17 March 2023

Australian Small Business and Family Enterprise Ombudsman Bruce Billson extract of interview with Selina Green.

ABC SA South East live from Lucindale

Subject: Visit to South East Field Days, role of ASBFEO, dispute resolution services, women entrepreneurs, insolvency reform, current challenges and opportunities for small businesses.


Selina Green

Small business. They're the backbone of this part of the country. 30% of all small businesses in Australia are in regional areas and here in regional South Australia, we've got thousands of them. Advocating and supporting small and family businesses in Australia is the job of the Small Business and Family Enterprise Ombudsman, Bruce Billson, who is with me this morning. Bruce, good to have you on site.

Bruce Billson

It’s huge to be here in Lucindale.

Selina Green

This is a great opportunity for producers, for those who run small businesses, of which there are many in the agricultural community, to get together and sort of see how they traveling and stuff, but also perhaps drop by your stand and find out a bit about what does an Ombudsman do?

Bruce Billson

Well, we do a few different things. Our core roles are in three streams.

One, we do dispute resolution. Now for your listeners, they probably know getting in a bit of a barney with a big corporate can be rather character building to put it mildly. And in the federal jurisdiction if you want a court-determined outcome you've got to race off to the federal court. Now that's a couple of hundred grand and you might be waiting two years.

Now, what small business can can stump that up and wait that long for a fairer deal so we get involved and try and mediate, find alternative dispute resolution strategies and tactics to equip the small business, to be able to have those conversations about, hey, you owe me some money, how about we get sorted and we square that off? Because a lot of these relationships might have a dispute or a grievance, but people want the relationship to continue. They want to keep doing business. So we try and find a classy way of resolving those issues.

So in that dispute resolution space, we also are the dispute resolution agency for a number of industry codes. Industry codes tend to pop up with is an inherent power imbalance. You see it in things like franchising, horticulture, food and groceries, the oil industry. You know, a behemoth international firm, a local fuel distributor. We get involved there where there's a dispute resolution mechanism in codes.

And we also have a key role with the Tax Office. So, if you're a small family business and you basically having a blue with a tax office, we can be of assistance either guiding you through the help that's available within the Tax Office itself or we we might part-fund a expert tax lawyer to find out whether you really have a grievance or whether there's not a lot of merit to it.

Which reminded me, when vegetarians argue, is it still a beef or is it called something else? Anyway, sorry, the Field Days have captured me. So that's in the dispute resolution area.

And then the other part what we do is around policy advocacy. So we provide advice in a classy way to government. I'm an independent public statutory office holder. So if there's things that need to be said, that aren’t maybe what government wants to hear, or they might know some challenge but not be clear on what the best solution is. Let's think of some examples. We were helping government with advice on the insurance crisis in some areas – really hard to get vital insurances because the market's hardened and there's a change in risk appetite.

We've done some work in the area of disaster preparedness and resilience and business continuity and what happens if the key breadwinner’s in strife, what happens to the livelihoods depending on that business? And we've just been asked to have a look under the hood at government procurement just to see how small and family businesses go in that space. So we do a bit of that work. That's stream number two.

And stream number three is we tell the story. The eclectic, fabulous, brilliant bunch of people that are those enterprising men and women of small business who create a third of our GDP. Two in five private sector jobs come from small and family businesses. The livelihoods they enable. Great story, but a complicated potpourri of of different experiences and journeys. And and at times that's tough for government. They might want to think, you know everyone's kind of homogenous and here’s a policy solution. We sort of say, look, the field evidence tells us this might not land right, or here's another way, that's the sort of stuff we do.

And I'm jazzed about being able to do that every day.

Selina Green

Yeah, because I imagine within your field might fall an ag business, like one represented here today, that might have 20 employees and they might be selling farm machinery or parts. And then you've got someone maybe who works out of the back shed and they bake dog biscuits and have someone help them out, and everything in between.

Bruce Billson

And it's a vital part of the economy, not just because of its contribution. If you look a bit deeper, as we do, you find that for women juggling perhaps multiple life objectives with family and career and other interests, being your own boss, being self-employed can often give you the flexibility a more traditional employee type role won't give you. So we see a greater number of women actually starting and forming their own businesses, and that's a real growing trend. So we're trying to say, well, what can we do to support women's entrepreneurship? And there's some great programs happening here in in the South East. But also for mature aged people, there's a higher proportion of mature aged people running their own business than there are participating as employees in the workforce. So that flexibility matters, that adaptability and the chance to pursue a livelihood with other objectives as well seems to be appealing. And we like putting wind in the sails of that kind of thinking.

Selina Green

We're broadcasting live from the South East Field Days this morning with Selina Green and with me is the Small Business and Family Enterprise Ombudsman, Bruce Billson, who's here at the Field Days. They've got a site if you want to drop by and get some advice about the work that the Ombudsman's office can do.

You mentioned there that advocacy around issues is one part of your role. I understand that insolvencies for small businesses at the moment is something that you've been involved in and you've been speaking to a parliamentary inquiry about that.

Bruce Billson

We've been making it known that some of the ideas in the law, and to the credit of the Attorney-General, Mark Dreyfus, he recognises that it's been three decades since there's been a really serious look at our insolvency laws. I'm sure your listeners would be aware, that as an individual there's bankruptcy, but as a business there's insolvency.

We're saying, hey, newsflash, in small and family businesses and in farming businesses, that idea that you're either the oil of a business or the water of a private citizen is nonsense. Those people are like salad dressing. They're inherently blended in their business interests and their family interests. And we see that in the farming community with farm and family businesses in particular. But we see it in small business generally. Half of all the small business loans are secured by personal assets. So that fudging of the distinction between the business and the individual happens by design. Yet, the law seems to think they're two different things. And so we're saying, hang on, we really need to renovate things here, because what's neat and convenient for the law doesn't actually line up with reality. And so we've been advocating a consolidation pathway for small and family businesses to understand and work through those interconnections.

We've also been saying, we've got to get past this idea that, say a major creditor - and it might be a bank, it might be an equipment hire finance business, someone's got a harvester on payment terms or it might be even the tax office - wanting their money and my concern is too often they'll go to winding up a business to get their money back.

So, the major creditor’s happy but everyone else who's got a stake in that business is thinking, hang on you're fine, you might have even done a fire sale on our equipment, you've junked the business. There's all these livelihoods that are hanging on it. Where does this stand? So, I know I look nothing like John Lennon, but all we are saying is give restructuring a chance.

You know that before we we harvest the organs with a business that had a sniffle or a high fever, let's check out what the genuine prospects are to reshape and restructure the business so it can continue to provide those vital livelihoods. Respect the stakeholders being more than the major creditor, but also meet the financial obligations of the major creditors. So these are some of the thoughts that we're trying to push into that mix and see where we can renovate and make those laws and those mechanisms more relevant to today's economy and what we hope for.

Selina Green

And speaking of today's economy, obviously a very relevant conversation to be having now, because it has been some tough times for small business and we're hearing a lot about the cost of electricity, of running businesses, skill shortages and the impact on businesses. Unfortunately there are a lot of small businesses out there who are doing it really tough at the moment.

Bruce Billson

And this is the fascinating thing about small and family businesses. Some have had a great pandemic and post pandemic. They just happened to be doing things that are valued. They might be solving new problems that really surfaced during the pandemic. And we see this a lot with women-owned businesses. Women-owned businesses are often problem solving first for themselves. They then share with their friends. And before, you know, that's a great idea and becomes a business.

So the pandemic and other economic challenges may have produced new problems that new businesses can come from. That's fine. But for many others, it's been a tough time. You know, those input costs that you've referred to, hard getting the talent and staff that you need, even access to finance, that's challenging. The banks have closed in a little bit around existing customers so they're not as open to new to bank customers. In some cases, your landlord might have cut you some slack and said, oh, let's defer some rent and maybe shave a little bit off.

But there comes a time when you've got to make good on those things. So as you're coming out of a difficult time, there's perhaps lead in your saddlebag from deferred rents. You might have been on a payment plan with the Tax Office, your financier or your equipment finance provider might have trimmed some of your payments, but they're now coming home to roost.

So that adds to it, as well as what you've pointed to earlier. South Australia in the latest job stats, I mean, you guys are doing very well in terms of job generation. But even just talking to some of the businesses … in Mount Gambier last night, they were telling me how hard it is to get talent. How one of the major hospitality business has heavy reliance on on migrants. But we haven't had the borders open so long. So they're pointing to a range of challenges. And you touched on energy. You know, for some businesses, the energy input costs, whether it's because of refrigeration, the equipment you've got to run, the lighting, all sorts of things can be a really significant input cost and it's hard to get relief from that. And you might not have the the cash flow to invest in energy efficiency technology or solar.

It's a challenging time. And whilst the number of insolvencies has been down during COVID, it's now coming back to its normal trajectory and we see banks, we see the Tax Office saying, look, we're going to go to normal mode now. So, you know, we expect to see some more activity in that space.

Selina Green

Bruce, it was great to have you on site. There’s a million other things that we could talk to you about. If people want to come and see you at the Field Days site, you're in the Ag tent.

Bruce Billson

It's just huge. But you are a big talent Selina, it's great to be here and have a great Lucindale Field Days.

Selina Green

Thanks for dropping by. That is Bruce Billson who is the Small Business and Family Enterprise Ombudsman. Catch him here at the Field Days over in the Ag tent.