Missed opportunity as small business ignored yet again

Louise Grimmer

Hodgman Government has provided the small business community with what can at best be described as a “mixed bag” budget.

At worst, it could be argued that echoing the federal trend, small business has again largely been left out of budget deliberations. While acknowledging this budget was always going to be about health, it is disappointing that the only real offering for small business is a modest program of grants to employ trainees and apprentices, and a smattering of funding for start-ups and “‘pre-start-ups”.

Budget documents state the Government is committed to “supporting business to support Tasmanian jobs”, but it is not clear how this will work for small business.

The centrepiece of the $4.1 million package to support small business is a $2 million small business grants program, which provides an incentive payment of $4000 per apprentice or trainee employed by small business, with the funding allocated on completion of milestones in the first two years’ training.

The Government describes this program as part of a commitment to drive further economic growth and job creation, however the measures do not go near providing adequate support for small business.

The $4.1 million package, which will be delivered over four years, equates to $114 for each of the 36,000 Tasmanian small businesses during the funding period, or $28.50 per year. While this is a fairly simplistic way of looking at the figures it nevertheless demonstrates small business does not seem to be a priority in this budget.

Figures from the Australian Bureau of Statistics show that in the period to June 2016, of 2,171,544 actively trading businesses across Australia, 60.7 per cent had no employees while 27.6 per cent had four or fewer employees.

Almost 90 per cent of Australian businesses therefore employ four or fewer people — they are microbusinesses — and this trend is echoed in Tasmania.

These are sobering figures, especially in terms of the capacity of these businesses to employ new staff. For most small and micro businesses, a $4000 grant administered over two years is not an incentive to take on apprentices or trainees.

Is the Government in touch with the needs of the small business community in Tasmania?

So what could the Government do instead?

Longitudinal research that I conduct at the University of Tasmania finds that what small business owners really need is initial (start-up) and ongoing access to financial capital as well as access to technological resources (computerised sales and customer information systems), plus the knowledge and skills to do strategic planning, and advice on

marketing and promotion in the digital landscape.

The Government is already assisting in some of these areas including the provision of the excellent Digital Ready program (which received funding in this budget) and the statewide support network of Enterprise Centres Tasmania.

But it is not clear that any of the budget measures have been designed to complement or build on existing government programs aimed at small business.

Perhaps a more nuanced approach is required by policy makers, and clearly the State Government will need to work with local government, industry and the university to carefully research, create and deliver targeted and appropriate support programs for small and micro business owners.

In the year to June 2016, Tasmania experienced the lowest growth in business counts across Australia, although it should be noted that this was the first instance of positive growth in Tasmania in the last five years.

Indeed, in May this year the Tasmanian Chamber of Commerce and Industry reported a continuing positive attitude to the Tasmanian economy for the March quarter of 2017 across all regions in the State.

Business confidence in Tasmania was higher than for the Australian economy as a whole. This is good news for the Government as it heads into the forthcoming election season.

One thing is clear, the small business sector, if not buoyant, is indeed afloat. Small business operators are trying to leverage a number of exclusively Tasmanian phenomena including the Mona effect, growing numbers of Airbnb travellers as well as increasing numbers of international students.

But they need support if we are to maintain independent, thriving and creative shopping and business precincts across our island.

Dr Louise Grimmer is a lecturer in Marketing in the Tasmanian School of Business and Economics at the University of Tasmania.