ASBFEO Live

Small biz needs all the help it can get

Olivia Pearce — Fri, 09 Aug 2024 02:21:47 +0000

Small biz needs all the help it can get Olivia Pearce Fri, 08/09/2024 - 12:21

08 August 2024

Opinion piece by the Ombudsman Bruce Billson.

Originally published in the Daily Telegraph.

Small business is a big deal. But not as big as it used to be. Economic contribution has dropped from 40 per cent to 33 per cent since 2006 and share of private sector jobs at 42 per cent, down from over half. We are sleepwalking towards a big corporate economy.

At the same time, insolvencies are at a record high. The Tax office, hot in pursuit of tax debt, reports that 46 per cent of small businesses aren’t making a profit. That’s why I’ve proposed 14 steps to energise enterprise. More incentives for those starting out, better access to justice when wronged and more emphasis on encouraging younger Australians to consider business ownership.

Let’s end the hidden tap-and go charges costing small business – and consumers - up to $1 billion. The big four banks still have to turn on the cheaper system for more than half their merchants. Small firms are too often left stranded by digital providers such as Facebook or Instagram.

Big tech needs real dispute resolution process (or a real person) to deal with disputes to avoid the run around of being told to log into your account to say you can’t after being hacked! How about a tax discount or offset for new small businesses to improve cash flow in the early ‘valley of death’ years? Nine out of 10 businesses who employ someone are small yet the rules are complex and onerous.

A dedicated small business fair work commissioner and rules could address this. Red tape grows in number and complexity. We need right-sized regulation and support that tells small business exactly what is expected. Cabinet submissions should include a small business impact statement so every time a decision is made, small business would be front of mind. Small business needs unfair business practices protections, solutions for the wicked challenge of insurance, a real opportunity to compete for government contracts and greater digital support and ease of access to get help.

The average business owner is now 50 and only 8 per cent are under the age of 30, half what it was in the 1970s. It is in our national interest to create a more supportive ecosystem to give enterprising people the best chance to be successful.

14 steps to stop small business's alarming downward spiral

Olivia Pearce — Fri, 09 Aug 2024 02:16:27 +0000

14 steps to stop small business's alarming downward spiral Olivia Pearce Fri, 08/09/2024 - 12:16

08 August 2024

Opinion piece by the Ombudsman Bruce Billson.

Originally published in the Canberra Times.

I fear we are sleepwalking into a "big corporate" economy.

Many small and family businesses are doing it tough right now and the post-COVID environment is, in many cases, even more difficult.

Small businesses are grappling with rising input costs, notably wages, fuel, gas, electricity, insurance and rent. And there continues to be ongoing shortages of talent and skills with lower rates of productivity putting upward pressure on labour costs.

The Tax Office has resumed its "lodge and pay" enforcement approach and those who had rent relief have found the landlord now wants to be paid. Then there is the whammy of 13 rises in interest rates by the Reserve Bank over the past two years still having an impact on the costs of financing and on customers' spending, preferences and confidence.

It's no surprise that corporate insolvencies have reached a record high and there's been a 50 per cent increase in calls to my office from small businesses worried a supplier might be insolvent or their own business might be heading that way.

There is also a growing number of increasingly complicated regulations such as a new definition of casual employment and provisions for converting to permanency; mandatory country-of-origin labelling for seafood in hospitality venues; and the prospective removal of the small-business exemption from the Privacy Act.

Together, it is taking a toll on time-poor and resource-constrained small business owners.

The ASBFEO �Թ�� Pulse, which is a "health check" of objective vital signs for the small business sector while also taking into account the "animal spirits" that drive decision making by the enterprising Australians, shows that post-COVID the business environment for small business is 25 per cent below the long-term average.

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.

After widespread consultation and investigation, my agency is outlining 14 steps designed to give more support to the nation's 2.5 million small businesses and calling on the parliament, policymakers and regulators to:

Explore the potential benefits of a tax discount/offset scheme for new small business owners to allow them to keep more of their income to re-invest in their business during the critical first three years.
Focus on right-sized regulation, including how regulators and government formulate and administer laws, to help, support and enable small business owners, who do not have the resources of big business, 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 �Թ�� Awards to recognise and celebrate excellence and inspire the next generation.
Give small businesses an affordable, effective and timely alternative to defend their own economic interest where fair trading protections and reasonable commercial conduct safeguards are infringed upon by creating a Federal �Թ�� and Codes List in the Federal Circuit and Family Court of Australia.
Give small business a greater chance to compete for government contracts by decoding the rules and practices that favour the 'in-crowd' of familiar, established and larger suppliers.
Make it mandatory for banks and other providers to charge the lowest fee for tap-and-go, dual-network debit card transactions as the default, saving small business around $1 billion a year.
Undertake urgent and decisive action to ensure that essential insurances for small businesses are understandable, accessible and affordable.
Ban unfair trading/business practices that distort competition and harm small business.
Create a dedicated �Թ�� Commissioner and Division within the Fair Work Commission.
Require digital platform providers to implement clear, appropriate and standardised procedures for timely small business dispute resolution.
Honour businesses who fulfil their workplace obligations to employees, meet tax reporting and payment obligations in a timely way and pay small business suppliers in under 21 days, with a 'Good Business Pays' recognition and accreditation.
Expand digital learning and practical support through business system and reg-tech solutions, information management and practical Artificial Intelligence uses.
Develop a readily accessible and easily navigable central resource hub of actionable information, 'how to' guidance, programs and assistance developed by government and private sector specifically prepared for small business use.

There's more detail on our website asbfeo.gov.au

We need to 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.

Small business is rightly celebrated for generating 33 per cent of our nation's gross domestic product and providing jobs for 42 per cent of the private workforce. But in 2006, small business contributed 40 per cent of GDP and employed 53 per cent of those with a private sector job. This is a worrying trajectory.

It is not enough to dedicate enormous time to just mitigating the wind in the face of our small and family businesses. These steps can provide greater support and some much needed wind in their sails.

Bruce Billson is Australian �Թ�� and Family Enterprise Ombudsman

Excessive insurance premiums are killing small businesses

Olivia Pearce — Thu, 01 Aug 2024 23:06:57 +0000

Excessive insurance premiums are killing small businesses Olivia Pearce Fri, 08/02/2024 - 09:06

04 March 2024

Originally published in the Canberra Times.

Finding adequate insurance cover at commercially viable terms is fast becoming a wicked challenge for small and family businesses.

There have been countless examples of small businesses closing down because they either can't get the insurance they need, or when it is available, they can't afford the prohibitively ridiculous premiums on offer, which in some cases have risen by 200 or 300 per cent.

Eye-watering excesses and a growing list of exclusions often accompany 'take it or leave it' insurance products that in some case undermine the business's ability to operate with any hope of being viable.

We saw this recently with a play centre that was told it would only get insurance at a very expensive price with behemoth excesses if it ditched its ninja obstacle course - its biggest earner. Despite having no claims, a well-developed risk management system, active supervision and monitoring and the help of an experienced broker, there was no insurer 'appetite' to cover this activity. The business was forced to close and the jobs, service to the community and resulting economic activity were lost.

Unlike households who - for many reasons - might choose to be uninsured or underinsured and have options about the level and nature of the risk protection policies they subscribe to, a small business must have insurance covering areas such as public liability.

If a small business isn't insured, it cannot engage in trade and commerce.

Live entertainment and music venues have been heavily affected by the lack of suitable insurance cover to continue what they have been doing for decades. While small professional services firms face skyrocketing insurance costs despite making no claims.

In sectors, such as amusement, leisure and recreation, the insurance crisis is so dire we were asked to look at an alternative model, known as a Discretionary Mutual Fund.

Our initial report called The Show Must Go On and subsequent further research and reports backed the creation of a DMF to prevent forced business closures, job losses and a reduction in activity that is important to livelihoods and communities, particularly in regional Australia.

Crucially, a DMF would be able to impose conditions of entry standards for members and enforce strong risk-management culture and procedures, reducing the likelihood of accidents.

Two years on, it is disappointing our major recommendations, including initial government support to set up a DMF, have not been embraced.

Over summer we've seen floods, storms and bushfires devastate some small businesses. The insurance sector can do more to be clear about what is and is not covered when a disaster hits a small business. Despite the reassuring advertising, complaints to regulators about claims being denied and a lack of responsiveness by insurers remain high.

We are already hearing complaints about insurance companies still holding up claims from terrible floods last year and a federal parliamentary inquiry is examining the response. Typically, these claims are mainly related to property, public liability and business interruption issues.

Two years ago, we conducted an inquiry into �Թ�� Natural Disaster Preparedness and Resilience which found insurers were uninterested in the steps individual small and family businesses take to mitigate disaster risk, or dismissive of them. It had zero impact on the availability and the pricing of their premiums as insurers say they look at risk across a community-wide or industry-wide basis.

It's frustrating many small, family and farming businesses are individually doing what's being asked of them but are seeing no upside to pricing premiums and availability and affordability of insurance cover.

With so many people now working from home, these home-based businesses need to check in with their insurer to make sure they are not on the wrong side of their cover.

Does their household insurance policy cover the two or three Harley Davidsons a business might be repairing in the home garage, if it caught on fire?

Is the business and customer protected if a patron slips on a wet floor and is injured at a home salon? And just how many assistants can you have in your home office helping with your digital media business or chooks producing eggs for roadside sale before your home base starts to not look like a 'household' by insurers?

This is all about important communication a business should have with their insurers and brokers, but it has to be both ways.

The insurance sector has explained the problem is a global one, described as a hardening of the market which means capital is scarce, reinsurance is difficult to obtain and risk appetites are low. In its 2022 annual report the Insurance Council of Australia indicated it would be a priority to address the availability and affordability of insurance.

More than a year ago, the regulator APRA urged the insurance industry to invest in "simplification across products, systems and processes".

For small businesses, insurance, while always vital business precondition, is no longer a once-a-year payment (with a likely inevitable modest price increase) that could be quickly sorted and the business owner could move on to the many other responsibilities of running a business.

It now requires active engagement, close attention to risks and their management, often data collection and collaboration with a specialist broker to navigate this 'hardened market' to source the cover that is needed, and a hefty uplift in cost even the Reserve Bank has called out as quite extraordinary.

And yet, still too many small businesses are not able to access and afford the insurance they need.

I'm pleading with the insurance sector to help small business by mapping out pathways to solutions to give small business the chance to stay in business. Urgent and decisive action is needed to ensure essential insurances for small businesses are understandable, accessible and affordable.

Small businesses can't be held to the same privacy standards

Olivia Pearce — Sun, 21 Jul 2024 23:48:45 +0000

Small businesses can't be held to the same privacy standards Olivia Pearce Mon, 07/22/2024 - 09:48

22 July 2024

Opinion piece by the Ombudsman Bruce Billson.

Originally published in the Canberra Times.

The public rightly expects any personal information collected and stored by businesses - whether they are large or small - will be protected and only used for the reasons it was provided.

It is not credible for small business to continue to have a blanket exemption from providing necessary and appropriate protection of the personal information they have about their customers, staff, and other businesses they are dealing with.

The digital world has added so much, creating new opportunities and risks and the responsibilities that accompany handling personal information need to evolve with the times.

That is why my office has been working with the Australian government to ensure what replaces the current small business privacy exemption and any new regulations, are right-sized and appropriate for small business, easy to implement with clear advice and timelines and will give confidence to customers.

While the exemption is no longer tenable, nor is it practical to directly apply legalistic privacy principles, which larger businesses have to work through, to a small business.

These are principles big business and government agencies need to decipher, interpret and apply to their circumstances, which most small or family businesses do not have the resources or staff to navigate and implement.

We welcomed the acknowledgement by Attorney-General Mark Dreyfus of the special circumstances and limited time and resources of small business, the need for support and a reasonable transition period and the need for an impact analysis of what changes would mean.

In the consultation sessions involving ASBFEO, we have worked hard with officials to help them appreciate that small businesses do not already have and will not soon have mastery of the Privacy Act. Nor will many be able to navigate data-handling protocols to develop a privacy statement and data-breach response plan. This understanding is critical to appreciate how small businesses operate and then appropriately design regulations to allow small businesses to be compliant.

Small businesses and their representatives are alarmed the system being contemplated would require a small business to interpret legalistic principles and undertake onerous and unfamiliar activities - exactly what small business consultation participants said was the worst way forward.

It is important now the consultation by officials focuses on readily understandable and practical steps supported by actionable information to ensure small businesses are not drowned in a sea of legal technicality and complexity.

A small business isn't a shrink-wrap version of a big corporation. There's no regulatory team or dedicated privacy experts, on-staff lawyers or sophisticated compliance systems. Typically, it's the owner - at 10pm - grappling with this after they've been running their business all day.

Small businesses will need clear guidance on the active steps they can take to protect the information of their customers, their staff, and themselves and to fulfil their responsibilities. This may include procedural templates, information guides and checklists explaining the clear steps required to meet their privacy obligations.

The government needs to translate privacy principles into clear, sequential actions, calibrated to the degree of privacy risk prevalent in the business that clearly responds to the question that will be asked by a small business: What is it I need to do?

Small business fears about new and unfamiliar compliance obligations would be eased by the government making a clear statement that it will provide concise, relevant and accessible guidance and there will be a suitable transition period.

Small businesses know they can suffer if customers lose confidence in their ability to protect personal information and will benefit from increased certainty around the way information is being managed and protected. There is a compelling business benefit in sound and dependable 'information management' in this digital era of opportunities and risks.

A cyber hack or malicious information release is harmful at many levels, including for the targeted small business that irreparably damages the business's ability to operate. The latest chilling report from the Australian Cyber Security Centre is that a cyberattack happens every six minutes and when a small business is hit, on average they suffer a financial loss of $46,000.

Sadly, in many cases it ends up being an enterprise-ending event as they never recover or re-earn the confidence of employees, customers, suppliers and partners.

Government should also embed any privacy changes in a nest of information management issues for small and family business including cyber protection, a safe digital presence, managing opportunities and risks presented by digital platforms, eInvoicing, data custodianship and consumer data right participation. Each is being pursued in a siloed way with different (often unknown) lead agencies, bespoke duties and concerns about mounting complexity and compounding compliance obligations.

These all can and should be addressed as an integrated 'information management' initiative highlighting both the business benefits as well as any new obligation through a synchronised engagement with small businesses through familiar intermediaries. This is an opportunity for government to progress important policy objectives while assisting small businesses to deepen their digital engagement, bolster vital information management tools and even explore the responsible use of generative artificial intelligence.

Why can't we explore what requirements can be systematised and routinely actioned by small business in existing 'natural business systems' and already familiar digital platforms and software being used for accounting and single-touch-payroll reporting? Rather than sprinkle resources around in the hope it better equips small business, why not work with the likes of MYOB, Xero, Intuit and Hnry (just to name a few) to embed key duties and action steps into the software businesses use daily?

More than nine out of 10 businesses are currently exempt from the privacy laws. Getting this reform right offers a golden opportunity to extend protection for customers, staff and suppliers. But it will not succeed unless the real-world circumstances and limitations of time-poor and resource-constrained small businesses are honestly understood and embraced by policymakers to create a workable, mutually beneficial and secure system for everyone.

VITAL SMALL BUSINESS PROTECTIONS SAVED IN NEW BANKING CODE OF PRACTICE

Olivia Pearce — Mon, 08 Jul 2024 22:57:40 +0000

VITAL SMALL BUSINESS PROTECTIONS SAVED IN NEW BANKING CODE OF PRACTICE Olivia Pearce Tue, 07/09/2024 - 08:57

09 July 2024

The Australian �Թ�� and Family Enterprise Ombudsman, Bruce Billson, says he welcomes the regulator’s decision to retain and enhance vital protections for small businesses in the new Banking Code of Practice.

“A push by the banks to shrink the Code has been rejected and they must continue to include an explicit and detailed pledge outlining how they will handle complaints,” Mr Billson said.

“The code will also be expanded to cover at least 10,000 more small businesses and it will include clear information about how a small business can enforce their rights.”

The Australian Banking Association’s code, which aims to set a consistent standard of good industry practice, has been approved by the Australian Securities Investments Commission and will come into effect on 28 February, 2025.

The Ombudsman strongly advocated against the Australian Banking Association’s proposal to remove from the code detailed ‘how to’ requirements regarding complaints-handling and instead refer customers to ASIC Regulatory Guide RG 271.

“It was never reasonable to expect busy and resource-constrained small businesses to read and understand regulator guidance for financial firms, and then to decipher and be clear on how to exercise rights afforded to them,” Mr Billson said.

“We are pleased ASIC has rejected this absurd change that would have omitted from the code existing explicit commitments by banks when there is a complaint to conducting a fair and reasonable process, as well as providing information on progress, a contact person, a written response, and an explanation and monthly updates regarding delayed responses.”

Mr Billson said small, family and farming businesses were frustrated with the banks, particularly in regional areas where branch closures and the removal of automatic teller machines have deprived them of face-to-face service.

“The banking code, like all industry codes, should be viewed as the ‘floor’ of minimum standards, not the ambition,” Mr Billson said.

“Competitive access to finance has been a longstanding challenge for small and family businesses. Policy incentives need to strike the right balance between managing risk and supporting entrepreneurship, including by ensuring small businesses have reasonable and reliable access to banking services.”

Mr Billson said the protections of the code will cover at least an extra 10,000 small businesses (and potentially many more), by increasing the value used in the aggregate borrowing criterion from $3 million to $5 million.

He said the code will also contain an updated introduction with information about how eligible individuals, small businesses and their guarantors can enforce their rights.

It will also commit banks that have signed the code to take reasonable steps to make sure a meeting is held with a prospective guarantor before taking a guarantee, and to discuss customer circumstances and reasonable alternatives to repay a guaranteed liability before selling a guarantor’s primary place of residence.

It also includes an updated conduct pledge by the banks to do all things necessary to ensure that banking services provided under the code are provided efficiently, honestly and fairly.

An updated definition of vulnerability and an enhanced definition of financial difficulty aims to cover customers who are likely or expecting to be unable to meet future repayments.

Mr Billson said while the banking environment was continually evolving, rising best-practice standards and expectations should be captured in each new version of the code.

“I call on the banks to make sure the benefits of their expanded commitments and the updates in the new code apply to both current and prospective small business customers,” he said.

Mr Billson also urged the independent review of the 2020 General Insurance Code of Practice, now under way, to follow ASIC’s example by applying the same lens of protecting small businesses and consumers.

Media contact: 0448 467 178 / www.asbfeo.gov.au

ASBFEO WEBSITE NOW AVAILABLE IN MORE THAN 100 LANGUAGES

Olivia Pearce — Mon, 08 Jul 2024 00:04:21 +0000

ASBFEO WEBSITE NOW AVAILABLE IN MORE THAN 100 LANGUAGES Olivia Pearce Mon, 07/08/2024 - 10:04

08 July 2024

The Australian �Թ�� and Family Enterprise Ombudsman’s website – www.asbfeo.gov.au - is now available in more than 100 languages to better assist migrant-led small and family business owners and managers.

“One in three small businesses are run by people who were born overseas and our culture and local business communities are enriched by their presence,” says Bruce Billson, the Australian �Թ�� and Family Enterprise Ombudsman.

“But sometimes when help is needed and people are distressed, many find it easier when the information is provided in a preferred language.

“I hope this new feature on our website, which can be activated by one simple click, will make it easier for migrant-led business owners to use the many helpful resources, tools and checklists available.

“Our research shows nearly one-quarter of small business owners use a language other than English at home and more than half of small business owners are second generation migrants, with a parent born overseas.

“Some 23 per cent of small business owners, who have required the assistance of one of our case managers to help with a dispute, spoke a language other than English at home. In almost two-thirds of these cases, the issue was about a payment dispute.”

The translation feature is clearly located at the top of our website with the translation software powered by Google Translate.

“Effort has been made to provide accurate translations, but no automated translation is perfect nor is it intended to replace human translators,” Mr Billson said.

“When we individually assist with cases, our case managers use human translators to help ensure that translations are accurate, and meaning is well understood.”

Media contact: 0448 467 178 / www.asbfeo.gov.au

SOME IMPORTANT END OF FINANCIAL YEAR INFORMATION FOR SMALL BUSINESS

Olivia Pearce — Wed, 26 Jun 2024 22:42:53 +0000

SOME IMPORTANT END OF FINANCIAL YEAR INFORMATION FOR SMALL BUSINESS Olivia Pearce Thu, 06/27/2024 - 08:42

27 June 2024

Income tax cuts, a rise in the minimum wage, updated information on tax deductions and increased superannuation payments are among changes coming into effect on 1 July, says Bruce Billson, the Australian �Թ�� and Family Enterprise Ombudsman.

“It is essential that small business owners and managers understand these changes,” Mr Billson said.

“Business leaders are responsible for getting this right and should check their payroll and accounting systems have been updated.

“If needed, we encourage talking with trusted advisers like accountants and bookkeepers and government agencies such as the Tax Office and the Fair Work Ombudsman which have extensive resources to help.

“With so many pressures on busy small business leaders as we near the end of the financial year it can be a stressful time and easy to overlook new and changing rules.

“The end of the financial year is also a good time to not just have a stocktake but to take stock of the health of your business and yourself and to make use of the many helpful resources, tools and checklists available, including on our website www.asbfeo.gov.au.

“But please be alert to scams as the end of the financial year is also a time when scammers try to trick small businesses either by impersonating official agencies such as the Tax Office or by offering unrealistic deals.”

Below, are some of the changes. It is not a complete list and other changes may affect a business are specific to industry sectors or states.

National Minimum Wage and Award Rate

The National Minimum Wage will increase by 3.75% to $915.90 per week, or $24.10 per hour.

Minimum award wages will increase by 3.75%.

Both changes are effective from the first full pay period starting on or after 1 July.

Small businesses can get further information from the Fair Work Ombudsman and can use its Pay and Conditions Tool and pay guides.

Visit the Fair Work Ombudsman for more information.

Income tax cuts

The Australian Government is changing income tax rates and thresholds from 1 July, delivering an income tax cut to workers.

Small business employers should ensure they have the updated tax tables from the Tax Office and check their payroll software is up to date to withhold the correct amount of tax. Employers are responsible for getting this right.

Visit the Australian Taxation Office for more information.

Super Guarantee

The Super Guarantee (SG) rate will increase from 11% to 11.5% for all employees eligible to receive superannuation.

Small business employers will need to use the new rate to calculate super on payments made to employees on or after 1 July, even if some or all of the pay period is for work done before 1 July. The SG rate is legislated to increase to 12% by 2025.

Employers are responsible for checking their payroll and accounting systems have been updated to ensure they correctly calculate their employee’s super guarantee entitlement.

The Tax Office is also urging employers to ensure that SG payments arrive on time, as processing times for payments made through a clearing house can vary and some take up to 10 days. Super contributions are only considered ‘paid’ when the super fund receives them, not the clearing house. If payments arrive after the due date, an employer needs to lodge a statement and penalties may apply.

Visit the Australian Taxation Office for more information.

Single Touch Payroll

Employers are required to finalise employees’ Single Touch Payroll data by 14 July.

The Tax Office advises this is an important end of year obligation and ensures employees have the right information they need to lodge their own income tax return. Employers must include all employees they have paid in the 2023-24 financial year, even those who are no longer on staff.

Visit the Australian Taxation Office for more information.

Instant asset write-off

The Australian Government has announced the instant asset write-off threshold will be $20,000 on a per asset basis for 2024-25 for eligible small businesses with a turnover up to $10 million.

Tax deductions

Small businesses can check with the Tax Office if there are any tax deductable items their business may need before 30 June such as day-to-day operating expenses, purchases of products or services for your business and capital expenses. Not all expenses are deductable.

The Tax Office says there are three golden rules:

The expense must have been for your business, available as an allowable deduction and not for private use.
If the expense is for a mix of business and private use, you can only claim the portion that is used for your business.
You must have records to prove it.

If a business is buying a new car in end of financial year sales to provide as a staff benefit, they need to be aware of fringe benefit tax rules. Some vehicles, like eligible electric vehicles, may be exempt from FBT while others, such as a ute, could attract FBT

Business name and company registration fees

The Australian Securities and Investment Commission will increase fees for registering, renewing and reserving company and business names from 1 July in line with the rise in the Consumer Price Index.

Details of the price changes are available on the ASIC website.

Engineered stone ban

A ban on the manufacture, supply, processing and installation of engineered stone benchtops, panels and slabs takes effect from 1 July. It has been imposed due to the danger that engineered stone dust poses to workers.

Some states and territories have specific transitional arrangements in place. Visit Safe Work Australia for more information.

New Commonwealth Procurement Rules

Changes to Commonwealth Procurement Rules will come into effect from 1 July promising small businesses an increased opportunity to win a government contract.

The Australian Government will boost the target for sourcing from small and medium-sized business for contracts below $20 million from 35% to 40%. While the target for contracts under $1 billion will lift from 20% to 25%.

It also says it will raise the SME exemption threshold to $500,000 to make it easier for government to buy from SMEs. New rules for panels will also hopefully increase opportunities for small and First Nations’ businesses.

The Australian Government’s new Environmentally Sustainable Procurement Policy will also take effect from 1 July. If your business supplies goods or services to the government, this means you’ll be required to undertake activities to substantiate environmental claims and demonstrate compliance with the policy.

Visit the Department of Climate Change, Energy, the Environment and Water for more information.

New workplace laws

A range of workplace changes take effect in July and August and small businesses should be prepared for changes to casual employment and new minimum standards and protections for ‘employee-like workers’ in the gig economy.

There are also new laws around the right to disconnect, although for small businesses with fewer than 15 employees this change does not apply for another 13 months on 26 August 2025.

More details and timelines are available from the Fair Work Ombudsman.

Other resources

A useful end of financial year checklist for small business relating to tax, insurance and avoiding scams is available here.

The Tax Office provides a Tax Time Tool Kit to assist small business to prepare their tax returns, which includes a directory of links to find information, tools, calculators and other support and resources. It will be available in early July from the ATO.

The ATO also provides a cash flow coaching kit, which is available through its new Essentials to Strengthen Your �Թ��.

ASBFEO Media contact: 0448 467 178 / media@asbfeo.gov.au

�Թ�� cranky and exasperated about delay passing legislation

Olivia Pearce — Tue, 25 Jun 2024 23:26:44 +0000

�Թ�� cranky and exasperated about delay passing legislation Olivia Pearce Wed, 06/26/2024 - 09:26

26 June 2024

The Australian �Թ�� and Family Enterprise Ombudsman, Bruce Billson, says the small business community is exasperated by the delay in passing vital incentives to invest and create jobs that will expire on Sunday.

The Ombudsman called for new safeguards to give small and family businesses certainty and a minimum 6 months to properly use government incentive schemes.

“With just days to go before the end of the financial year, Federal Parliament last night finally passed two pieces of legislation from the 2023 Budget that were announced more than a year ago and will expire on 30 June,” Mr Billson said.

“The small business community is cranky and exasperated about the incredibly slow way these measures have progressed.

“Incentives are designed to encourage a type of behaviour you want to see more of but if there is so little time to act, the purpose and value of the incentive is undermined.”

Fourteen months ago, the Australian Government announced the �Թ�� Energy Incentive tax break worth up to $20,000 to support electrification and more efficient use of energy. It also set a new $20,000 threshold for the Instant Asset Write Off. Both promises were contained in Treasury Laws Amendment (Support for �Թ�� and Charities and Other Measures) Bill 2023.

“It’s absurd to think a small business can evaluate options, get advice about whether a possible investment is eligible for the incentive, confirm that stock and installation help is available, now buy, install and be using the equipment in line with the rules by 30 June,” Mr Billson said.

“We’ve heard from confused small businesses and their representatives that they just wanted certainty. But until a Bill passes Parliament, they cannot know what the final law will say and if an intended investment is eligible.

“We’re talking about a small or family business spending $100,000 to get the full value of the electrification and energy efficiency tax incentive. That’s a big commitment, and as recognised by the Government, the tax break may be the critical difference in being able to afford to do this.

“This week we are celebrating World Micro, Small and Medium-sized Enterprises Day (on Thursday 27 June) but the Parliament is hardly treating small and family businesses with respect by this behaviour.

“It is fine for opposition parties to seek to change government legislation and it is equally fine for the Government to say no.

“But it is not fine for political squabbling to run down the clock so there is no realistic prospect a small business can have certainty to provision for and spend this money with confidence the tax deduction is real.”

Mr Billson called for new safeguards to give small business certainty.

“Small businesses need time to know the announcement has become law, so they can confidently plan in a sure-footed way for important investments that uplift the capacity, the productivity and drive innovation in their business and not be forced in the final days of the financial year when they have so many other deadlines to meet, to rush such big financial commitments,” he said.

“Laws with a time deadline should come with a minimum implementation period. We would suggest no less than 6 months from Royal Assent until the time a scheme ends.

“Incentives like these programs help energise enterprise. That’s why they are announced in the first place.

“The policy was designed to encourage small businesses to spend money it would otherwise not have spent, but a lack of certainty over the program may have deterred them.”

This Energy Incentive promising a bonus 20 per cent depreciation is available to businesses with a turnover below $50 million to save money on energy bills by electrifying their heating and cooling systems, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps.

“The Government said the $314 million scheme had been ‘specially timed’ to help small businesses lay the foundations for their future growth,” Mr Billson said. “Yet, time has almost run out.”

Mr Billson said he feared that the limited time available could mean the bonus tax deduction will only benefit businesses that were going to purchase energy efficiency upgrades before the policy was announced.

“I’d hate to see economists questioning the value of these settings because they’re only rewarding behaviour that otherwise would have happened anyway,” he said.

Each year the Instant Asset Write-Off resets to $1000 unless new legislation is passed to increase it. In the May 2023 Budget the Government announced it would be $20,000 for eligible small businesses with a turnover up to $10 million.

“We need to give more encouragement for people to turn an idea into an investment and to make that big decision to turn scarce resources into new capability, new equipment, new technology to help with the success and ‘future readiness’ of that enterprise and the livelihoods that depend upon it,” Mr Billson said.

“Repeatedly we hear it said that small business is the engine room of the economy yet that engine is being forced to operate below capacity.

“Small businesses need to be able to trust Parliament to give them enough time to understand changes and with certainty factor them into their planning.”

MEDIA CONTACT: 0448 467 178 / media@asbfeo.gov.au

Celebrating World Micro, Small and Medium-Sized Enterprises Day

Olivia Pearce — Mon, 24 Jun 2024 23:02:16 +0000

Celebrating World Micro, Small and Medium-Sized Enterprises Day Olivia Pearce Tue, 06/25/2024 - 09:02

25 June 2024

The Australian �Թ�� and Family Enterprise Ombudsman, Bruce Billson, is encouraging Australians to celebrate World Micro, Small and Medium-sized Enterprises Day on 27 June by saying thank you to small and family businesses for their contribution to our economy and our country.

“These are great people in plain sight, and we see them everywhere, every day,” Mr Billson said.

“We depend heavily on the small and family-run businesses in our lives who work every day to delight customers and energise enterprise.

“The best way to support small businesses is to be a kindly customer – patient and understanding, with good and generous intent.

“Small business also needs to be front of mind for our policy makers and regulators. We need to do all we can to shift the mindset from minimising headwinds to maximising the ‘wind in the sails’ of our hard-working small and family businesses.”

Mr Billson called for a greater appreciation of the contribution of small business to be shown by creating the Prime Minister’s �Թ�� Awards and for state, territory and federal governments to require every Cabinet submission to include a small business impact statement.

“Why not establish the Prime Minister’s �Թ�� Awards to celebrate excellence and inspire the next generation?” Mr Billson said.

“And a simple improvement that governments at all levels around the country could take is to require every submission to Cabinet to include a small business impact statement.

“Every well-intentioned change by Parliament or regulators risks adding to the mountain of red tape that gets between the owner and the small business they are trying to run.

“Regulatory impact assessments should start with and focus on small business implications, not consider this as an afterthought. This would mean every time a decision is made, small business will be front of mind and bright on the radar screen.”

Almost 98 per cent of businesses in Australia are small businesses – some 2.5 million who generate almost $600 billion of economic activity accounting for 33 per cent of our nation’s GDP.

Small businesses provide jobs for 5.36 million people – 42 per cent of private sector jobs.

“This contribution is truly worth of recognition and celebration, but in 2006 the sector contributed 40 per cent of GDP and employed 53 per cent of private sector jobs,” Mr Billson said.

“This worrying trajectory shows we need to do more to energise enterprise.

Just released figures from the Tax Office show 46 per cent of small businesses didn’t make a profit in the most recent year of accounts available.

And some three-quarters of self-employed business owners are earning less than the average total weekly, full-time earnings.

“There’s no rivers of gold for these people, just a hard slog,” Mr Billson said.

“Surely, we can do more to get the risk and reward balance right, ensuring small business and entrepreneurship is a really attractive option for people, then create a supportive ecosystem to give enterprising people the best chance to be successful.”

Mr Billson said there needed to be a greater understanding of the cumulative demands and resource-constrained circumstances of small businesses.

“There’s a flurry of new workplace rules and obligations, changes to privacy laws, fear about cyber security and what we call ‘white tape’ where big business is asking for more and more information from small businesses suppliers,” he said.

“Small and family businesses are not looking for an escape hatch, but need a right-sized, actionable, fit-for-purpose, and efficient approach with appropriate support and guidance.”

Data compiled by ASBFEO also shows small business owners are also getting older with the average age now 50, up from 29 where it was in 1976. In the 1980s there were twice as many small business owners aged between 30 and 49 as there were aged over 50.

Only 8 per cent of our small business owners are under the age of 30, half what it was in the 1970s.

“Why is the next generation not seeing self-employment and their own enterprise as a pathway for the future?” Mr Billson said.

“At a time when young people, particularly, look for purpose as well as profit in their lives, isn’t self-employment a natural fit?

“Encouragingly, 35 per cent of small businesses are owned by women –double the rate from the 1970s. Increasingly, new businesses are being created by women who are finding solutions to everyday problems, sharing their ideas and building a business from their ingenuity.

“One in three small businesses are also run by people who were born overseas and our culture, local business communities, and the choice of goods and services available to consumers and other businesses, are enriched by their presence.”

Mr Billson said small business is a dynamic and fast-growing sector that allows people with an entrepreneurial spirit to pursue their dreams and own livelihoods.

“They come with varied ambitions, backgrounds and experiences but what they have in common is the desire to have a go,” he said.

“Taking on the responsibility of owning and running a small business can be inspired by a range of goals and motivations, an abundance of purpose and meaning and be rich with unpredictability of challenges, flexibility, self-agency and income.

“The spirit that drives people to run a small business also makes them great advocates for and contributors to their community and they are more likely than the general population to be a volunteer.

“For small and family business owners, their identities are interwoven into their business and the stakes are so much higher than just a job. Many people have invested a lifetime -- and put their family home on the line -- to build up their business, which amplifies the emotional challenges.”

Mr Billson said it was important those running a small business look after their emotional well-being and mental health and commended the Australian Government’s budget decision to provide $7.7 million over two years to extend funding for mental health support through the New Access for �Թ�� Owners program and $3.1 million over two years for the �Թ�� Debt Hotline.

“We have seen a 20 per cent increase in calls to our helplines over the past year from small businesses struggling to manage their debts,” he said.

“Sometimes it can be as simple as making time to pause, reflect and reconnect. Talking to trusted advisers and networks is a great way to find solutions. Our website www.asbfeo.gov.au also has tools and resources that can be useful.

MSME Day is an initiative of the United Nations General Assembly to raise public awareness of small business’ contribution to our prosperity, wellbeing, and community.

MEDIA CONTACT: 0448 467 178 / media@asbfeo.gov.au

Keeping small businesses afloat comes down to us all

Olivia Pearce — Sun, 23 Jun 2024 23:38:56 +0000

Keeping small businesses afloat comes down to us all Olivia Pearce Mon, 06/24/2024 - 09:38

24 June 2024

Originally published in the Canberra Times.

This week we celebrate World Micro, Small and Medium-sized Enterprises Day, which is a terrific opportunity to say a big thank you to the enterprising people who are the lifeblood of our communities.

We depend heavily on the small and family-run businesses in our lives - whether it is an electrician or builder, childcare operator, gardener, dog groomer, doctor or dentist.

It may be a bookkeeper or accountant, private tutor, cleaner or health therapy professional, a truck driver, fitness instructor or graphic designer.

Perhaps it is a local winemaker or farmer, mechanic, bespoke jewellery maker, pharmacist, grocer or cafe owner who work every day to delight customers and energise enterprise.

These are great people in plain sight,. We see them everywhere, every day.

Small business is a dynamic and fast-growing sector that allows people with an entrepreneurial spirit to pursue their dreams and own livelihoods. They come with varied ambitions, backgrounds and experiences but what they have in common is the desire to have a go.

MSME Day, on June 27, is an initiative of the United Nations General Assembly to raise public awareness of small business' contribution to our prosperity, wellbeing and community.

Almost 98 per cent of businesses in Australia are small businesses - some 2.5 million who generate almost $600 billion of economic activity, accounting for 33 per cent of our nation's GDP.

Small businesses provide jobs for 5.36 million people - 42 per cent of private sector jobs.

This contribution is truly worthy of recognition and celebration. But in 2006 the sector contributed 40 per cent of GDP and employed 53 per cent of private sector jobs.

This worrying trajectory shows we need to do more to energise enterprise.

Small business needs to be front of mind for our policymakers and regulators. We need to do all we can to shift the mindset from minimising headwinds to maximising the "wind in the sails" of our hard-working small and family businesses.

Why not establish the Prime Minister's �Թ�� Awards to celebrate excellence and inspire the next generation?

Every well-intentioned change by Parliament or regulators risks adding to the mountain of red tape that gets between the owner and the small business they are trying to run.

A simple improvement that governments at all levels around the country could take is to require every submission to Cabinet to include a small business impact statement. Regulatory impact assessments should start with and focus on small business implications, not consider this as an afterthought.

This would mean every time a decision is made, small business will be front of mind and bright on the radar screen.

Just released figures from the Tax Office show 46 per cent of small businesses didn't make a profit in the most recent year of accounts available.

And some three-quarters of self-employed business owners are earning less than the average total weekly, full-time earnings.

There's no rivers of gold for these people, just a hard slog.

Surely, we can do more to get the risk and reward balance right, ensuring small business and entrepreneurship is a really attractive option for people, then create a supportive ecosystem to give enterprising people the best chance to be successful.

Expectations and the "ask" take too little account of the cumulative demands and resource-constrained circumstances of small businesses.

There's a flurry of new workplace rules and obligations, changes to privacy laws, fear about cyber security and what we call 'white tape' where big business is asking for more and more information from small businesses suppliers.

Small and family businesses are not looking for an escape hatch, but need a right-sized, actionable, fit-for-purpose, and efficient approach with appropriate support and guidance.

Our small business owners are also getting older with the average age now 50, up from 29 where it was in 1976. In the 1980s there were twice as many small business owners aged between 30 and 49 as there were aged over 50.

And only 8 per cent of our small business owners are under the age of 30, half what it was in the 1970s.

Why is the next generation not seeing self-employment and their own enterprise as a pathway for the future? At a time when young people, particularly, look for purpose as well as profit in their lives, isn't self-employment a natural fit?

Encouragingly, 35 per cent of small businesses are owned by women - double the rate from the 1970s. Increasingly, new businesses are being created by women who are finding solutions to everyday problems, sharing their ideas and building a business from their ingenuity.

One in three small businesses are also run by people who were born overseas and our culture, local business communities, and the choice of goods and services available to consumers and other businesses, are enriched by their presence.

Taking on the responsibility of owning and running a small business can be inspired by a range of goals and motivations, an abundance of purpose and meaning and be rich with unpredictability of challenges, flexibility, self-agency and income.

The spirit that drives people to run a small business also makes them great advocates for and contributors to their community and they are more likely than the general population to be a volunteer.

For small and family business owners, their identities are interwoven into their business and the stakes are so much higher than just a job. Many people have invested a lifetime - and put their family home on the line - to build up their business, which amplifies the emotional challenges.

The pressures can feel unrelenting, but it is vitally important those running a small business look after their emotional wellbeing and mental health.

Sometimes it can be as simple as making time to pause, reflect and reconnect. Talking to trusted advisers and networks is a great way to find solutions. Our website asbfeo.gov.au also has tools and resources that can be useful.

The best way to support small businesses is to be a kindly customer - patient and understanding, with good and generous intent. Small businesses are run by real people who deserve our respect and empathy every day.

Our small and family business owners and managers are great people, and we salute the terrific contribution they make everywhere, every day.

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�Թ��� cranky and exasperated about delay passing legislation

Celebrating World Micro, Small and Medium-Sized Enterprises Day

Keeping small businesses afloat comes down to us all

�Թ�� cranky and exasperated about delay passing legislation