Editor’s note: As we begin 2019, we wanted to get your thoughts on what to expect in the year ahead. So we’ve asked some of the most influential voices in accounting, bookkeeping, technology, and public policy to weigh in. Today, we hear from Angus Capel, former ministerial advisor in Canberra and current Xero Small Business Advocate.
Federal elections are a chance for small businesses to have their say on how Australia should be governed and how to best grow the economy. Employing half the workforce and adding around $380 billion annually to GDP, a healthy small business sector is critical to the economy. So what small business issues are likely to be in focus ahead of the 2019 federal election, which is expected before mid-May?
Payment times & terms
There is a long list of well-known business consequences due to late payments and extended payment terms. They include stymied investment, time spent chasing invoices, negative cash flow and market inefficiencies. On the other hand, reasonable payment terms and on-time payments generate business certainty and have been described by one business owner as on par with helicopter money in terms of stimulus.
The government has asked big business to disclose payment times while encouraging mirroring of its own small business-friendly payment policies, including shorter payment terms due to take effect from July. Anecdotally, however, big business payment practices remain a problem.
Early 2019 will likely see the government move from “encouraging” to “persuading” big business to offer reasonable small business payment terms that are paid on time.
The sector can expect the beginnings of change in red tape management over the course of this year.
Xero’s Digital Connectivity report highlighted the time saved (and related revenue and employment gains) of automating small administrative tasks. Over 2019, I expect decision makers will work on what a framework would look like to allow technology companies — including app makers — to reduce red tape through automation.
Next year may be an important one for beginning to create a market for products that ease red tape without compromising business or consumer protection.
Access to finance
Small businesses found affordable credit increasingly scarce as 2018 wound up. With the Royal Commission’s final report due in February, falling home prices in Australia’s most populous cities and the government’s $2 billion intervention to increase the competitiveness of non-big four small business lenders, expect to hear a lot more about small business access to finance this year.
Fintechs are aiding sector liquidity and open banking reforms are on the way. But expect a battle of ideas on how best to ensure credit reaches sound businesses that need it.
Apps & advisors in the spotlight
The National Broadband Network is scheduled for completion in 2020, with just over a million more premises to connect. With the vast majority of premises able to connect in 2019, expect a nationwide push for businesses to realise the productivity gains from embracing digitisation and innovation.
The push to implement productivity-enhancing products and services has been happening in one form of propaganda or another forever. However, the mode of delivery is about to shift. Canberra is realising that to scale behavioural change across the small business sector, it needs the support of trusted expert businesses advisors — namely accountants and bookkeepers.
Advisors may very well find themselves at the centre of government efforts to better educate small businesses. The need to educate small businesses and the potential of trusted advisors was a key theme discussed during Xero Partner Advisory Council discussions with leading accountants and bookkeepers from across Australia.
Barriers to growth & competition
The small business sector can expect a broad focus on barriers to growth. While many small businesses are perfectly content with their size, some businesses want to grow but avoid doing so because expanding brings risk.
Sources of risk include the complexity of employing, difficulty and cost of resolving business disputes, and perceived increasing dominance of large market players. Over 2019, the sector can expect research and policy proposals in these areas and others to clear the way for gains in productivity and competition.
This year will undoubtedly be a full one in terms of small business policy, and it’s important that business owners have a say. Input and feedback is the best way to ensure decision makers act wisely. Speak with your local member, industry body or even Xero as your proxy, but make sure your voice is heard in the national small business conversation this year.
Angus Capel is Xero’s Small Business Advocate in Canberra following three years as a ministerial advisor at Parliament House. Passionate about small business and the role it plays within communities, Angus works to help solve the problems that block the sector from reaching its potential.