MGA attends Federal Small Business Policy Forum seeking solutions for members

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On 26 November 2021, MGA was invited to attend a high-level Small Business Policy Forum with the Federal Minister for Small Business Stuart Robert, organised by Small Business and Family Enterprise Ombudsman, Bruce Billson.

The forum discussed the many challenges Small Business owners are facing amid the Pandemic and workshopped possible solutions to help small business owners through this difficult period.

Minister Robert opened the forum stating government will focus on post COVID-19 recovery with assistance of $271 billion designed to support small business future revitalisation.

Measures including reducing red tape and associated cost burdens, investing in technology and digital solutions, were discussed, with an emphasis upon avoiding post COVID-19 unemployment problems that followed the Global Financial Crisis. Matters discussed included:

Pandemic Lessons

Forum participants questioned how to capture lessons learned by small business in terms of policy settings, program design and interventions/ support. Key example presented was access to government support services with the solution being to create a one stop shop rather than a series of touch points.

It was important to learn lessons from the Pandemic – what has been done well, and what has been done badly. What has been done well includes the use of technology and digital with meeting procedures, signing documents, entering into contracts, and, for example, allied health providers working remotely.

Government to business consultation was considered inadequate, particularly in some states, but is improving.

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Supply chain problems

Participants highlighted severe supply chain problems across industries. There is difficulty purchasing assets and it is not possible to make the most of the instant asset write off, with suggestions this measure will need to be extended for three years.

Businesses are observing warehouse stock piling due to supply chain issues; in the wholesale food sector it has been necessary to destroy much perishable food. Unlike hospitality, there has been no government compensation, and there will be liquidity impacts for some time to come.

The cost of freight overseas (inward and outbound) has skyrocketed with delays at ports. Fuel supplies and cost of retail operations are under pressure, together with driver shortage concerns and price increases, which was suggested to be more palatable than the consequences of insufficient fuel if demand goes up in the holiday season.

Small business does not have the same protection as consumers when they cannot afford to pay for utilities due to other liabilities, with many currently struggling to afford bills. A ‘no disconnection’ policy during COVID-19 is helpful but a transition pathway out is needed and strategy to prevent this in the future.

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There is still much illicit tobacco coming into Australia – up to one in five packs are sold on the black market. The prescription model for vaping has moved people looking for nicotine towards the black market, leading to loss of legitimate trade and taxation opportunities.

Skills shortages

Points raised in the forum covered severe workforce shortages, demand for skills and unskilled people, limited labour mobility and placements that are not well matched.

With income support being tapered down through pandemic recovery, the importance of helping welfare recipients return to work was highlighted, as well as balancing access to jobs for citizens with migrant workers, typically holding hospitality and harvest roles. From 1 December 2021 235,000 migrants will be permitted to arrive in Australia.

Wages and on costs of employment of skilled staff is high and unskilled pay rates are rising, with small businesses struggling to fill positions. Skilled workers require retraining and support was requested. Extending the number of hours student visa holders can work or suspending the twenty hour cap were suggested as short-term measures to bolster labour market capability.

Accommodation shortages

Delegates advised that available housing stock does not match the location of labour force needs. People are reluctant to move with online job searches mostly within five km of home. Solutions suggested beyond the current incentives were housing pods or temporary housing.

The housing shortage in regional Australia was acknowledged, but this will moderate as 500,000 Australians return to work overseas and Australians move to the city for work. Conversely overseas workers appear more prepared to move into hostels or shared accommodation.

Insurance access

Some industries are struggling to get insurance - professional indemnity and asset protection -especially in environmentally vulnerable areas.

De-risking the business environment

The forum discussed the need to de-risk our market for small and family business participation and disallow some terms in business-to-business contracts.

Access to finance

Forum participants were concerned small businesses are accumulating more debt. There is limited use of changes in insolvency laws to know if these are meeting policy objectives.

It was suggested HECS scheme for business be developed – modelling was requested, as well as a proposal for applicant suitability assessments, along with mentoring be considered in the onboarding process.

Pressure release

Small businesses were struggling to address emerging issues, such as sustainability and ongoing challenges with access to justice and urged ASBFEO to ‘lean in’ on this. Other requests were to hold off on the 0.5% superannuation increase support cashflow during recovery.

Government priorities and program implementation

Government’s digital agenda was backed by calls for government departments to lead by example, and build implementation momentum, by moving towards e-Payments and issue e-Invoices.

Driving digital uptake supports other priorities around least-cost routing, building cyber awareness and digital identity reforms.

Ongoing pandemic effects

The stop/start impact that COVID-19 staff testing is having on business operations is a problem. Cross border travel restrictions are causing problems for business and mental health problems are rising. There is a mental health component to the government small business initiative.

General issues raised

• Make sure sole traders are considered in government work for small businesses. • In Victoria, letters regarding

National Environmental Protection requirements are being received but no one has been consulted. • Modernising business register work is critical and should be rolled out as quickly as possible. • Ongoing leasing challenges and a need for some adjustment attention. • Ongoing mental health and wellbeing concern for small business owners and the need for an EAP program to support small business employees. • Continuing need to simplify workplace relations system for smaller employers. • In times of disasters, communications networks must be restored quickly to continue trading.

Source: Bruce Billson Small Business and Family Enterprise Ombudsman