The ABS figures show that the Australian economy grew by just 0.2 per cent in the March quarter, with public spending seeing the largest detraction from growth since 2017. 

In Addition, GDP per capita swung to a 0.2 per cent decline from a 0.1 per cent rise in the December quarter.

COSBOA CEO Luke Achterstraat said the figures are a wake-up call for policymakers, highlighting the urgent need to boost private sector investment and support businesses.

“The data paints a clear picture of an economy under pressure; with business owners bearing the brunt of rising costs, policy uncertainty and falling consumer demand.

“Private sector investment is stalling. Productivity is stagnant. Small businesses are doing everything they can, but the settings are not helping them to grow,” Achterstraat stated.

To address the issues, COSBOA is calling for reforms to unlock small business potential and restore national productivity.

The proposed measures include reducing the small business tax rate from 25 per cent to 20 per cent, making the instant asset write-off permanent, flexible and fit-for-purpose training pathways, and balanced, supportive digital and privacy reform among others.

The organisation stressed that reducing the small business tax rate could boost the Australian economy by up to $11.4 billion and create up to 3370 permanent jobs.

“The modelling confirms what we’ve heard from countless small businesses: tax relief boosts cash flow, reignites investment, and increases output, wages, jobs and growth,” said Achterstraat. “This is a policy that delivers a clear net benefit to the whole Australian community.”

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With the re-election of the Albanese government, the proposed ban on non-compete clauses, which was announced during this year’s budget, remains on the table.

The proposed ban follows the release of the Treasury’s Issues Paper in April 2024, which considered the impact of non-competes and other employment restraints.

Because promoting job mobility in the labour market remains a focus for the government, now is an ideal time to start thinking about what the ban could mean for you and your small business. 

What’s happening?

Non-compete clauses could be banned

If the proposal is passed by Parliament in its current form, non-compete clauses will be banned in employment contracts from 2027 for workers earning less than the high-income threshold (currently $175,000 per year).

At present, around 3 million employment contracts in Australia contain non-compete clauses which restrict these workers from going to work for a competitor or setting up a competing business within a certain geographical area for a set period once they cease employment with their employer. 

Non-solicitation clauses may also be on the chopping block 

The government has also foreshadowed consultation on the use of non-solicitation clauses. These clauses seek to prevent former employees from soliciting clients or employees from their former employer. 

Should a ban be implemented on non-solicitation clauses, this is likely to be of significant concern for small businesses seeking to protect their valuable confidential and sensitive information, especially in the context of a ban on non-compete clauses. 

Possible crackdown on wage-fixing and no-poach agreements

Post-employment restraint clauses are not the only target for further reform. 

The government has committed to close further loopholes on the use of “wage-fixing” and “no-poach” agreements. 

Under a wage-fixing agreement, two or more businesses agree to fix wages or employment conditions to discourage workers from moving to a higher paying role with a competitor. 

Similarly, under a no-poach agreement, businesses agree not to hire workers from certain other businesses, thereby reducing job opportunities for workers. It is not uncommon that workers are not aware of these agreements.

It is projected that the proposed reforms will increase job mobility within the labour market, leading to higher wages for workers and greater economic productivity. 

What you should do now

While it remains to be seen whether the proposed reforms will pass through Parliament and become law, there are several steps small businesses can take in the interim to ensure they are prepared for the changing competition landscape:

1. Review the business’ current use of non-compete clauses – review existing employment contracts and determine how many contracts contain non-compete clauses and if there is a trend in their use (for example, lower income earners in specific positions)
2. Consider the reasonableness of existing non-compete clauses – irrespective of any possible ban, it is important to consider whether the non-compete clause is reasonable having regard to the legitimate business interests you as a business owner are trying to protect. 
3. Review non-solicitation clauses – while the government has foreshadowed consultation on the use of non-solicitation clauses, these clauses provide an alternative method for seeking to protect legitimate business interests by preventing former employees from poaching clients or other employees.
4. Review employee confidentiality clauses – given the uncertainty surrounding the future use of non-compete clauses, it is wise for small businesses to ensure their employee confidentiality clauses are adequate to protect their business interests. Given an employee’s obligations under a confidentiality clause survive the termination of their employment contract, these clauses, when drafted appropriately, are an effective way to protect confidential information.

Are your non-compete clauses really enforceable?

Even if you already have non-compete clauses in your employer contracts, there’s no guarantee these are actually enforceable.

In order to be enforceable, a non-compete clause must be reasonable, having regard to the legitimate business interests an employer is trying to protect, and not be contrary to public policy.

A variety of factors would be considered, including:

– What is the legitimate business interest the employer is seeking to protect?
– Does the non-compete clause interfere with an employee’s ability to work and earn an income using their skills and experience?

The post Non-compete clauses may be banned by 2027 – here’s what small businesses should do now appeared first on Inside Small Business.

But if you’re a young, start-up, or a family-run business who sees an opportunity to get a product onto the market on your own, or you’re importing something from a cheaper production source overseas because you’re trying to get off the mark – sometimes it’s not always easy to know what is and what isn’t safe.

That’s where Australian Standards come in. These documents provide the critical framework that helps maintain an even industry playing field and support consumer safety and regulatory compliance.

Australian Standards are developed and published by Standards Australia, a government-mandated, not-for-profit organisation. It’s important to note that Standards Australia does not certify or test compliance – it develops the standards that others refer to. 

Ben Russell is an engagement manager, consumer products, with Standards Australia. He focuses on consumer product safety, engaging with industry, consumers, government, research, and other organisations to develop standards, either voluntarily adopted by industry or mandated by government. 

With the average small business probably dealing in only several product or service categories, Russell estimates the cost of working with relevant standards, for most businesses, to be a few hundred dollars a year. That’s a small price to pay compared to the potential cost of breaching a standard or regulation you might not be aware of and facing fines running into thousands of dollars, just because you failed to do your homework. 

On top of those fines, companies can face recall costs, often including reaching out to affected customers, product refunds and may have to pay for the collection of returned goods, along with their disposal.  

“Regulators are absolutely not flexible when it comes to enforcing consumer safety, nor should they be. It’s definitely worth the effort to make sure you know what standards apply to your business rather than roll the dice with the regulator.”

Of course, it is not just the fines that hurt a business when compliance errors are made – the reputational damage to a brand can be extensive. Picture a headline with your brand name linked to selling a toy that breached button battery standards, for example – a measure to ensure infants don’t choke on dangerous batteries or get poisoned by them. 

 “The last thing you want is to be known as someone importing or selling dodgy products,” says Russell. “It’s very hard to recover from people losing trust in you as a brand.”

Russell says Standards Australia is witnessing a lot of people buying stuff online from overseas marketplaces, and it is really hard to know if those products are compliant with Australian laws or standards. 

“They’re coming from different jurisdictions. Sometimes they’ll say they’re compliant with standards, sometimes they won’t bother, and even big retailers have been caught out. When you buy your goods online, you don’t always know what you get. So if you’re importing products or manufacturing products, you need to have the confidence to say we’ve got the standard, we can tell that our product covers the standard, and we are going to be alright. 

But Russell warns there is a feeling among smaller businesses, particularly that, ‘We’re small, we’re under the radar, we’re not going to get caught’. It is not worth the risk, he stresses: “The regulator won’t be forgiving.”

Standards compliance offers a competitive advantage

Savvy businesses that subscribe to standards, research their obligations and ensure compliance can boast a competitive advantage.  

“Consumers generally are more confident in a product, and they’re more likely to buy it if they know that it’s certified to a standard, whether it be an Australian Standard, an ISO standard, a European standard, or whatever standard within that ecosystem. They feel safer buying it. It’s a no-brainer for a consumer.”

One of the most considerable challenges Standards Australia notices is a reliance on importing products from overseas. Importers do not always know whether or not their products will meet standards. The exporter might say the product meets another country’s standards or another climate standard, or maybe they don’t say anything at all. 

“People are getting caught out because they’ve thought, ‘Maybe we can save a bit of money’. Button batteries are one of the easiest examples. The number of recalls you’ll see pop up on consumer websites, the stories you hear in the news about companies importing products, and they’ve not met the standards,” says Russell. 

“You see so many different toys come out here, and you find out they do not comply. A product recall gets issued, and for these retailers – large or small – that’s a considerable cost to recover all those products.” 

In an ideal world, businesses should be doing their best to ensure that whatever they are selling is safe. If there is a standard relating to their product, there’s no excuse for avoiding that willingly.

Standards Australia provides access to all its published Australian Standards through the Standards Australia Store. Businesses can purchase individual documents or subscribe to bundle relevant standards together and receive automatic updates, so they always have the latest version on hand. 

But while the onus for standards compliance rests with retailers and manufacturers, Standards Australia seeks to engage more with consumers as it creates product standards.   

Standards Australia wants consumers to have a better understanding of what’s in the market, so it is in the process of developing Consumer Reference Guides, which will be available for free to access. The intention is to empower consumers with knowledge of what to look for when purchasing goods in product categories where there might be a high risk to the public, educating people on what a standard might mean. 

Talking more to consumers will be part of the future direction of Standards Australia, says Russell. 

“We’ve been heavily involved with industry and manufacturers for many years, and while we’ve also engaged with consumers, we’re now looking to increase that visibility and direct connection even further. So the next step for us, particularly in product safety, is to come out of the shadows a little and give some visibility to consumers around who we are and what we do, and help them understand what it means to you if a product has a standard.”  

Conversely, that might help consumers understand why they should bother to buy a product that has a standard and make them feel more comfortable and safe when they do. 

• Learn what small businesses need to know about product safety in the report Product Safety Through Standards and Regulatory Compliance.

The post Why Australian Standards matter for every business – big or small appeared first on Inside Small Business.

“It has come to something when the confirmation of no new business taxes is presented as good news,” said Gavan Ord, business investment lead for Australia’s largest accounting body CPA Australia. “It’s like the camel thanking its owner for not adding that final straw to its back.

“Though a period of stability and no new tax shocks is welcome and coincides with today’s much-needed cut to official interest rates, the conditions under which Victorian businesses operate remains incredibly challenging. The Emergency Services and Volunteer Fund levy, announced in December, is an example of an added financial burden on Victorian property owners that further compounds the difficulties for businesses across the state.”

Ord stated that while the return to an operating surplus was an encouraging sign that would hopefully lead to pressure easing on Victorian taxpayers in the future, the state budget failed to show fiscal restraint.

Victoria’s budget been fattened by a $5.7 billion increase in Commonwealth grants, which CPA Australia says is being spent on pre-election sweeteners rather than reducing state taxes.

“Many Victorians will not realise that they already pay more in taxes than people in any other state or territory,” Ord said. “The cost-of-living relief provided in the Budget is largely down to the extra funding Victoria is receiving from federal government grants in the next 12 months.”

He also noted that while several programs aimed at building small business capability were announced in the Budget, their scale is limited. And if the small-business sector is to be supported, he pointed out that both state and federal governments must place a higher priority on policies that back business investment and innovation, with the funding to back it up.

“We need to revitalise the business environment by removing unnecessary regulatory burdens and supporting entrepreneurship,” Ord concluded.

The post Victorian businesses left out in state’s budget bonus appeared first on Inside Small Business.

The workshop, “Doing Business with Government”, will break down WA Government procurement processes and provide SMEs with tips on how to improve their success in responding to tenders, as well as improve the purchasing options for the WA Government.

With goods and services procured by the WA Government worth over $30 billion a year, this presents a significant and sustainable opportunity for local enterprises to take advantage of.

WA Premier Roger Cook said: “With more local businesses supplying to the WA market there will be positive outcomes for our economy and jobs staying in the state. This initiative will build on our record of achieving over 85 per cent Western Australian content in the state’s purchasing.”

The training, which has been initiated by the Department of Jobs, Tourism, Science and Innovation and the Small Business Development Corporation, is open for registration.

The first workshop session was held on Thursday, 8 May. The second session will be held on Tuesday, 20 May from 10 am to 1 pm.

More information on the workshop is available at the Small Business Development Corporation website.

The post Procurement workshop to help WA SMEs win state government tenders appeared first on Inside Small Business.

Council of Small Business Organisations Australia (COSBOA) CEO Luke Achterstraat welcomed the new cabinet and called for small businesses to be recognised as central to achieving national economic goals. 

“Unlocking small business potential is essential to lifting productivity,” said Achterstraat.

“Measures like reducing the small business company tax rate from 25 per cent to per cent would provide immediate relief and drive investment,” he said.

With small businesses representing 97.7 per cent of all Australian businesses and employing over 5 million people, Achterstraat emphasised creating policies that support their success.  

Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, emphasised the opportunities available to “further support small and family business at a time when many are reporting really challenging trading conditions”. 

“As greater attention is given to lifting productivity and improving the supportiveness of the economic environment within which enterprising women and men consider forming, growing, investing in their business and taking risks to create economic and employment opportunities, I look forward to continuing to work well, cooperatively and with purpose with Dr Andrew Leigh in his Assistant Minister role, which now has an added productivity focus”, said Billson.

The post New small business minister Dr Anne Aly welcomed by industry appeared first on Inside Small Business.

Furthermore, the Federal government announced that the office of the Minister for Small Business has been retained as a Cabinet-level appointment.

The Australian Small Business and Family Enterprise Ombudsman Bruce Billson has welcomed Aly’s appointment and looks forward to working with her on the implementation of the Government’s small business election commitments.

“There are many opportunities to further support small and family business at a time when many are reporting really challenging trading conditions, and I look forward to collaborating with Minister Aly and her colleagues to progress initiatives to ‘energise enterprise’,” Billson said.

Meanwhile, former Small Business Minister Julie Collins was reappointed as Minister for Agriculture, Fisheries, and Forestry, another important office as many small and family businesses belong to the agriculture sector.

Another notable appointee is Dr Daniel Mulino who is named the new Assistant Treasury Minister for Financial Services, a significant office that is influential to the taxation, regulatory and operating environment small and family businesses inhabit.

The post Federal government announces new appointments and reappointments appeared first on Inside Small Business.

In a joint submission to Treasury this week, eight professional bodies have set out their concerns and key recommendations to ensure a smooth transition to the new model once all stakeholders are prepared.

In particular, CPA Australia, Australia’s peak professional accounting body, argued that “a period of chaos could ensue” if the timeframe is not extended, as businesses will find themselves struggling to fulfil their compliance obligations through a system that potentially can’t deliver.

Payday Super was originally set up to ensure eligible employees are paid superannuation entitlements by their employers as part of their regular pay cycle. Unless the request for a delay is granted, the scheme is due to take effect on July 1 next year.

CPA Australia’s superannuation lead, Richard Webb, said that while CPA Australia is a strong advocate for the goals of Payday Super, the superannuation industry and small businesses are not yet ready for the change and compliance obligations it brings.

“One of our main concerns is that the superannuation transmission network will not be ready to manage the increased traffic by July next year,” Webb said. “We believe it is vital to postpone the start date for Payday Super by at least a year, ideally 24 months, to allow all stakeholders sufficient time to comply with the new logistical demands on the system.

He added: “The superannuation transmission network is fundamental to the successful delivery of Payday Super. If it is not adequately prepared for the transition, it would create a perfect storm of confusion and uncertainty for both employees and employers. The practicalities of delivering once-in-a-generation reform of the infrastructure underpinning the superannuation payments system are extremely challenging.”

Webb added that the weight of expectation on small businesses is another good reason to delay the rollout.

“The new regime will be challenging for some big businesses, but small businesses will be particularly impacted by the change. The regime requires considerable upfront cash flow and system changes, posing difficulties for small businesses that may lack the resources and technological proficiency to adapt swiftly,” he said.

Webb pointed out that while advisors and accountants can help ensure a smooth transition to the Payday Super, they will need the time to support and educate their millions of small-business clients on the new scheme.

“The government should introduce a grace period to allow employers to receive education and support without immediate penalties for non-compliance. Delivering Payday Super reliably, fairly and without unintended consequences must be the priority,” he concluded.

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The statement has acknowledged the importance of small businesses to the state and the challenges they face such as the high cost of doing business, regulatory burden, the impact of global uncertainties and digital transformation.

“A supportive business environment, with a reduced regulatory burden, reduced operating costs, improved access to workforce and skills, easier access to improved services and supports, and higher rates of productivity and innovation, is critical to Queensland’s future success,” the statement said.

In addressing these challenges, the state government stated it is committed to improving the experience of small businesses in dealing with government and making the necessary “positive changes”. As a first step, the state will invest over $100 million within four years to deliver outcomes with the following measures:

• Easier access to government services with Queensland’s first dedicated Business Concierge service and improved access to services.
• Tailored support for small businesses at every step of their business journey.
• Identify and respond to red tape and other pain points with the establishment of a small business first lens to regulation.
• Boost procurement opportunities for small businesses.
• An Apprenticeship Pilot Program that will support small and family businesses taking on apprentices.

In addition, the state government will also seek to address the challenges of the ageing small-business owner population by encouraging more young people to take over or create new businesses.

Small and Family Business Minister Steve Minnikin said that the Action Statement provides practical support and assistance to small and family businesses across the state.

Groups such as CPA Australia have welcomed the Queensland government’s pronouncement, saying that these plans offer reassurance of small-business support. However, they also pointed out that more needs to be done.

Gavan Ord, CPA Australia’s business investment and international lead, emphasised that the State government should “place a stronger focus on supporting digital adoption among small businesses. Australian SMEs are falling well behind larger businesses and small businesses in Asia in terms of technology uptake. This gap is undermining their performance and competitiveness.”

Ord added, “It’s crucial for the federal government and state governments to work together to address the challenges being faced by businesses, including how to ease tax and regulatory burdens and provide greater relief and incentives through targeted policies.”

The post Queensland government to provide additional funding to support small businesses appeared first on Inside Small Business.

The new requirements include attaching permanent warning labels, information on anchoring products in manuals and assembly instructions, and providing warnings to consumers in furniture stores and online.

The guidelines apply to chests of drawers, wardrobes, bookcases, hall tables, display cabinets, buffets, and sideboards with a height of 686 mm, as well as all entertainment units, allowing suppliers a 12-month transition period of implementation.

“Suppliers face serious penalties for non-compliance, with penalties up to $50 million for businesses and $2.5 million for individuals,” said Catriona Lowe, ACCC’s deputy chair.

As part of the customers’ injuries, especially those of children and elderly people, ACCC has provided consumer advice and supplier guidance on complying with the mandatory standard.

“Suppliers must meet these requirements, and the ACCC will be working with state-based consumer agencies to monitor compliance and take enforcement action if appropriate.”

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