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Addressing cost challenges: COSBOA’s recommendations

In an effort to tackle the pressing challenges faced by Australian small businesses, the Council of Small Business Organisations Australia (COSBOA) has put forth a series of recommendations. 

These recommendations encompass various aspects, including energy cost relief, rental cost relief, lowering insurance premiums, reducing barriers to entry and exit, and alleviating regulatory burdens. 

COSBOA recently unveiled its comprehensive report titled “The Small Business Perspective Report 2023: Challenges & opportunities facing Australia’s small business community,” shedding light on the evolving vulnerabilities and potential for growth amidst yet another demanding year. 

The report underscores the pressing issues encountered by small businesses, including the persistent rise in costs, dwindling revenue streams, workforce challenges, and the looming spectre of cyber security risks.

By delving into these critical factors, COSBOA aims to provide valuable insights into the current state of Australia’s small business landscape and identify potential avenues for progress.

Amidst the aftermath of the COVID-19 pandemic, Australian small businesses grapple with lingering effects, including increased operating costs and diminished revenue. 

The strain of successive interest rate hikes has reverberated across various sectors, impacting the bottom line of small enterprises. Additionally, the escalating energy costs pose a formidable challenge, with small business owners feeling a sense of helplessness as they struggle to control this expenditure. 

The consensus among industry leaders is clear: labour shortages coupled with rising wage entitlements are major contributors to the upward trajectory of production costs. Insurance expenses have also experienced a substantial surge, further burdening small businesses across diverse sectors. Furthermore, global and domestic supply chain pressures have led to a significant increase in the cost of purchases for small enterprises.

Navigating digital transformation: opportunities and risks

As Australian small businesses embark on the digital transformation path, many opportunities and risks emerge. Leveraging emerging AI technology can empower small businesses to meet their customers’ evolving demands effectively. If harnessed correctly, this technological advancement can prove instrumental in streamlining operations, enhancing customer experiences, and driving growth. 

However, the growing risks of cyber-attacks loom large in the consciousness of small business owners. Highly publicised data breaches in the media and the surge in personal threats have heightened awareness among small businesses regarding the need for robust cybersecurity measures to safeguard their operations and sensitive information.

Labour skills and vocational education challenges

In an increasingly competitive environment, Australian small businesses need help in training, hiring, and retaining skilled workers. Industry leaders stress the distinction between shortages of skilled labor and shortages in other labor sectors. Addressing the skills gap is perceived as a critical priority, and increasing the number of skilled migrants is seen as a necessary policy lever to bridge this gap. 

However, concerns are raised regarding the efficacy of additional fee-free Technical and Further Education (TAFE) places, with industry leaders asserting that these measures may not adequately address the persistent shortage of skilled labour faced by most small businesses. 

Furthermore, industry leaders strongly desire greater consultation with the small business sector before major industrial relations decisions are made, ensuring that the interests and perspectives of small businesses are considered and prioritised.

Nurturing entrepreneurship and fostering innovation

Thriving amidst a challenging economic landscape necessitates comprehensive support for new small businesses. Certain sectors offer unique opportunities for small enterprises to innovate and carve out their niche creatively. 

Recognising the potential of these ventures, industry leaders contend that governments should play an amplified role in supporting the growth and development of new small businesses. By implementing targeted initiatives, policymakers can foster an environment conducive to innovation, offering essential resources, guidance, and financial assistance to nascent enterprises seeking to make their mark.

The report highlights the range of cost-related challenges burdening Australia’s small business community. COSBOA has submitted recommendations to the Select Committee on the Cost of Living to address these pressing issues and combat the cost-of-living crisis. 

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Yajush Gupta

Yajush Gupta

Yajush is a journalist at Dynamic Business. He previously worked with Reuters as a business correspondent and holds a postgrad degree in print journalism.

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