Xero : 28/04/2021 - Small businesses set a high bar for Australia’s Federal Budget, Xero survey finds

MEDIA RELEASE

Small businesses set a high bar for Australia's Federal Budget, Xero survey

finds

Xero uncovers the priorities for small businesses ahead of Australia's Federal Budget 2021-2022

to be handed down in Parliament on 11 May

Melbourne - 28 April, 2021 -Small business owners have high expectations of next month's Australian Federal Budget, with 27% looking for more support, and a further 24% saying small business should be a high priority, according to a new survey by global small business platform, Xero.

Small businesses are looking to the Federal Government for support to smooth the rocky path created by the pandemic. When asked about their pain points, many businesses said they were still reeling from the impact of COVID-19 restrictions on their business operations (38%), revenue (34%) and cash flow management (29%). Business owners say they need government support most when it comes to continuing trading (19%), and readying their business for the future (18%).

The survey of more than 500 Australian small businesses, employing fewer than 20 employees, unpacked what government should focus on when it comes to small business and the budget, with the top five priorities being:

• Additional instant asset tax write-ofs (26%)
• Free or low-cost training to upskill and reskill (24%)
• Relief packages relevant to COVID-19 lockdown impacts (23%)
• Support for young entrepreneurs to grow their networks and experience (22%)
• Skills training assistance to help with running the business (20%).

Longer term, small businesses were aware of the need to be resilient and adapt to uncertain times, with 24% saying the government must do more to prioritise digitisation with more online tools and better technology.

"We know the government is releasing a digital economy strategy, but they'll need to give significant assistance to the nation's two million small businesses who are seeking to rebuild their operations afer a year of uncertainty. Business owners have their eyes on the future and will welcome the already-flagged support for skills training and deregulation," said Angus Capel, Small Business Advocate, Xero.

The research outlined how small businesses intend to leverage the Australian Federal Budget if the measures are supportive:

• Sell existing products or services to new customers (28%)
• Sell new products or services to existing and new customers (27%)
• Sell more product or services to existing customers (26%)
• Use more technology to run their businesses (26%)
• Hire new staf (15%).

The success of the vaccine rollout is now firmly a focus, with around one-third (31%) of small businesses placing the threat of ongoing lockdowns as the major concern for the immediate future of their business.

With the next election on the horizon, small businesses are divided on who would best serve them in coming years:

• 32% are confident that the current government will support small business if elected
• 31% say a change of government is needed
• 22% are more sceptical in thinking small business would fall by the wayside during an election campaign.

Small businesses are looking to the government to better support women in the sector. Nearly one-third (31%) of respondents say the government could be more supportive of women looking to start a small business, while a further 24% noted there's room for improvement.

The research also found the outcomes of the recent ministerial reshufle hasn't trickled through to small business owners - most couldn't name the Federal Minister currently responsible for small business, with only 11% correctly identifying the portfolio sits with Minister Stuart Robert.

Small business optimism grows for the next fiscal year

The research found that while business owners are still feeling the pain of COVID-19, they were more hopeful about the future, with almost two in three (58%) expecting their business to perform better over the next financial year. More than half of respondents (64%) plan to focus on growing their business in the next three months through new customer acquisitions and expansion of existing oferings. Some 39% plan to focus on keeping their business viable, while 17% say they plan to use more digital technology in running their operations, continuing the future-ready theme.

Peter Freeman, Managing Director of WOOF Media, a local marketing agency focused on regional tourism businesses, shares his optimism about the year ahead for the domestic tourism market, despite the challenges of the past 12 months.

"Many of our customers have had to adapt their business models to be more digital since the pandemic began, with those who were already on the path of digital innovation faring better than others. With the states remaining open and tourism activities starting to pick up again, we will be looking to the Federal Budget for incentives that would help improve digital capabilities for regional tourism operators and support Australia's domestic tourism recovery," said Freeman.

ENDS

Media Contacts

Xero Australia

Jessica Brophy

[phone] [e-mail]

About Xero's survey

The survey was commissioned by Xero Australia and undertaken by Pureprofile to analyse the sentiments and expectations of small businesses ahead of the upcoming Australian Federal Budget 2021-2022. In April 2021, Pureprofile conducted an online quantitative survey, interviewing more than 500 sole traders and small businesses with fewer than 20 employees. The Australian survey is nationally representative.

About Xero

Xerois a cloud-based accounting sofware platform for small businesses with 2.45 million subscribers globally. Through Xero, small business owners and their advisors have access to real-time financial data any time, anywhere and on any device. Xero ofers an ecosystem of over 800 third-party apps and 200 plus connections to banks and other financial partners. In 2020 and 2021, Xero was included in the Bloomberg Gender-Equality Index and in 2020, Xero was recognised by IDC MarketScapeas a leader in its worldwide SaaS and cloud-enabled small business finance and accounting applications vendor assessment.