CPA Australia calls on government to revamp ‘bleak’ SME landscape

CPA Australia has said the next federal government must take urgent action and “act decisively” to boost small business innovation, competitiveness and productivity.

The recently conducted CPA Asia-Pacific small business survey revealed low confidence in the Australian economy, with Australia having ranked 10th out of 11 markets in the Asia-Pacific for SME growth.

The survey included feedback from 4,236 small businesses in the 11 markets across the region and “painted a bleak picture” for small businesses in Australia.

The survey found only 42 per cent of Australian small businesses had reported growth over the past 12 months compared to an average of 64 per cent across the region.

CPA Australia’s business investment and international lead, Gavan Ord, said without an urgent change of course, Australia’s economy would continue to underperform and small businesses would fall further behind international counterparts.

“Australia’s small businesses are held back by insufficient government support for digital adoption and excessive red tape,” he 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.”

To tackle this, the next federal government will have to prioritise reforms, create a more business-friendly environment and substantially increase investment in digital support, according to CPA.

The body believes this can be achieved by reducing regulatory pressure on businesses, improving policy development, and helping small businesses realise their growth potential.

In terms of expectations for the year ahead, 55 per cent of Australian small businesses expect to grow in 2025 compared to the Asia-Pacific average of 71 per cent.

Additionally, Australian small businesses were also the least likely to increase their headcount last year, with only 9 per cent having created new jobs, while 33 per cent grew their workforces.

Ord noted this was a “worrying sentiment” that was fuelled by a sense that Australia’s overall economic prospects were weak.

“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,” he said.

“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.”

CPA urged for more digital support from the next government as the benefit higher technology adoption levels had on Singapore, Malaysia and Vietnam was notable.

Only 39 per cent of Australian small businesses reported more than 10 per cent of their revenue came from online sales, compared with the Asia-Pacific average of 67 per cent.

Furthermore, only 18 per cent of Australian small businesses sought expert advice from IT consultants or specialists last year, compared with an average of 28 per cent across the region.

The Australian government should take inspiration from what some Asia-Pacific counterparts have done to support small businesses in adopting technologies and good business practices, Ord suggested.

“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.”

Ord also added that Australian businesses had fallen well behind Asian counterparts and a comprehensive plan to urgently address this was needed from the next government.

“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,” he said.

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