TRANSCRIPT
Australian Small Business and Family Enterprise Ombudsman Bruce Billson interview with Leon Delaney.
2CC Canberra
Subject: ASBFEO Pulse
Leon Delaney
The latest ASBFEO Pulse. Now, I know you're wondering what that is, right? Australian Small Business and Family Enterprise Ombudsman. It's a mouthful, isn't it? Anyway, the latest ASBFEO Pulse has shown signs of increased optimism amongst small and family businesses. The ASBFEO Ombudsman is Bruce Billson. Good afternoon, thanks for joining us today.
Bruce Billson
Is this the Quiz Master?
Leon Delaney
It is the Quiz Master, that's right.
Bruce Billson
Oh, my goodness, you're on fire there. I mean, generous too. I think the actual answer is seven to nine metres, Leon but, you know, given there's such… I know, was the nearest, neatest correct entry. If they had us at 7 to 9, they could have gone off and seen Downton Abbey. That's a new movie that's on at the moment. Anyway, off topic. How are you, sir?
Leon Delaney
Off topic. Look, I'm surviving, you know, as I keep telling people, they haven't caught me yet. So, the latest Pulse report has apparently shown signs of life. If we can continue that medical analogy.
Bruce Billson
Yeah, that's right. I mean, the Pulse is actually a vital signs tool. It's an index that brings together actual hard economic data around growth and other things happening in the economy. It brings sentiment data in, Leon, those animal spirits that drive small and family business people. But it also picks up some real-time data about the decisions businesses are contemplating, what they're investigating and the choices that they're making.
So, it's a really, a really vivid and insightful pulse and a great way of, a window in on what's going on in the small business world. And what it's showing is we've actually seen, you know, it's a microscopic uptick, but it is an uptick. And that uptick is 0.6 of 1% in the quarter leading to August. Now, that's the second consecutive improvement. And I guess the good news about that is the challenging headwinds that many small and family businesses have been facing, there's a kind of sense we're through the worst of it, that that's been stabilised by some interest rate cuts. A little more buoyancy in consumer expenditure and you're seeing businesses thinking, okay, we've got to think beyond survival. What can we do to consolidate our business? What do we need to do to thrive and to prosper into the future? And what we're seeing is a real examination of what those choices look like. Is it, am I delighting my customers adequately? Are there new markets that I can take advantage of? Should I be repricing what I'm doing to make sure I've got adequate profit to really keep funding and, in some cases, replacing cash reserves and rewarding people for their efforts?
But also, what does technology mean? So, there's a real interest and appetite about how technology might make the business of running the business, Leon, that back-end compliance stuff a little less draining. So, there's more time to think about the business and dare I say spend time with family and other pursuits. But also, whether AI can be a real enabler of some of that. Plus a concern, wonder what my competitors might be doing with AI? Are they going to leave me behind?
Leon Delaney
Now, it's good to hear that there's signs of life in terms of some growing optimism, but I suspect there are still some things that business owners and operators continued to be worried about. What are they?
Bruce Billson
Yep, well there's a couple of things. One is the perpetual optimism of small business people doesn't always line up with actual business conditions. We're still seeing fairly significant numbers of insolvencies, but also a slight uptick in what are called personal bankruptcies resulting from a business interest. So, that might be an independent contractor, a sole trader, not incorporated, not having a separate business entity, but carrying out their enterprise through personal structures like being a sole trader or independent contractor. There's a bit of a concern there.
And there's also a concern that some businesses may be dealing with other businesses that are having real challenges meeting their bills and that that might flow onto the non-payment of work or services or activity that's already been provided, that could really make a financially challenging time of it for the business supplying that business to another business customer.
Leon Delaney
I also noted that there continue to be concerns about insurance matters and of course there's obviously been a big increase in the cost of insurance in a variety of sectors and that's got to be hurting, hasn't it?
Bruce Billson
Well, it's not just cost, it's actually accessibility Leon. What's happened with the market hardening, some insurers have vacated the market. They just don't offer the policies that they used to offer before. And if they are offering them, we've seen some eye watering increases in the cost of those premiums, but also a change in the conditions that's accompanied them. In some cases, the excess, the amount that a business needs to pay before they can make a claim has stepped up very significantly.
But there's also been a growth in exclusions where there might be some kind of business activity. The insurer says, hey, you've got to, you've got, let's call it an activity centre in Jamison. I know it does all sorts of things from those balls that you jump into, to things you can climb on, ropes you can dangle from and a ninja course. We're happy with everything except the ninja course because people might hurt themselves, so we're not going to insure that. And the businesses are going, hang on a minute, that's a key revenue driver – you take that out of my business activity, I'm not really left with a viable proposition. So, that's what we're seeing.
Business owners are also saying they're taking the advice of insurance companies and taking mitigation actions, steps to minimise the risks, and not really seeing any uptick or improvement at all in the affordability and accessibility of cover. So, these are the sorts of things that keep coming through Leon.
Leon Delaney
Well, there are certainly plenty of ongoing challenges for anybody brave enough to tackle operating a small business and we've only touched on a few of them, of course, but your office is always there to provide a little bit of information, advice and guidance, particularly on your website.
Bruce Billson
That's right. So, jump on our website asbfeo.gov.au – a whole lot of resources that are there and who can't forget the name, a snappy name like ASBFEO or Australian Small Business and Family Enterprise Ombudsman.
Leon Delaney
You just need to take a deep breath before you try to say it.
Bruce Billson
It rolls off the tongue, it's a glorious moniker, but we're here to help and we get up and work every day to support the success of enterprising men and women.
Leon Delaney
Fantastic. Thanks for your time today.
Bruce Billson
Great to be with you, Quizmaster.
Leon Delaney
Thank you. Bruce Billson, the Australian Small business and Family Enterprise Ombudsman.