11th May, 2021
On the morning of the Federal Budget, MYOB called out the digital divide with a message written in the sky above Sydney: one in five businesses are being left behind.
Incentivising digital adaptation could result in a $10.5 billion dollar boost to the Australian economy, says MYOB.
The business management platform has released new research ahead of tonight’s Federal Budget announcements to highlight the digital divide, particularly among small-to-medium enterprises (SMEs).
In a report entitled ‘Closing the digital gap: An incentive for SMEs‘ MYOB calculates 466,062 SMEs – approximately 20 percent of the 2.29 million sector – are not engaged with digital tools across critical areas of their business workflow, such as compliance and supplier management.
At the other end of the scale, 50 percent of SMEs with advanced levels of digitisation are more likely to grow their revenue, making a clear case for further digital enablement.
MYOB chief employee experience officer Helen Lea says the government has the tools at its disposal to encourage digitsation in the tax system.
“For the one in five SMEs at risk of being left behind, a tax incentive that is easy for businesses to engage with, that is pointed out to them by their accounting and bookkeeping advisors with whom they speak regularly, will remove a significant hurdle to digital adaptation.
“Our research supports this: 27 percent of respondents shared that an incentive, such as a tax deduction, would help them get started.”
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Other details regarding the adoption of digital technology among Australian SMEs has emerged from MYOB’s Business Monitor survey that give a clearer indication of where the challenges lie.
Despite significant uptake of online tools — 40 percent of businesses use cloud-based software for work in progress management, 38 percent for managing their team — a significant portion continue to have reservations.
“Our new research tells us 24 percent of SMEs are worried new technology is too expensive and a further 24 percent don’t have the time to set it up,” said Lea.
And yet, the benefits of always-on, cloud-based business tools are clear.
“Of the businesses who digitised during the pandemic, 39 percent found themselves to be more productive and 34 percent were more profitable.
“Eighty-five per cent said they were able to keep their business running thanks to digital tools.”
For these reasons, MYOB has packaged up its research alongside a recommendation to the Federal Government that could be worth more than $30 billion to the economy.
“We are recommending to Government that they consider a refundable rebate on new SaaS subscriptions for SMEs with 0-199 employees, with a tiered incentive structure to promote end-to-end digitisation of businesses,” said Lea.
“This change alone we predict is worth $10.5 billion to our economy in the short term.
“If you combine this with the annual saving of $23.5 billion afforded by a mandatory introduction of B2B e-invoicing, adoption of which could also be motivated by this SaaS incentive, it’s a pretty compelling case for putting our trust in small businesses as Australia’s economy recovers and grows.”
Want to hear more about what the 2021 Federal Budget means for small business?
See our expert panel featuring the The Hon. Stuart Robert MP, Minister for Employment, Workforce, Skills, Small and Family Business, Dr Craig Latham, Deputy, Small Business and Family Enterprise Ombudsman and Helen Lea, Chief Employee Experience Officer, MYOB, discuss what the Budget means for your small business (from Friday 21 May at 9:30am-10:15 AEST). View it here today.