Australian Small Business and Family Enterprise Ombudsman – ASBFEO

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COVID stress got you down? The Small Business Ombudsman has got your back

Australia’s Small Business and Family Enterprise Ombudsman, Kate Carnell, has your best interests in mind. If you’re currently feeling like your heart is heavy, that stress is turning your worry lines into permanent facial features, and you don’t know which way is up, this article is for you.

The list below summarises the Ombudsman’s recommendations for COVID-19 small and family business recovery. This is at the heart of what the ABRT stands for and we proudly stand alongside the ASBFEO and the work Kate Carnell is doing.

If you are very keen to see any of these reforms go through, please contact your local Member of Parliament and make that known.

To read the full Recovery Plan by the ASBFEO, please visit their website and download the Plan.

We’ve cover recommendations regarding Insolvency, Restructuring and Turnaround under a separate article.

1. Introduce new small business loans, HECS-style

Titled, ‘revenue-contingent small business loans’, the idea is that you can access a loan to help you pay your staff once JobKeeper ends. The amount you can access depends on the size of your business. Repayments would be deferred until your revenue hits a threshold level.

2. Legislate a 30-day payment term

If you’ve ever contracted for a large organisation, you’ll know that your payment terms may as well not exist. The Ombudsman has recommended that Australia legislates a 30-day payment term, so that cash flows to small businesses.

Other countries have already done this. For example, in Germany, payment terms are set at a maximum of 30 days. And it’s hard to get of! Let’s say you wanted to negotiate a longer payment terms, that may be successful. But, if you end up in a dispute, then the request may be deemed unreasonable. Sounds amazing, doesn’t it?

3. Take care of businesses affected by infrastructure works

Those businesses whose shop-fronts are adjacent to major infrastructure works like roads and bridges know well the impact it has on trade. While the Ombudsman recognises that some disruption is unavoidable, she is seeking a bit more care. In particular, she urges that consultation occur more broadly. It’s more important, she argues, to ascertain businesses’ needs than to worry about negative press.

Some of her recommendations include financial help, mentoring, face-to-face communication, and the ability to reach someone by phone 24 hours per day. While many look to online portals, the Ombudsman recognises that escalating issues online is inefficient and unhelpful.

4. Standardise farm debt mediation

It might surprise you to learn this, if you’ve always lived in a city, but small businesses are what help our farms to function. In fact, according to the Ombudsman’s report, small business provides 75% of the total value to the agriculture, forestry and fishing sectors.

The Ombudsman’s key recommendation is to standardise farm debt mediation nationally. And, more importantly, that there ought to be consistency in terms of process, costs, and timelines to resolution. The absence of good solutions forces many farms into liquidation, which reduces competition, variety in produce, and fails to support Australia’s independence.

5. Improve access to essential services

The ‘essential services’ noted are:

  • insurance
  • telecommunications
  • banking.

If you’ve never had to deal with a denial of service (as metals traders, adult service providers, tattooists, and some newsagencies have), then you might wonder how banking services could be hard to obtain. But for some, they are.

In fact, some companies are ‘de-banked’, and that without much (or any) information provided to support the decision. Others are ‘de-platformed’ (such as from social media); are unable to access insurance (especially in times of disaster); or have poor service from telecommunications providers.

In all of these cases, businesses find themselves unable to trade. And as Australia recovers from the COVID crisis, such actions inevitably add numbers to unemployment lines.

6. Improve access to skilled employees

Even though small business owners are entrepreneurial, skilled, and innovative folk, it’s often not enough to help them conjure skilled employees out of the air. Finding talent can be hard work!

The Ombudsman has pointed out that many employers are pushed to find workers from overseas. However, there is very little support for developing those skills locally.

In the wake of COVID, employers face heightened risk from employing those on visas. Many had to leave the country, and others simply can’t get back in!

The Ombudsman’s recommendations include a swathe of changes to the National Skills Needs lists, processing times for visas, better support of the vocational education sector, and better cross-over between employers’ needs and the vocational education sector.

Her plan, it seems, is to bring in talent until we have grown enough of our own. To me, that seems eminently reasonable.

7. Start a ‘Buy Small Business Australia’ campaign

Much of Australia was still reeling from last summer’s bushfires just as governments closed everything down with COVID. Thousands of small businesses closed, or are barely limping along.

A ‘Buy Small Business’ campaign, like the ‘Buy Local’ campaigns that popped up around the country in the last few years, will encourage spending to stay local.

And nowhere will this have more impact than in local retail, hospitality and tourism sectors. Spending local doesn’t have to mean big spending. Every dollar counts!

8. Improve ability to trade across borders

And no, we don’t mean international borders. Those businesses who trade in more than one state are often crippled by dealing with different regulatory regimes. It isn’t just the additional administration that is challenging: it’s knowing that your business is always compliant on each side of the border.

There are many examples of this: Trade qualifications that don’t match from state to state; food standards that vary; even differing road rules!

Regulation is always an issue. But as economies begin to recover, this is one area that can seriously hamper a company’s ability to grow.

So what can you do right now?

The question really is, what can you do today? What can you do to ensure that you have the best chance of a good recovery?

You can:

  1. Get your books up to date
  2. Focus on preserving your cash position
  3. Make any changes you have to make (yes, including to staffing) before the COVID supports end
  4. Get specialist professional advice to help you identify and assess the best options.

Eddie Griffith

Eddie Griffith is a founding member of the ABRT and acting president. Eddie is also the senior partner at TurnAbout AU based in South Australia.

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