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Carbon Tax Sees Small Business Support For Federal Government Hit 15-Year Low

Carbon tax sees SME support for government hit 15-year low

By Michelle Hammond
Thursday, 30 June 2011

Small business support for the Federal Government has plunged to a 15-year low, according to the latest Sensis Business Index.


The Sensis Business Index is a quarterly survey providing the latest snapshot of SME business activity, surveying firms with between one and 199 employees.


The latest survey, based on the responses of 1,800 businesses from metropolitan and regional areas, reveals only 7% of small businesses approve of the government’s policies. Support for the government’s policies fell 16% during the quarter, taking the indicator to -41%.


According to the survey’s respondents, government policies work against small businesses, with the carbon tax identified as a particularly unpopular policy.


The survey reveals 35% of small businesses do not understand the carbon tax, while 51% partially understand it. Only 14% of respondents say they have a thorough understanding of the tax.


Meanwhile, 53% of small businesses believe the carbon tax will have a negative impact on their business. This compares to 41% who say it will have no impact, and a tiny 6% who believe the impact will be positive.


Of the respondents who say the carbon tax will have a negative impact, 9% said they would consider closing or selling their business.


Six percent said they would consider modifying products and services, and 5% said they would look at decreasing staff.


The results back up recent findings from The Executive Connection, which surveyed 300 SME chiefs about their views on the carbon tax.


The survey reveals an overwhelming level of dissatisfaction, with 55% of respondents saying their business would be adversely affected by it.


“The SME community is clearly concerned that the carbon tax will impose another obstruction in their path, effectively preventing them from running a productive and profitable business,” Executive Connection chief executive Chris Gorman told StartupSmart.


“Failure to sufficiently compensate small business for the associated costs of the tax could be extremely damaging to the economy.”


The Sensis survey suggests small firms are not only concerned about their own prospects, but are equally concerned about Australia’s economic outlook.


According to the survey, business confidence has fallen from 44% to 28%, while perceptions about the current state of the economy fell 8% to -7%.


The report’s author, Christena Singh, says business confidence has experienced its second-largest decline in the index’s 18-year history.


“In a historical context, business confidence is at a low ebb in Australia. We have really only seen business confidence lower during the peak of the global financial crisis and during the introduction of the GST,” Singh says.


Amid slow consumer spending and ongoing economic uncertainty, the survey highlights SMEs’ concerns about their business prospects for the next 12 months.


“This is the first time in a year we have seen perceptions of the economy trend into negative territory... Small businesses believe the economy is currently slowing and that it will have deteriorated in a year’s time,” Singh says.

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