The state of small businesses: They’re getting older and think the NBN is pointless, Roy Morgan reveals

The majority of Australian small businesses believe the National Broadband Network will not provide any benefit and believe the federal government is “very poor” at fostering business growth, according to a new study.

Research firm Roy Morgan’s latest State of the Nation report canvassed Australian small businesses on issues such as technology, business performance and outlook and attitudes to national issues.

The survey of 750,000 Australians, including 30,000 business decision-makers nationwide, found small businesses are gradually recovering from a rough 2011-2012, with positive consumer sentiment slowly returning.

Roy Morgan industry communication director Norman Morris told SmartCompany business confidence will increase alongside consumer sentiment.

“I think it’s the general outlook in the economy influenced by interest rates coming down and banks being a bit more open to lending. Business confidence is also now reflecting consumer confidence, but it’s all relative to recent levels of confidence, they certainly aren’t back where they used to be.

“When they have confidence, they’re more likely to invest,” he says.

Roy Morgan reports small business confidence levels are lower than that of big businesses and are still lower than this time two years ago, but they are following an overall upward trend.

But the report also found the overall sentiment of small business owners toward the federal government, including major projects such as the NBN, was negative.

Four in 10 small business owners do not expect any benefit from the federal government’s $37.4 billion infrastructure project compared to 29% who do, with uncertainty levels still high.

“I don’t know if they’re so much against it, but they don’t really see the benefits of it. Whilst there’s a lot not expecting any benefit, another 29% don’t know,” Norris says.

“We hear this great expenditure in terms of how much it’s costing and people don’t know what it will mean for them. Obviously the benefits are not understood out there and if you’re not using sophisticated communications technologies and don’t work in an office, it’s hard to imagine its use,” he says.

The majority of small business owners also rated the federal government as “very poor” at fostering business growth since mid-2011.

Over half of the respondents said “I don’t trust the current Australian government” while only 35.3% thought the government were doing a good job at running the country.

Morris says the lack of trust for the government stems from too much uncertainty and too many changes.

“I believe this is influenced by the government constantly changing things and compliance regulations,” he says.

“For example, the possible changes to superannuation – any change means a lot more work and effort and it’s pretty hard to think that businesses won’t lose out financially.

Queensland businesses reported “particularly poor” overall performance for the year to December 2012.

The industries which reported the worst results for 2012 were the retail, manufacturing, construction, personal services and agriculture industries, where difficult conditions are expected to continue, but small mining businesses were buoyed by the mining boom.

Over the past 10 years the report found the demographics of small business owners have changed. The fastest growing age group was the over 50s, who now make up 45.7% of the small business operators, compared to 38.8% in 2002.

Morris says this growth is a mixture of people just getting older and financial conditions for the youth of today.

“It’s partly people getting older since there has been a change in the age distribution of the population. But it’s also more difficult for young people to start up a business now.”