The Franchise Council of Australia (FCA) has warned that the government should be wary of adding red tape and regulatory burdens when business confidence is low – a key message that was highlighted in a Deloitte’s small business survey.
The Black Ink survey reports a stagnation of business growth amongst accounting and legal SMEs, with only 3.8 per cent of respondents saying clients had experienced business growth in the previous quarter, down from 45.1 per cent in June 2010. It identified regulation as an area of concern.
Partner and national leader of Deloitte’s Black Ink program, Neil Cussen, said the result showed the middle market was struggling and that the road to financial recovery could take longer than expected for some sectors of the economy.
“SMEs are increasingly coming under pressure from a range of international and domestic economic influences – sovereign debt issues, falling consumer sentiment, increased regulatory changes at home and the spate of natural disasters have all conspired to have a detrimental impact on many businesses,” he said.
The survey follows recent official statistics showing South Australia lagging behind the rest of the country in terms of business/consumer confidence.
FCA executive director Steve Wright said the report is disconcerting news for the $9 billion South Australian franchise sector and the thousands of franchisees and employees who work in it.
“The strong message to the South Australian Government should be that at this time the small business sector needs proactive support, not extra taxpayer funded bureaucracy which will serve only to put a brake on business investment,” he said.
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