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The small business advocate has identified top reform priorities to reinvigorate small businesses currently struggling in the current economic climate.
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‘Re-energise’ SMEs with 14 steps: ASBFEO
09 August 2024
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The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Bruce Billson has outlined 14 steps to provide more support to the nation’s small businesses.
The 2.5 million small businesses in Australia currently struggling in the economic climate need to be “inspired” to persevere with “14 steps to energise enterprise.”
Billson said many small and family businesses are “doing it tough right now” and require extra support.
“We need to do more to energise and create and nurture the spark that will inspire someone to turn an idea into investment, to build a business, to take on the risk and big responsibility of creating an opportunity-generating new enterprise and to employ that extra person,” he said.
“We need more incentives for those starting a small business, a simple, quick and cost-effective way for small business owners to settle court disputes and more emphasis on encouraging younger Australians to consider business ownership.”
Small businesses generate 33 per cent of Australia’s GDP and provide jobs for 5.36 million people, equating to 42 per cent of the private workforce, Billson said.
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However, in 2006 small businesses contributed to 40 per cent of GDP and employed 53 per cent of the private workforce.
Billson said this is evidence that small Australian businesses need guidance to try and work back towards that level.
“This is a worrying trajectory. We are sleepwalking into a ‘big corporate’ economy,” he said.
Recently, ASBFEO released the ‘Small Business Pulse’ which acts as a “health check” of objective vital signs for the small business sector.
The latest data from the Pulse highlighted the business environment for small businesses is 25 per cent below the long-term average.
It also showed that 46 per cent of businesses did not make a profit in the most recent year of accounts available and three-quarters of self-employed full-time business owners are earning less than the average total weekly, full-time wage.
Small business owners are getting older, with the average age being 50 with only 8 per cent of small business owners under the age of 30.
To attempt to “energise” the small business community once more, Billson has recommended 14 steps for the economy to follow.
Energise enterprise with 14 steps:
First, small businesses need to explore the potential benefits of a tax discount/offset scheme to keep more income to be able to reinvest it later.
Focus on right-sized regulation, such as how regulators and government formulate and administer laws to help, support and enable small business owners to meet their obligations.
Require every Cabinet submission, preliminary and formal regulatory impact statement and new policy proposal to include a small business impact statement.
Establish the prime minister’s small business awards to recognise and celebrate businesses to inspire the next generation.
Small businesses need to be given an affordable and effective alternative to defend their own economic interest through the creation of a Federal Small Business and Codes List in the Federal Circuit and Family Court of Australia.
A greater chance to compete for government contracts needs to be given to smaller businesses. This can be done by decoding the rules and practices that favour the ‘in-crowd’ of large, well-known businesses.
Small businesses could save $1 billion a year if it was mandatory for banks and other providers to charge the lowest fee for tap-and-go debit card transactions.
Undertake urgent and decisive action to ensure essential insurance for small businesses is understandable, accessible and affordable.
Remove unfair competition that inflicts harm on small businesses, such as particular trading and business practices.
Create a dedicated Small Business Commissioner and Division within the Fair Work Commission to honour the ‘special circumstances’ of smaller employers existing workplace laws are required to reflect and to oversee the implementation of proportionate instruments, procedures, practices and protections.
Establish digital platforms to implement clear, appropriate and standardised procedures to resolve small business disputes quickly and efficiently.
Reward and recognise businesses who fulfil workplace obligations to employees, meet tax reporting and payment obligations in a timely way and pay small business suppliers in under 21 days.
Expand digital learning and practical support for businesses expanding their technology usage, such as generative AI.
Develop a readily accessible and easily navigable central resource hub of “best of breed” actionable information and support developed specifically for small and family businesses.
Billson said these recommendations have been identified after “widespread consultation and investigation” and that Australia needs to do more to help its small businesses through this time.
“We can and must do more to make the risk and reward balance more attractive. We need to create a more supportive ecosystem to give enterprising people the best chance to be successful.”
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