14/09/2015 - 06:49

Positive vibes from small end of town

14/09/2015 - 06:49


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Apart from size, small businesses currently have one thing in common – optimism.

If small business represented a typical person or a standard strategy, this huge group would be an unstoppable political force.

In reality, however, small business is a tag placed on a diverse range of businesses run by an equally heterogeneous bunch of individuals – families and partnerships.

The key thing many of these businesses have in common is their size; they are generally represented by a number of employees and a certain amount of revenue, and, as a result, share some of the issues that affect enterprises lacking scale.

But perhaps there is more they have in common? Is there, perhaps, a slightly more optimistic view of economic conditions than those in bigger businesses?

A Business News audience survey earlier this month certainly suggest as much. While it shows many business owners and managers believe economic conditions have deteriorated in 2015, the survey results showed a distinct difference in views when it came to the size of the respondent’s business.

Intriguingly and, perhaps, surprisingly, small and medium enterprises appeared slightly less dismayed by the past year and slightly more optimistic about next

year than their bigger brethren. Most of the people who responded to the survey were CEOs, owners, partners or business development managers.

Around 37 per cent of 175 people surveyed with roles in self-identified SMEs felt conditions were ‘worse’ or ‘much worse’ at the moment than this time last year, while 27 per cent felt conditions were ‘better’. For the 1,268 people in a variety of businesses overall that responded to our survey, those numbers were 44 per cent and 23 per cent respectively.

Looking ahead, a more positive picture emerged overall with, again, SME respondents more optimistic.

Half the SMEs felt the climate would be ‘better’ or ‘much better’ this time next year than now, while nearly 15 per cent felt it would be ‘worse’ or ‘much worse’. By comparison, 46 per cent of all respondents all respondents said that the economy would be ‘better’ or ‘much better’ this time next year and 19 per cent thought it would be ‘worse’ or ‘much worse’.

Outside of Business News’ survey, there was some other surprising data.

According to Bankwest’s latest business trends report, Western Australia has had the biggest increase in business owner numbers, up by 5.8 per cent to 133,600.

Given the rapid slowdown in mining it would not be unexpected to see more business closures than startups. However, perhaps the entrepreneurial spirit of Western Australians is behind this drive, as those who have lost direct employment have sought alternative pathways to income via their own business.

Canning by-election

It is very surprising to find that, at the time this newspaper went to press, the federal government had not committed to the proposed $290 million Community Connect South road project being put forward by the cities of Armadale and Cockburn.

This is a government that has touted infrastructure as a major focus and highlighted the importance of roads. The Canning by-election would seem a sensible moment to really show that commitment.

It would also help address the imbalance in the federal-state funding arrangements, which affect road users in a similar way, as all WA consumers lose out via the GST.

According to a new report commissioned by motorists lobby group RAC of WA, for every dollar the federal government collected from WA motorists in 2014, it returned just 34 cents on improving the state’s roads. That was worse than the previous year’s 41 cents.

“In real money terms, this means last year the Australian government collected $2.3 billion from WA motorists in the form of motor vehicle taxes, but spent only $780 million on State transport infrastructure upgrades,” RAC senior manager policy and research, Anne Still, said.

She said if WA received just 50 per cent of the money paid in federal taxes by motorists, an extra $360 million would be returned to the state this year.

While the RAC didn’t specially mention the Community Connect South project, those funds would easily cover this much-needed link between two of Perth’s major growth corridors.


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