Small business has confidence in economy, but not in govt

The federal government has made sweeping cuts to red tape as small and medium businesses grow more confident about the year ahead, but a growing number believes the state government is working against their best interests, according to the latest Sensis survey.

SME confidence levels rose by 16 per cent nationally in the three months to August, bouncing back after a steep decline earlier in the year.

The survey, which is based on research of 1,000 SMEs, revealed 53 per cent of small businesses are confident about the year ahead, up from 47 per cent in June.

In Western Australia, confidence among SMEs increased to 35 per cent, up from 24 per cent in May.

While an improvement, it still has ground to cover after a significant drop in May.

Sensis chief executive officer John Allan said confidence levels had almost returned to the February 2014 level, but remained below the post-election peak recorded last year.

In the November report, SME confidence in WA was at 56 per cent.

That figure fell slightly to 50 per cent in February, before dropping significantly in May.

“There’s a real sense people aren’t spending and there’s increasing concern around competition,” Mr Allan said.

“We’re seeing more and more businesses looking for help in finding new customers using a range of marketing tools.”

Meanwhile, the federal government has brought in a wave of measures to erase more than 7,000 pages of regulation from the statute books in a bid to ease compliance burdens.

It pales in comparison to the first so-called "repeal day" in March, where more than 10,000 pieces of legislation and 50,000 pages of regulations were abolished.

But Parliamentary Secretary to the Prime Minister Josh Frydenberg insists these fresh measures will save far more than just the $2 billion in compliance costs.

"The economic benefit to the economy is exponentially bigger than just that $2 billion," Mr Frydenberg told reporters.

He said it wasn't just businesses that would notice the changes, but individuals using simplified websites like MyTax and government services such as Centrelink and Medicare.

There are concerns in some quarters that streamlining approval processes at a state and federal level could erode crucial environmental protections.

But Mr Frydenberg said the aim was to remove duplication and standards would not be diminished.

According to the Sensis survey, SMEs were concerned on the federal government’s small business policies.

On a national level, 24 per cent of SMEs believed federal government policies were supportive of small business, while 29 per cent believed they worked against the interests of the sector.

On a state level, an 18 per cent average felt their state or territory government was supportive of small business, while 22 per cent felt they were working against small business.

That equals to a net balance of -4 per cent.

In WA, the proportion of SMEs who believe the government is supportive less the proportion believing it to be working against small business interests fell 3 percentage points to -20 per cent.

“Business owners are supportive of the government’s aims to reduce debt, red tape and boost the economy, however, there are perceptions that the government is more focussed on big business, that there is too much bureaucracy, and that their policies are affecting consumer spending,” Mr Allan said.