Around 20% of small businesses across Australia changed their prices on July 1 this year under the belief they were legally required to increase prices by the full 10%, according to the latest Yellow Pages Small Business Index.
The survey found that 68% of small businesses increased their prices by 10% or more.
Some of this increase is suggested to have been due to the one fifth of businesses surveyed who held the incorrect belief they were required by law to simply increase prices 10%.
"While support for GST is high, the Index found around 20% of small business proprietors felt they still had a less than adequate understanding of the new tax," Pacific Access chief executive, Andrew Day, says.
"This was more applicable to very small, or micro, businesses. Most of these believed the system was too complex and that they had not been exposed to it long enough to fully understand it.
"In the lead up to GST implementation, we saw high levels of concern among small businesses (but) now they have been through the transition, which seems to have been easier than anticipated, support levels have surged to more than double those who supported it in our last Index - an incredible reversal over one quarter.
"Importantly, support for GST is across all industries, with well over half the small businesses in each sector in favour of the new tax. In keeping with these results, only one quarter of small businesses supported the concept of a roll-back."
However, Day says a clear picture will not be apparent until November, after the first quarterly Business Activity Statements have been submitted.
Other key findings in the survey were:
- confidence levels have surged, but are still well below 1999 levels
- support for GST has increased dramatically, but uncertainty and administrative burden are still the key concerns
- perceptions of the economy a year from now have vastly improved
- the third successive quarter of low jobs growth was recorded
- the federal government's approval has risen.
The research found more than 60% of small businesses are confident in their prospects for the next 12 months and 19% are worried.
While confidence levels increased significantly compared with the last Index, Day says they are still significantly lower than those recorded a year ago, and remain on par with the lowest recorded since the Index began.
"Approximately 20% of small businesses were worried about the future, which is obviously of some concern," he says.
"For these businesses, a downturn in business, along with uncertainty about the GST, were major concerns.
"However, as businesses become increasingly comfortable with the government's new taxation system, confidence levels will probably improve.
"We've already seen GST drop from being the major overall concern for small businesses, supplanted by a more traditional concern - lack of work - in the current Index."
For further detail and a copy of the survey visit the media section of the Pacific Access
website.