On June 14, small business ministers at both the federal and state level met in Melbourne to begin work on a new, harmonised small business strategy.
Matthew Addison, chair of the Council of Small Business Organisations Australia (COSBOA) attended the meeting, sharing his organisation’s vision for small business policy.
Below is a lightly-edited version of his remarks.
The Australian Small Business and Family Enterprise Ombudsman recently reported that the percentage of small business not making a profit has increased from 43% to 46%.
Meanwhile, 75% of small business owners take home less than the average wage.
Yet small businesses remain the largest private sector employer in Australia, comprising more than five million employees in the workforce.
They employ part-timers, casuals, and parents to fit around their home duties.
They employ school kids and university students to support their incomes and lifestyles.
They support their community.
So, who are these 2.5 million small businesses that we need to support, encourage, regulate, and assist?
It is the individual providing care services or a trade.
It is a retail outlet with an owner and a couple of staff.
It is a self-employed mechanic.
It is the mum and dad in their convenience outlet who are working 60 to 80 hours a week.
It is the individual with a good idea who is trying to be an entrepreneur but is lost in red tape for what they are and aren’t allowed to do.
How can it be acceptable that many small businesses, specifically restaurants and retail, chose not to open over Easter due to the financial impost?
How can it be that small businesses are now closing their doors, and saying they will be better off if they pay out their lease rather than stay in business?
COSBOA would like to bring to you today the challenge to positively impact your small business sector, so that they are encouraged.
So that they are in an environment to invest.
So that they are able to be fit and healthy.
So that they are appropriately, if not well-rewarded.
So that they employ amd develop the skills of their employees.
And so that they grow and continue to contribute to a developing economy and community.
Xero has released a small business productivity report.
It found the most productive Australian industry in 2023 was wholesale trade at $214.20/hour, while hospitality lagged at $40.20/hour.
While a decline in productivity was experienced across all industries, ten sectors, including manufacturing, agriculture and construction, surpassed the national productivity average ($100.30/hour).
A key finding of the report was that despite being traditional industries, agriculture and construction were two of Australia’s most productive industries between 2017 and 2023.
Agriculture operators appear to have embraced innovation, achieving a productivity rate of $120.60/hour in 2023, while construction businesses have seemingly prioritised skill development, recording $117.00/hour.
What might enhanced productivity in 2024 for small business look like?
It probably shouldn’t be based on fewer worked hours or less cost of labour.
Maybe it could be based on more income generation for each hour worked.
Productivity is about working smarter, not harder, but this is difficult when compliance costs and red tape are blowing out.
How do we generate that productivity in small business?
We need encouragement that they are recognised and appreciated.
The respective small business commissioners and the federal Australian Small Business and Family Enterprise Ombudsman are, and should be, a key component of each government’s signal to small and medium-sized businesses that the sector is important.
A commissioner in the government who inquires, investigates, arbitrates for and on behalf of small businesses is an essential indicator of your intent and belief that they are important.
You invest in commissioners to look after them – a great sign.
A second factor of encouragement: we look for your overt understanding and statements about the impact of each new initiative, each new regulation.
When sitting in a recent government consultation about a new regime of rules and regulations, the questions were about how government would regulate it, how the regulatory computer would work, and not what impact it would have on business.
In order to consult we need to have the user stories of its impact on small business.
What problem is being solved, and what will be achieved, at what cost?
Thirdly: government needs to support the recognition of successful small businesses – the COSBOA Small Business Champion could become the Prime Minister’s and or Premier’s award in each jurisdiction.
We need to encourage small and medium-sized business people to both remain in business, but also to create an environment that it is worth them investing in improving their business.
This includes incentives to effectively streamline, simplify and innovate through digitisation.
In today’s world might mean incorporating artificial intelligence.
We look for incentives, rewards, or support for skill development through fit-for-purpose training of existing or newly employed people.
Streamlined, simple, fit-for-purpose skills.
Rewards for employment, reward for productivity enhancement.
We look for your future support programs to incentivise people to be in, and grow their small business.
As small business ministers, we look for your influence to create an education and skills development system that enables and improves business.
Where every level and sector of our education system works towards a set of fit-for-business-purpose learning outcomes that create productive workplaces and the skills to do the work in business.
All small businesses are looking to take on trainees but need support and a system to do so.
Trainees that get on-the-job skill development combined with the fit-for-purpose formal education.
The lack of young people seeking to explore being in their own (or someone else’s) small business is alarming.
Supported workplace traineeships need to be widely embraced.
Let’s ensure that the regulatory environment applies right-sized guard rails about how to do business.
Let’s ensure those guard rails recognise and are designed in a way that empower small business to comply, and not encumber mum-and-dad owners with red tape.
Compliance burdens could threaten their health, their wealth, their family; accordingly, their small business suffers.
Let’s ensure those guardrails are expressed in a way that we become a world-leading nation of young people in small business.
People who are energetic, enthused, entrepreneurial and empowered to begin and work within small business.
Let’s be a nation that uses digitisation, which uses technology, but let’s create an environment around small business where young entrepreneurs want to bring their skills — and even risk developing their own business.
An aspect of initiatives and regulation that we call for is a national solution. or at least a nationally consistent approach.
While most small businesses may operate within one state, they are subject to information and advice from a far wider source – social media is not state-based, digital media is not state-based, so when a person offers advice from their perspective, it tends to be that states’ version and not universally applicable.
We call for ongoing and increasing consistency between federal and state definitions and regulations.
My challenge for you, all together and individually:
Encourage small business to exist, expand and grow.
Encourage, facilitate and reward their investment.
Let’s grow and support the 94% that willingly comply and participate fairly, and not design for the others that need to be prohibited from causing harm.
The small business sector will contribute to your success if you help create a supportive infrastructure around them.
Thank you.
Matthew Addison is chair of the Council of Small Business Organisations Australia.
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Matthew Addison is chair-elect of the Council of Small Business Organisations Australia and executive director of The Institute of Certified Bookkeepers.
