The annual pre-budget survey of our mid-market client base by KPMG Enterprise this year takes place just months before the Federal Budget which will be handed down on Tuesday, 29 March 2022.
Our survey of 100 leaders in Australian businesses – ranging from listed companies just outside the ASX200, to private companies, family businesses, and some public sector organisations – shows that the mid-tier sector, the backbone of the national economy, is feeling relatively upbeat about the future, after emerging from two largely interrupted years and more than half (54%) surveyed were confident about growth prospects for the rest of 2022 and the next three years.
Summary of key findings
1. COVID-19 recovery
- 54 percent of business leaders feel optimistic about profitability and growth for the rest of 2022 and across the next three years
- 87 percent of survey respondents expect wage growth of 2-8 percent in the context of record low unemployment rates and skill shortages across various areas of the economy.
- Recruiting and retaining skilled staff is by far the top challenge for businesses across the next 18 months.
2. Debt repayment and growth
- 97 percent of business leaders feel that interest rates will rise in 2022 – but 71 percent feel their debt levels are low or manageable enough that the interest rate rise won’t have a significant impact on their business.
- Most survey respondents believe it is important to start repaying Government debt – and two-thirds say the best way to do this is through economic growth and increased productivity.
- 93 percent of business leaders said there should be tax changes in the Budget to help boost growth in the mid-market sector. 61 percent call for major tax reform to help Australia’s recovery.
3. Tax audits
- 60 percent mid-market leaders are concerned about the prospect of increased audit activity being carried out by the ATO.
- Only one-third of respondents said they had comprehensive Tax Governance documentation in place addressing tax risk management issues. This is key to meeting the ATO’s new compliance requirements.
KPMG's Customer Intelligence team conducted a pulse check on behalf of KPMG Enterprise targeted at clients running mid-market firms in order to gauge sentiment regarding salient issues before the 2021/22 Federal Budget is announced. Australia’s mid-market is often referred to as the ‘engine room of the nation’s economy’, employing nearly a quarter of all Australians and responsible for almost 40 percent of Australia’s business revenue.
The survey was completed by 100 mid-market business directors and decision makers. Most respondents were from private companies, however there were also some from publicly listed companies, family businesses and NFPs. Respondents also came from a range of industry sectors; however the majority were from manufacturing, banking and financial services, retail or health and human services. Results are a valuable indicator of Enterprise clients’ opinions concerning the current business and budget environment.
KPMG's Federal Budget summary and analysis on impacts and implications for the Australian economy, business, industries and sectors.
KPMG's Federal Budget analysis on the major implications for Australia and business.