Future Looks Bright, But Right Now It’s a Matter of Survival

SA Business Journal  •  South Australian Business News  •  Opinion
Andrew Kay
Tuesday, May 28th 2024

With the SA unemployment rate at such a low level for the past couple of years, the expression I’m between jobs” hasn’t held much currency for workers. However, for the small business community, the sentiment is somewhat different.

Our most recent SA Business Chamber/​William Buck Survey of Business Expectations for the March Quarter reported yet another month of decline in trading conditions for SA businesses. That continued a twelve-month trend. 

It is important to have a vision for our state and the Premier has repeatedly outlined his aspirations around defence, renewables and key infrastructure projects that may set up the South Australian economy for decades to come. 

But ask a small business owner what their next 12 months looks like, and survival will be a common theme. We are starting to hear of redundancies, complementing the news of business owners exiting amid the pressures of rising costs and falling revenue. While the intent of the RBA was to deliver an economic slowdown, having it coincide with the most significant increases in energy, wages, insurance and interest costs a generation of business owners has experienced, was more than unfortunate.

The message from our members is clear. What the business sector in SA needs is cost relief and a short-term plan for the next three years. A strategy to set us up in readiness for the pipeline of work that has been projected, and to ensure businesses can thrive and prosper in the interim. We regularly hear about the need for a skilled and trained workforce for these future projects and investment is already being made in this area. Just as important, is a healthy, sustainable small business community ready to drive the supply chain and help deliver these projects for the state.

For every big business operating in the defence, renewables and infrastructure sectors, there will need to be dozens of SMES in the supply chain, with capacity and capability beyond where they stand today.

These businesses won’t survive by laying idle until the back end of this decade or the start of the next when most big projects hit their straps. They need clarity and direction around where the work is today and tomorrow, what Government procurement looks like, how investment will unlock innovation, and what the business community can do to help fast-track housing and the necessary infrastructure required to make it happen. 

They also need some sort of relief from the cost pressures that are driving existing businesses out and deterring others from starting up.

The recent Federal Budget offered nothing to change the trajectory for small businesses. It is now up to our government to take up the challenge and present a business-friendly budget on June 6.

This budget can kickstart the short-term agenda for small business and help protect our long-term prosperity by addressing two of the requests that the SA Business Chamber made in our pre-budget submission. 

Firstly, draw on our suite of six initiatives to relieve the burden of payroll tax created by wage inflation bracket creep, and secondly support ongoing funding for our entrepreneurs’ program to give new businesses the best chance of making it through the challenging first few years of operation.

Then, let’s talk.

The Premier has shared his vision for the future and the State Prosperity Project. The South Australian Business Chamber extends an invitation for him and his relevant ministers to join us, business leaders and other industry groups to co-ordinate a Three-Year Plan that speaks to the here and now. 

This is not about handouts; it is about playing our roles. Government as the enabler, removing roadblocks to growth and innovation and business delivering the goods. Three years can be a long time in business. 60% of Australian businesses will fail in their first three years of operation. We can’t afford to wait for the future, as the future is now, and so is the need for action. 

Author

Andrew Kay

Chief Executive Officer
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