Red tape cuts and digital transformation on the agenda at COSBOA National Small Business Summit
SMEs are navigating the practical terms of how businesses can manage scaling up their technology and workforce at the annual COSBOA summit this week.
Following the Morrison government’s budget promise to accelerate Australia’s digital transformation with a raft of policy aimed at small business, the SME community is navigating the practical terms of how businesses can manage scaling up their technology and workforce.
While Opposition Leader Anthony Albanese’s budget reply was light on detail around business policy, Labor made a more concrete election pitch to the small business community on day one of the COSBOA National Small Business Summit in Sydney on Tuesday.
Deputy Opposition Leader and Shadow Small Business Minister Richard Marles declared Labor the “party for small business” in the morning’s Minister’s Address.
The opposition promised to cap invoice payment times at 30 days, champion lower merchant service fees, standardise disaster support, and slash red tape at tax time.
The first day of COSBOA’s annual summit also saw peak government bodies and industry experts answer the council’s questions and delve into further detail around government policy to aid digitisation of the sector.
Regulators to ‘cut red tape’ that hampers SMEs
At a panel of regulators featuring leadership from the Australian Securities and Investments Commission, the Australian Competition and Consumer Commission, Fair Work Ombudsman and the Australian Taxation Office, the focus was on how regulators could individually and collectively cut red tape for small businesses.
In one of her first public appearances, new ACCC chair Gina Cass-Gottlieb highlighted the agency was focused on strengthening consumer guarantees that would benefit small businesses, as well as continue its digital platforms services review.
Among broader measures, enacting recommendations from the review could better protect small businesses from the impact of adverse fake reviews and the closure of social media accounts without appeal, Cass-Gottlieb told the summit.
Jeremy Hirschhorn, second commissioner of taxation in charge of the ATO’s client engagement group, said the office is moving full steam ahead in partnership with ASIC on its streamlined business registry system.
Last month’s budget papers outlined further details of the government’s four-year deregulation agenda, which will streamline a number of fees incurred by businesses using the current system.
Regulators need to work more closely to “get data from natural systems”, Hirschhorn said, which would reduce the time small businesses spent inputting data to separate government bodies.
ASIC commissioner Danielle Press called out insurance claims handling as a major area of focus for the agency, which wants to ensure “insurers are treating businesses honestly”.
Among challenges for small businesses that the regulators admitted need to be addressed was the ongoing complexity that hampered innovation and growth.
“The bulk of our work should be about communication and education,” Sandra Parker of the Fair Work Ombudsman told the summit, explaining that businesses often inadvertently imposed red tape “on themselves”.
Fair Work will be increasing communication that spotlights the specific industries it has in its sights, such as non-compliance in fast food restaurants, she added.
“It’s not about surprises,” Parker said.
“For the sectors we are not focused on, you don’t need to be concerned.”
Hirschhorn said SMEs recorded 87% tax compliance compared with 96% for the nation’s corporations.
“Our solution is: how do we make the system easier and not prone to mistakes,” he said of the office’s current work to improve its user experience to increase compliance.
The ATO as a whole “really understands that it’s: ‘how do I drive employee experience’ to improve compliance”, he said.
The path to business digitisation
In response to the federal budget’s proposed digital skills and technology package for small businesses, stakeholders across accounting, IT and cybersecurity, along with digital innovation experts, said small businesses need education to help reduce fears associated with digitisation.
The Small Business Technology Investment Boost, and the Small Business Skills and Training Boost, included in the 2022 federal budget, offer participating businesses an extra 20% tax deduction on relevant expenditure including investment in new technology or external digital skills training for staff.
The package is designed to encourage small business investment, while preparing Australian SMEs to compete in an increasingly digital economy.
But many SMEs still fear the known unknowns of scaling up their business’s digital capabilities, Rosemary Sinclair, chief executive of industry self-regulatory body au Domain Administration (auDA) told a panel focused on small business digitisation.
Internal research at auDA revealed that 22% of SMEs are so worried about cybersecurity they use the internet less, Sinclair said.
The panel, which sought to inspire ways small businesses can improve their digital presence to “compete effectively and capture the online market” said many businesses need support to manage risk as they invest money and time in digital transformation.
Small businesses aren’t investing in cybersecurity in particular because “they don’t know where to invest and they don’t get much support”, Sinclair said.
The cybersecurity policy proposed by the government in the budget is a welcome first step in changing that, she said.
Independent bodies such as auDA are also developing tools for businesses.
In partnership with ASPI it has launched a free tool, AU check, which enables businesses to benchmark where they sit in terms of cybersecurity against international standards.
David Field, founder of e-invoicing solution software OZEDI, told the summit it has partnered with 40% of the payroll providers to bring Single Touch Payroll (STP) to employees and providers, including a new partnership with Bunnings and its payroll provider Xero.
Following the announcement the government has agreed to feed data to all states into STP systems, small businesses could engage partners such as OZEDI to automate payroll, potentially saving hours of manual work, he added.
Shaye Thyer, head of accounting at accounting and bookkeeping practice Intuit Quickbooks, said technologies like Field’s could enable small business owners to “spend their Sundays doing more than accounting”.
But there was still a barrier around mindset for many SMEs.
“I think for many small businesses, they think about the cost and lift. But they don’t think about the value of [their] time,” Thyer said.
On the question of whether the government funding is enough of an incentive, Sinclair said while the government’s tax deductions would help propel small businesses to action, “the question is, is the supply chain ready” to scale up products and training services.
Thyer recommends small businesses find a “trusted advisor” to guide them through the process.
“There’s a lot of choice out there. That’s where trusted advisors are so critical. To make sure the right advice comes with the right changes,” she said.
The experts were unanimous in their enthusiasm for small businesses to power Australia’s mission to become a digital leader.
Recent research from CPA Australia showed Australia’s small businesses are lagging behind their counterparts in the Asia Pacific when it comes to embracing digital systems, but the government can play a role in changing this.
“We know that digitisation is absolutely critical to Australian business,” Sinclair said.
