During the 2019–20 financial year, the Office of the Australian Small Business and Family Enterprise Ombudsman (Ombudsman’s Office) reached its fourth year of operation. During this time, the Ombudsman’s Office continued to grow with expanded roles and greater visibility and outreach.

The Ombudsman’s Office was established in March 2016 with the commencement of the Australian Small Business and Family Enterprise Ombudsman Act 2015 (the Ombudsman Act). The Ombudsman has dual functions to both directly assist and advocate for small business and family enterprise.

In respect of the assistance function, the Ombudsman provides direct and tailored support for Australian small businesses and family enterprises with business disputes. Direct assistance is provided to enable small businesses to access low cost and efficient dispute resolution, whether a dispute is with government or another business.

In respect of the advocacy function, the Ombudsman is an independent advocate for small business and family enterprise, with legislative powers to inform and advise Australia’s lawmakers and regulators on small business issues and operations. The Ombudsman has the power to conduct research and inquiries on the request of the Minister for Employment, Skills, Small and Family Business, as well as self-generated inquiries into important issues for the small business sector.

A primary aim of the Ombudsman is to ensure that the voice of small business is heard across government and to inform policy processes so that the needs of small business and family enterprise can be met. The operations of the Ombudsman are informed through its assistance to small business as well as extensive relationships across business and government, including the following:

• The Ombudsman’s Policy Forum draws together 31 industry and professional associations from across the sector, with the group also separately meeting via seven working groups to progress key issues:

– Access to justice – Contracts and unfair contract terms – Cyber security – Digitisation and the National Broadband Network – Energy – Human capital – Workplace relations.

• The Ombudsman chairs the Federal Regulatory Agency Group, which on a quarterly basis brings together the Ombudsman’s Office and several key Commonwealth regulators in the sector (Australian Competition and Consumer Commission, Australian Securities and Investments Commission, Australian Taxation Office and Fair Work Ombudsman).
• The Small Business Commissioner’s Group, which includes the Ombudsman and representatives from each of the states, meets on a quarterly basis and also meets with the Federal Regulatory Agency Group at least twice annually to ensure good communication between the state commissioners and Commonwealth regulators.
• The Ombudsman participates in and engages with various consultative groups including peak small business meetings held by the Australian Competition and Consumer Commission and the Australian Taxation Office.
• The Ombudsman engages with various business forums, conferences and small business events (including with accounting and other industry bodies).

The Ombudsman has expanded these relationships by developing an online consultation network so that small businesses, industry associations (and their members) and others can provide direct feedback on policy issues. Alongside this broadened network, the Ombudsman also operates a Small Business Hub that provides free desk and meeting spaces for small businesses, family enterprises and industry associations so that they can gain better access to government and the public sector while in Canberra.

Expanded roles During the 2019–20 financial year, the Ombudsman’s office became responsible for the administration of the Dairy Code, including mediation and arbitration services. Integrating this role into the Ombudsman’s assistance function allows the Ombudsman to provide far broader support for the small business community.

In December, the Ombudsman launched the My Business Health portal, providing useful tips to help small business owners with some of the issues that go hand-in-hand with running a small or family business. It also provides excellent resources to help support small business owners experiencing psychological distress as a result of concerns about their business. The portal was comprehensively reviewed and updated following the COVID-19 outbreak to better support small businesses navigating changing closure rules and available supports.

Advocacy During the 2019–20 financial year, the Ombudsman conducted a broad range of research and inquiries into a number of key issues affecting small business and family enterprise. The research and inquiries were all self-generated by the Ombudsman. The Ombudsman also provided regular quarterly updates to the Minister on the operations of the Ombudsman’s Office and relevant legislation, policies and practices that affect small business (available via asbfeo.gov.au).

Research and inquiries conducted by the Ombudsman during the reporting period addressed a broad range of issues impacting small business and family enterprise, including:

• Delivery of an industry-first publication, the Business Funding Guide for small business advisers and its companion guide for small business owners, FitsME – Essential guide to business funding.
• A comprehensive Review of the Small Business Fair Dismissal Code.
• Delivery of Small Business Counts, a report providing a snapshot of the small business sector.
• A review of the Research & Development Tax Incentive.
• Inquiry into Insolvency Practices, examining the ways the insolvency system could be made fit for purpose for small businesses.
• A review of Supply Chain Financing, looking at the ways in which it can be used by small businesses to manage cash flow, and how it can be used by big business to offset poor payment practices.
• A detailed COVID-19 Recovery plan encompassing a suite of recommendations to drive small business recovery.

In addition to these reviews and inquiries, the Ombudsman has conducted significant work to support small and family businesses through Bushfire Recovery, and during the COVID-19 crisis.

In advocating for best practice, the Ombudsman continued cross-government work in respect of completed inquiries, including on small business loans, payment times and practices, and affordable capital for SME growth. In addition, the Ombudsman received 14 official requests for review of regulation impact statements and made 96 submissions on legislation and regulation affecting small businesses and family enterprises including:

• NDIS Thin Markets
• Open Banking Designation Instrument
• Impact of Statutory Trusts in the Building and Construction Industry
• Model WHS Laws
• Cash Payment Limits
• Intellectual Property Laws Amendments
• Heavy Vehicle National Law Review
• Disclosure of Business Tax Debts
• Review of the Tax Practitioners Board
• Performance of the Inspector-General of Taxation.
• Franchising reform
• Migration in regional Australia
• International Mobile Roaming Regulations changes
• Australian Apprenticeships National Skills Needs List
• Boosting Female Founders Initiative
• Mortgage broker best interests duty and remuneration reforms
• Options to improve the national professional indemnity market for building surveyors
• Resources Sector Regulation
• Financial and Regulatory Technology
• Industrial Relations
• Recovering Unpaid Superannuation
• AER Default Market Offer
• Employee Share Trust Determination
• Energy Efficiency Methods
• Cyber Security
• Drought Affected Communities
• Murray Darling Basin Inquiry
• Rollout and performance of the NBN
• Improving Small Business Payment Times
• Co-operative Supermarkets authorisation
• Future Drought Fund
• The Queensland Small Business Strategy
• Single Touch Payroll Reporting
• Compensation Scheme of Last Resort
• The Financial Accountability Regime
• Enforceability of Financial Services Industry Codes
• Paid Parental Leave Amendment
• Buy Now Pay Later Code of Practice
• Payment Times Reporting Bill – Exposure Draft
• Agricultural Machinery After Sales Market
• Review of ePayments Code.

Assistance During the 2019–20 financial year, the Ombudsman received 7835 requests for assistance, as well as 182 643 visits to the Ombudsman’s website (asbfeo.gov.au).

Of the 7835 requests for assistance, 6164 related to disputes including 2309 formal requests for assistance submitted in accordance with the Ombudsman Act. The Ombudsman made 189 recommendations/referrals for parties to take part in Alternative Dispute Resolution of which, to date, 84 have been resolved within the mediation process.

We received 725 enquiries in relation to Industry Codes and 71 enquiries about our AAT Small Business Tax Concierge Service. A number of the AAT Small Business Tax Concierge Service enquiries related to the recently introduced ATO administered JobKeeper and Cash Flow Boost Incentives. No formal requests for assistance in relation to no adverse cost orders were received during the period.

Over the period, a significant number of small businesses contacted the Ombudsman seeking assistance in relation to COVID-19 government restrictions and the impact of those restrictions on their businesses. This included a large number of inquiries relating to commercial lease disputes and franchising disputes arising as a result of the COVID-19 situation. In many of these cases, the underlying issue was that restrictions affected one party’s ability to meet its financial commitments.

The Ombudsman was also contacted by a significant number of financial advisers being exited from the financial planning industry, seeking assistance with the process. Other trends included an increase in requests for group mediation where more than one party has an issue with another party, franchising issues and unfair contract terms in standard form contracts.

The Ombudsman worked closely over the period with a range of Commonwealth, State and Territory agencies on a wide variety of requests for assistance. Cooperation with the agencies during the reporting period did not require entry into any formal cooperative arrangements (as outlined in Section 70 of the Ombudsman Act).

Table 53: Resolution of disputes received during 2019–20 financial year