TRANSCRIPT
Australian Small Business and Family Enterprise Ombudsman Bruce Billson interview with Leon Delaney.
Radio 2CC Canberra
Subject: Helping small business resolve disputes, payment times, digital platforms
Leon Delaney
Small businesses in Australia have sought the assistance of the Australian Small Business and Family Enterprise Ombudsman for issues including such things as payment disputes, trouble with digital service providers, contract battles, franchise disagreements. The list of disagreeable things that can occur to a small business appears to be endless. Joining me now, the Australian Small Business and Family Enterprise Ombudsman, Bruce Billson. Good afternoon.
Bruce Billson
Leon. Awesome to be with you and your listeners.
Leon Delaney
Thanks very much for joining us today. So how have you been able to help small businesses over the past year?
Bruce Billson
Well, the good news is we've been very busy and in fact, in the last few months, we ticked over our 40,000 small business we 've been able to help. And that's largely through dispute resolution services, better practice guidance to help people avoid getting into difficulty in the first place, and also at times calling out the behaviour of some big businesses and occasionally governments that aren't really playing that nice with their small business customers.
Leon Delaney
Well, obviously, if the big if the big businesses and the even the governments don't play nice, who's going to set an example for everybody else?
Bruce Billson
Well, we hold up a bit of a mirror at some times and say, look, really, is this the way we want to be treating really important suppliers that are small and family businesses?
And what we're seeing more and more of Leon, is two out of every five of the disputes that come to my office involve payment disputes. So, this is just where people just want to be paid for the work that they've done. And in some cases, the bigger parties - big business or others - are just a bit tardy making those payments, not realising that cash flow is the oxygen of enterprise. Those businesses are hanging out for that payment. They've often incurred costs to provide goods and services as part of their contract, and they just want to be paid.
So, two out of five of those and worryingly, Leon, in many cases, parties are just slow to pay because they can. And the small the family business lacks the market power and presence to be able to bring about a change in that behaviour.
Leon Delaney
It's that power imbalance that really does create the problem, isn't it? And when you talk about bigger businesses not realising the importance of cash flow. Oh no, they do, they do. But they're only concerned about their own cash flow, not somebody else's. That's the problem. In some instances?
Bruce Billson
It is, and that's partly why we were really positive that the government looked at the payment times register.
We'd been calling out pretty shabby business performance where, in some cases, one in four were taking over 100 days to pay. This just isn't right. And what's happening is this is increasingly becoming a focus, even overseas there's campaigns like ‘Good Business Pays’ where they hold up information in public view to show who is doing the right thing and who's gaming their market power. So, there's stuff going on there, but it's still happening. It's still a concern.
Although digital service platforms are the fastest growing area of disputes we've been involved with.
Leon Delaney
Yeah, we've spoken about dealing with digital platforms on a previous occasion and of course in the modern business environment, there's no escaping the need for digital engagement at some level, is there?
Bruce Billson
Well, that's right, and it's changed everything for many small and family businesses. The way in which they identify and engage with their customers is through a digital platform. Some of those platforms are really helpful in bringing the eyeballs and customers to maybe a new business or a niche business that doesn't have endless amounts of cash to go out and market and find those valued customers.
But the flip side is if something doesn't go right, Leon, can you imagine how annoying it is that your accounts on one of these platforms might have been hacked? It's been shut down, but to actually register a concern and get it fixed, you've got to get it to the very account that’s no longer available to you.
That's the ultimate run around. And that's why we've been saying to these digital platforms, come on, guys, you can do better than that. Have internal dispute resolution mechanisms. Have available a real human to speak to, where you know the frequently asked questions don't solve the problem and if all else fails work with us just to make sure those enterprising men and women can stay in business.
Leon Delaney
This question of having a real person to speak to, I mean, this has been a phenomenon now that's been expanding for a couple of decades. I remember years ago I was thumping the table, suggesting that if I was handed the job of dictator of Australia, one of the first things I would do would be to pass a law requiring all government entities and large businesses and corporations to make sure that the phone is answered by an actual human being, which would solve two problems: the problem of customer service and it would also provide more jobs. I mean, really it's a win-win, isn't it?
Bruce Billson
Leon that's a cunning plan of yours.
But that's the challenge. You often see technology helping to guide a call to where it needs to be. If your concern is about the high-rating Canberra talk show, push 1 for Leon Delaney. If you want to talk to a handsome radio jock, push 2 for Leon Delaney.
But at some point you get to a problem where the frequently asked questions, the automated sort of effort to resolve, isn’t there and you just want to talk to someone to get it done. And that's at the heart of what we try and do Leon. Many people want to keep these business relationships going. They've got a dispute, they want it sorted and then they want to get back to business, hopefully with the relationships intact. And that's the approach that we take. And it's a terrific service.
Leon Delaney
Now, in terms of payment terms, I note that the Small Business Minister Julie Collins, who now has your old job, has provided information today showing that payment times have improved, but there's more work to do.
It turns out, according to the figures that she's presented today, the average payment time for a big business to pay a small business is now down to 35.4 days. So, in other words, it's more than 30 days. And that represents an improvement? It's still too long, isn't it?
Bruce Billson
I welcome the Government's interest and Minister Collins’s activity involved in highlighting these things. We've been banging on about it for some years, saying, 30 days is hardly shooting the lights out. We know during COVID that some of the biggest businesses in the country were paying their small, family and indigenous suppliers within three or four days. So, it's not a question of whether they're capable of doing it. It's whether there's the appetite to do so?
And what we think would help, and what a recent review of the payment times reporting system has suggested, is we need some way of proclaiming, naming and shaming. Really putting a spotlight and praising those that are doing well, naming those that are not doing so well and maybe pointing to some of their competitors saying, well, they can pay in seven days, why can't you?
And then for those that are really shabby, and I mentioned earlier some are 120 days plus, we need to get out there to say this is just not classy. This is unacceptable. This is really misusing a dominant market position for the harm of small and family business suppliers.
Leon Delaney
If somebody is running a small business and they're running into some of these obstacles, how do they get in touch with your dispute resolution service?
Bruce Billson
Jump on our website www.asbfeo.gov.au No Leon, that is not a foot fungus from Latin America, that’s the acronym of Australian Small Business and Family Enterprise Ombudsman. There’s some helpful tips there, because many times it's about building capability to raise concerns. But then if that doesn't work and people have had a go at it, then we can get involved in our brilliant case managers can really look for a path forward to resolve the dispute.
Leon Delaney
Fantastic. Bruce, thanks very much for your time today.
Bruce Billson
Great to be with you.
Leon Delaney
Thank you. Bruce Billson, the Australian Small Business and Family Enterprise Ombudsman.