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In seven years of operation, the ombudsman has helped more than 40,000 small businesses.
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Digital and construction disputes push ASBFEO past milestone
01 August 2023
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A sharp rise in disputes relating to digital platforms and a doubling of problems involving the construction industry have pushed the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) past the milestone of 40,000 interventions since it was formed in 2016.
ASBFEO said the number of disputes peaked during the special circumstances of the pandemic, but today’s problems are more involved and the number one issue remains late payment.
Ombudsman Bruce Billson said late payments accounted for 38 per cent of ASBFEO disputes, up from 30 per cent two years ago, with a decline in problems relating to franchises but an increase in contract issues.
But Mr Billson said he is concerned by the rise in disputes involving digital services, which account for 26 per cent of all cases, and there is a need for agreed resolution procedures.
“The number of cases involving digital services and platform providers is double the proportion we received just two years ago,” Mr Billson said.
“I have been vocal in our concern about the rising number of problems small and family businesses are encountering with digital platform providers, particularly the nightmare in restoring an account that has been shut down after being hacked.
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“Some people have built their entire businesses on social media and digital platforms and having someone else access and control their account is devastating for their business and their reputation.
“One of the absurdities of the current situation is after being locked out of your account, you need to access your account to make a complaint. It’s the ultimate run around.
“It is crucial that clear, appropriate, and standardised procedures be put in place to enable a timely resolution for small business disputes with digital platforms.”
Mr Billson said there had also been a doubling over two years in the proportion of cases relating to the construction industry, which now account for just over one in 10 of assistance calls.
“This coincides with the rising number of insolvencies in the construction sector,” he said, with ASIC figures showing building company insolvencies up 72 per cent in 2022–23.
“In one example, a family enterprise that subcontracts in the construction industry contacted us because they had not been paid and this was affecting their ability to pay their own subcontractors,” Mr Billson said.
“As a result of these difficulties, a family member working in the business also suffered mental health problems. They were grateful for our guidance to resolve their issues.”
In its seven years of operation, ASBFEO said it handled 40,510 cases and the milestone was a “significant moment” for the agency.
“We are proud that we have helped more than 40,000 small businesses resolve disputes with other businesses or government agencies, outside of the costly legal system,” Mr Billson said.
“We strive to help small businesses get back to business as fast as possible and pleasingly nearly two-thirds of the cases that come to us are helped quickly by our call centre or assistance team providing useful information.”
Almost 28,000 small businesses had been helped quickly with information to resolve their concerns while a further 12,656 cases had involved ASBFEO’s assistance team helping one-to-one.
This can include arranging alternative dispute resolution or referral to another government agency in line with ASBFEO’s mandate to avoid overlap.
“We also provide access to mental health support and tools to help people start and grow a business, and make better business decisions. We also offer a tax concierge service for small businesses who have a dispute with the Tax Office,” Mr Billson said.
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