TRANSCRIPT
Australian Small Business and Family Enterprise Ombudsman Bruce Billson interview with Leon Delaney.
2CC
Subject: Right-sized regulation
Leon Delaney
The Australian small business and family enterprise Ombudsman, Bruce Billson has ramped up his call for regulatory reform to help small businesses survive their difficult startup years. Bruce, good afternoon.
Bruce Billson
Look, Leon, it's great to be with you. I'm glad you're not asking me to sing, but I'm always singing and championing the cause of small business. Red tape and compliance burdens are the bane of their life and we're just pointing out how that can be addressed.
Leon Delaney
Well Bruce, if passion were talent, you and I both could put on a hell of a performance at the grand final. Unfortunately, it doesn't always work out that way, does it?
Bruce Billson
No, I mean, we'd get the coaches award, wouldn't we, for effort and endeavour and I mean, Barnes would be great and bring back Tina Arena. And what about some of these emerging Australian artists? They could put on a real show. What would be better though is the connection and I hope you like the segue, Teddy swims – well so do small businesses, feeling too often they're against the current.
Leon Delaney
Well, sometimes they sink rather than swim. And you want to try and stop that?
Bruce Billson
Well, they do because we're seeing an increasing concern about small businesses feeling more of their time and a heavyweight rests on them over the business of running the business. Now, we've talked before and I'm sure your listeners would connect with the idea that most people don't go into for lodging BAS returns and all of the compliance stuff. They go in, you know, what's really motivating them is delighting customers, their jam about their passion, what they really want to do. That's what the focus is. But increasingly we're hearing compliance burdens, regulatory obligations and also the fear of misstep, like getting it wrong and the heavy consequences is really, having an adverse impact on their hope, their optimism, their drive and their focus on delighting customers.
Leon Delaney
Now, you've spoken a lot about red tape, green tape and now something called white tape. Hang on, there's too much tape. Bruce, what is white tape?
Bruce Billson
Well, you can blame me for that one. That's a phrase that we've initiated to pick up on what is frankly an insidious compliance burden that really doesn't get enough attention. White tape is when another business says to a small business, hey, we'd like you to do this as well. You need to follow this process, get this software, do these sorts of requirements, share this kind of information if you want to do business with us.
Now that's not additional requirements that generate additional value and income for those businesses. No, no, no. It's just a licence to play. And you see this in supply chains where they might want you to talk about your modern slavery obligations. Most small businesses go, I know about modern slavery – that's what I do every day, try to earn a crust and support my team and keep my head above water. But these additional requirements aren't necessary by law for the business to be involved in trade and commerce but they're imposed on a business, usually by another business because it's convenient for that business.
Some of it, like green tape might be the big business needs to report on its climate related financial disclosures. They want to be able to account for their emissions and part of their emissions, you know, scope three are emissions that their supply chains contributed. So, you and I might be as a small business, really doing delightful things to support our big business customer. They come back and say, hey Leon, what's your emissions profile? And then you think, yeah, okay… let me see what I can find out. And that represents another compliance burden that's not government imposed, but cascades from larger business customers.
Leon Delaney
Indeed. And governments might be able to directly rein in red tape and even green tape. But what can a government do about this white tape?
Bruce Billson
Well, you can sort of say, look, enough is enough. Like white tape might be, on major infrastructure projects that engineering firms across the country are being told by prime contractors that have the work order from government, that they need to go and send a mountain of material offshore for these quality assurance agencies to have a look at and then tell the prime contractor that they think this subcontractor is okay. So, the prime contractor doesn't do that work. They outsource it to another business. They then say to the subcontractor, I know you're working your tail off to deliver value, but can you spend several thousand dollars doing a show and tell with some crowd offshore just so they can tell us you're okay to do that work?
I mean, you can actually make sure that those sorts of requirements aren't excessive. You can also make sure for things like work, health and safety, that if you've got an international accreditation or you've got something from SafeWork Australia, that'll do. You don't need to go and get a whole range of other ones just because you might be maintaining assets that reach into other interstate boundaries. So, they're the sort of examples. We're up for that conversation and we think it's necessary because this is quietly strangling time poor, resource constrained small and family businesses, stopping them from innovating and really delighting customers and introducing new products and services that they're really keen on.
Leon Delaney
Now you've got a specific plan to help new businesses survive that difficult initial startup period where they're under quite significant pressures. What's your plan?
Bruce Billson
Well, it's similar to the Singaporean model, Leon, and that's where for any of your listeners that have ever started a business, there's a whole lot of cash going out the door during that establishment and early scale up phase where there's a delay in you getting income coming in or even you finding the customers you hope to be attracting. That's the cash flow valley of death. That's that first two or three years when small businesses and new businesses are really struggling to have the cash flow to keep going whilst they wait to connect with their customers and have sales and income coming in to support the business.
Now in Singapore they actually say to those businesses, we value you, we see you, we think business formation is important for our future economic prospects. We will discount the amount of company tax you pay in those early years so that you can put that money back into the business and help overcome that cash flow valley of death.
We think that's a really constructive, practical example that would help in Australia – send a powerful signal that new business formation is valued, that there's an understanding of what that commercial life looks like in those early years. A lot of those businesses, Leon, they're not spectacularly profitable because they are in that startup phase. But if they are paying company tax, here's an opportunity to discount that and put more cash back into the business when they need it most.
Leon Delaney
Absolutely. Now Bruce, I know you love to provide as much advice and support and useful information as you possibly can to small business and family enterprise operators all around Australia. Where can people access that advice and assistance?
Bruce Billson
Look, the greatest website you'll ever find, www – that's for website worth watching – ASBFEO.gov.au. Not only do we bring our insights there, we collaborate with a whole range of other departments and agencies that have helpful guides that can be hard to find. Send your eyeballs to our website and we'll be that ally that most small businesses are really looking out for right now.
Leon Delaney
Indeed. Bruce, thanks very much for chatting today.
Bruce Billson
Thanks Leon. Always good to be with you sir.