The impact of technology
Farrall says digital technology will continue shaping small business over the next few months.
“We are seeing an integration of systems now in small business with the costs of technology coming down,’’ Farrall says,
“More small businesses [are] taking to technology like Xero and they are able to scale that up to the size that suits them.
“What we’re seeing is small businesses setting themselves up with technology at a lower price point. We can expect to see more small businesses doing that [and] digital will allow them to compete with the larger companies.”
He says the main investment areas will be in campaign management technology, analytics and content management systems.
The Australian dollar
“The direction of the Australian dollar is now the big question for tourism operators and retailers. Everyone is watching that closely,’’ he says.
All up, the Australian dollar is expected to continue its downward trajectory. Weak commodity prices and the slowdown in China will likely put downward pressure on the AUD.
The likelihood of the Federal Open Market Committee in the United States raising interest rates (the first time it’s happened in many years) could see the Aussie dollar falling even further.
While some are predicting it could fall as low as US60 cents, some expect it will settle somewhere around US70 cents – this is good news for exporters.
The GST will continue to focus the minds of small business operators, particularly retailers. There is pressure on the Abbott government now to raise the GST as high as 15 per cent, although this may not happen before the election.
Additionally, the Federal Treasurer Joe Hockey has flagged the Government imposing the GST on all overseas online purchases. At the moment, internet shoppers enjoy tax exempt status for purchases less than $1000.
Farrall acknowledges that one of the issues for small business to deal with is to make sure their systems will be able to easily work with an increased GST, whatever level the government chooses.
This was an issue for many retailers when the GST was introduced: They simply didn’t have the systems to deal with it.
“They would need to be able to make modifications,’’ Farrall says.
That said, businesses are likely to have time to adapt to the implications, as any changes are not expected until after the election. But it’s worth thinking about what it may mean, should it happen.
He says the prospect of the government imposing the GST on all online purchases would be a big change for retailers who have had to compete with offshore rivals offering cheaper goods without requiring people to pay the GST.
“It could equalise things with some of the offshore e-commerce providers,” he says.
“It would make local retail more attractive.”