The measures announced in the Australian Federal Budget will have an important flow-on effect for Australian businesses.
SMEs are facing into macroeconomic headwinds: higher rates, higher inflation, and slower growth. A sharp pullback in demand is a key risk for SMEs, which are often more vulnerable to economic slowdowns/downturns.
This scenario could play out if the resilience of households and businesses in the face of rising rates and inflation has been overestimated. Measures in the budget aimed at managing household confidence are a good step in working to manage such risks and positive for businesses going forward.
Support in the budget for big expenses like childcare and parental leave not only help with household confidence but play directly into the major issue facing business now – finding staff. One in three businesses reported difficulty finding staff in June.
SMEs I speak to feel they are being held back by an inability to meet demand and with such a strong position on employment, it is hard to see that demand reducing quickly anytime soon, so helping more people back into the workforce is a good thing.
The commitment to vocational education with TAFE and university places being supported through additional funding are positive, although benefits that will take longer to realise.
Housing availability is also an issue in regional Australia with the obvious flow on impact to business coming back again to skills shortages. The regional first-home buyer guarantee scheme call out in the budget is a positive for these communities.
Jenefer Stewart is General Manager, Business Banking at ANZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
26 Oct 2022
26 Oct 2022