Originally published in The Canberra Times

By Bruce Billson

The first half of this year has been characterised as a test of endurance for many small businesses, but I'm encouraged by the enduring optimism and the promise of improvement.

A greater focus on the exceptional grit of small businesses that are our economic foundation is essential.

Courageous and committed small business owners have been contending with a prolonged challenging operating environment. It is essential we recover lost ground.

We start the new financial year with continuing challenges of cash flow, margins and input cost pressures still facing many small businesses - and with the remarkable and continuing optimism and resilience displayed in recent years.

There are a number of changes happening from July 1 - and many of them will impact small businesses around the country.

There are updated tax rules, increased superannuation payments, changes to minimum and award pay rates, commitments to renew instant asset write-off tax incentives, and more.

Talk to your trusted advisers, such as accountants and bookkeepers, to make sure the business of running your business is on track, and check your payroll and accounting systems are up to date.

It is important to get this right and make sure you start the new financial year with your best and the right foot forward.

One of the changes to keep an eye on is the increase to the national minimum wage.

You'll be aware the Fair Work Commission has announced a 3.5 per cent increase to the national minimum wage and minimum award wages. This change applies from the first full pay period starting on or after July 1.

It has received a lot of media coverage as the Commission sought to balance the recovery of employee spending power after the corrosive impact of prolonged inflation and the reduced capacity of employers, particularly smaller employers, to cope with another cost impost at this challenging time.

But we cannot forget that small businesses are also fighting to stay afloat in the current economy - cost-of-living pressures are also cost-of-doing-business pressures.

Small businesses lack the market power to push back on cost increases - they can't easily cut costs, and often can't or won't pass cost increases to their loyal customers.

So what ends up happening is that small businesses can face grim choices over what this all means for their business - its viability, the scale of their operations and their staffing levels.

The modest incomes of many small and family business owners are too often overlooked.

The ATO has just released their most recent annual tax stats (2022-23), showing 45 per cent of small companies were not profitable - an ever so slight improvement on the previous year (46 per cent).

The ATO also reports no improvement over the same period for the three-quarters of self-employed small business owners working full-time who earn less than the average full-time adult wage.

That's why I keep urging governments and regulators to consider the cumulative effects of numerous decisions that add pressure on small businesses, and to acknowledge the benefits small businesses deliver for the Australian economy and community.

Small businesses provide jobs for approximately 5.2 million Australians and support 43 per cent of all apprentices and trainees - almost twice the amount supported by big business.

Costs-of-living pressures are crippling, for employees and employers alike. But if small businesses go under, that's devastating for the owner.

It's livelihoods lost, and an economic and social contribution that will no longer benefit the community and the national economy more broadly.

These enterprising women and men and their businesses need more than hope to recover and thrive.

We need to reduce costs for small businesses and need to push down the costs of doing business in a way that doesn't weigh on the small business owners or their employees.