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Gloomy Tas businesses turn away from Govt

June 30, 2011

Profitability amongst Tasmania’s small businesses is the lowest in the nation, according to a leading business survey released today, and expectations are for worse to come.

 The Sensis® Business Index also shows small business support for the Tasmanian Government has plummeted during the quarter, making it the least popular state or territory government.

 Report author Ms Christena Singh said Tasmanian small businesses experienced deteriorating trading conditions during the quarter and expected the nation’s weakest profitability over the short and longer term.

 Business confidence also fell strongly during the quarter and is now at a 27-month low. Ms Singh explained that Tasmanian business confidence was below the national average, only weaker in New South Wales and South Australia.

 The key reasons Tasmanian businesses are worried about their business prospects over the next 12 months are perceptions about:

·         too many businesses closing down

·         some downturn at the moment

·         too many people leaving the state

·         the small population.

 Given the topical nature of a proposed carbon tax in Australia, the Sensis® Business Index also asked Tasmanian small businesses specifically about their views.

 Thirty-two per cent of Tasmanian businesses said they did not understand the proposed carbon tax, while 55 per cent said they partially understood. Thirteen per cent said they had a thorough understanding.

 Fifty per cent of Tasmanian small businesses said a carbon tax would have a negative impact on their business, while 41 per cent believe it would have no impact. Nine per cent believe it would have a positive impact.

According to the findings, Tasmanian small businesses are most concerned about a carbon tax impacting on costs, lower consumer demand and disposable income and slow business growth.

 For those Tasmanian businesses that felt the carbon tax would have a negative impact on their business, 10 per cent said they would consider modifying products and services, while four per cent said they would consider closing or selling their business, and three per cent would look at decreasing staff.

 The Sensis® Business Index finds that support for the Tasmanian Government declined significantly this quarter. The key reasons small businesses gave for their disapproval include:

·       the government did not understand small business needs

·       no incentives were offered for small businesses

·       the government was only concerned with big businesses

·       having no faith in the Labor Government

·       the government being manipulated by the Greens.

 Key Tasmanian findings from the June 2011 Sensis® Business Index:

·         Business confidence fell from 39 to 23 per cent (28 per cent nationally)

·         Profitability dropped from negative 16 to negative 33 per cent (negative 14 per cent nationally)

·         The sales indicator fell strongly, down 11 percentage points to negative 20 per cent (negative 14 per cent nationally)

·         Overall employment by Tasmanian small businesses improved during the quarter, taking the indicator from negative three per cent to a flat result of zero (one per cent nationally)

·         Support for the Tasmanian Government dropped 19 percentage points taking the indicator to negative 39 per cent. Breaking the indicator down, it shows four percent of Tasmanian small businesses are supportive of the state government’s policies compared with 43 per cent who disapprove.