Zali Steggall (Warringah, Independent) Share this | Link to this | Hansard source

Today I rise to speak about the situation facing small businesses in Warringah and Australia more generally. Australia lost so many small businesses during the three years of COVID, and many surviving businesses only just made it through those difficult times. After COVID, many businesses were expecting a recovery. However, most have been so badly affected by rising inflation and the cost-of-living crisis that it is harder for them now than it was even during COVID. Accountants and insolvency experts in Warringah have warned me that they have never seen so many small businesses going under.

We must recognise how important small businesses are to Australia's economy and to the local communities. From an economic perspective, small businesses make up 97.5 per cent of all businesses in Australia. In Warringah alone, there are over 8,000 small businesses. From 2020-21, over five million Australians were employed by small businesses, and small businesses contributed to 33 per cent of Australia's total GDP. They are the backbone of our communities and our economy. Our local cafes, shops and restaurants are focal points for community gatherings. Small businesses include childcare providers, GPs, local accountants, butchers, bakers, hairdressers and sports coaches. They also include innovators and start-ups. They have the potential to make great changes in our country.

Small businesses in Warringah and throughout Australia are feeling significant pressure. The cost-of-living crisis is reducing customer spending, and it is getting increasingly difficult for small businesses to keep up with significant cost increases in electricity, petrol, freight and wages. The 12 consecutive interest rate rises have resulted in a dramatic downturn in consumer spending on non-essential items, with the March quarter seeing a six per cent contraction in retail spending, putting many small shops on the brink of going out of business. I know this is a wicked problem when it comes to dealing with inflation and the power the Reserve Bank has. But there is a role where government can step in to assist small businesses in weathering this storm and getting through.

The constant media reporting on the impending recession and rising cost-of-living pressures is also affecting consumer spending. In my community, there are stories of desperation as a combination of these factors seriously impact income flow for small-business owners. Another major issue is the difficulty of recruiting staff, particularly after the mass exodus from industries such as hospitality after COVID. While we have seen the return of international students and working holidaymakers who may assist with retail and hospitality workforces, unfortunately, we've also seen a return to pre-COVID restrictions on the number of hours that these international students can work, which could potentially constrain their ability to assist with staffing pressure. So it really doesn't make sense.

Despite these obvious difficulties, businesses are reporting that the Australian Tax Office is extremely aggressive, even if a payment is only one day late. The government needs to do more to support our small business community, given their importance to the Australian economy and to our communities. Small businesses are struggling to navigate the tax systems, business activity reporting, pay as you go, STP and super payments. Arduous reporting procedures are time consuming and difficult for small businesses, especially when they have staff shortages, which puts further pressure on them. Rents are also rising, not just in residential for housing but also for commercial properties, and small businesses are dealing with inflexible landlords. That is being compounded by landlords who are now seeking to recover the cost of rising interest rates and claw back the income lost during the reprieve conditions that we encouraged in relation to rent during the COVID pandemic.

It is the perfect storm. I call on the government to work on reducing gas and electricity prices, consider incentives for small businesses to purchase solar panels, invest in electrification and energy efficiency measures. It means putting in place incentives for commercial property landlords as well as residential properties. Amid this cost-of-living crisis, the government needs to come up with creative solutions to support small businesses. Unions and big businesses have a lot of access to government around policy. Small business needs a voice and more attention.