Small businesses seeking help from the Victorian Small Business Commission (VSBC) are waiting 20 weeks for dispute resolution officers to take their case, after staffing cuts at the support agency during the last financial year.
The VSBC offers low-cost dispute resolution and mediation services to small businesses across the state, helping them navigate overdue payments, commercial leasing disputes, and disagreements with the government, among other concerns.
In 2020-2021, the Victorian Government provided the VSBC with extra funding so it could assist small businesses navigating COVID-19 restrictions.
VSBC counted 32.4 full-time-equivalent staff that year, and clients waited roughly one week for dispute resolution officers to hear their complaints.
But with the pandemic fading into the past, and debt levels on the rise, the state government has since revised its funding for the VSBC.
Its staff numbers shrank by 60% last financial year to just 8.2 full-time-equivalent staff, according to its new annual report.
As a result, cases are taking longer to manage.
It took an average of 15 weeks for complaints to reach a dispute resolution officer last financial year, forcing some small businesses to wait months for assistance.
The VSBC is now advising small businesses it could take 20 weeks for their concerns to reach a qualified officer.
In a statement provided to SmartCompany, Commissioner Lynda McAlary-Smith said the VSBC is working hard to adjust to the restructure.
“Firstly, my team and I are focused upon helping Victoria’s small businesspeople,” she said.
“We’ve been working to resolve disputes as efficiently and equitably as possible, that includes screening applications for urgent matters, such as eviction, to help people in crisis in a timely way.”
Although many pandemic-era disputes have been resolved, small businesses are still dealing with COVID-19 related debts and deferred payments, she added.
As it adjusts to the new normal, the VSBC is bringing its funding concerns to Victorian Minister for Small Business Natalie Suleyman.
“I’ve been regularly communicating the impacts of the current budget settings to the Minister for Small Business,” McAlary-Smith said.
The government has lowered the metrics it uses to assess the performance of the VSBC, given the reduction in the commission’s headcount.
The annual report shows the VSBC is meeting many of those revised targets.
Some 34% of complaints brought to the Commissioner are resolved before mediation even takes place, which is above the VSBC’s target of 25%.
Three out of four mediations are successfully resolved, compared to its target of three in five.
And nearly 85% of clients reported satisfaction with the VSBC’s mediation service, above its target of 70%.
In a statement, a Victoria Government spokesperson told SmartCompany the VSBC continues to supply “high quality, low-cost” services to the state’s small business community.
“The VSBC continues to achieve high overall satisfaction rate for its services and is focused on providing a high-quality service and resolving as many disputes as possible either before or during mediation,” they said.
Nevertheless, staff cuts are ringing alarm bells outside the VSBC.
Gavan Ord, business investment lead at CPA Australia, said the changes to VSBC funding coincide with a tough economic environment for small businesses.
“At a time when the economy is weak and many businesses are struggling, they need to spend as much time as possible focusing on running their business, not chasing unresolved complaints,” he said in a statement provided to SmartCompany.
VSBC data shows complaints about unpaid money made up 41% of disputes in the last financial year, which highlights the importance of cashflow to small businesses.
“Federal, state and local governments need to take a holistic view of the impact they’re having on business,” Ord continued.
“This is just another example of the under-funding of an essential service to small business, which is increasing the burden on business.”
Beyond the pure financial cost of an unresolved dispute, Ord said lingering complaints can also take a mental toll on business owners.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
