Saying that 2020 has been a trying year for the economy is a significant understatement. The Australian Government and State Governments have provided considerable support to people and businesses throughout the various stages of restrictions. And while the situation in Victoria indicates we still have a long path towards recovery, we need to think about how Australia’s economy can recover and grow post-COVID.
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Much of the country’s economic recovery needs to be driven by businesses and people thinking about creative ways to keep serving their customers or capitalising on new commercial opportunities. As the engine room of Australia’s economy, the mid-market – made up of inspired and energetic business owners and leaders – is a group who’s up to the challenge.
What’s top of mind for Australia’s private and family-owned businesses?
The Pitcher Partners Business Radar ‘Understanding the businesses that drive Australia’s economy’ report analyses and provides insights into private and family-owned businesses across Australia.
Canvassing over 400 private and family business owners and operators in Australia’s mid-market, the Business Radar is an independent research report that investigates the common challenges that business owners and leaders have on their radar. Turning these challenges into opportunities and remaining opportunity ready is critical for the future success of these businesses. While business owners and leaders in this market share a strong, independent mindset, this strength is tested when the broader political, business and economic environment jeopardises the very independence that inspired these people to start businesses in the first place.
Challenges and opportunities for business owners and leaders
The Pitcher Partners Business Radar report outlines the key opportunities and challenges respondents identified in each stage of the business lifecycle. With many of these challenges and opportunities focused on moving to a new stage of growth, the broader economic environment must encourage people and businesses to innovate and progress.
For seed, growth and mature stage businesses, gaining access to new markets was identified as a top opportunity for just over half of the respondents in each group. Further, and unsurprisingly, some of the top challenges identified by respondents were also identified as opportunities. Sure, it’s paradoxical, but it demonstrates the strong mindset of many business owners and leaders across Australia.
For seed-stage businesses, taking advantage of digital marketing was identified as a top opportunity for 46% of respondents, while it was identified as a top challenge for 38% of respondents. Growth-stage businesses identified finding new sources of growth in their market as an opportunity (51% of respondents) and a challenge (35% of respondents). For those mature-stage businesses amongst the respondents, finding internal efficiencies to cut costs was identified as a top opportunity for 53% of respondents. In comparison, it was identified as a top challenge for 35% of respondents.
Don’t waste this golden opportunity for supply-side reform
Many business owners in this market will tell you that it’s up to you to create and capitalise on opportunity. However, a strong business environment can be the extra boost that business owners need to keep growing their businesses, and, as a result, the economy. Fostering this kind of environment shows business owners that Australia’s economic recovery starts now. It also tells the world that the stable economic and business environment that makes Australia an attractive investment destination for so many dealmakers is here to stay and continue growing.
In his address at the National Press Club in July, Treasurer Josh Frydenberg stated that supply-side reform would be a key part of Australia’s economic recovery. How much of the government’s 6 October Budget will seek to stimulate economic growth by Reaganesque deregulation and lower corporate taxes is yet to be seen.
While the idea of supply-side reform has been a welcome message to many who fear the point of no return when it comes to relying on deficits and fiscal support to keep the economy afloat, naturally it’s not as welcomed by some.
The important thing to remember, and we’ve lost sight of this in recent years, is that disagreeing is ok. It’s an opportunity to hear both sides of an issue and find a productive middle ground.
There’s an opportunity here to empower people and businesses with the environment that’s needed to capitalise on new business opportunities, build wealth and engage with domestic and international markets in new ways. Let’s not waste it.
An opportunity to discuss broader business and tax policies
Based on what’s been mentioned to date, industrial relations reform, tax incentives and deregulation will form the key components of the Government’s policy agenda in the October 6 budget. These reforms will all play a role in supporting the country’s economic recovery, but we also need to look at all the different policies that help.
For business, reviewing the complexity of some taxes would be a good start. Simplifying tax is an important issue for businesses of all sizes, but particularly the mid-market whose business owners often put their capital on the line every day. As Ken Henry, former Treasury Secretary has suggested, a simplified cash flow tax that replaces the GST, payroll taxes and state and territory taxes might be one solution. We need to have the debate on these reforms, and mid-market businesses need a voice in this debate.
Set the stage for economic growth and engage with all industry
As is often the case when policymakers come together to develop policy responses to our challenges, confusion and frustration ensue when governments develop policy without properly consulting industry. Further, the balancing act between economics and politics in Australia is one that’s becoming more tedious and difficult to navigate. As a result, business productivity and economic growth can, unfortunately, become collateral damage.
If supply-side reform is the name of the game in Australia’s next phase of economic recovery and growth, private and family-owned businesses, arguably some of the stakeholders who can drive much of the growth and flexibility afforded by reforms, needs a seat at the table.