Ombudsman calls for government to act on small business growth

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Ombudsman calls for government to act on small business growth

The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell has called for the government to take action on the barriers to small business growth after the results of an Institute of Public Affairs Report showed small business growth is in decline.

Carnell suggests the report’s findings proved small business growth is in crisis and she urged the government to take action.

“What concerns me greatly about this report’s findings is the sharp drop in the percentage of small businesses hiring additional staff,” Carnell said.

“Less than one per cent of small businesses with 1-4 employees in 2017, employed more than four workers in 2018. That’s significantly below the historical transition rate of 6 per cent.

“Less than one per cent of businesses with 5-19 employees were employing more than 19 people in 2018. That’s also well under the historical transition rate of 4 per cent.

 Carnell cites Australia’s ‘rigid industrial relations system as a significant barrier to small business owners.

“The research cites World Economic Forum surveys, which have consistently found Australia’s Labour Market regulation is the most problematic factor for doing business.

“Part of that broad picture is ensuring small business owners can feel confident they can meet their obligations and avoid an unfair dismissal claim in the event they need to let a worker go.”

In response to small business owners’ concerns over navigating the complex system, the Ombudsman has recommended a number of changes to the Unfair Dismissal Code to incorporate fairer circumstances for small business.

“A clearer Code would reduce the risk of unfair dismissal claims and provide small business owners with the impetus they need to hire more staff.

“The government has announced a review into the industrial relations system. The Small Business Fair Dismissal Code should be number one on that agenda.”

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