News

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 91��Ƭ�� Small Business 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 Small Business 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 Small Business 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 Small Business 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 Small Business and Family Enterprise Ombudsman

Checking the pulse of small businesses across Australia

Olivia Pearce — Sun, 04 Aug 2024 23:32:58 +0000

Checking the pulse of small businesses across Australia Olivia Pearce Mon, 08/05/2024 - 09:32

05 August 2024

Opinion piece by the Ombudsman Bruce Billson.

Originally published in the Canberra Times.

Small business is the beating heart of our communities and our economy, so it is crucial to check the pulse of such an important sector to measure its health and vitality.

Whether we realise it or not, small businesses are a big part of our daily lives from the local café to the tradie or any one of the many personal services providers who improve our lives.

But it's a significant responsibility running your own business and the unseen 'business of running the business' can be physically, mentally and financially exhausting.

That's why I'm so pleased my agency, the Australian Small Business and Family Enterprise Ombudsman, has created the 91��Ƭ�� Small Business Pulse to measure and communicate a small business "health check".

The Pulse is an innovate combination of non-traditional and traditional data to produce an indicator of small business health. It's a 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 who look for delicious opportunities as they navigate challenges they may face.

The first release of the 91��Ƭ�� Pulse shows the business environment remains well below the long-term average - about 25 per cent down. Put another way, if you believe, as I do, small and family businesses are the "engine room of the economy", we have lost a cylinder in a four-cylinder engine in the aftermath of COVID.

Most recently, the Pulse fell 0.6 per cent in August 2024 and over the past 12 months it has fallen 3.5 per cent, pointing to a stabilising trend in a particularly challenging period. We will release a new Pulse check every three months.

What is clear from the Pulse is there continues to be a modest decline after the stark deterioration caused by an end of COVID support and COVID-amplified changes in the structure of the economy including inflationary pressures, skills shortages, supply chain challenges and pronounced margin squeeze, and the series of interest rate increases.

For small and family businesses, higher interest rates not only impact their costs of financing but have profound implications for customers in terms of their spending, preferences and confidence.

The time-series for the Pulse covers the past eight years and has been developed by my agency over the past two years and 'field tested' with small businesses.

We created the Pulse in line with OECD best practice. It brings together a range of data sources that can provide early indicators of changes in the lived experience of small business and the motivations that drive them and is particularly important when conditions are changing rapidly, which traditional sources of information and point-in-time surveys often miss. The Pulse captures three broad areas that reflect the eco-system for small business owners.

Sentiment: the human emotions and instincts that drive behaviour. This includes people considering starting a business, existing business owners considering closing their business and existing sentiment survey measures.
Business transformation: measuring variables such as queries about engaging staff, innovation, coaching and mentoring, marketing, advertising, capital investment and funding.
Business operation: The business of running a business such as complying with regulations, business entries and exits (including insolvencies), demand, economic performance, levels of debt and general economic conditions including disputes.

Our approach is different to other interesting and informative small business surveys that provide useful snapshots, since we use measurements beyond customer data, sample populations and specific questions. We are therefore able to capture the views and experiences of the business life-cycle, and in near-real time.

The Pulse probes factors which range from people considering starting a business, responses to changing conditions, those who are transforming or growing their business, through to those who are considering closing their business and those who finally do so. We're seeing rising queries from exhausted small business owners looking at their options. These include those who are in financial distress and those who are looking for a dignified dismount while they still have choices.

Small business owners are concerned about the viability of their business and whether they can ride out the tough economic climate. The value of debts owed by small businesses increased over the last year and around half of small business loans are secured by the family home.

Small businesses are increasingly concerned other businesses that owe them money are insolvent with corporate insolvencies at record highs. Unincorporated business failures have also increased, although they remain below pre-pandemic levels. Payment disputes are often an early warning sign of cash flow issues. These now account for 42 per cent of disputes where we provide one-to-one assistance to small businesses.

The labour market remains tight but has eased slightly over the past year. While this is encouraging for small businesses looking to hire staff, there are fewer smaller employers than last year. Queries about recruiting new staff have reached their lowest levels in nine months.

A bright note is queries from people considering taking the leap into business have remained relatively high since February and business formation continues. Similarly, there has been a rise in small business owners interested in growth ambitions and seeking business coaching and mentoring.

However, the operating environment remains challenging. Concerns about regulation continue to remain high, particularly tax and work health and safety. There are also increasing queries about small business privacy obligations.

Our Pulse check tells us we need to do more to energise enterprise. It is not enough to rely on the abundant optimism and drive of small and family business owners alone. We need the right incentives and better encouragement to do more than just mitigate the "wind in the face" but to confidently "put wind in the sails" of businesses and to make sure the "engine room" of the economy is firing on all cylinders and is supported by conditions that optimise the prospects for success.

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 91��Ƭ��, 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.

Government should show small businesses respect

Olivia Pearce — Mon, 10 Jun 2024 23:12:39 +0000

Government should show small businesses respect Olivia Pearce Tue, 06/11/2024 - 09:12

10 June 2024

Originally published in the Canberra Times.

Australia's small businesses have been treated in a very shabby way by squabbling in our Federal Parliament.

And our Parliament is a repeat offender.

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. And small and family businesses with the means and capacity to play a part of the energy transition have been dudded.

Thirteen months ago, the Australian government announced a new Small Business Energy Incentive to give a tax break worth up to $20,000 to support electrification and more efficient use of energy.

This bonus 20 per cent depreciation was available for those with a turnover below $50 million and promoted as helping them 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 boasted the $314 million scheme had been "specially timed" to help small businesses lay the foundations for their future growth.

Now the clock is running out. The scheme requires a small business to have the assets or upgrades not only purchased but installed and "ready for use" by June 30.

However, the legislation that would make this tax break law has still not been passed by the Parliament and is caught in a battle between the parties about other legislation.

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 this 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.

We're talking about a small or family business spending $100,000 to get the full value of this 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.

As it currently stands, the package of bills has passed the House of Representatives but been changed by the Senate. The government rejected those changes and sent it back to the Senate, which stood its ground. As did the House.

So, this stalemate goes back to the Senate, but it does not sit again until June 24. Even if this is the first item of business and the Senate changes its mind, it will leave small business with less than a week to buy, install and use this equipment. That's if it's even available.

It's just not realistic and it's an insult to small businesses.

We're hearing from confused small businesses who just want certainty. Until it passes Parliament, they cannot know what the final law will say and if an intended investment is eligible.

Leading accountants say it is difficult for tax agents to advise clients about the Small Business Energy Incentive and until it becomes law, the Tax Office can't provide guidance to understand the types of investments that qualify for the incentive.

Small businesses need time to plan investment decisions, not be forced in the final weeks of the financial year when they have so many other deadlines to meet, to rush such big spending decisions.

Frustratingly, this is not the first time this has happened.

The $1 billion technology investment boost, announced in the March 2022 budget was not made law until 15 months later on June 23, 2023, and then expired a week later on June 30, 2023.

It offered businesses with an annual turnover of less than $50 million a bonus 20 per cent deduction for investing in digital operations such as new equipment like technology, cloud-computing, eInvoicing or cyber security.

We don't know how much of the proposed $1 billion in tax breaks were actually used.

Then there's the perennial uncertainty about the Instant Asset Write-Off Measure, that is again held up in Parliament.

It has become the practiced for the eligible amount and the qualifying threshold to be adjusted by governments from year to year, and during the pandemic this was generous to help business confidence.

However, for the soon-to-be-completed 2023-24 financial year, the amount announced last year of $20,000 per asset basis for eligible small businesses with a turnover up to $10 million, has not yet become law.

It may not be settled until a week before the end of the financial year. If there's no agreement by the Parliament, the rate will only be $1000 - so that's a big risk for a small business to take.

This highlights the need for predictability and certainty so a small business can plan in a sure-footed way for important investments that uplift the capacity, the productivity and drive innovation in their business.

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

Such incentives help energise enterprise. That's why they are announced in the first place.

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 of that enterprise and the livelihoods that depend upon it.

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.

Most of all, small and family businesses need to be treated with respect.

Opening statement to Senate Estimates

Olivia Pearce — Wed, 05 Jun 2024 00:52:17 +0000

Opening statement to Senate Estimates Olivia Pearce Wed, 06/05/2024 - 10:52

04 June 2024

Australian Small Business and Family Enterprise Ombudsman Bruce Billson opening statement to Senate Estimates

It is often said that small business is the engine room of the economy. We must ensure that small and family business can fire on all cylinders – not have a cylinder taken out.

The federal budget offers targeted support to ease current pain points and headwinds, but small and family businesses will not be punching the air with excitement, thinking the budget is a real game changer for them.

A Future Made in Australia must be founded on harnessing the innovation and drive of our small businesses -- small businesses that have a proven track record of lifting our nation. Remember, coming out of the global financial crisis, almost 60 per cent of the new jobs were created by small employers.

But right now, it’s tough for our small and family business owners.

We need 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.

Our 2.5 million small businesses employ 5.36 million people – 42 per cent of private sector jobs. And generate 33 per cent of GDP.

But in 2006 the sector employed 53 per cent of private sector jobs and contributed 41 per cent of GDP.

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

Some 43 per cent of small businesses didn’t make a profit in the last full year of reporting.

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

Yet not a day goes by when you don’t hear a regulator or a legislator saying: “Don’t get this wrong”. But even big businesses struggle at times to get all things right.

So just imagine how difficult this is for time and resource poor small business owners. A small business isn’t a shrink-wrap version of a big corporation.

Expectations and the ‘ask’ tend to 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 -- one after another, changes to privacy laws with the removal of the exemption for the small business community, cyber security fears and what we call ‘white tape’ where big business is asking for more and more information from small businesses suppliers.

Small businesses don’t want to ignore these important areas and reforms but need a right-sized, actionable, fit-for-purpose, and efficient approach with appropriate support and guidance.

Small business needs to be front of mind.

We have been working closely with the Australian Government and regulators urging them to make sure changes are easy to implement for a time-poor small business owner, with clear advice and timelines.

Since our inception, we have helped small businesses to resolve over 40,000 disputes, at no or low cost, with other businesses or government agencies outside the costly legal system.

We have continued to be vocal in our concern about the rising number of problems small and family businesses are encountering with digital platform providers, which now account for one in five of our cases.

Two out of every five requests for help from a small business relate to a payment dispute. Too often that first party that is slow to pay its suppliers is a big business or a government department.

Cash flow is the oxygen of enterprise, but difficult conditions mean when one party is late in paying, it can cascade through the supply chain.

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.

Corporate insolvencies are at their highest level in nearly a decade and at record highs in the construction sector.

It is often not realised that there are more small businesses in the construction sector than any other industry, so it’s a terrible truth that when construction falters many small businesses can collapse.

One of the biggest areas needing reform is access to justice for small business to enforce their rights and seek justice under the laws and protections Parliament has already put in place.

This could be done by introducing a Federal Small Business and Codes List into the Federal Family and Circuit Court of Australia to provide an affordable, effective and timely alternative for small businesses themselves to seek redress for unfair conduct.

Finally, our inquiry to examine the impact of reforms to Commonwealth Procurement Rules on small business was recently released, containing 11 specific, constructive and practical recommendations that, together, can achieve the profound change in incentives and behaviours required to address persistent problems and realise the full benefits of government spending through a genuine embrace of small businesses in the supplier community and procurement processes.

The response by the Australian Government was a missed opportunity to meaningfully improve the ability for competitive small and family businesses to be a supplier to the Commonwealth and disappointingly at odds with the evidence, research and reference group input, and the clear view of those who made submissions about their direct experience trying to navigate the existing system.

I think the greatest renewable resource in our country is the perpetual optimism of enterprising men and women.

It is quite uplifting and remarkable how optimistic our small business community is even when they're facing confronting and challenging business conditions.

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.

I look forward to your questions.

MEDIA CONTACT: 0448 467 178

Big tech laziness is hurting small Australian businesses

Olivia Pearce — Sun, 12 May 2024 23:49:09 +0000

Big tech laziness is hurting small Australian businesses Olivia Pearce Mon, 05/13/2024 - 09:49

13 May 2024

Originally published in The Canberra Times.

Digital platforms have fundamentally changed the way small businesses connect and sell to their customers. Yet, when there is a problem - such as having your account shut down after being hacked - solving it can be a nightmare.

Whether it is Facebook, Instagram, Uber, Amazon, eBay, Shopify or any of the many other digital platform providers, across the board there is an urgent need for them to do better by their small and family business customers.

In too many cases, when there is a problem these platforms require a time and resource-poor small business to navigate the most elaborate maze of dead-ends and blockages.

The number of cases we've seen involving a small business having problem with a digital platform has more than doubled since July 2022 (up by 127 per cent) and continues to be one of the top requests for assistance that requires a case manager to get involved.

Two-thirds of our cases relate to Meta, the owner of Facebook and Instagram, and 75 per cent of those disputes last month alone were about getting access to an account after being hacked.

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.

Meanwhile, small businesses watch helplessly as the financial and emotional damage occurs in real time with no ability to stop it.

They lose customers and money if a credit card linked to these accounts is being used by the hacker or the hacker uses the account to access and harm other customers.

Big tech must do better by its small and family business customers that depend on them.

What is most important is to have processes in place so businesses relying on these digital platforms to conduct their business and provide a livelihood can get back to business as quickly as possible.

Some of the delays experienced by small businesses have lasted many months and having someone else access and control their account is devastating for their business and their reputation.

We are urgently calling for codified, dependable and easy-to-use internal dispute resolution processes to be adopted by these digital platforms that can get problems resolved quickly.

They need to be backed up by a real person you can speak to when a problem can't be easily fixed.

And this can be supported by a promoted external dispute resolution service, such as the Australian Small Business and Family Enterprise Ombudsman, for small businesses that can't gain a satisfactory outcome when working directly with the platforms.

We have also launched a Guide to Using Social Media Securely, which include tips for small and family businesses about how to reduce the risk of being hacked and steps that can be taken with the digital platforms if you are.

When setting up a business on a digital platform:

Create your profile with the level of privacy and settings you are comfortable with, and that you can easily control and manage.
Make sure you can remove other users or profiles connected to the account and can control their level of page access.
Confirm you can turn ads on or off and can remove or update advertising payment information.
Have your account/s set up so the platform can communicate with you either via an app, text message or email to help with account recovery (should you need it).
Create a separate payment method that is only used for your social media account/s and set a limit on spending.
Keep your account details in a safe place. If your account is hacked and/or disabled, you may need to provide the URL for all your pages/accounts; the phone number and email address; and a screenshot of your page/s with the business name.
Consider expanding your business online presence to more than one platform. If your account is disabled, you can use the other platforms to continue to operate and keep your business going.

Treat your online business security like you would a shop, factory or your home. You wouldn't give a person you have just met the keys to your business or your house, so only give access to your business account to trusted individuals. And remember, not all users require full admin access.

And if you are hacked, report your issue immediately to the platform and make sure you are actually communicating with the platform and not the hacker.

The free guide is available on our website at asbfeo.gov.au/sm-securely

We are also concerned about the rising trend of digital platforms routinely giving purchasers their money back without verifying their claim and then clawing back that money from a small business seller.

The practice called "chargebacks" is a routine aspect of card-based transactions and is useful to consumers and small businesses when transactions have been falsely initiated and payment taken for goods or services not actually supplied.

But the system is being gamed by scammers. Platforms tend to favour the consumer in these instances, while banks issue an immediate reversal of the charge and give the small business limited time to contest it.

We have had cases where customers tell the platform the item never arrived despite evidence of the delivery. The platforms tend to simply accept the customer's claim of non-delivery with fewer questions asked and scammers make an untrue claim an item hasn't arrived, seek a recharge and keep the item.

This bias towards purchasers over small businesses sellers makes it extremely difficult to dispute claims - even when there may be very real indicators of fraud.

Online and platform retailers need to ensure they have fulfilment processes that provide delivery evidence to be able to challenge a chargeback against them given the reluctance of banks and platforms to go against what a consumer is claiming.

Some platforms offer chargeback protection but there have been mixed experiences whether this works and, in some circumstances, Australian cases are not actually covered.

What's at stake, though, is a small business' livelihood. A fraudulent chargeback doesn't just represent the loss of profit on the sale. It's the loss of profit on the sale plus the cost of the good and freight borne by the small business.

It is similar to driving off at a petrol station without paying. And, let's be clear, it's stealing.

This current approach by platforms and banks doesn't give small business a fair go.

It's time to celebrate Australia's small businesses

Olivia Pearce — Mon, 15 Apr 2024 02:40:02 +0000

It's time to celebrate Australia's small businesses Olivia Pearce Mon, 04/15/2024 - 12:40

15 April 2024

Originally published in The Canberra Times.

By Bruce Billson.

It is often said small business is the engine room of the economy. We must ensure small and family business can fire on all cylinders - not have a cylinder taken out.

We need to get the risk and reward balance right, make small business and entrepreneurship a really attractive option for people, then create a supportive ecosystem to give enterprising people the best chance to be successful.

There's a lot of things coming 'at' the small business community. We seem to be perpetually involved in consultation about a new imposition, a new measure, a new burden, a new complication that's on top of the challenges and those late night compliance activities those of us that have run a business know we are contending with right now.

It seems so often we are there to mitigate the worst of new headwinds. That we're trying to make something that's not that great, a little less bad.

Everyone asks, what can we do to make things easier? Well, we could stop making them harder. There's a tip.

We need to shift the mindset from minimising headwinds to maximising the "wind in the sails" of our hard-working small and family businesses.

I think the greatest renewable resource in our country is the perpetual optimism of enterprising men and women.

It is quite uplifting and remarkable how optimistic our community is even when they're facing confronting and challenging business conditions and some hard numbers that might tell a different story.

Some 43 per cent of small businesses were not profitable in the last full tax year. Three-quarters of self-employed people, for whom their business is their full-time livelihood endeavour, take home less than average total weekly earnings. There's no rivers of gold for those people. They're working their tails off every day.

The narrative about how buoyant profitability is in the business economy is not the profit trajectory of the 70 per cent of small businesses who are unincorporated. If there is profit, it is 3 per cent a year, whereas for the larger corporates annual profit growth is at 13 per cent.

And our small business owners are getting older and having fewer succession options. The average age of a business owner is now 50, up from 45 in 2006. Only 8 per cent of our small business-owning fraternity are under the age of 30, half what it was in the 1970s.

We honour and celebrate the 42 per cent of private sector jobs made possible by the small and family business community. That is fantastic and small business continues to be the largest employer compared to large- and medium-sized enterprises. But in 2006 it was 53 per cent of private sector jobs coming from small business.

The vast majority - 94 per cent - of employing businesses are small. But does anyone believe the workplace relations system is designed for this vast majority?

And while we cheer that small businesses contributes one-third of GDP (32.4 per cent), that is actually the lowest proportion since that data series began in 2006 when small businesses were contributing 41 per cent of the economy.

Small businesses are working extremely hard but the subterranean shift is Australia is becoming a big corporate economy. This transformation is happening before our eyes. And I would suggest we need to do more to try and bring about a change if we believe, as I do, small and family businesses will be the drivers of innovation and our best prospects for improving incomes and living standards.

Those underlying numbers point to a different story. Advantage being gained by large, already advantaged, well-resourced businesses.

How do we encourage the next generation of small business owners? How do we take the inspiration, support the perspiration that's part of it, and drive the innovation people keep talking about with the new productivity initiative. Something that will do better than what we're doing right now? We need to shift the conversation.

For example, where are the deregulation targets? Where is the agenda that says we need right-size regulation, risk-informed, proportionate, relevant and able to be competently implemented by a party of good will?

You don't hear a word about targets for reducing compliance costs. And why are some of the worst offenders other businesses? We call it white tape. You want to become a supplier to a major supermarket chain, you have to jump through a mountain of hoops. Does that improve the return? No. It's a right to play!

Why don't we have Regulatory Impact Statements that have to have a small business impact and implications area in them? Cabinet submissions talk about regional implications. Where's the small business implication so that those considerations are front-of-mind and bright on the radar screen every time governments make a decision?

Where is the criteria that talks about how responsive and engaging a regulator is with the small and family businesses they are regulating? If regulators and impositions get too heavy who can open that door to that opportunity? It won't be a small, less well-resourced businesses. It will be a big business already advantaged with another avenue to exercise that advantage.

Departments and agencies boast about the resources available for small businesses and the ATO has done a great chart just on government supports. But it looked like Noodle Nation. You need to be a genius to navigate it and to find 'actionable information' about your area of concern or interest. What's a time-poor small business to do?

Take digitisation, which is a really crucial challenge but also an enormous opportunity that will help the business of running the business, as well as finding new markets and new ways to delight customers. How can we join up all the various programs to make it easier for small business to embrace those opportunities?

We celebrate arts and sport. Why not create a Prime Minister's Small Business Awards to draw attention to how valued small business people are?

It's time to energise enterprise.