overturns decisions by the commission, that was set up to determine increasing or decreasing wages, it opens a Pandora’s box for a whole series of other changes and decisions to be overturned.”
Ombudsman Kate Carnell agrees.
“Whoever wins should respect that Australia has an independent umpire in terms of wage fixing and industrial relations,” she said.
“In recent years, wages have increased above the rate of CPI putting further pressure on owner-operators.
“It’s been a challenge for small businesses to manage, but they’ve done it,” Ms Carnell said.
Tax cuts
Eastwood newsagent Simon Wu has seen many local businesses close down.
Like those who are struggling to survive on slim margins, he wants government action on operating costs including energy prices.
“Just give us something to survive,” he said smiling.
Access to finance for small business remains difficult, with many owners facing tighter lending restrictions in an ongoing ‘credit squeeze’.
Eastwood newsagent Simon Wu has seen many local businesses close. Source: SBS
“This has to be a real focus. We can’t get growth in the Australian economy if small businesses can’t borrow,” Ms Carnell said.
One-third of owner-operators are enjoying benefits of tax cuts, and 85 per cent are re-investing in their business, research from software company MYOB has found.
“Owners are purchasing new equipment and hiring new workers, so it’s money being invested in skills and capabilities,” said MYOB CEO Tim Reed.
And while small business has welcomed the new Instant Asset Write off increase to $30,000, MYOB found most now want stable government for long-term planning.
“When there’s instability in Canberra we know that impacts consumer confidence and it also creates uncertainty for business to invest,” Mr Reed said.
MYOB CEO Tim Reed says small businesses are re-investing after tax cuts. Source: SBS
Both parties have flagged a boost to science and innovation, which startup advocates say is vital to transition Australia to a tech-led economy.
“How do we help Australian companies turn ideas into commercial realities? What that means is supporting research and development [R&D] across the economy,” StartupAUS CEO Alex McCauley said.
“Australia currently underperforms its OECD counterparts. We spend around 1.87 per cent on R&D every year, the OECD average is more like 2.3 per cent.”
CEO of Skalata Ventures, Maxine Lee added: “We are closely watching the recent heightened scrutiny with regards to R&D tax incentives in Australia. More tax incentives available will generally mean more investment into research, allowing early-stage companies to create innovative products, services and processes in order to grow.”
