Small business confident to invest

A growing confidence among small business is encouraging investment, although they are still less upbeat than their larger business counterparts.

That's the finding in the latest Australian Chamber of Commerce and Industry small business survey, which showed most indicators reaching or exceeding five-year averages in the December quarter 2015.

Notably sales are increasing, profits are improving and growing confidence is promoting investment in plant and equipment, stock and also new staff.

"Now that's a really good outcome," the chamber's chief executive Kate Carnell told reporters in Canberra on Monday.

However, she believes small businesses continue to be more exposed than larger enterprises to wage pressures and elevated non-wage labour costs.

The survey's small business conditions index rose to 44 points in the December quarter from 43 in the previous three months, while expected economic conditions rose to 46.3 points from 45.4 and above a five-year average of 45.

Ms Carnell believes for small business to catch up with big business in terms of confidence there needs to be a reduction in government red tape, a simplification of the tax system, including a simpler business activity statement (BAS).

"Make it simpler for small businesses to pay what they are meant to pay," she said.