Australian Small Business and Family Enterprise Ombudsman Bruce Billson interview with Dusty Fitzpatrick.
Radio 2BS Bathurst
Subjects: 2024-25 federal budget, small business mental health in Bathurst, small business procurement
Dusty Fitzpatrick
The Australian Small Business and Family Enterprise Ombudsman Bruce Billson says the federal budget offers targeted measures to help small and family businesses deal with current pain points and headwinds. I'm pleased to say he joins us now. Bruce, good afternoon.
Bruce Billson
Dusty, good to be with you and your listeners.
Dusty Fitzpatrick
It's lovely to have your company this afternoon, Bruce. The federal budget offers a $325 energy bill relief for small businesses. How significant is this relief for businesses facing high input costs at the moment?
Bruce Billson
Look, any help is welcome. Small businesses have got higher input costs squeezing their margins. You've got the budget forecasting a tapering, you know, pretty sluggish growth. It's tough to make a dollar out there Dusty and there's no sloppy margins for any small business that I've been speaking with or that I've heard about. So, these assistances are important.
It's worth noting that not every small business will be eligible. So, it's largely those operating out of someone else's premises away from, say, a home-based business or something like that. And that's being worked through by the government. So, you need to be on those business tariffs, I think is a good rule of thumb. So that's about a million of the two and a half million small businesses in Australia.
And the other thing to be alert to is last budget a similar announcement was made at a Commonwealth level and in most cases states and territories also matched to that amount. That's not the case this time around. So, whilst that relief will be there, people might wonder why it's not as impactful on the bill that they get, and that may explain that change.
Dusty Fitzpatrick
The budget also extends the instant asset write-off for another year. How critical is this extension?
Bruce Billson
It's really important for a number of reasons. Right now, we need to be energising enterprise. We need to be giving more encouragement for people to turn an idea into an investment. For business owners to make that big decision to turn scarce resources into new capability, new equipment, new technology to help with the success of that enterprise and the livelihoods that depend upon it.
So having that encouragement to invest in new kit, new plant and equipment, new technology is really an important signal. It's one that was made in last year's budget, although we are just a handful of weeks away from the end of the financial year and everyone's hoping that the legislation authorising that is around, but at least it is continuing into the coming year.
But it also underlines why greater predictability about those sorts of incentives for business owners would be really useful so people can plan for and count on some sort of encouragement to invest in innovation, to invest in improve productivity, to invest in improved business capacity so that they can factor that into these forward times that are pretty challenging right now.
Dusty Fitzpatrick
So, you're hoping that the asset write-off might become, I suppose, a permanent feature?
Bruce Billson
I certainly think it needs to be. And it's a view that's expressed by many small business representative organisations. For that simple reason, Dusty, in the absence of a one-off year-by-year announcement, things go back to the normal state of affairs, which is basically a $1,000 deduction and then you have to run a depreciation arrangement either separately or through what's called an asset pooling vehicle to get that that kind of assistance through your profit and loss. That's not ideal. That is far from giving predictability and certainty where a business can plan in a sure-footed way for important investments that uplift the capacity, the productivity and drive innovation in that business.
So, having it sort of locked in as an ongoing feature and even expanding its reach. At the moment it's $20,000. A lot of your listeners will think, well, that'll get you about a third of a SUV four-door pickup truck for a tradie. It might not buy that new machine that you need in your factory. You could well extend the $20,000 out and even look at whether the $10 million turnover cap is something that could be extended as well.
Dusty Fitzpatrick
Bruce, we also saw some funding allocated for mental health support. We know the cost-of-living pressure is really affecting everyone at the moment, but particularly having an impact on small businesses.
Bruce Billson
It's really important these two measures. Now, sadly, they are a sign of the times that the economy is more challenging. And we know owning and leading a business is a big responsibility Dusty, and it's one that brings a lot of heavy decision making, a lot of reflection. And also for the business owner, often their personality, their sense of being, is interwoven into the business and its success. And then they know the people that are in the business, their livelihoods depend on it.
And we've even seen through looking at some research that about a third of small business owners operating in the greater Bathurst area have been told by a clinician that they have not only a long term health condition, but about a quarter have had been identified as having a health condition related to their emotional and mental wellness.
So that's really significant. And we look at the types of industries where that can impact, you know, in hairdressing and beauty services, automotive repairs, construction. That's what the statistics are telling us about the Bathurst small business community, which is actually a little bit older than is the case across the country. More than half are aged over 50, with only 6% under the age of 30. Now it's about 8% nationally.
But this tells us that there's pressure points and challenges and that's why extending the funding for the New Access for Small Business Owners coaching support line, which is designed to help business owners understand their own mental wellness, identify when they're starting to feel pressure or overwhelmed, and how to get back into a space where they can make good decisions given the big responsibility that they carry.
And then the other part of that program, Dusty, sadly, is where it all gets a lot in financial terms. And there's a Small Business Debt Helpline that's been extended for another year to help businesses navigate when debt is really crippling the business and there's an important discussion about how do address that debt for the business owner.
Dusty Fitzpatrick
It is an important change there, Bruce, there is so much to get through this afternoon, but we'll move on now to the procurement report. The Government's response has been released.
Bruce Billson
We were we were underwhelmed by the government's response. I mean, it's an enormous missed opportunity to meaningfully improve the opportunity for competitive small businesses and family businesses to become a supplier to the government. At a time when growth in the economy is really, really slowing, the budget foreshadowed quite an expansion in the types of things government was involving itself in and therefore opportunities for people to supply to government.
We were asked by successive governments - so this was a bipartisan request that spanned the previous government and the new government - to have a look at how those procurement rules, those purchasing rules, were operating in terms of support for small business, whether certain provisions within them are achieving their objectives and what improvements could be made.
And what we found overwhelmingly is small businesses they felt supplying to the Commonwealth was very much an 'in crowd' game.
For people that knew the rules, knew the way the Commonwealth operated, knew where to look to find where opportunities might be advertised, knew who to talk to when there's specifications being developed. They were pretty okay with how they interacted with the Commonwealth.
But if you were a business that hadn't previously been a supplier to the government, this is a bewildering space. Really hard to understand how to get involved. And then under those procurement rules, Dusty, there's certain exemptions and encourage meant for Commonwealth public servants to consider Indigenous business supplies and small business supplies as part of that work. And those exemptions are really hard to navigate. Hard for the procuring officials, hard for the businesses to know how to do it.
And we thought there was an enormous opportunity to improve that small business supply possibility into the Commonwealth, particularly when governments are talking about a Future Made in Australia and there's programs like the Buy Australian Plan. We thought there was some really sensible steps that could be taken to help bring those ambitions to life. But sadly, they weren't picked up by the government and we think there's plenty of work still to be done there.
Dusty Fitzpatrick
Bruce, there's so much to get through this afternoon, really appreciate your company on the program this afternoon.
Bruce Billson
Dusty, great to be with you and your listeners.
Dusty Fitzpatrick
Australian Small Business and Family Enterprise Ombudsman Bruce Billson joining us on live and local.
