Follow Hockey’s lead with your business and cut waste
WELCOME to Federal Budget week.
We don't like to touch on politics too much, however we are conscious that Treasurer Joe Hockey is talking tough.
He seems to be sending the message that Australians have been living beyond their means for too long and an adjustment is needed now to avoid a more painful economic squeeze in future years.
"Business as usual" is no longer an option.
To capture the urgency of the budget repair task, the government has released the findings of its Commission of Audit charting a pathway back to a surplus of 1% of GDP by 2023-24. It sets out sweeping cuts to health, education, family payments and the pension.
Now clearly the government was never going to adopt all of the commission's 64 recommendations.
But it will introduce measures in this week's budget that begin to trim excess fat and ensure expenditure does not continue to outpace revenue.
Of course as a business owner, I know hard times often require tough decisions that can impact on staff and management.
The painful truth is that sometimes downsizes do occur; staff need to be let go; bonuses need to be scrapped and expenses examined closely.
It's tough medicine, but the success of your business often depends on it.
Economic realities mean you can't always please everyone.
But it's not all doom and gloom.
Managing your finances properly during the tougher years can lay the foundations for future growth and the creation of more jobs longer term.
I know cutting costs when business is booming can be hard.
And most business owners wait until the tougher times to make these decisions.
But that only makes it more important to make the necessary adjustments when the good times end.
The waste you can discover can be amazing.
So when the budget knife falls next week, ask yourself: "What changes can I make to my business? How can I curb my expenses?"
For one moment, forget about how unpopular your decisions might be, and look at what actually needs to be done and whether cuts need to be made.
Can you afford to continue putting them off and for how long?
We assist businesses to highlight where they can trim their business costs, so if the government is prepared to ask the hard questions, it should serve as a timely example for business-owners.
Call accountants Sothertons on 4972 1300.