A date is still yet to be announced, but the looming federal election - likely to be in May - is already having an impact on the decisions of Australian small businesses new research from Westpac has revealed.
Westpac’s latest Small Business Report noted that two in five small businesses reported that the upcoming federal election is impacting their decision making, while 50% said that they were worried or uncertain about the impact the election would have on their operations.
The report also outlined high energy costs, excess red tape and increasing government grants as being three of the top priorities Australian small businesses wish the federal government would address.
“Our customers tell us that small business tax cuts, less regulation and red tape, and energy policy are a top priority in the upcoming election. The recently announced plans to fast track tax cuts for small business will offer some support; but more can be done to help particularly with grant funding,” said Ganesh Chandrasekkar, Westpac’s General Manager of SME Banking.
“If there is one area which we could boost confidence it is in the areas of grants – both government and corporate – by easing the burden of compliance and complexity so that businesses receive the benefits.”
Are economic conditions hurting business lending?
While the uncertainty surrounding the election certainly appears to be influencing decision making, Westpac’s report found that the most important drivers of business performance are actually local (1st) and global (2nd) economic conditions, with the federal election ranking 5th.
Given the state of many of economic indicators in Australia, including the most recent quarterly GDP growth figure of 0.2%, it’s hardly a surprise that business confidence is down, which is exactly what NAB’s February Business Survey found.
And with that lack of confidence comes a reluctance to borrow said Mozo Product Data Manager, Peter Marshall.
“I think there’s a lot of credit out there to be taken. The banks really would love to pump business credit out if they could, but the problem is that confidence is down which means that businesses just don’t want to borrow,” he said.
In fact, lenders have made it clear that they’re open for business when it comes to providing business loans, with Westpac ($30 billion) and online lender Moula ($250 million) both recently announcing significant extra funding for small businesses.
“We do appreciate not all businesses will share the same level of confidence, and that is why they’re more cautious and delaying decisions after the Federal Election. To ensure more small businesses can continue to operate with confidence, Westpac is here to help with an additional $30 billion available to lend to this sector,” Chandrasekkar said.
RELATED: Moula takes challenge to banks with $250 million business loans boost
If you are looking for a funding injection for your own business, make sure you find yourself a great loan to match. Get started by checking out some of the competitive offers in the table below, or head over to Mozo’s business loans comparison hub for even more deals.