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Opinion Piece: Much more is needed to help small businesses

Family Business Association CEO, Catherine Sayer, and Council of Small Business Organisations Australia (COSBOA) CEO, Luke Achterstraat, jointly wrote an opinion piece on the impact the proposed Industrial Relations (IR) changes will have on small and family businesses. Published in The Daily Telegraph.

5 February, 2024
Article, Legal, Small Business, Family Business, Family Business Owners, Family-Owned Business
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Small and family businesses have a lot in common even though not all small businesses are family-run, and not all family businesses are small. Australians prefer to buy from small and family businesses which comprise over 98 per cent of all businesses in the economy, something many people don’t recognise.

Small and family businesses enjoy high levels of trust and it is no surprise they are more likely to sponsor their local sporting club than other firms. Family businesses play a unique role in the social fabric of Australia with legacies created and handed down from generation to generation. Household names like Kennards Hire, Haigh’s Chocolates and Bundaberg Drinks are all family businesses.

Many regions have relied on small and family businesses for generations including in the agriculture and farming sectors.

We need to back our small and family businesses in 2024 particularly with economic headwinds ahead.

That is why the government’s latest tranche of industrial relations changes are so alarming.

The agenda being pursued is radical, costly and comprehensive: it touches every corner of the economy and the damage done to the small and family businesses will be significant.

Casual work makes up a quarter of all jobs in our economy and provides flexibility for carers, parents and students alike. Small and family businesses are often seasonally driven and reliant on the ability to engage casuals to meet demand.

Meanwhile, over 2.2 million Australians enjoy the flexibility of casual work and, for many Australians, their first job is a casual job. The ability to receive the additional 25 per cent casual loading is highly valued in our current cost of living crisis.

It is hard to understand why the government wants to eradicate the definition of casual workers that is currently well understood, used and implemented by business and workers alike.

The government is proposing a new three-page, 15-factor test for casual workers with an obligation for employers to assess and satisfy these factors in real time. The reality is small and family businesses typically do not have specialised HR support, meaning they need to spend time away from their operations to seek and pay for advice.

Disappointingly, no modelling has been provided on the cost this change will have on small business in terms of the associated red tape, compliance and complexity. Furthermore, many small businesses are themselves self-employed. The IR changes will radically overhaul the existing definition of employment – making it harder to be your own boss – and tie a leg rope around the 1.1 million self-employed contractors in Australia working as tilers, scaffolders, consultants and builders.

Small and family businesses often rely on the support of subcontractors or “subbies” and this supply chain faces disruption at best, and decimation at worst, if radical changes proceed.

Industrial relations is already notoriously complex with the existing Fair Work Act some 1200 pages in length. Governments should be seeking to make our regulatory system clearer and give time back to our small and family businesses rather than take it away.

The Senate inquiry into the bill has left many more confused at the end than at the beginning.

Encouragingly Senators Cash, Lambie and Pocock zoned in on the practical realities of the bill but were often met with vague answers to straight questions.

Some of the assumptions in the bill – such as an employer will only take 15 minutes to totally reclassify an employee – certainly bend the imagination. Small and family business believe the Closing the Loopholes Bill has been poorly scoped, communicated and executed in an environment where many businesses are up against the wall. 2024 is set to be a challenging year for small and family businesses. Let’s hope that common sense prevails before significant damage is passed into law.

This opinion piece was published in The Daily Telegraph on 2 February 2024.