CPA Australia calls on next federal government to take urgent action to revitalise small business

• CPA Australia’s Asia-Pacific Small Business Survey reveals low confidence in the Australian economy.
• Australia ranks 10th out of 11 markets in terms of small business growth.
• Limited technology adoption and excessive regulation are stifling business innovation and growth.
• The Australian government should look to Singapore for examples on how to boost small business.

The next federal government must act decisively to boost small business innovation, competitiveness and productivity, says CPA Australia. Without an urgent change of course, Australia’s economy will continue to underperform and small businesses will fall further behind their international counterparts.

Australia ranks 10th out of 11 markets in the Asia-Pacific for small business growth, with only 42 per cent of Australian small businesses reporting growth over the past 12 months compared to an average of 64 per cent across the region, according to CPA Australia’s 16th Asia Pacific Small Business Survey which launched today.

“Australia’s small businesses are held back by insufficient government support for digital adoption and excessive red tape,” CPA Australia’s Business Investment and International Lead, Gavan Ord, said.

“We need the government to give small businesses the backing they need. This will require a significant culture shift, but it is desperately needed.”

CPA Australia says the next federal government must:

• Prioritise reforms that reduce the regulatory pressure on Australian businesses.
• Create a more business-friendly environment through improved policy development.
• And substantially increase investment in digital support services to help small businesses realise their growth potential. CPA Australia’s Asia-Pacific Small Business Survey comprised feedback from 4,236 small businesses in 11 markets across the region and paints a bleak picture for small businesses in Australia.

CPA Australia’s Asia-Pacific Small Business Survey comprised feedback from 4,236 small businesses in 11 markets across the region and paints a bleak picture for small businesses in Australia.

In addition to ranking 10th for growth in the past 12 months, it’s a similar story when it comes to expectations for the year ahead, with just 55 per cent of Australian small businesses expecting to grow in 2025, compared with the Asia-Pacific average of 71 per cent, placing Australia 9th out of 11.

Only 35 per cent of Australian respondents expect the national economy to grow in 2025. This compares with an average of 67 per cent across the Asia-Pacific, placing Australia last out of the 11 markets.

Australian small businesses were also the least likely to increase their headcount last year, with just 9 per cent creating new jobs. Across the region, 33 per cent grew their workforces.

“This worrying sentiment is fuelled by a sense that Australia’s overall economic prospects are weak,” Mr Ord said.

“There is a lack of confidence in the ability of federal, state and territory governments to foster economic growth and improve conditions for small businesses to flourish.

“Successive governments have failed to strike the right balance between innovation and regulation, making Australia a less attractive place to do business. A significant cultural shift is needed at all levels of government to prioritise economic growth rather than defaulting to regulation to address every problem.

“Businesses understand the need for well-designed regulatory frameworks, but government instinct for red tape has swung the balance so far that even the most creative and innovative of businesses are struggling to prosper.

“We encourage the next government to focus on fostering economic growth, and not assume it can regulate the economy into prosperity.”

The survey highlights how small businesses in other markets, most notably Singapore, Malaysia and Vietnam, benefit from higher technology adoption levels.

Only 39 per cent of Australian small businesses report that more than 10 per cent of their revenue comes from online sales, compared with the Asia-Pacific average of 67 per cent and placing Australia 10th out of 11 markets.

Likewise, only 18 per cent of Australian small business sought expert advice from IT consultants or specialists last year compared with an average of 28 per cent across the region, once again placing Australia 10th out of 11.

Mr Ord said the Australian government should take inspiration from what some Asia-Pacific counterparts are doing to support small businesses adopt technologies and good business practices.

“The Singaporean government recently committed $150 million to support businesses adopt AI,” he said.

“Emerging technologies will continue to drive economic growth in other markets, as will the ‘can do’ attitude of their governments. Our research from Singapore shows a link between the government’s announcements on funding and increased technology adoption by small businesses. The investment from the Singaporean government is paying off.

“Australian businesses have fallen well behind our friends in Asia and a comprehensive plan to urgently address this is needed from the next government.”

About CPA Australia

CPA Australia is one of the largest professional accounting bodies in the world, with nearly 175,000 members in over 100 countries and regions, including more than 21,000 members in South-East Asia. Our Vietnam offices, located in Hanoi and Ho Chi Minh City, have been serving members since 2008. Our core services are education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to promote policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au 

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