Australian Small Businesses Need Us To Energize Enterprise

By Bruce Billson, The Australian Small Business and Family Enterprise Ombudsman

(small.news) — Hope is important for enterprising men and women, but this perpetual optimism is best honored by genuine action that creates the most supportive business environment policymakers.

No one can guarantee that every single small business will succeed. However, we should work as hard as small business owners do to make sure our smaller enterprises have the best possible prospects for success. Courageous people who choose to make their own livelihoods and provide opportunities for so many others in our communities deserve a supportive ecosystem.

In Australia, what is needed is a plan to tackle the many headwinds that small and family businesses are currently facing. That wind needs to be put in their sails to improve the prospects of success, get the risk and reward balance right, and ensure that small business ownership is a really attractive option.

That’s why we need to back hope with a plan of practical, positive, and constructive action to develop the small and family business economy. A greater sense of urgency needs to be more widely shared.

How To Energize And Support Australian Small Businesses

For me, the foot is well and truly down on the accelerator with less than one year to go in my Ombudsman term. There is still much to do to ensure small and family businesses are powering forward on all cylinders.

Since August 2024, I have been talking about 14 steps to energize and support Australia’s more than 2.5 million small businesses. These steps are practical, readily implementable, and action-driven.

Better Incentives For Small Businesses

We also need better incentives for small businesses to form, invest, take risks, survive, and thrive.

Discounting small business company tax paid in the first three years will help new firms get through the early years’ “cashflow value of death.” This will support reinvestment into a more robust foundation and help reduce the rate and cost of the reported 50% small business failure rate within the first three years.

A more generous and durable instant asset write-off provision can support vital capital deepening and capability-building in smaller firms. And implementing digital reforms, which will encourage the adoption of business-ready new tech and AI, offers the promise of streamlining the business of running the business.

A restoration of tax and incentives to encourage investment in digitization will boost productivity, support innovation and competitiveness, and enhance resilience and market access.

Australian Small Businesses Are Struggling With Technology

Small businesses in Australia are falling behind their Asia-Pacific counterparts in the adoption of digital technologies. Investing in targeted support and education for small businesses to adopt digital technologies can increase productivity by:

– Streamlining processes
– Building resilience to economic shocks
– Mitigating risks of cybersecurity threats
– Supporting innovation and growth
– Enhancing competitiveness with larger firms

Digital compliance and reporting systems that work in harmony with the natural business systems currently used by small businesses can ease the regulatory burdens. Synchronizing and harmonizing the ask of small businesses across various regulators and levels of government, and a tell-us-once ethos, shouldn’t be too much of an ask.

We Need A Risk-Based, Small Business First Approach

Most small business owners do the right thing each and every day in fulfilling ever-increasing, more complex, and onerous compliance and regulatory obligations. Right-sizing regulation has to be the imperative in our commitment to lift the regulatory burden and compliance costs imposed on small businesses.

A genuinely risk-based, small business first approach and robust impact evaluation framework that considers non-regulatory options is needed. A renaissance in the rigor and discipline around “right-sizing” regulation will properly recognize that small businesses aren’t just “shrink-wrapped” versions of Australia’s big corporate businesses. It will improve the way new impositions are devised, and existing ones are implemented and enforced.

Unfair Business Practices Should Be Banned

Banning unfair business practices that distort competition and harm small businesses needs to be a priority. If this happened, small businesses that are in a more competitive economy would have improved access to affordable and timely justice.

This would allow smaller firms to enforce fair trading protections through a tribunal-like Small Business and Codes List in the Federal Circuit and Family Court of Australia. These are all doable activities, and small business owners and industry associations are rightly calling for decisive action.

Energizing enterprise is not just for the benefit of small businesses. It will also deliver dividends for the nation.

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