SME Christmas wish list revealed: Banjo Loans

SME Christmas wish list revealed: Banjo Loans

Small- to medium-size enterprises (SMEs) are facing a tough Christmas and New Year period, as inflationary and cost of living pressures place further pressure on the engine room of the Australian economy.

That’s why Banjo Loans CEO Guy Callaghan has compiled this list of the top Christmas ‘love to have’ wishes for SMEs as we head into a new calendar year:

  1. Inflation to continue to fall

Mr Callaghan said this would enable businesses to plan for future costs with some confidence of price stability over the next 12 months. “Rising costs have wreaked havoc with small business’ ability to price their goods and services. Further reductions in inflation would be a perfect Christmas gift, so businesses can have more stability heading into next year,” Mr Callaghan said.

  1. Wage growth to ease off from record highs

Cash flow has been a persistent challenge over 2023 with high wage growth, fuelled by a tight labour market, particularly in the health care and social assistance and accommodation and food services sectors. “Small business needs some breathing room to reduce pressure on cash flow, which is one of the key pain points for SMEs.”

  1. Consumer spending to return to normal over Christmas/New Year

Christmas spending in 2022 surprised observers by showing a significant increase from the previous year. However, recent research from Roy Morgan seems to point to softer spending in the lead up to Christmas. “SMEs, especially those in the retail sector, will be hoping predictions of reduced spending turn out to be untrue, with a much-needed injection of spending over the holiday break. While we do not want to fuel inflation, a little boost would be nice,” Mr Callaghan said.

  1. Removal of government red tape to stimulate building and construction sector

“The time it takes for developers to gain planning permits is stifling the industry at the same time as we have a housing shortage. Many SMEs are suppliers to the industry and need governments to come to the party and remove unnecessary regulations preventing badly needed housing from being constructed in a timely manner.”

  1. Interest rate cut in February

SMEs have already had an early Christmas present with the RBA’s decision to leave rates on hold this month. “Hopefully by February, when the next RBA board meeting is scheduled, there is reason enough for the first rate cut in some time which would be a great way for SMEs to start the year,” Callaghan said.