Electricity rebates likely to go as business grapples with costs

Labor is unlikely to extend electricity rebates past December, as a major survey shows nearly a third of small business owners are worried they may close within the next year.

ACCI chief executive Andrew McKellar says ‘business owners are spending too much time tied up in regulation’. Picture: Martin Ollman

Labor is unlikely to extend electricity rebates past December, as a major survey shows nearly a third of small business owners are worried they may close within the next year.

Despite rising electricity prices putting upward pressure on headline inflation, The Australian has been told senior ministers are concerned extending the rebates would be costly at a time when the budget is under growing strain.

There is also a concern another extension of rebates would increasingly leave voters with the impression the subsidy was a permanent feature of the budget.

Sources said no final decision has been made and it would be debated in the expenditure review committee ahead of the mid-year economic update in December.

NDIS Minister Jenny McAllister on Sunday said the rebates were “not a permanent feature of the budget”.

“More generally, of course, cost-of-living relief is an area of focus for the government,” she told Sky News.

Labor MPs have been told not to expect any sweeteners for voters in the MYEFO given growing concerns over the structural position of the budget.

NDIS Minister Jenny McAllister says the rebates aren’t a ‘permanent feature of the budget’. Picture: Martin Ollman

With cost of living and the budget likely to regain their place in the centre of the political debate next year, the Australian Chamber of Commerce and Industry is using the release of a major survey to urge the government to turbocharge its deregulation plans.

The ACCI survey of 1100 small business owners and managers found that 28 per cent had considered closing in the past year, while 30 per cent were worried their business would close in the next year.

While 82 per cent of respondents were confident in the future of their business, the report says “this reflects survival rather than stability”.

The report said lowering energy costs was “essential to reduce financial strain, support growth and maintain international competitiveness”.

It called for “decisive policy ­action” to give more certainty to small business.

“Solutions must target compliance simplification, workforce readiness, cost relief, technological support, mental health care, and gender inclusion,” the report said.

Only 28 per cent of small business owners are women, which is lower than the 35 per cent recorded in the 2021 census.

Treasurer Jim Chalmers is intent on increasing deregulation to improve productivity. Picture: Martin Ollman

With Jim Chalmers vowing to pursue deregulation to lift productivity, the ACCI report showed 42 per cent of small businesses reported that regulation harmed their operations and 61 per cent spend more than $20,000 a year on compliance.

Industrial relations was a top compliance burden, with 42 per cent struggling to understand ­termination and unfair dismissal rules, 37 per cent having difficulties managing the casual conversion obligations and 36 per cent ­grappling with understanding the awards system. “Nearly half have been penalised in the past four years for not meeting compliance obligations,” the report said.

It showed 44 per cent of small business owners and managers were experiencing “high stress”, with this above 50 per cent for firms with between 15 and 24 staff.

With the government to release a national artificial intelligence plan by the end of the year, the ACCI report showed 59 per cent of small businesses were being assisted by the technology.

More than 60 per cent of small businesses expected the positive impact of AI to continue over the next three to four years.

ACCI chief executive Andrew McKellar said the survey showed “business owners are spending too much time tied up in regulation when they want to be attending to their customers, employees and suppliers”.

“Small businesses are resilient and the backbone of the country, yet the regulatory framework and the lack of incentives to invest is testing that resilience and holding back their potential to thrive and employ more Australians,” he said.

Mr McKellar urged the government to make the instant asset write-off a permanent initiative, while also bolstering funding for “all vocational and educational training”.