A leading business group believes the federal coalition’s small business policy is a step in the right direction for a sector that remains in the doldrums.


Opposition Leader Tony Abbott has formally launched the plan, which includes earlier promises to reduce business red tape and cut the corporate tax rate.

“The extent to which we can peel back regulation is a good thing, the extent we can lower the overall taxation burden on business is certainly a good thing,” Australian Chamber of Commerce and Industry (ACCI) chief economist Greg Evans told reporters in Canberra on Monday.

The small business plan also highlights Mr Abbott’s promise to scrap the carbon tax – something the ACCI has supported for sometime to help lower energy prices.

The policy’s release coincides with the ACCI’s latest small business survey showing continuing weakness in the sector.

“We are beginning to see some stabilisation in this survey, although stabilising at generally contractionary levels,” Mr Evans said.

The small business conditions index was 41.2 points in the June quarter, a minor improvement on the 41.1 points in the previous three months.

But the index remains below the 50-point mark separating contraction from expansion.

Sales, profitability, investment and employment all stabilised below 50 index points.

But selling prices continued to slide, touching a record low for the survey of 43.4 points, the lowest in 17 years.

“Business is under considerable pricing pressure in the market place. It’s not able to lift its own prices and it continues to be squeezed by higher costs,” Mr Evans said.

“That’s having an impact on the bottom line and profitability.”

Lower interest rates are yet to make their mark, with Mr Evans pointing out overdraft rates for businesses were still around eight per cent compared to mortgage rates below six per cent.

Institute of Chartered Accountants Australia general manager Yasser El-Ansary said the next federal government must invest in small businesses to generate jobs and opportunity across the country.

“Reducing red tape is central to making life easier for small businesses and we welcome the coalition’s pledge,” he said in a statement.

“Cutting red tape should be an ongoing process – not a one-off promise that happens at each election.”

The coalition’s commitment to improving small businesses’ access to finance was also important because the sector didn’t have the same bargaining power as larger businesses.

“What’s missing from today’s announcement is a plan to give Australian small businesses a leg up in the Asian markets,” he said.

“Australia’s future prosperity is inextricably tied to the living standards and prosperity of our neighbours in Asia.”

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