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Crossbenchers support changing the definition of ‘small business’ but amendments are unlikely to occur before the federal election.
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Federal government rules out small business definition change for 2024
09 December 2024
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The Australian Chamber of Commerce and Industry (ACCI) has announced it welcomes support from parliamentarians for the policy proposal to change the definition threshold of ‘small business’.
Despite the support from eight crossbench MPs, the government revealed it had no intention of changing the definition now, but may revisit the proposal in the second half of 2025.
According to ABC reports, the Fair Work Ombudsman had begun a review of the small business definition.
The ACCI recently released a proposal to change the definition of what small business means and welcomed the support shown by a number of parliamentarians last week.
Though changes to the threshold were not to be reconsidered until the second half of 2025, the body said it encouraged parliamentarians from across the board to lend their support.
In the campaign, ACCI proposed to change the definition of small business in the Fair Work Act from 15 employees or less to 25 employees or less.
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ACCI chief executive Andrew McKellar said the change would benefit small businesses in many ways and was an eminently sensible reform.
“The lifting of the weight of regulation from the shoulders of small businesses would be the biggest benefit,” McKellar said.
“Lifting the threshold would mean fewer small businesses would be subjected to the same level of regulation that larger businesses face.”
In the ACCI 2024 small business conditions survey conducted earlier this year, 82 per cent of small business owners said red tape had negatively impacted their business.
Fifty per cent of the respondents were spending more time on red tape than they were 12 months prior.
A second survey conducted by ACCI, the National Business WHS Safety 2024 Survey, revealed that 34 per cent of SME owners had been recently diagnosed with a mental health condition, up from 22 per cent in 2022.
McKellar said the survey results brought no surprises and supported the motivation behind changing the definition.
“It’s hardly a coincidence that small business owners are experiencing increasing mental health issues at the same time that the government is imposing regulatory burdens,” he said.
“The current compliance burdens are not fair on small businesses and it needs to stop. An increased threshold for small businesses in the Fair Work Act will make it easier for small businesses to create more jobs and succeed.”
McKellar noted the benefits behind the proposed policy change were reflected by Australian Bureau of Statistics (ABS) data, which demonstrated that changing the definition from 15 to 25 employees would benefit more than 46,000 businesses.
ABS data also revealed that the accommodation and food services sector would benefit the most if the small business definition was to be changed.
McKellar said simplifying inconsistencies in other commonwealth legislation affecting small businesses would also benefit the sector.
“The government should streamline and fast-track environmental approvals to reduce the compliance burden on small businesses and allow them to focus on growth.”
“By cutting red tape, reducing costs, and investing in skills, the government can ensure small businesses thrive and continue to drive Australia forward.”
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