Key small business lobby groups are calling for an immediate interest rate cut and government guarantees the sector won't be hit in the May budget amid the release of new data showing significantly deteriorating small business conditions.
Two new surveys out this week, covering the last three months of 2012, show small businesses seriously struggling with one survey showing profitability near the lows seen during the 2008-2009 global financial crisis.
"The sector was under significant pressure over that period, and it is certainly continuing to endure very difficult trading conditions," Australian Chamber of Commerce and Industry (ACCI) chief economist Greg Evans says.
The ACCI small business survey showed the conditions index eased to from 40.7 in the September quarter to 40.5 points in the last three months of 2012. A reading below 50 signals contraction in the sector.
Substantiating that survey was the National Australia Bank's SME survey which showed conditions fell two points to minus seven, signifying the majority of respondents reported weakening conditions in the December quarter.
Opposition small business spokesman Bruce Billson echoed Evans comments on the results, pointing out "not only is a small business paying the price for an unhelpful government, but so is the wider economy."
Australian Retailers Association executive director Russell Zimmerman says that retail conditions remain particularly tough.
"Many would be hard pressed to take home a wage at the end of the day in the current conditions," Zimmerman said in a statement.
In contrast, the listed end of town hit fresh four-and-a-half year highs yesterday as the local share market surged again on positive company earnings reports and signs of improvement in the global economy.
With companies including Coca-Cola Amatil, Southern Cross Austereo and Asciano reporting today, we will get a pretty good gauge on how the top end of the Australian economy fared over the second half of 2012.
And if these consumer and infrastructure heavyweights meet or exceed expectations, small businesses can hope to see that improved performance trickle through over the first half of 2013.
But for now at least, the track record speaks for itself. It’s tough out there.