Australian Small Business and Family Enterprise Ombudsman Bruce Billson interview with Nick Rheinberger.
ABC Illawarra and ABC South East NSW
Subject: Small business natural disaster preparedness and resilience
Nick Rheinberger
You would know from listening to ABC Local Radio, your official disaster broadcaster, that we're always reminding you to have a disaster plan for you and your family at your home. What about at your business? Whether you run a small or medium business. Do you have a disaster plan? Not just what you're going to do when you might get out of town.
God knows the businesses of places like Cobargo. And to quickly get out of town as they watch their businesses burn down. But what about afterwards? What do you do afterwards? Do you have some sort of way of continuing your business in different premises or at home, or online? Have you thought much about it? Some recent research has shown that only one in four small businesses has a business continuity plan.
Bruce Billson is the Australian Small Business and Family Enterprise Ombudsman and joins us now here at ABC Illawarra. Hello, Bruce.
Bruce Billson
Nick, fab to be with you and your listeners in the Illawarra.
Nick Rheinberger
This is this is surprising. I would have thought continuity is a very important part of being in business. Tell me about what you found in your research.
Bruce Billson
Yeah, it was interesting. I suppose I was less surprised. I was optimistic those numbers might be a bit higher. But what we know and see and hear about so often is just how time-poor small and family business owners and leaders are Nick. And they're so busy working in the business rather than on the business, if I could make that distinction. And that's been particularly the case with COVID, the natural disasters, a tough time getting staff in your listener region as well.
So, a lot of proprietors, a lot of business owners have been flat-out just keeping the show ticking over and trying to delight customers and make a livelihood.
So, the thought that you take a little bit of time out to stop and think, well, what might knock my business off course? A natural disaster. We've seen too many of those and in some cases, individual businesses have had to navigate more than one. But even the business owner themselves, Nick, you know, if a bad health episode came around? Those critical things that are the key foundations of the business. What happens if they were challenged? What would you do? How would you try and mitigate those sorts of impacts and then be best placed to get through those events and then recover on the other side?
So that's really what we were asking of the small business community and found that the interest and engagement on those types of things, Nick, was very strong immediately after they or someone they knew had been impacted by an event, but that drained away quite quickly as the mind's shifted more to the day-to-day operational needs of the business.
Nick Rheinberger
Is reflected in our response as far as state and federal government is concerned? That businesses are not as considered, I'm not saying not considered as important, but we think of people's houses first and businesses kind of come second.
Bruce Billson
And look, that was part of the message we were trying to get across. In no way diminish the importance of that community impact, people's homes and the like. But these livelihood premises need to be more front of mind. And one of the things that our report was recommending was that as communities plan for how they'll respond to natural disasters, have this small business and livelihood lens more front of mind, have a predictability there, Nick, for the businesses that will know that if X and Y happens, the town will be shut down or here's what the disaster response will look like, so there's some predictability and that those small businesses are more front of mind, they're part of those discussions with emergency service agencies, local government and the like, to have their interest factored in to those planning responses.
And, also, then the businesses being aware of what's going on around them. They can take account of that. They can contribute to it and then calibrate their own plans about response and recovery in light of that greater knowledge.
Nick Rheinberger
I mentioned Cobargo, which had its business centre destroyed by the fires. Another one that comes to mind is Picton with floods, which was just devastated, and a lot of the issues came about because of insurance and different insurers saying yes, your covered or you're not. How big of an issue is that when it comes to business planning because if you're not insured, you're not going to be able to set yourself up again.
Bruce Billson
It's absolutely huge. Couple of things that are going on. We've seen in the insurance market itself, the jargon is it's hardened. That is the risk appetite, the willingness of insurers to insure, to take on certain kinds of risks at the moment, is diminished. They're being more discerning about which risks they will take on.
The premiums in some cases have been eye-watering in their increase. And in others, the excesses, the amount of out-of-pocket to be paid before a claim, can be of such a high number people sit there and go, hey, is this really worth it? But it is really worth it in most cases where the market's working well. But that's not everywhere. These more disaster prone regions, you can do all that anyone can ask of you in the building structures, in your planning, in mitigating those risks. And too often, Nick, as we travelled around the country visiting disaster impacted communities, we were told, 'Hang on, Bruce, we did everything that anyone could ever ask of us. And we were still told, sorry, no insurance for you because you're in this postcode'. And I suppose what we were trying to highlight in this report, Nick, was that, surely there's going to be a greater incentive for businesses that are doing all that you could possibly ask of them.
Where's the price signal? Where's the savings on insurance costs? Where's the improvements in availability? And, you know, there's a range of things.
It's so pleasing to hear government talking about more investment in mitigation. For every dollar that the taxpayer contributes to disasters and disaster activity of governments, 97 cents is after the event, Nick, and only three cents is beforehand.
And government talking about increasing that and that increased investment will add to the mitigation, the steps that can take to reduce risks. And we're just really hopeful then the insurance industry will say, yep, that's now a more acceptable risk. Yes, this individual business has done everything you could possibly ask of them. We're back in.
And then we're also saying to the insurance industry, have a bit of a think not only about rewarding those businesses that are doing the right thing, mitigation and risk management wise, but also change the policy settings because a lot of them, Nick, are like-for-like and we've seen in too many communities just building back the same thing is really not a very clever thing to do. There may be new building requirements, particularly in fire strike risk areas that mean it's more expensive to rebuild. But shouldn't we be doing that? So, shouldn't like-for-like be replaced with like-for-right when it comes to those sort of claims? So, they're the sorts of ideas we're pushing for.
Nick Rheinberger
Another CBD which is probably top of mind is Lismore. We've got the Government relocating many people's houses to higher ground. Is the same kind of response being offered to businesses within Lismore, do you know?
Bruce Billson
We're watching that carefully because the Lismore community was so forthcoming with their experiences and their ideas. We haven't heard many of the businesses being relocated. It's been largely a focus on residential housing.
Nick Rheinberger
This is exactly where we started. And yet, the heart of the community is the main street.
Bruce Billson
Yep. Let's pick Lismore. I mean that community - my admiration is immense for the resilience and the experience that the Lismore community have dealing with so many flood events. There are business leaders there that have their plans. They have business continuity plans, Nick. They know if a certain spillway tips over they've got X amount of hours before it floods the main street.
They activate their plans, they remove valuable stock, they move equipment to higher territory. But, you know, in one example that was shared with me, they've got all that knowledge, it's all understood. But then an incident controller decided to shut the town hours earlier than would be the experience of long-term business owners, and therefore they were denied the opportunity to implement their plan.
So that's where that certainty response piece that we talked about earlier comes in. If you'd had that conversation, they'd have the time to implement the plan. The responsible authorities would know that that's part of the response that the business community has factored in, and they can work more collaboratively with it. And these are the sorts of things that we're highlighting in our report.
Nick Rheinberger
Bruce, great to talk to you today. Thanks very much.
Bruce Billson
Thanks Nick. Have a fab day and best wishes to your listeners.
Nick Rheinberger
That's Bruce Billson, Australian Small Business and Family Enterprise Ombudsman. I know it's a bit of a mouthful, but if you put that in your search engine or you can go to asbfeo.gov.au where you can see that latest report. If you're a small businessperson I do hope you've got the time to think about it.
ENDS
