As the federal election in 2022 approaches, everyone is curious about what the candidates want and expect from business owners.
As if running a small business wasn’t challenging enough, the last few years have made it even more so. Lockdowns and social isolation are significantly reducing foot traffic. Supply chain issues prevent the delivery of valuable materials, equipment, and deliveries. Employee turnover has increased as a result of the Great Resignation.
In this week’s Let’s Talk, our experts highlight the top concerns for Australian small business owners in the run-up to the federal election in 2022.
Callam Pickering, APAC economist, Indeed
“Increasing costs, talent shortages, climate change and rising interest rates:
- Rising costs: Rising business costs are squeezing margins and forcing prices up. Producer prices are rising at the fastest pace since 2008. Households aren’t the only ones struggling with cost-of-living concerns and inflation.
- Talent shortages: Australia’s unemployment rate is at its lowest level since 1972 and heading lower. Finding talent is increasingly difficult, particularly for businesses that typically attract younger workers. Skilled migration is a key pressure point for Australian businesses.
- Climate change: adapting to climate change will be a key challenge for Australian businesses over the next decade. Reduced policy uncertainty, stronger targets and a greater sense of direction from the federal government will be necessary.
- Rising interest rates: the Reserve Bank of Australia hiked the cash rate for the first time since November 2010. More rate hikes are on the way, which will heavily impact those businesses – often smaller businesses – that rely on debt funding.”
Will Drysdale, APAC Sales Manager, ActiveCampaign
“In comparison with the rest of the globe, Australia has a substandard internet. While there are planned upgrades, these are being made on an already antiquated system that is still being rolled out to parts of the country. As we have seen, a trend for employees right now is to leave the big cities and to seek a better quality of life in the regions.
“This will further reinforce the need for higher quality internet in these areas. At the same time, Australian businesses need more incentives from government to invest in and adopt technology to improve business operations and efficiency whilst maintaining security standards.”
Vicki Wright, ANZ Regional Director, MetricStream
“Recent disruptions to key supply chains within Australia have served to shine a light on where improvements need to be made. Shortages in everything from grocery items and food to electronic components and cars is having a knock-on impact throughout the economy.
“The next Australian government needs to make supply-chain resilience a top priority and invest the funds required to fix any areas of weakness. Failure to do this will allow further disruptions to occur that will have a direct negative impact on national productivity.
“At the same time, when it comes to the issue of improving levels of cybersecurity in Australia, one area that is not getting sufficient attention is public education and awareness. More needs to be invested in this critical area. So many Australians are unaware of the threats they face and the steps they need to take to protect themselves, and this situation must change.”
Ron Gauci, CEO, Australian Information Industry Association (AIIA)
“Skills, skills and skills. AIIA members have told us clearly, innovative businesses and products are being held back, or worse still, lost to overseas opportunities, because Australia doesn’t have enough of the talent available to meet the demand. Our industry could easily be employing 1.2M today given the vacancies and could easily grow to 1.5M in the next few years if we address this need.
“A clear plan with immediate action to grow Australia’s workforce in these areas is needed. We know that there isn’t one idea or solution that will fix Australia’s skills shortage, but a concerted approach addressing training, up-skilling, microcredentials, migration and other measures all working together is required to address this opportunity.”
Michelle Kvello, Director, Lantern Partners
“For me the key election issues for business in the 2022 election are:
Addressing the skills shortage in the market
- Primarily, addressing the still critical issues around funding for childcare. Without access to affordable childcare the talent pool is unnecessarily diminished which has profound economic benefits for all Australians. This isn’t a “women’s issue”, it’s an issue for the employees and businesses across the board.
- Short term – policies around access to global talent and making it easier for businesses to recruit from overseas in key areas of skills shortage including technology, engineering, healthcare and finance.
- Long term – We need to fix the structural issues around the skills shortage by investing in training and education in these areas.
Committing to action around climate change
- Not just a “green” issue or a social issue but one that inevitably has long term impacts on business. Severe weather events over the last two years have impacted significantly on businesses within impacted areas having knock on impacts for rising prices and loss of employment. Neglecting the issue just isn’t good enough.”
Mark Khabe, Co-Founder, PRIME BPM
“Small to medium sized businesses are cautiously awaiting the outcome next week of the Federal Election. As the lifeblood of the nation’s economy, SMBs account for more than 97 percent of all Australian businesses and they employ almost 8 million Australians. Yet the sector, more often than not, fails to get the required backing it deserves.
“Australian small businesses have continued to struggle with their long-standing challenges, including cash flow constraints, regulatory burdens and profitability. However, greater support for digital technology adoption sits at the top of that list. The post-pandemic world is digital, therefore stronger uptake of digital technologies will help SMBs drive greater profit, expand footprints and hire remote, borderless teams from any part of the world.
“Research suggests that small businesses with higher levels of digital transformation are 50 per cent more likely to grow revenue, eight times more likely to create jobs and seven times more likely to export. As digital transformation continues to lead the change in business operations, government support will help SMBs expand globally and put the national economy on a favourable growth path.
“Sustainability practices are another key point that many SMBs feel strongly about, so many business leaders will be looking to the government for guidance on greater policies surrounding this.”
Shannon Karaka, Head of Expansion ANZ, Deel
“The labour shortage is one of the biggest issues facing business today. Finding, hiring, and keeping good talent, in the wake of the pandemic and constraints on skilled migration, has meant that experienced staff are thin on the ground and salaries are rising. Skills, jobs, and related issues like migration top the agenda for many businesses.
“Australia’s labour force is changing and so must the government’s approach to it if we are to stay relevant on the global stage. The pandemic spurred the growth of platform work or freelance work, both because of the lack of other options as well as the flexibility that this work provides. Remote work, overseas talent working for Australian companies and increasing acceptance of contractors and short-term work arrangements, are new work models that are fast rising in popularity, both by businesses and by their teams.
“Policy makers need to stay across these new trends and continue to help Australia attract high-skilled and specialised talent, ensuring that regulation both protects workers, but addresses a more diverse and fragmented labour market.”
Maja Paleka co-founder and director, Melo
“From working closely with diverse businesses across Australia it is clear that access to talent is one of, if not the number one, business issue at this time. The changes to the world of work have instigated a massive talent reshuffle, and low immigration rates are causing skills shortages leaving many business owners looking for solutions through policy change.
“Research shows us that through the pandemic women left the workforce at a much higher rate than men. At the same time, a recently launched report by CEW shows that just halving the workforce participation gap between men and women would unlock an additional 500,000 full-time skilled workers.
“Businesses and start-ups like ours are working on this issue, but it is not enough. Policies like parental leave and access to affordable childcare are critical systemic issues that need to be addressed to unlock local and readily available talent. Looking at it from this perspective, independent comparisons show that Labour is ahead on this issue.”
Adam Boote, Director of Digital and Growth, Localsearch
“The challenging business environment means the upcoming election is a pivotal time for change, with the following four issues key action areas that will influence the outcome:
- Digital skills shortage: border closures have made the hiring process even more competitive, with high demand for skilled workers. The government must invest in human resources and upskilling the workforce so Australia isn’t dependent on international talent.
- Compliance costs: operating a business is expensive, even more so for small businesses who are the backbone of the Australian economy. After two incredibly challenging years, businesses are looking for government assistance to help get back on their feet and thrive.
- Logistical aid to help small businesses grow: the regional boom has supported small business growth but now they’re struggling to find the trade and logistical support. Rather than throwing money at small businesses who cannot stand up for themselves, initiatives need to lean toward logistical aid for the “economy’s backbone”.
- Economic tax assistance: after the government recently pledged $17.9 billion to the Business Energy Advice Program (to help small businesses become more efficient), it will be important for the government to continuously invest in incentives that will reduce the financial burden of operational taxes.”
Rohan Langdon, Vice President Australia and New Zealand, ExtraHop
“The Australian government needs to put more focus and resources around innovation grants and programs that not only support startups with funding but also exposes these next entrepreneurs to other entrepreneurs who have succeeded in the past.
“This could lead to creating a collaborative ecosystem between the public and private sector with opportunities for mentorship and guidance from the government IT leaders on how startups can innovate to solve emerging cybersecurity challenges.”
Dion Williams, CEO, Servicely.ai
“The skills shortage is holding Australian tech companies back from competing on the world stage. Given the highly desirable lifestyle Australia offers to skilled workers the government can help address the skill shortage in a number of ways:
- First, actively market and promote Australia as a destination for skilled IT resources, with the benefit of the Australian lifestyle.
- Secondly, focus on supporting tech hubs in regional areas where cost of living is less while offering great lifestyle options. Remote working means we no longer need people to be within commuter distance of the city. Regional tech hubs can build a community for like-minded individuals to catchup for meetups.
- Finally, we need to streamline the visa program for highly skilled resources to easily relocate with their families and start a new life in Australia.”
Mariia Starikova, Head of Product, Felix
As we consider Australia’s economic future, there exists a prevailing and urgent need for our leaders to prioritise innovation to improve sustainability of our workforce across various key sectors. The construction sector, one of the largest in the country, is going through increasing complexity in its workforce amidst an unprecedented infrastructure boom. The industry suffers from some of the highest rates of insolvencies in Australia, low productivity growth, poor rates of female participation and high stress levels and suicide rates.
“The Construction Industry Culture Taskforce (CICT) is a crucial initiative aimed at driving a positive and effective industry culture that caters to the broadest range of talent. Creating a more attractive industry for a more diverse cohort of workers will establish a more resilient workforce and deliver the future infrastructure needs of Australia.
“Organisations need to improve their risk management in order to minimise the adverse impact of the status quo on people and the planet, including the health and well-being of the Australian workforce. Our heavy reliance on the construction industry has led to a growing chorus calling for industry-wide reforms, including the need to improve productivity and efficiency. Only through adoption of digital by default can organisations ensure greater transparency, accountability and sustainability of the industry and our collective economic agenda.”
Christian Lucarelli, Vice President Sales APAC, Nintex
“The government has already announced a ‘digital first’ strategy which is welcome news. This will, however, require some considerable investments by organisations conducting business with government to ensure they are compliant with these strategic guidelines. It would be good for the government to consider offsetting some of these costs through tax breaks or incentives.
“At the same time, there needs to be more funding and grants made available to support small start-up companies in becoming established. This would lower the number that head overseas in search of talented staff and venture capital funding.
“Another thing we should do as a nation is to nominate one location as Australia’s tech hub. Rather than the states competing with each other, a national approach would ensure that resources could be more focused and a critical mass of early-stage companies to be established. This would become Australia’s equivalent of Silicon Valley.”
Michael Bovalino, ANZ Country Manager, LogRhythm
“Organisations around the world are investing heavily to take advantage of the significant economic and social opportunities that a digital economy can bring.
“Australian business ongoing success depends on our ability to harness technological advances to improve, create new products and markets, and enhance our everyday life as citizens. Recent reports estimate that improvements to existing industries and growth of new ones could be worth $300 billion to the Australian economy over the next decade.
“A key fundamental to advancing and improving the Australian business landscape is the continuous improvement and advancement to digital assets by continuing to build broadband and fiber optic infrastructure and providing secure access to high-quality data and services.
“Our government of the day can definitely do better by investing heavily and delivering high grade digital services and assets by building infrastructure and providing secure access to high-quality data and internet to all businesses across Australia.”
Craig Somerville, Managing Director and CEO, Somerville
“There are simply not enough skilled people to fill existing vacancies across all business sectors.
“When it comes to solving the challenge within the IT industry, we need to be starting at the school level. We should be explaining to school-aged children that there are many and varied options available to them within the sector that can provide them with long, satisfying, and lucrative careers.
“It’s often been said that Australia needs to position itself as a ‘clever country’, but to achieve this we need to start with the basics. This includes having structured training paths in place that can guide children through school, into further education, and then into long-term employment. With these paths in place, we will be in a much stronger position to overcome the skills shortage.”
Clarence Dent, ANZ Regional Vice President, WalkMe
“The IT skills shortage currently being experienced by many Australian organisations is very real and unlikely to be resolved any time soon. Strong demand for skills is pushing salaries up and leading to increasing numbers of people accepting new positions at different organisations.
“The trend is also leading to an increase in onboarding costs for companies who manage to attract new staff. They will need to find ways to make these processes more efficient to keep these costs contained.
“The best way the Australian government can help to reduce skills shortages is by increasing investment in more modernised education and training services. This will help to ensure Australia has a digitally led workforce that can help organisations take advantage of opportunities as they arise.”
Tal Rotbart, Chief Technology Officer, Marketplacer
“In the short term, we need a drastic simplification of the skilled migrant visa program similar to the one recommended by the recent Grattan Institute report, so that employers could use the Temporary Skilled Worker visa to sponsor workers in any occupation, provided the job paid more than $70,000 a year (substantially higher than the current threshold) and the worker was paid at least as much as an Australian doing the same job. This utilises the competitive market to ensure that only truly skilled occupations can utilise the visa, versus the cumbersome governmental red tape and also acts as an economic ‘pressure valve’.
“In the long term, we need a significant investment in STEM education as well as investment in research and development (such as through the CSIRO) to reverse the deep-tech brain drain Australia suffers from.”
Theo Hourmouzis, Regional Vice President ANZ, Snowflake
“The current skills shortage is often attributed to closed borders, and while that exacerbated it, an often-overlooked factor is the rate of innovation in the tech space and the urgent need to upskill and futureproof jobs. Larger organisations have been successful in this effort, by establishing training guilds with technology partners to reskill and upskill their workforce on new technologies.
“However, we’ve yet to see these guilds cascade to mid-market or smaller firms, which make up the bulk of Australian businesses. Incentivising businesses of all sizes to apply the guild model in their own organisations could create a much larger pool of tech-skilled talent.”
Marcus McNamara, Head of APAC, Sana Commerce
“Recruitment is really challenging right now. The lack of supply of digital and IT skilled staff is driving up the cost of resourcing new projects, to the point where the business case for these projects may be too difficult to make. A lot of innovative digital projects aren’t getting off the ground, curtailing Australia’s digital ambitions.
“We need to focus on having an ICT professional sector that doesn’t revolve around the common roles being outsourced – and that starts with education: encouraging more students at an early age to embrace STEM, and providing pathways to develop those skills through tertiary studies and in the workforce.
“We need a nationally coordinated response to solve the technology skills shortage. We need governments to come together to build that grassroots interest in STEM, and to collectively uplift the number of people trained in STEM disciplines domestically.”
Danny Lessem, CEO, ELMO Software
“There are a lot of opportunities and challenges for the next Government. Chief among the focus issues for businesses will be the challenges that directly impact the workplace. This includes the skills shortage, rising inflation and interest rates, digital transformation and sustainability.
“The skills shortage has made it harder for businesses to get the talent they need when they need it. It’s also made retention a critical issue because organisations can’t afford to lose good employees. Our latest HR Industry Benchmark Survey found that the cost to hire a new employee has more than doubled in 12 months to $23,000. Businesses will have a keen eye on what is being done to increase the availability of skilled workers in the short and medium term.
“Inflation and interest rate rises have an acute impact on Australians as cost of living pressures increase. If working Australians struggle to make ends meet it can mean they are less likely to spend on discretionary items and try to cut costs where they can. It’s a real challenge Australians are facing as our latest Employee Sentiment Index (ESI) report found almost a fifth of working Australians stated that they are not working enough hours to meet their cost-of-living needs.
“The pandemic has made many businesses realise they need to digitalise their operations as much as they can. Having cloud-based technology is mission critical for how businesses function in the new way of working. This election, business owners will be eager to see what additional support measures are being put forward to help with the cost of a digitalisation process.
“Lastly, sustainability will be a challenge that many organisations will have an interest in. Sustainability is a particularly important issue for many Australians with 82 per cent believing the Government should do more to take action on climate change. Businesses will be keen to see the path being taken by Government and the policies that will be implemented to achieve net zero.”
Jonathan Perumal, Country Manager ANZ, Safeguard Global
“Critical business issues, including the ongoing skills shortage, the rising cost of living, energy transition, and business support packages (e.g. tax incentives and access to childcare), will have a bearing on the outcome of the 2022 Australian federal election. Chief among these is access to skilled talent, business leaders have expressed a desire to see government help solve the talent shortage by driving new education, training, and skilled migration programs.
“The most valuable resource in the Australian economy is our people. Growth, innovation, and success rests in the ability to bring the best talent onboard – and right now, this is something we’re struggling with.
“The government initiatives being debated now result in progress we will see in five to 10 years, and this is a realistic time horizon, but businesses need workers now. Companies that are open to hiring globally and adapting to the new expectations of a distributed workforce, will be better positioned in the interim.”
Jonathan McFarlane, Co-Founder and CEO, PlaceOS
“One certainty for businesses moving forward is rising costs, including higher power bills and cost of living, which may not necessarily sit well with climate agendas at election. However, we are at a critical moment in time of the environmental crisis, where participation from all sectors will determine how we adapt and minimise the damage caused. Globally, we have seen governments elsewhere introduce laws to curb emissions from buildings but this remains unaddressed in Australia.
“Australia’s built environment accounts for almost a quarter of the nation’s greenhouse gas emissions and more than half of electricity consumption. Focusing on environmentally friendly buildings is not only better for the planet, they are better for the bottom line and better for people. When buildings introduce efficiencies and workflow automation, they can lower operating costs while increasing the value of the assets and maintaining a better user experience for tenants.
“Digitised buildings can offer valuable data, analytics and connections that can ensure all technology in the building is operating as efficiently and effectively as possible. By connecting to every disparate technology system, organisations can play their part in solving sustainability issues, as climate policy continues evolving.”
Albert Nel, Senior Vice President APJ, Contentsquare
“We expect the growing reliance on technology and digital solutions to continue and with that, continued commitment to support digital uptake by businesses and help ensure we are able to chart a strong recovery across all sectors. While investment in new skills and tech capabilities to lift jobs and investment is welcomed, there’s a need to ensure everyone in society can participate.
“Currently, 1 in 5 Australians have some form of disability. Despite this, much of the internet remains inaccessible, despite existing policies to make websites more accessible. In this digital era, the government and businesses need to be more agile and inclusive, including offering inclusive online experiences to secure a digital future for everyone. Organisations need to begin viewing accessibility as an essential part of their digital presence, incorporating it into every facet of their culture and business strategies.
“Accessibility cannot be an afterthought; it must sit at the very heart of great design. Technology can play a massive part in making the online experience available to all.”
Alok Kulkarni, CEO, Cyara
“This year’s election will be determined by rising inflation, global uncertainty, lack of skilled labour and pork-barrelling.
“Global inflation, fuelled by COVID-19 and the war in Ukraine, points to economic uncertainty, rising costs, and interest rates. This will greatly affect consumer confidence and spending, impacting companies across every sector.
“The talent shortage remains a major problem. More needs to be done to develop talent locally, especially in STEM. Education needs to start in high school, before being built upon at the tertiary level to strengthen Australia’s future workforce.
“Resources need to be allocated to ensure government spending goes to the right places. What we are currently seeing on the election campaign is pork barrelling. Rather than outlining a spending strategy that will positively impact Australia’s future, parties are simply buying key votes in marginal electorates. Sadly, climate change is a big part of this short-term view, but a sustainable economy, powered by renewable energy, is front and centre for many organisations.”
Chris Dahl, Director of Sales and Growth, Pin Payments
“Small businesses in Australia have endured a difficult past two years and we need to see greater support from the government to help businesses in their continued efforts to digitalise.
“SMBs are already delaying significant financial decisions, investments and hiring until after the election, which has an impact on the overall flow of business in Australia. With this in mind, we hope that the small business community will not be forgotten during the hype of this election and a potential party change-over. With economic uncertainty at an all-time high in Australia, as the nation waits to appoint a new leader, SMBs will need additional financial support and the implementation of new initiatives to boost business. The recent Federal Budget was disappointing from a small business perspective, as very little support was provided outside of training initiatives. Greater funding surrounding business digitalisation should have been provided, as well as additional support to those businesses on the brink of collapse.
“While the Liberal and Labor parties have both briefly outlined that support for SMBs is important, surrounding the digital economy, cash-flow and other age-old small business issues, there is little evidence to show what actual financial or tangible support will be provided. The business community is tired of false promises and a general lack of support, particularly after two years of lockdowns and the pandemic. We hope to see stronger policies, greater funding, an increased push for digitalisation and better business sustainability policies and practices from the government.”
Brett Elliott, Managing Director, UM Canberra
“Addressing skills shortages is the top priority. With a small and ageing population our economic success is dependent on skilled migrants. Visa reform is an area of particular importance and needed to increase migrant intake and attract global talent back to the country.
“Skilled migration alone is not enough and needs to be coupled with investment to reskill Australians locally. This was recognised in the 2022-23 Budget with additional provisions for the National Skills Agreement.
“Providing the right support for upskilling in digital technologies will be critical to help make SMEs competitive and sustainable in a tight labour market where automation can alleviate pressures. Digital transformation is a must and the government of the day must assist in expediting this.
“Finally, it is important that Australia is seen as a place to do business through reform to minimise regulatory burdens, securing global supply chains and providing access to free trade agreements and overseas markets.”
James Needham, co-founder and Strategy & Research Director, Untangld
“Small businesses are the heartbeat of the Australian economy and despite rising inflation, natural disasters, a depleted workforce and a global pandemic, they continue to find ways to thrive.
“A government that takes real, actionable steps to supporting businesses through grants, tax relief and incentivising innovation and growth will win their favour.
“Enticing skilled workers from overseas and stimulating consumer demand are fundamental to a healthy economy and the party that is seen to be working on behalf of businesses, and not just a mouthpiece, will likely win the election in 2022.”
Noel Allnutt, Managing Director, Sekuro
“To put it simply, there are really only two: inflation and innovation – both of which are intrinsically linked. From a business perspective, the strength of Australia’s innovation is directly tied to the strength of the economy. There’s no doubt rising inflation will result in a cost squeeze across corporates, and with this means stagnating innovation which will have a major impact on our digital economy.
“Like the uncertainty that followed the first COVID wave, when there is economic uncertainty, the corporate world tends to freeze. Whilst inflation is the central issue to this year’s election, it’s not a problem either party can really promise to solve, so it’s going to be interesting to see who Australia trusts more on the issue.
“For those in the cybersecurity industry more specifically, we want to see the government leading by example, and that means investing in a dedicated cybersecurity ministry to demonstrate that protecting Australian infrastructure, businesses and citizens from imminent cyber threats is a real priority.”
Mark Perry, Chief Customer Officer, Biza.io
“From my perspective, there is one key issue, and that’s investing in digital strategies to support the government’s target of becoming a leading digital economy by 2030. We’re currently a long way off this, for many reasons, but primarily because we’re not seeing enough acknowledgement within the government as to the importance of the Digital Economy portfolio. For starters, it’s lumped in with Broadband and Communications.
“Those working alongside the government can tell you that the Digital Economy Strategy needs more funding to be able to improve its own knowledge and ability to communicate with Australian businesses on regulations. Taking the Consumer Data Right as an example, the rollout has been fraught with challenges, with the onus on companies to understand and implement rule changes and an ambiguous government process. This approach is not conducive to creating an environment where start-ups and innovation can thrive, with the main outcome being a barrier to entry to smaller players, which is the opposite of the government’s stated objectives.”
Walter Scremin, CEO, Ontime Delivery Solutions
“It’s hard to currently go past inflation and rising business costs as major business issues set to influence the Australian election. These have widespread impact across the country as just about everyone feels the pain. In transport and logistics, fuel costs are creating a domino effect right through supply chains, as fuel has an outsized influence on the costs of deliveries. This adds to business costs, which were already increasing across the pandemic due to labour shortages and the increasing cost of materials.
“It’s all coming at a delicate time given many businesses are still in recovery mode yet finding their margins being squeezed. And there is still some uncertainty over what may happen next with the pandemic, not to mention the global economy.
“It’s up to business to look at what it can control, such as becoming more efficient, more flexible, and using technology to its full – this doesn’t always happen in the transport and logistics industry. By doing these things business can become stronger and more resilient.”