Australian Small Business and Family Enterprise Ombudsman Bruce Billson interview with Lisa Millar.
ABC News Breakfast
Subject: 14 Steps to energise enterprise, tap-and-go merchant fees, digital platform disputes, small business owners getting older, regulatory burden on small business, making the ecosystem more supportive for small business
Lisa Millar
Many of us are aware of fees on the tap-and-go at the checkout or the train station but how many Australians know that retailers and service providers also take a hit? That's among a growing area of concerns for the nation's Small Business Ombudsman, who's published a list of measures he'd like to see tackled. Ombudsman Bruce Billson joins us now from Canberra. Bruce, good morning. Welcome to the program.
Bruce Billson
Lisa fab to be with you and your audience and how good are the Olympians! There's also a group of Australians that need their personal best every day and, in some cases, needing to be world class every day. And that's the women and men owning and leading small business. So that's what gets me out of bed.
Lisa Millar
Well, how do you want to try and get them some gold medals because you're really worried about this tap-and-go cost and I'm curious about that because I'm not sure a lot of viewers would realise how much of a hit they're taking. Talk us through it.
Bruce Billson
It's one of 14 really practical measures that we're encouraging our leaders and our policymakers to embrace to improve the ecosystem for small and family businesses. This tap-and-go arrangement, it incurs higher fees where people's transactions are routed through those international cards when there are cheaper options available. We think there's about $800 million to $1 billion worth of savings there, and small businesses needs that help right now. It's a needless additional cost impost.
The cost-of-living pressure we rightly turn our mind to, are business cost input pressures on small and family businesses who are really doing it tough right now, and that's a practical step that will give just a little bit of breathing space as they tackle a really challenging time.
Lisa Millar
So, what are you saying, the credit card companies should wear the cost and not be passing that on to the small businesses?
Bruce Billson
Well, most of our banks have their relationship with their merchants. Those EFTPOS machines have the capacity to switch to a lesser cost option. Only half of those machines have been activated to do so. So, the big banks really need to lead on this front. Merchants, small businesses, need to be aware of the impact, and also for consumers that don't want to pay surcharges and the like, let's go with the cheaper option. That's one of a number of ways we can reduce those input cost pressures that are adding to a really challenging time for small business owners.
Lisa Millar
You know what? Something else that jumped out at me in the figures that you've been looking at is the number of people who've been employed by small businesses, and how much that's changed over the years.
Bruce Billson
It's a worrying trajectory and I'm calling it out because I think we really need to turn our minds to it. We are sleepwalking into a big corporate economy, where complexity in the economy, challenges that are faced, they might be fine for a big corporate that's got dozens of people in the back room doing the business of the business, but it's tough for small business.
Right now, we celebrate the one-third of Gross Domestic Product that's generated in our economy by small and family businesses, and the two-in-five jobs that are made possible by these small employers. But just less than 20 years ago, it wasn't one-third of the economy, it was 40 per cent were being driven by small business. And it wasn't two-in-five jobs, half of private sector job numbers was being enabled by a small business. They're also known to be the ones driving training. It's where innovation comes from. We really need to make the ecosystem more supportive for those small businesses.
Lisa Millar
And the other red flag about that, of course, is that small business owners, the average age, is getting older. So, you look at the figures and the lower profits, and you'd ask a young person, why would they bother starting a small business?
Bruce Billson
And you're right on the money. We think the risk-reward balance has got a little bit out of whack. The regulatory burden is growing. The complexity and consequences is getting more profound. And for people that go into a business, the jam - what motivates them - is not the business of running the business. So, let's not make that so hard that the reason that motivates people to get into business is overwhelmed by these other burdens.
Our research and the Tax Office figures show that 46 per cent of businesses in the last full year where records are available weren't making a profit. For those million and a half people that are self-employed, three-quarters of those, whose full-time livelihood is their self-employment, are taking home less than average weekly earnings. And the average age is 50. We've got about 8 per cent, Lisa, that are under the age of 30. It was 17 per cent in the '70s.
So, we really think you need to energise enterprise. There's much joy to be found in leading and owning your own business, but the business of running the business is becoming so much more of a big challenge and a big responsibility.
Lisa Millar
Hey, Bruce, just before you go, there's another point that I think we really need to make, and that's about the social media that a lot of these small businesses rely on, whether it's Facebook or Instagram or all the rest of it. But when there's a problem, if they've been hacked, they've got nowhere to go, they can't get the help they need. What do you want to see happen?
Bruce Billson
Well, we want the big tech companies to step up. You can imagine if yours and my business was reliant on social media and those e-commerce channels as the only way we could contact our customers. We're hacked, we can't get into our account. Can you imagine how frustrating it is that the advice from those big tech firms is, can you please log into your account to tell us you can't log into your account? I mean, come on, to quote John McEnroe, you can't be serious. That is something that's got to change. We think those dispute resolution processes need to be improved. How about having a real person to talk to? Otherwise, come to my agency, and we've been working hard to get outcomes, to get business back to business.
Lisa Millar
A real person to talk to. What a novel idea. Ombudsman, Bruce Billson, great to talk to you this morning. Thanks for coming on the show.
Bruce Billson
Thanks for your interest, Lisa.
