Essential tips & tools for small business

Published: 30 October 2014

Summary: An interagency webinar by the ACCC, Australian Securities and Investments Commission, Fair Work Ombudsman and Australian Taxation Office, with business advisory comments from Small Biz Connect, a program at the University of Western Sydney.

MIKE HAWKINS: Good evening everyone, and welcome to Essential Tips for Small Business, an interagency webinar brought to you by the Australian Securities and Investments Commission, Fair Work Ombudsman, the Australian Competition and Consumer Commission, and the Australian Taxation Office, with business advisory comments from Small Biz Connect, a program at the University of Western Sydney.

Thank you for taking time out of your busy day to tune in to this webinar, which promises to both be informative and interesting.  I'm Mike Hawkins, I'm the Executive Officer of BEC Australia. We run a network of over 100 centres across the nation, and we work a lot with federal, state and local government bodies, in particular the regulators that are here this evening.  It gives me great pleasure now to introduce our presenters for this evening, and I'll start with the Australian Securities and Investment Commission presenter, Brett Bassett.

Brett is the Queensland Regional Commissioner of ASIC, and is also the Senior Executive Leader of Small Business Compliance and Deterrence.  Brett has a regulatory and consulting background, having worked in the Queensland Police, New South Wales Department of Fair Trading, the ACCC, and various forensic consulting firms.  Brett is responsible for ASIC's engagement with small business, and as part of this his team undertake compliance, surveillance and enforcement work in that industry sector.

Our second presenter for this evening from the Fair Work Ombudsman's office is Robert Hortle. Robert is the Fair Work Ombudsman's Director of Small Business Strategy and Campaigns.  Robert and his team ensure that the needs of small business are understood and accounted for within the work of the Fair Work Ombudsman.  The campaign's work undertaken by Robert's team also ensures that employers receive the appropriate support and assistance they need to help them meet their workplace relations obligations.

Our third presenter is from the Australian Competition and Consumer Commission, Dr Michael Schaper, is the Deputy Chairman of the Australian Competition and Consumer Commission, and has a special focus on small business, franchising industry associations and business liaison.  Michael has previous small business administration experience as President of the Small Enterprise Association of Australia and New Zealand, the Small Business Commissioner for the ACT, a Director at the International Council for Small Business, and also he's managed a community based Small Business Advisory Centre.

Our fourth presenter from the Australian Taxation Office is Judy O'Connell.  Judy O'Connell is the Assistant Deputy Commissioner Small Business, Individual Taxpayers, Australian Taxation Office.  In her current role Judy leads a range of key programs to deliver innovative and contemporary support options to make it easy for small business to interact with the tax office.  Programs include the development and implementation of cross agency fix it squads, and the establishment of small business multi-use panels.  Judy also sits on various internal and external committees and forums spanning both the micro and SME markets, and the ATO Senior Liaison for the Small Business Minister.

And I'd also like to welcome from Small Business Connect, the University of Western Sydney, Inu Rana.  Inu Rana is the Senior Business Advisor at UWS under the Small Biz, Business Connect program.  She provides advice and some support to SMEs.  She has devoted the last 14 years to consulting, advising and mentoring businesses.  Previously she worked in a productivity consultant international basis.  She also runs an export business with her husband in Sydney.  So ladies and gentlemen, that's our panel for this evening.  I'd now like to cross to Brett Bassett from ASIC for his presentation.  Over to you Brett.

BRETT BASSETT: Thanks very much Mike.  Good evening everyone.  Before I begin, I want to thank the agencies here tonight for their commitment to supporting Australia's small businesses.  I do think I can speak on behalf of everyone on this panel this evening when I say that our focus is definitely on providing people involved in small businesses with the best information possible, so that they can have the confidence to effectively and efficiently run their businesses.  I do encourage those of you with questions tonight to submit them, and we do, although we do have a, a limited amount of time, we'll certainly do our best to get through all of them.

As Mike mentioned, I'm ASIC's Regional Commissioner for Queensland and Head of our National Small Business Compliance and Deterrence Team.  The team was established in July 2013 and is very much focused about supporting SMEs and working more closely with other government agencies such as those here tonight, professional and industry associations, and small business owners themselves of course to better engage with the sector.

Before I discuss some of the work we've undertaken, I do like to think it's important to talk about who ASIC is, what we do, and why we do it.  So we are of course Australia's corporate regulator.  We regulate Australian companies, financial services organisations and professionals, who deal and advise in investments, superannuation, insurance, deposit taking and credit.  Because almost every Australian adult owns at least one financial product, making sure consumers and investors have confidence in our financial system is at the heart of everything that we at ASIC do.  This is why our regulatory priorities are to promote investor confidence and trust, to ensure fair, orderly and transparent markets, and to provide accessible and efficient registration.

Now, you may very well be thinking “But what does this have an impact on small business about?” Well, from ASIC's perspective small business is certainly our largest customer.  Of all the companies and businesses registered with ASIC, over 96% of them are considered to be small businesses with less than 20 employees.  And what that means is that small businesses make a significant, considerable contribution to the Australian economy, both in respect of their output, but also in respect of the people that they employ.

Small businesses collectively employ half the Australian workforce, and account for one fifth of Australia's gross domestic product.  And if one of ASIC's fundamental objectives is to maintain, facilitate and improve the Australian financial system and the businesses that operate within that system, obviously regulating and assisting small businesses has to be an integral part of everything that we do.  But what is ASIC doing?

Well, two years ago ASIC's first small business stakeholder survey clearly showed that small business owners knew little about us and the laws that we administered.  Those that were of ASIC regularly found it difficult to access information about what they physically had to do to comply with their obligations.

Now it was clear to us at ASIC that if we wanted to achieve better compliance we needed to make it easier for small businesses to understand and comply with their legal obligations.  And ASIC's Small Business Compliance and Deterrence Team is focused exactly on that.  Helping small business advisors, and of course the business owners and managers, better understand and comply with their legal obligations.

Now obviously we do need to identify misconduct, and we do take action against those particularly who break the law, but also who make small businesses suffer detriment.  Now, both are important because they help businesses operate fairly and transparently, which in turn ensures that there is an integrity in the commercial system, in other words from our perspective, it provides a level playing field for everyone involved in commerce.

The focus of my presentation tonight, apart from what it is that ASIC does, is to actually tell you about what else ASIC is doing to help small businesses and importantly their advisors.  But before I explain how we're exactly doing that, it's important to know that you don't always have to engage with ASIC.  You'll only need to do it on an ad hoc basis generally.  And generally if you use a company or a business name to operate a business, or if you require a licence or authority to operate in certain industries, such as financial services and credit, that's probably when you'll need to engage with us the most.

Now over the past 18 months we've actually released a range of tools that we think help small businesses and their advisors better understand who ASIC is and how we can help.  Last year we published a booklet called Your Obligations as a Small Business Operator, which provides, in our view, easy to understand information, and highlights the key obligations that directors of small proprietary companies need to do to comply.

For example, one key obligation is providing details to company directors and secretaries about how to keep financial records, and what to do to make sure that the company is solvent and can pay its debts.  A copy of this booklet is available and it's free on the ASIC website.

We've also got a dedicated small business hub on the ASIC website, which brings together information particularly relevant to those operating small businesses through the company structure.  Now, the hub provides a whole range of tools, including one minute guides on popular topics, and acts as a gateway to more detailed information that is available throughout the ASIC website.  And a link to the small business hub can be found on the ASIC home page at www.asic.gov.au.

And most recently we've released the agency's first dedicated smart phone app for business owners.  Now, the app is called ASIC Business Checks, and it's been developed to encourage business owners and operators to start their due diligence early, before they enter into a business relationship with a new party, or of course to verify information that they have for existing parties.

Now we do know that small businesses don't necessarily have the same resources, both financial and human, as some of the larger companies.  And we also understand that small businesses need to be particular about where they concentrate their time and money.  So a big part of what we're trying to do at ASIC is actually help small businesses minimise their risk.

And with the help of the ASIC Business Checks apps, we actually think that it does exactly that.  It certainly helps business owners to ask the right questions about the company, business and individuals that they're dealing with.  It allows them to check ASIC's public registers and verify that the information that they've been given by people that they're dealing with is accurate.

It certainly provides instances where we do suggest that business owners and managers should seek the support of professional business advisors if they need it, and finally, if things do go wrong, and something is, goes awry, we do suggest, and the app allows people to actually report suspected misconduct to ASIC if they believe that a company, business or individual is acting unlawfully.

Now the app is a tool, but it's certainly not a substitute for seeking trusted professional business advice.  But in our view we actually think it's a starting point for the checks that all businesses should do before they deal with another business.  Now, the plug is that the app is free, it's easy to use and it's available on iTunes and Google Play, and we do encourage you when you get the opportunity to take a look.

And another way that we at ASIC are endeavouring to help small businesses is by offering business holders more support and guidance when they come to using our business names register and other online services.  And as you probably know, demand for those services is extremely high.  And in the last financial year, ASIC registered almost 300,000 new business names, and renewed another 350,000.

And to assist business holders, ASIC has also released a whole range of videos.  We've turned some of our most popular user guides into handy tutorials that step customers through common business name transactions such as registering, renewing and cancelling a business name.  Now, we do have a YouTube channel, it's ASIC Connect, and you can go and view that at YouTube.

I do hope that by speaking with you today you have a better understanding of just how important the small business sector is to ASIC, and what we're doing to support you.  One of the key challenges for us and other government agencies is identifying new and effective ways of reaching small businesses, tapping into communication channels small businesses use, and making our information and services easy and simple to use and find, and connecting with our stakeholders who are very important to us through events such as tonight's webinar, are keys to increasing our awareness of you, and us similarly helping you understand the role that ASIC has and how we can better assist you.  Thank you very much for taking the time out of your day to join us this evening.

MIKE HAWKINS: Thank you very much Brett, and that was very informative.  And it's good to see that ASIC is certainly up with YouTube and mobile phone applications to make it really easy for small business to connect.  So thank you Brett, very informative.

We now work to the Fair Work Ombudsman's presentation from Robert Hortle.  Robert, over to you.

ROBERT HORTLE: Thanks very much Mike.  And as Mike said, I am Rob Hortle, I'm the Director of Small Business Strategy and Campaigns at the Fair Work Ombudsman.  My job within the Fair Work Ombudsman is to make sure that the needs of small business are understood and accounted for.  And we do deal a lot with small business.  We take around 11 million hits on our website every year.  We take around half a million calls to our Fair Work info line on 13 13 94, and we receive around 26,000 complaints every year as well.  The majority of dealings we have are with small business.

We understand that small business are under a lot of pressure, and of course the big one is the time pressure that they face.  In addition to that, we understand that workplace relations is rarely at the top of the list when it comes to the priorities of a small business owner.  So knowing where to start can be the first challenge.  Today I'm going to take you through five tips to assist with your workplace relations, and they're focused on employee management.

So let's get into it.  Tip number one.  Take the time to think about the recruitment process that you're going to be running.  If you put time into thinking about the recruitment process, you'll have not only the best chance of finding the right person for your workplace, but also being able to keep them.

There is nothing worse, of course, than being able to find a good employee and then only losing them down the track.  To help you do this we've created an online hiring guide which has an accompanying online course, which steps through all the processes that you need to go through in terms of hiring an employee.  It takes you through who to talk to, what to check, what to do each step along the way, because there are some important decisions that need to be made when you're hiring an employee.

Of course, you need to think about what type of a recruitment process you're going to run.  Are you going to advertise, are you going to ask for applications, are you going to interview, perhaps you want a demonstration of skills.  And then you need to think about the type of person you're looking for.

Are you looking for someone new to the industry, someone with experience, perhaps a mixture of both?  When you get the person in, it's also important to think about the aspects of the job and the expectations of them when they come on board.  Doing these things allows you to be able to, as I say, find the right person and keep them in the workplace.  So that's my first tip.

Secondly I would say take the time to think about some formal training and development, perhaps in workplace relations or management.  We know that most people who go into small business don't go into small business because they're business experts, they go in because they're passionate about making pastries or selling books.

They're passionate about what they do.  So sometimes businesses do need some professional expertise.  We've put together some online courses on our website, fairwork.gov.au, and I wanted to touch briefly on a couple of those courses, because I think they'll be helpful for you.

The first is called Managing Performance.  Now, once you recruit your employee and you get them in, obviously you want to be able to promote good performance, but also manage performance that's not quite meeting expectations as well.  So this online course has a range of tips and tricks and practical advice to help you do both of those things.

The second course I wanted to mention very briefly is called Difficult Conversations in the Workplace, and we know that the workplace sometimes can be an environment where issues arise and where conversations have to be undertaken that aren't always easy for both employees and employers.  So we've done a course, one for employees and one for employers that focuses on how to have these conversations, how to deliver the messages, and how to work in the workplace in a productive and a cooperative way so that issues don't escalate.  These online courses are completely free, and I'll speak about them more in a moment.  They're at our website, fairwork.gov.au.

My third tip is to think about the working arrangements that best suit your business.  We know that there's a range of benefits associated with flexibility in the workplace, and it's twofold.  Obviously being able to be flexible in the workplace gives employees the chance to maintain a reasonable work life balance, but it also can make them more productive and more efficient in your workplace, therefore making you work, your, your business more profitable.

There's two ways that you can do this, and the first is called an Individual Flexibility Agreement.  Every single modern award contains what's called an Individual Flexibility Agreement clause, and what that lets you do is actually vary terms within an award that aren't quite working for your business by agreement with your employees.  So for instance, if the span of hours isn't quite working for you, you can, by agreement, vary that clause.  The same with allowances or overtime.  You can make variations to it by agreement.  It's a really effective way to enhance the flexibility in your workplace.

There are times when employees can actually come to you as well and ask you for flexible arrangements, and our website has a whole range of information on this particular topic, including a really good Best Practice Guide.  And dare I say it, if you're able to tune in to a webinar, you're more than capable of jumping on the website and having a look at the Best Practice Guide.  It's really useful, it's completely up to date, jump on it and have a look.

My fourth tip is about when issues do arise in the workplace, and it's about taking the time to actually sort them out when they arise.  Most issues that come up in the workplace are inadvertent in our experience.  They're either mistakes, misunderstandings, or just a lack of knowledge as to what the workplace laws are.  My experience also tells me that if you just ignore an issue, very rarely will it go away.

You might get lucky, it might go away, but I think that's reasonably rare.  So approach us in the first instance.  We're here to help you.  13 13 94 is our Fair Work info line.  You can actually get completely free advice from us to help work through these issues.  Most issues are not all that serious, and we actually have a range of ways within the Fair Work Ombudsman that we can help you resolve them that, just like the issues, aren't big formal ways of doing that either.

So we have things like a mediation process, alternative dispute resolution processes as well.  These are all aimed to be quick, simple, effective ways of helping you resolve these disputes so that you can actually get back to get on with your business, which we know you would rather be doing than dealing with any regulators, and no disrespect to all of my colleagues here today.

Of course we are a regulator, and sometimes we do need to take serious action against people who do the wrong thing, but it's usually against people who are deliberately doing the wrong thing, who are doing something wilfully or seriously, perhaps taking advantage of vulnerable employees, or ignoring us.  It's a great way to get our attention, is to disengage with us, there's nothing surer of it.  So be proactive, engage with us, and you'll be able to get on with doing your business.

My final tip is about taking some time to proactively seek out the tools and resources that we have available for you.  As I said my entire job in the Fair Work Ombudsman is to make sure that these tools and resources are available for you, and I wanted to step you through some of the services that are here to assist you.

The first is our small business help line.  It runs through the 13 13 94 number, and it's a dedicated small business help line.  You press number three and you get through to specific small business advisors.  We actually launched this in December last year.  We've taken over 130,000 calls since it launched, and as I say, it's a priority service, it's there for small business.

We've also relaunched our website, fairwork.gov.au, and that has a dedicated small business page within it.  On that page you'll find not only your information, tips, tricks, things like that, but a whole range of resources like template letters, wage calculators, leave calculators, links to our paycheque tools, all these things are here for small business, and they're all on that small business page, so please, log on, have a look at it.

The other thing I wanted to mention about our website is we also have a feature called 'My Account'.  This is your way of being able to personalise the content on our website.  What happens, you log on to our website, you sign up to My Account, and you're able to get specific information for your business, save information, come back to it at a time that suits you.  You can also get regular updates and subscribe to our newsletters and our other updates that we push out through that service.  So My Account is your way of being able to stay up to date with the workplace relations, news, laws and things like that.

Finally, I wanted to just quickly mention our online learning centre as well.  Our online learning centre has five courses in it at the moment, ranging from hiring employees all the way through to managing performance and a few other bits and pieces in between.  These courses are completely free, online, interactive courses that you can do in your own time.  They're available 24 hours a day across any platform that you've got, whether you want to access it on your smart phone, your iPad, or your PC.  And you can actually undertake these courses which give you video based scenarios, there's multiple choice question and answer, there's little quizzes, they're completely interactive.  And they'll be able to give you a certification at the end of those courses as well.  So jump on and have a look.

If you take the time to get to know some of these tools and resources, you might actually find that you save yourself a little bit of distress down the track, because you'll know where to go for help, you'll know what to look for.  So that's my fifth tip, take the time to proactively seek out those tools and resources.

So just to recap, take the time to invest in the employment relationship, whether it's the recruitment phase, whether it's getting someone in and managing their performance, or whether it's actually finding the tools and resources that you need, it's worth the effort.  Actively engage with the FWO.

If we come to you, don't ignore us.  We're here to help you, we're not here to harm you.  We're here to be an asset and an ally to small business, and we will help you as easily and quickly as we can.  And finally we want to resolve issues and promote cooperative workplaces.  This means we want issues solved just as quickly as you do.  So we want you to be able to get on with what you do best, which is running your business.

That's my overview of the Fair Work Ombudsman and my five tips.  I hope this has been useful.  Thank you very much and I look forward to taking your questions.

MIKE HAWKINS: Thank you very much Rob, and that was a most informative presentation, and what I got out of that was the perception that employees and employers have about what is good performance, and certainly it can vary between employer and employee.  So thank you for making resources available to try and demystify that process so that everybody's on the same page.  And as you said, you're here to help.

Our third presenter this evening, is Dr Michael Schaper from the ACCC.  So Michael, over to you for your presentation.

MICHAEL SCHAPER: Thank you Mike.  Good evening everyone.  The ACCC is a name probably familiar to many people, and we've got a, a multiple set of functions.  We're the national competition regulator.  We're the national consumer protection agency.  We're also the fair trading agency, and we're also responsible for product safety, amongst other things.  So one of the things that most businesses will contact you, as a business advisor, as an accountant, as someone working in and around small businesses though, is the issue about advertising, pricing and marketing.  What can I do, what can't I do?

So today, rather than run through some of our online resources in detail, let me run you through a couple of common issues that businesses are coming to us about.  And we get about 10,000 businesses a year contacting us with queries, some of the things they're contacting us about and which you in turn might want to make sure you're up to speed on.

There's a golden rule in all pricing, all advertising and all marketing, and that is to avoid misleading or deceptive conduct.  And indeed, it's a key part of a Competition and Consumer Act.  Now, it's important to bear in mind that really honesty is the best policy.  You can fall into all sorts of traps if you think that gilding the lily or taking a shortcut on either the truth, the amount of information that you provide to people, hiding information, might give you some sort of commercial advantage, when in fact it can trip you up in the law.

So there's a general set of really important things to bear in mind here.  Leading people to a wrong conclusion, lying, creating a false impression, all of these are things best avoided.  And so our advertising and marketing guide, which you can find more about at the end of tonight, is a really good summary of all of these.  But let's have a look at that and how it works in terms of your advertising and your pricing and what that means on a day to day basis.

Now, as you can see here with this first slide though, just bear in mind, you need to sell things on their merits, and you need to be honest about what it is that you're selling, what it is it's costing, and what isn't included.  One of the most common things most people would be familiar with today is the fact that when you buy something, for example an airline ticket, you no longer get hit with an airline ticket fee, plus a boarding fee, plus a fuel charge, plus a tax.  Indeed, you're required under Australian law to make sure that all of those compulsory prices are bundled up together and presented as one.  We refer to this as component price advertising, but really it's about total price.  If there is a mandatory fee, then you've got to include it.

So if you can see here in the slide in front of you, you can't say that for example something is $40, plus taxes and charges, plus fees and charges.  You can't say that a car is $35,000 plus drive away costs.  You have to actually give the full price, the full minimum expenditure that someone is going to face.  So if you are selling something, for example a ticket online and it's $40, there's a $3 booking fee, and then the GST comes in over the top of that, then you've really got to tell them that it's $47.30.  So always make sure that the minimum total price is fully disclosed.  And equally, you've got a right, as a business, if your competitors aren't doing this, and that's putting you at a disadvantage, you're also free to contact us and we will look into those matters as well.

Let's have a look at that in a practical sense.  Full and open disclosure is the rule of the day here.  So these sort of advertisements that are up there in front of the screen at you at the moment.  Get a great, hot, holiday in Hawaii.  Seems like it's $1,799, but when you start looking into the fine print, you realise very quickly that it's nothing like that at all.  There are extra charges there, there are limitations there.  If you squint really closely you can start to see some of the fine print details that are there.  So what looks like a great deal for $1,799 actually comes up into several thousand dollars, and it also has a number of limitations about it.  This is clearly against the law, because the customer isn't getting the full basic price about what it's actually going to cost them.

Here's another example.  This is a real life advertisement that cost the company in questions penalties from the ACCC in the vicinity of about $100,000.  Here you can see an advertisement being placed up on a bus for a fee for a monthly charge.  What you don't realise unless you run behind a bus very quickly is that it's actually for 24 months, and so the $59 per month rapidly comes into a figure well over $1,000, and that's the minimum price you've got to pay.

So I think this gives you both a really good sense about what we're on about here.  You've got to give the total price, and customers aren't expected or required to have to go hunting for it.  You've got to make it very clearly visible to them.  You can't put it in a fine print disclaimer.

Likewise, if you're operating a business, no one else in your supply chain can tell you the price that you're to charge products for.  It's up to each and every business in the retail sector to set their own prices, and they're free to do so.  We call this resale price maintenance, and it's a really important issue.  Interestingly enough it's fine for a supplier to say “This is a recommended retail price”, for example an RRP, but you can't require someone to sell something.  You can't fix prices for them.

A real small example there you can see on the screen is an aquarium.  Aqua Depot Imports, back in August 2011.  Resale price maintenance by ceasing to supply another firm, a retailer, who wanted to discount the products in question.  And really, retailers are free to set their own prices.  So if you're in the business of dealing with other businesses, make sure you don't fall into that trap of trying to tell them what prices they must or must not sell at.

Another area that businesses in the retail end of the spectrum also fall into difficulty with is the so called was-now pricing, or this is the past price and this is the present price.  You can see a car there displayed on the screen, and you can see the price has been reduced.  Now, that's great, if it's really been reduced.  But if the price was only ever at that original one, that struck out price, for a day, for an hour, and you then turned around and said “Now it's been vastly discounted”, then you really are lying and misleading to your customers, and that's against the law.

Again, playing fast and loose with the truth, trying to be a little bit too clever with it, rather than asking yourself the question “What would an average customer, a reasonable member of the public, expect?  What would they think that a previous price was?”.  They probably would have expected that it would have been up for sale for some time before it got reduced.

Finally all this comes together with this issue about price fixing.  Businesses can't get together and fix prices.  If anyone approaches your firm and says “Let's get together and cut a cosy deal in terms of dividing the market up”, sharing who gets which customers, or making some sort of attempt to set the prices that you're all going to follow, then this can lead to really serious breaches of the law.  And it's not just big firms, it's also small firms that run into this.  And the penalties can be substantial, including gaol time and literally up to millions of dollars in penalties at the most serious end of the scale.  So be really careful about any temptation to try and fix prices with other businesses.

So finally, the golden rules for advertising and pricing.  Truth in advertising isn't just a nice saying, it's essential.  It is the gist of what accurate, legal advertising and marketing is all about.  Always display the total price, and always try and put yourself in the mind of the average customer, the typical customer.  What would they think about what you're saying, and what would they assume is behind it?  So put yourself in their shoes, and you will find that complying with the law is so much easier.

As everyone else has pointed out tonight, we also have a range of online tools, ranging from both self-education programs displayed up there, through to brochures that you can download.  We have a small business information network that you can subscribe to, and we also have a help line if you also want to speak to someone and get a better sense of what we're doing.  So Mike, I'll leave it there for questions, and I think that's probably a good start for everyone.

MIKE HAWKINS: Thank you very much Michael, and again, a very informative presentation. What I got out of that was fairness, truth and honesty, and if you abide by those principles then you probably won't have the ACCC knocking on your door.  So thank you again Michael, very informative.  Our fourth presenter for this evening is Judy O'Connell from the ATO, and Judy, I think you're ready to go, so I'll pass over to you, thank you.

JUDY O’CONNELL: Thanks Mike.  Good evening all.  My job in the ATO is to work with small business, to help make it easy for you to comply with your tax and super obligations.  Over the past 12 months the ATO's embarked on a new era in tax administration.  We've actually gone out and spoken to a lot of small businesses, and we know for you that being a small business is rewarding, and it has its benefits, but it also can be challenging, and, to try and meet your obligations.

So what we're trying to do is provide support and cut red tape to make it easier for you.  We're reinventing the ATO, and small business is at the forefront of our change agenda.  To that end, we're developing tools and services that are convenient, accessible and personalised.  We're trying to give you the right information at the right time, and we're also trying to let you focus on what is important to you, and that's running your business.

So when we've been out talking to small businesses, we've been hearing that it's difficult for you to meet some of your obligations, that you're time poor, that you're actually, some of you are having difficulty meeting your record keeping, and so we want to help you, and we're introducing a range of services and tools to do that, such as our Small Business Assist, which is on our website, and it allows you type in a question and get a quick response.  And if you don't get the answer that you're actually looking for, there's a function that you can actually have a call back, or our new facility, which is our web chat, where you can get a real time conversation with one of our ATO customer service representatives.

And when we've been talking to small business, we've actually heard you say that during the day you're busy running your business, and it's not until at night that you actually sit down and start doing your paperwork.  So what we've done is we've actually, for both the call back functionality and also the web chat, we've made it available from 6:00 to 9:00 pm at night, so you can call back at your convenience.

We've also heard that you're too busy to read all of the generic letters and mail outs that we've been providing.  So what we've done is we've actually co-designed, with small business, our new Small Business Newsroom.  The Small Business Newsroom is an online information service that streamlines communication to small businesses.  And it's got an option-out functionality.  So you can choose to stop getting the ATO generic letters.  For some of you that would be pretty impressive I think.

What you do is you select 'yes', and we'll stop sending you the general mail, such as advice when there's a tax or a super rate change, and you'll be able to read about it online in the Newsroom if you want to.  But we'll still be sending you out information that is specific to your needs as required.

Then there's the small business app.  What you've told us is sometimes you need to do things when you're out and about, and you want to be able to do it easily on your phone or on your tablet.  So there's a range of services that you can now access via the phone or tablet.

We also have a new focus on early intervention.  So if a small business gets into difficulty, we provide assistance for the business with overdue lodgement and debt before you get into unmanageable levels.  So what that means is if a small business has a good history with the tax office, we'll arrange with you flexible payment arrangements that will align with your cash flow, and where necessary we'll actually remit the GIC if it's appropriate.

We're committed to giving viable businesses the best possible chance of survival.  And with that in mind, we've actually developed a business viability tool.  This tool again is on the website and also is available as an app, and it allows you to go in and assess your ability to pay debts and meet your obligations in a confidential manner, and none of the data will be kept by the tax office.

A further initiative is the Small Business Consultation Panel.  We want to listen to small businesses, and we want to co-design any solutions so that we get the best possible outcome for everyone.  So the ATO is inviting small businesses to join our Consultation Panel and view ATO activities through their eyes.  To date, panel members have been involved in one on one co-design sessions, workshop and user testing of a number of our systems and tools and services that we've developed.

We realise that time's precious for you and time means money, so any of the Small Business Panel members will be paid for their services when they come in and help the ATO.  And we're looking for new people to join.  So if you'd like to join, please send us an email to smallbusinessconsultation  at [ sign ]  ato.gov.au.

We've enabled members of the Small Business Panel to join the Fix It Squad.  The Fix It Squad is a ground-breaking initiative that has been brought together representatives from three levels of government, federal, state and local, and small business owners to look at a problem and to make recommendations for improvement.  And the last Fix It Squad looked at the issue around selling a business, and what it came up with was that there's a myriad of information out there on a number of government websites about what you should do when you sell a business.

And what the Fix It Squad did together with the small business owners is come up with a very streamlined efficient website that's now hosted on one, a governmentagencybusiness.gov.au, so that anyone who's thinking about selling their business can actually go to that, that site.

So in conclusion, the ATO is investing in the future client experience for small business that will cut red tape and make it easier for you to apply your tax and super obligations.  We want to do this in partnership, and I look forward to hearing your ideas and your feedback as we go forward.  Thanks very much.

MIKE HAWKINS: Well, thank you very much Judy, and another informative session from our regulators.  Very interesting, and it was good to see that the ATO is listening, that message came through very clearly with all of our presenters, and again with Judy, that you, that the regulators are listening, they're not just here to make sure that they're doing their duties, they're listening to what you want as well.  So thank you very much, and especially about that Small Business Panel, most informative.

So ladies and gentlemen, that's our regulators' presentations.  We're now going to move into our question and answer session, and we do have a range of questions that have already been received from you, and I'll be ably assisted in this by Inu, so thank you very much for sort of being present here this evening.

And you're going to be our special, I guess, comments person in regards to anything that's of a generic nature that can't be answered by the regulators.  So moving into our question and answer question session, let me just see what we've got here.  I've got a question from Jasmine, who asks for Inu, there we go, from the University of Western Sydney.  What is the most fundamental component in starting an online business to ensure its success and legality?

INU RANA: Oh, a very interesting question, especially because many, many businesses are being started online today, and we're seeing a shift now that people are, because it's easier and it's cheaper to go online, people are actually selling online, and they're running very profitable businesses online.

Now the, the, the word that attracts my attention here is 'legally' more than 'profitable'.  Of course if you have your business basics right, and if you've done your research well, you will run a profitable business, but what many run a business online, there is very, it is very easy to fall into certain traps, so that I should make the businesses aware of.

First is people come to me and they ask me what if we get products made from China, and counterfeit products, when you say, and sell them online.  So when you're running an online business, you have to remember that it's essentially the same as running a physical business, or a business out of a physical location.  So the same rules apply to you.  The regulators will watch your business and they have a role to play as we know today.  So what I would like to say is that be very mindful of the legal aspect of where you getting your products from, whether it is legal.  There are a lot of cases of parallel importing as well, which is not illegal, but again you might cross a border line there if you're not careful enough.

So I would say that when you set up an online business, do your research as you would do with any business and be very careful that you're not crossing any legal borders there.

MIKE HAWKINS: Excellent, thanks Inu for that very comprehensive answer, and I hope that answered what Jasmine had actually said.  So thank you very much again.  Our next question is to the ATO, so one for you Judy, and Christy asks what does it cost to establish a business and more specifically, what can be claimed back against income?  So costs in establishing a business, and what can be claimable.

JUDY O’CONNELL: Well, the cost to establish a business depends on the business, so I can't really go into that.  But in terms of being claimable, all of the deductions for actually setting up the business are deductable against your income, assessable income. There's two types, so there's running expenses, so for example if as part of setting up the business you actually set up an office space and you have to rent it, or you know, pay the electricity there, the running costs, and they're deductible, fully deductible.  You'll also probably have to fit out the office, so for example the capital expenditure of buying the computer, the desk, the chairs.  Now these are capital items, the things that are going to last longer than 12 months, and so the deductibility is spread over a number of years.

MIKE HAWKINS: Thanks Judy.  Again, a comprehensive answer.  And a lot of this information of course is on the ATO website, isn't it?

JUDY O’CONNELL: That's right, yes.

MIKE HAWKINS: So thank you for that.  So thank you, Christy, for that question.  Moving on, we have one for ASIC now.  Lesley asks what is ASIC doing to reduce red tape to make compliance easier for small business?

BRETT BASSETT: Thanks Mike, and thanks to Lesley for the question.  We're doing a number of things.  If I talk about starting a business up, I think that's a very good starting point.  ASIC is now responsible for the National Business Names Register.  And previously to ASIC taking over the Business Names Register in 2012, if you wanted to own, to start up a sole proprietor company, you had to go to each different state and territory and actually register the business individually in those locations, pay one fee in each individual jurisdiction. There is now one way that you can do that via the ASIC Business Names Register, and you only have to pay a one off fee of - a yearly fee or a three yearly fee.  So that's certainly a way that we're reducing red tape, by making it a lot easier to go across jurisdictions, through one register.

 

Obviously the costs are significantly reduced as well, so for one year a business name registration is $34, and for three years it's now $78, so significantly easier way to do it that way.  So that's saving some time and money.

We're also trying to make it easier for small businesses to actually understand their obligations.  One thing that we've heard ad infinitum from small business owners is that they don't have time to read the detailed documents that ASIC has on the ASIC website, and the fact that the ASIC website may actually be hard to navigate.  I'll say two things about how we've addressed that.  We're actually going through a re-platforming of the ASIC website right now as we speak, and we've got some significant user testing out there to make it easier to find information, so that will obviously cut down the time that it's taken for people to identify it.

And what we've also got in the small business hub is what we're calling one minute guides, which is basically information that we think if you can't read and understand in one minute, or five minutes, then it's too voluminous and we think you should go and get some business advice.  So they're just a couple of real life examples of how we're doing exactly that, Mike.

MIKE HAWKINS: Excellent Brett, that's an excellent answer to the question, but you're not off the hook yet, because someone else has asked a question, Hannah, and she's saying “Hi Brett, I'm new to small business governance and keen to get it right.  Is it possible to meet with someone in person on the occasions when I have questions?.  So is an ASIC representative able to explain unfamiliar terminology, and what is required?”.  She's based in Sydney.

BRETT BASSETT: Hannah, well, congratulations on starting your new business, it might be daunting, but I think you're off on the right track by wanting to meet with someone from a regulator, as I think it's fair enough to say that we're not monsters, we're actually here to help, and I think that's one really important thing.

Getting back to the specific question, absolutely, you can meet with somebody.  You can meet with somebody from my team.  I won't give you the phone number out over the webinar, but, I'm sure that we will be able to get your details, and I will get somebody from my team to contact you directly offline, so that we can arrange a one on one meeting with you to have a specific conversation about any issues that you've got.

MIKE HAWKINS: Great, thanks Brett, and thanks Hannah, and as he said, Brett or his staff member will be in touch, so thank you for your question.  Elaine asks, and this is a question for the ATO, so another popular one.  Elaine has said “Hi, I'm new to the country.  I would like to know is there any counter help for managing BAS?”.

JUDY O’CONNELL Well, thanks Elaine for the question and welcome to Australia.  It's pretty important when you first arrive and you're not quite sure about what's happening with setting up a business, which I assume you're doing if you're getting a BAS.  So we've actually developed, I think there's 13 modules online for helping people to actually set up a business or what you need to do, what are your tax obligations and super obligations when you start up a business. And one of those modules is specifically about your BAS, so what you have to do.

 And it actually takes you through each of the labels, so the GST label and what you have to include there, the pay as you go withholding and the pay as you go instalments.  So given that you're on the webinar, and so you're pretty savvy with the internet, I'd suggest that you get on and try that module, and also the other modules that I think will probably help you.  So the actual, I think if you actually either Googled or go on to the ATO website, and you put in 'tax basics for small business', and I think you'll probably come up with those.

MIKE HAWKINS: Excellent, thanks Judy.  And your website is very comprehensive, so I would recommend that to you Elaine, to have a look at that and work your way through it, and I'm sure you'll get a good result.  Our next question is from Sonia, and it's to the Fair Work Ombudsman, Rob.  And Sonia would like to know is there any cost for the online courses that you have available.

ROBERT HORTLE: Thanks Mike, and thanks Sonia for your question.  The short answer is no, there is not.  The only cost obviously is the time taken to spend and do them.  These courses, we've spent a significant amount of money, to design and develop these courses in consultation with a range of experts, so we do not charge for them.  We want to make sure that these courses remain free and available for people who need them.  Actually all of our tools and resources,  you don't need to pay for any of them including if you call up the Fair Work info line or log on to our website.  It's all freely available, and available at a time that suits you.  I expect that the online courses in fact will continue to grow, and we'll continue to keep them free.

MIKE HAWKINS: So free, and at your leisure.

ROBERT HORTLE: Absolutely.

MIKE HAWKINS: So a great result.  Thanks very much Rob for that.

ROBERT HORTLE: Mike, I might add also, I think that pretty much that, free is pretty much the way, all the way around in terms of all the regulators that are here today.  It's certainly the case for ourselves, I can see Brett nodding his head emphatically.

BRETT BASSETT: Yep, absolutely.

MICHEAL SCHAPER: And the same for the ATO?

JUDY O’CONNELL: Yes, yes.

MIKE HAWKINS: Yep, thank you, Michael.  And probably a question now to your good self, and maybe Inu.  Jason asks “I'm thinking of starting my own accounting firm.  I'm not sure whether to start on my own or go into a franchise”.  So can you offer any suggestions there?

MICHAEL SCHAPER: Well, a couple of general comments, and then I'll throw to Inu,  I'm sure she can make some comments from experience.  Essentially starting your own business has the advantage that you can basically mould your business in the way in which you want to do it.  It's your enterprise, it's your project.  But it does come with a steep learning curve and quite a lot of time and cost in terms of getting it set up.

Now, that's great for independent entrepreneurs, but there are many other people who also want to run their own business, but are really looking for what you might think of as a turnkey solution, i.e. I'm prepared to invest the money, but I really would feel more comfortable with a proven product, a set market, and a proven customer base.  And so that's why franchising appeals to so many people.

Now, when you go into franchising there are a lot of questions to ask.  Suffice to say that many of them, we do have a point on our website where we go through some of those.  We are the national regulator of franchising, and Australia, actually is one of the few countries in the world where there is a mandatory set of laws, they're called the Franchising Code of Conduct, which basically ensures that you get information before you start your franchise, during the life of the franchise and at the end of the franchise agreement from the person who owns the franchise system, which is called the Franchisor.  So it's really worthwhile doing those.

And interestingly enough, due diligence is important.  Statistics show that you might think that a franchise actually has a higher survival rate than standalone independent businesses, but in fact the jury's quite out on that.  So don't think that simply taking someone else's pre-prepared product is always the best one for you.  Both of them have merits, but they also have disadvantages.  Think carefully.

INU RANU: I totally agree with you Michael on that.  Many people go into franchising just because it gives them a safe system and processes, gives them a product as you said.  But later they realise that they haven't done their due diligence enough.  So it is very important, like starting a business, you would think about, what you need to know.

Similarly with a franchise, you need to be comfortable with the product, just because it's a bit cheaper than the other one, you don't go just on the price.  So you need to know what product, are you comfortable selling that product?  You need to know the information that has been provided by the Franchisor, that you've actually taken steps to verify that information, whether that information is correct.

But again, I would say franchising does come with its benefits, and there is no yes and no answer to that, so it's, it's up to you, if you find a franchise which is well within your range, which answers all your questions, where you feel comfortable, well, go for it.  Otherwise, starting on your own business is also, it's not that hard.  You know that the regulators are very open and they'll give you all the questions - all the answers that you need.  You've got business advisors you can go to.  You've got a range of advisory services, you've got information online.  So yes, based on those factors, I would say then make your choice according to what you're comfortable with.

MIKE HAWKINS: Excellent, thank you Inu, thank you Michael.  And certainly the message from that is do your due diligence, and do it well, and hopefully you'll end up with the product that you want.  So thank you for that.

BRETT BASSETT: I'll just right there and then, due diligence, ASIC Business Checks, a fantastic app, it's available for free, I highly commend it again.  Thanks Mike, I had to get that in there.

MIKE HAWKINS: There we go, a free plug from Brett, thank you Brett.  Our next question is from Amanda, and it's an ACCC question.  “anti-competitors' behaviour is usually illegal, but I've noticed that the ACCC sometimes gives permission to smaller businesses to work together and negotiate as a group with bigger players.  Can you explain the reason for this Michael, and how it works?

MICHAL SCHAPER: Thanks, good question.  This is called collective bargaining, and it's designed to deal with the fact that many times really small businesses, when they're negotiating with a much larger supplier, are in a fundamental situation of weaknesses.  And in fact they're not the only one, and in fact there may be several firms all trying to negotiate directly with that business.

Now, on the surface of it, businesses coming together to set a common price or terms or condition breaks those conditions I talked about, those laws about price fixing and so called cartels in similar parts of the Act.  However those small businesses can come to us and ask for approval to do so called collective bargaining.

And in the past we've given it to many different groups of businesses.  Chicken growers, vegetable producers, self-employed owner drivers of transport vehicles, a whole variety of them.  And it allows you to sit down with a group and negotiate with the supplier at the other end about the contract that you might want to enter.

And there are some advantages for both parties, because it allows you to get a common contract that's easier to work out, and it also means that you can in many respects also ensure that you're getting a standardised approach, rather than everyone having to try and work out what's exactly the same thing, but do it six or seven times.

The way to find out more about collective bargaining is either ring the help line, go on our website, but search the phrase 'collective bargaining'.  That's one of those areas where we're very comfortable to actually have someone sit down and talk to you.  And if you're a member of an industry association, that's a key role for many industry bodies as well.

MIKE HAWKINS: Excellent, thanks Michael, very informative once again.  And Amanda, I hope that that was of benefit to you.  Very complex area, but as Michael said a lot of information on the ACCC website, and officers from that organisation are happy to help you with that, so thank you again for your question.  We've a question now to Judy from the ATO.  And one of our callers has just asked about the Small Biz Panel, and her question is, and it's from a small business operator, how - that they could get paid for being on the panel.  So what's the pay rate to be a person on the ATO Small Business Panel, and where is the location to go to do the consultation session, and how long will it take?

JUDY O’CONNELL: Well, it varies.  The cost varies, and I don't know the actual cost.  I think, oh, $100 or something like that for coming on.

MIKE HAWKINS: Certainly people are not out of pocket, Judy, when they come on the team.

JUDY O’CONNELL: People aren't out of pocket, and they also get their travel expenses.  Look, we've got a range of industries, and a range of people so far who have used it in various states.  So for example in, you know, people in Queensland have been used on the panel for the Fix It Squads, we've done user testing in Canberra and Melbourne, we're looking for people in regional areas, so that we can see what there is in the regional areas.  As I said, if you like to email us at smallbusinessconsultation at [ sign ] ato.gov.au, we'll give you all the facts and figures about what you need to do to apply.

MIKE HAWKINS: Great, thanks Judy.  Again, there's a lot of information available on the website, the ATO website, and of course, you will be contributing towards I guess the ATO you know, the policy for the future.  So if you're involved, then you can make your representations known.  So thanks very much for that.  We have a question now from Greg, and it's to the ACCC.  If a company is not following the ACCC rules and regulations, how do you report the company?

MICHAEL SCHAPER: We've got a number there I've displayed up earlier on, and it's available, it will be available afterwards as well.  Our small business help line serves both functions.  If you've got a question about some part of the law and you want to know a little bit more or you want some guidance, but also it's a place in which businesses can ring up and lodge a complaint as well, if they've got one.

Interestingly enough, out of the many thousands of both consumer and business contacts and queries that we get every year, in regards to small businesses, whilst the single biggest group of people that ring up and complain about small businesses as customers, it's not surprising in terms of “I've got a concern or I don't think I got necessarily got dealt properly this way”.  But the second biggest group is actually businesses ringing in about each other.  So I think there's probably another lesson there, not only about how do I complain in this case, but just bear in mind also, if you're tempted to gild the lily or break the law in any way, just think that it may not be your customers that, they're the ones that lodge the complaint, it may be your competitors.

MIKE BASSETT: Yep, again, those three tenets, fairness, honesty and truth, yep.

MICHAEL SCHAPER: They go a long way.

MIKE BASSETT: Thank you, thank you very much Michael, for that.  A question now for FWO or ACCC.  What digital electronic channels are there which can be used to keep up with changes in laws and policies which impact small business.

Do you want to start, Rob?

ROBERT HORTLE: Yeah, sure.  Well from the Fair Work Ombudsman's perspective, we've got a range of channels that are actually available.  As I said earlier, the My Account channel is a really good way of keeping up to date with sort of contemporary workplace relations, information and change.  That is a personalised way of getting the information that you specifically need.  And look we do, I mean, probably like all of our regulator colleagues here, we do a range of things across a range of platforms.  We do email updates, we do RSS, we do a whole heap of that sort of thing as well.

Another channel if I could just mention as well, and it picks up on what you said before Michael, is if you're a member of an industry association or a professional association, quite often this is a very good way of keeping up to date with particular changes in the industry that you're in as well.  And as much as I'm here to talk about the resources that we have, and I do think they're fantastic, you know, quite often your industry associations, who you're paying largely most times, they often have a lot of really good resources, and a lot of those are online as well.  So I would echo Michael's comments about leaning on them for some support as well.

MICHAL SCHAPER: Frighteningly enough Rob I think you've read my mind and we didn't set this question up, but I was just thinking that that's a really important one.  Whilst we can give you generalised information, for example, like everyone else, we've got a website, we've also got a subscription service called the Small Business Information Network, you can email us, we'll put your details down, and we'll give you alerts from time to time about key developments.

But industry associations have a really important role, and many of the times they will take the generalised information that we provide and they'll customise it, or they'll put the slant, or they'll point out how it applies to your particular industry sector.  And that's something that quite frankly they're much better at than a regulator who's trying to look at it across, right across the whole Australian economy.

If you're not getting that from your industry association, I would also encourage you to turn around and say “Why aren't we getting it, and what are you going to do to make sure that we're kept up to date?”.  Because that is one of the things about being a member of an industry body, or at least it should be.

MIKE BASSETT: Thank you Michael.  We have time for one more question, and I'm going to take that from Melanie, and it's for ASIC.  “Can someone”, well, that would be you Brett, “Can someone please go through the process of registering a business name on the ASIC website, it's so difficult”.

BRETT BASSETT: Thanks Melanie, and thanks Mike.  It's interesting that Melanie that you think it's difficult.  We've spent a lot of time and it took a significant amount of feedback from small business owners and our stakeholders and customers when we took over the business names process in 2012.  I think it's fair to say that there were some glitches initially,  but we're very comfortable with where the process is now.

In effect it, it should be pretty simple.  If you go to the right hand side of the asic.gov.au web page there's an ASIC Connect area.  You basically click on the ASIC Connect area, and that will then take you to the Business Names Register.  Before you actually start the process you'll need to do one of two things.  You'll need to already have an account, or you'll need to create an account.  Whichever way it goes, and the whole way there are tools that are actually within the Business Names Register to actually step you through each of the processes.  I spoke before about YouTube and some of the videos that we have, you can certainly use those, and they can actually be similar to an aide memoire as you're actually going through the process.

It has been designed to be very intuitive and to be very easy to use.  We've actually made some changes as a direct result of the feedback that we've got.  So I think if you have the YouTube videos with you, if you look at the information that's within the actual business names website itself, you'll actually find that it is quite easy.  And of course, if that doesn't work, then you can call,  there's a help line number in the website as well to take you through it.

MIKE BASSETT: Thank you Brett, and thank you Melanie for that question as well.  So ladies and gentlemen, it's now up to me just to conclude the session.  First of all I'd like to thank all of our presenters, Brett, Rob, Michael, Judy and Inu, thank you very much for giving up your time this evening and being here, and actually giving us some really informative and interesting discussion on the questions that were raised, and your presentations were very informative too, so thank you very much for your time.

I'd also like to thank everybody that's tuned in this evening.  We hope that you find this to be as an informative session as we have had the pleasure of making it for you, and I'd also like to mention that a video is going to be made of this presentation that will be made available as part of the regulators' information package that will be coming out in due course.

We did not have the opportunity, because of time constraints to address all of the questions that were presented here this evening. We do thank everybody that has presented questions.  The regulators will take those on board and try and answer as many of them as they can in as short a time frame as they can, but there were a huge amount of questions.

So thank you everybody for tuning in. It's information sessions like this that make doing business easier, and again thank you to our presenters and for making themselves available and demystifying that connect between small business and the regulation, which is most important.  Thank you, and goodnight.

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