An Australian watchdog says complaints from small business owners surged 50 percent since last year, with the majority concerned about being paid on time.
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) said 42 percent of complaints involved requests for assistance to deal with payment disputes, up from 36 percent last year.
Ombudsman Bruce Billson said nearly two-thirds of cases were easily resolved.
The construction industry recorded the highest number of payment disputes, while the hospitality sector saw a threefold increase over the past 12 months.
In total, ASBFEO received 6,254 requests for assistance, a 10 percent increase from the previous year.
Billson reiterated that the biggest concern, by quite a margin, is about getting paid.
Insolvency Issues at New Highs
The number of requests for help with insolvency has also increased by 50 percent, including those considering insolvency and those concerned that an insolvent business owed them money.“Cost of living pressures for households and cost of doing business pressures for small businesses, such as rising input costs—wages, energy, insurance, and rent—while the Tax Office has resumed its tougher enforcement approach,” Billson said.
Many small businesses are drawing on their cash buffers to stay afloat.
“Recent surveys have found nearly one-in-four have no cash reserves, while 18 percent have less than a month’s cash on hand to fulfill their obligations.”
The report further reveals that new figures from the Australian Tax Office show 46 percent of small businesses did not make a profit in the most recent year.
Additionally, three-quarters of self-employed business owners—whose business is their full-time livelihood—are earning less than the average total weekly full-time wage.
Billson also highlighted that small businesses are increasingly seeking help with Big Tech digital platforms, with disputes involving a digital service now accounting for just over one-in-four new cases.
“The number of cases we’ve seen involving a small business having problems with a digital platform has more than doubled since July 2022,” he said.
“Digital platforms have fundamentally changed the way small businesses connect and sell to their customers. Yet, when there is a problem—such as having your account shut down after being hacked—solving it can be a nightmare.”
Since its inception eight years ago, the Ombudsman’s office has handled nearly 47,000 cases, with most involving disputes between small businesses against corporations or government agencies.
