Summary: An interagency webinar by the ACCC, Australian Securities and Investments Commission, Fair Work Ombudsman and Australian Taxation Office, facilitated by Business Enterprise Centres Australia.
Published: 19 January 2015
Mike Hawkins: My name is Mike Hawkins, I'm the executive officer of Business Enterprise Centres Australia. We are a national network of small business advisory centres helping in a low cost way people that are thinking about starting in business or existing business owners. I'm joined tonight by a panel of experts and I will introduce them to you each one.
My first person is from the ATO and that's Steve Vesperman. Steve is a Deputy Commissioner at the ATO with responsibility for small business tax payer's business line. Steve's role involves significant interaction across government agencies and industry associations and the ATO's role in all of this Steve is to make sure that small businesses assisted to make their obligations with tax and superannuation. So welcome Steve.
Steve Vesperman: Thank you Mike.
Mike Hawkins: Next we have Dr Michael Schaper from the ACCC. Michael is the Deputy Commissioner at the Australian Competition and Consumer Commission. He has a particular interest in small business franchising and industry associations in particular, Michael works well with industry associations liaising between them and his department to make sure that the dialogue is promoted in regards to national competition and consumer protection issues. So welcome Michael.
Michael Schaper: Evening Mike.
Mike Hawkins: From the Australian Securities and Investments Commission or ASIC, I welcome Brett Bassett. Brett is the Queensland Regional Commissioner of ASIC, a role that he has held since 2011. Brett is responsible for ASIC's engagement with and regulation of small business. His team undertake compliance, surveillance and enforcement work in industry. Welcome Brett.
Brett Bassett: Thanks Mike. Good to be here.
Mike Hawkins: Thank you. And from the Fair Work Ombudsman's Office, I welcome Lynda McAlary-Smith. Lynda is the Fair Work Ombudsman's Executive Director of Proactive Compliance and Education. Lynda leads a branch that proactively assists Australian workplaces by helping them to understand their workplace rights and obligations and Lynda works across the whole department to make sure that small businesses first and foremost with regards to the department's dealings. So welcome team.
Lynda McAlary-Smith: Thanks Mike.
Mike Hawkins: I'm going to throw to a few questions now and the first one I've got here is: what are government agencies doing to assist start-up businesses? And I think I might throw to you first Steve from an ATO perspective, can you give us some outline there please?
Steve Vesperman: Yeah, thanks Mike and we recognise that when starting up a small business there are many things to consider and one of the critical success factors is getting it right from the start and the ATO is very keen to provide the assistance and support to ensure that small business people can get it right from the start in relation to superannuation and tax arrangements.
Now we do this through our Small Business Assistance Program and that's made up of a number of elements. We have a small business assistant tool which is available on our website and it's also available on the ATO app. By using that tool you can key in particular questions, particularly related to starting up a small business and you get responses back from the information that's available on our website. We also have a web chat facility available now through our contact centres or online through our ato.gov website where you can also key in questions and there'll be someone in the office who will be able to respond to the questions that you're asking. That web chat facility is available from three o'clock to nine o'clock, Monday to Friday and it's also available on Saturday. This recognises of course that small business people do not necessarily have time during the day to be sorting through particular issues in relation to their obligations.
We also have an after-hours phone facility available so small business people can use a phone service where we call back those that nominate for a call to be made after hours. So that facility is available for call back system from six o'clock til nine o'clock, Monday to Thursday. A very good system for assisting those people who need to undertake sort of enquiries after business hours. In addition to that, on our website we have a number of YouTube videos available and they cover a range of subjects, most importantly they do talk about starting up a new business, but also record keeping tips and hints so that people when they're starting up a small business get their record keeping arrangements in place. So that's a very important source of information. We also partner with the Business Enterprise Centres.
Mike Hawkins: You do indeed.
Steve Vesperman: We do that in partnership around Australia where we offer free tax-basic workshops and these are very keenly sought after and they provide a valuable information source for businesses who are starting up. We actually have now a small business news room in place that's run by us through our website and we do encourage every small business person to subscribe to that small business news room because we are sending out information very particular to the small business community on a regular basis. And it's done in such a way that it provides some headlines of the information that's available and then you can drill down further to get more information if that's necessary.
The other thing that I wanted to mention, Mike, in wrapping up, is that there is another source of information for small business people and registered tax agents also can provide assistance to small business people and we do encourage that, to use that as another avenue for information for those who are starting up a small business.
Mike Hawkins: Thanks Steve. I like that access ability issue there with your staff being available on weekends, I mean that's pretty good, pretty impressive. Thank you, Steve. I'll throw over to Brett now from ASIC. How are you handling this situation here?
Brett Bassett: Well thanks Mike. I think it's important to note that from ASIC's perspective we recognise that small businesses are actually our largest customer and I think that's really, really important. You know we've got roughly 3.8 million companies and business names registered with ASIC and of those 3.8 million, roughly 96% of them are businesses with twenty or few or less employees. So it's important to note from the outset that small business is actually our largest customer.
Our team that actually has the most interaction with small business on a daily business is our registry team. And the registry team is probably the place where most small businesses are going to get in contact with ASIC in the start-up, in the start-up part of their actual moving into a business. And obviously one of the first ways that they'll do that is through the business name process and since ASIC took over the business name process, you may be interested to note that you can actually do all your business name online registration via the web at a time that's suitable and convenient to you. And in the last financial year of the 327,000 new business names that were registered online, only thirty-six actually didn't go online, so that demonstrates that at start-up of a business people really are moving online. And of that 327,000 in the last financial year, another interesting stat, is that 30% of those new business names registrations were done after hours. Gets back to Steve's point. We really acknowledge and understand that small businesses need to have accessibility with us as regulators at a time that's convenient to them.
Obviously when people start to think about going to small business or any type of business, they may think “Well where's the information that I can read or get access to?”. When we actually started looking at this from a small business perspective a couple of years ago, we were told very, very definitively by small business that they couldn't read the information that ASIC had on its website because it was too voluminous. They didn't have time to actually sit there for hour upon hour and actually go through what the obligations were in starting up a business, so we listened to them and what we've done is we've developed a small business hub. And that small business hub is a single place on the ASIC website where you can get a whole range of guides such as starting up a business name, starting up a company, all the information that you need about what it means to be a sole proprietor or a director of a small business from ASIC's perspective. And we think that they're really, really important to help businesses and owners of businesses really understand what their obligations are before they start up.
And I'll talk about two other things as well. Our financial literacy team has a website through Money Smart and we've got a fantastic tool that's available through the Money Smart website and it’s called ASIC’s Be Money Smart Through a Career in Small Business. Now this resource will help small business owners actually improve their financial literacy and it also encourages people who are considering going into a small business to actually understand the key issues, the concepts and the regulatory burdens that are actually imposed on small businesses.
And the final thing I'll talk about is a new tool that we put in place in July last year which actually helps small businesses protect themselves. Unfortunately there are a lot of small businesses that are scammed by other people and other businesses, so what we thought is if you're going into a small business for the first time or you've been in a business for the first time and you want to just protect yourself, do some type of due diligence because unfortunately a lot of people don't necessarily have the skills or the financial means to actually do some type of due diligence. So ASIC developed a business checks app which actually helps small businesses go through a very, short, quick, succinct, due diligence process that will help them protect themselves at the beginning of a start-up. So they're a couple of the key things for us.
Mike Hawkins: Look I'm impressed, as with Steve. You know listening to customers’ questions and responding and also that access again at all hours. So good on you. ACCC, Michael, you must have been doing some work in that area.
Michael Schaper: Indeed we have Mike. In fact if you talk about listening to customers, in some senses if you think about it, when you start a business you've got some regulatory requirements such as dealing with the tax office and dealing with ASIC but in addition to that there's also some issues you've got to think about just in a practical sense. What's your relationship going to be between yourself and your suppliers? How are you going to treat your customers? How are you going to market to them? And what sort of relationships are you going to strike up and how are you going to deal with other businesses that are also competing against you? So that throws up a whole bunch of questions that you probably want to think about and which unfortunately the rules aren't quite necessarily as clear cut as they might be about how you pay tax or how you register a company but they're still really important.
And they're things such as how do I set my price? For example can I use the recommended retail price? What are the rules about advertising? What can I say and what can't I say? What are the issues about my relationships with suppliers? Does someone have to supply products to me if I ask them to do it? And what about my customers? If they want a refund, do I have to give it to them? How am I supposed to deal with things such as complaints? And finally, as Brett mentioned, the ever present threat of scams which loom all the time in the background for businesses.
Now the ACCC's got another online device, we've got a few online programs happening here tonight, this one's called CCA Education Programs and you can actually walk yourself through each of those issues as well as a few other ones that are emerging on the horizon as well. So that's a useful starting tool and it's very much geared to the start-up business. Thanks Mike.
Mike Hawkins: And look, thank you. And it's nice to see the ACCC's already up there as well with some of these walk through programs so that people can actually educate themselves at any time of the day or night.
Michael Schaper: Absolutely.
Mike Hawkins: Great work. Lynda I haven't forgotten you from Fair Work Ombudsman. I know you've got some contribution to make to this discussion. Over to you.
Lynda McAlary-Smith: Absolutely. We're very much playing in the online space at the moment and last year we launched our fairwork.gov.au website with information specifically tailored for small businesses. Where small businesses if they are starting up for the first time or perhaps are taking on an employee for the first time can actually jump onto our website and go in and select information that's tailored to the very specific industry that they're working in so that they can know that they're getting the information that's right for them and for their industry.
When a small business is starting up or taking on a new employee or perhaps a first employee, one of the most important things they can do at that early stage is as Steve said before, about getting off on the right foot right from the start. So that includes making conscious decisions about what kind of employer do you want to be, what are your expectations of staff, how are you going to do the right thing by your staff and get the most out of them. We have some great resources available at fairwork.gov.au including an online learning centre, we have one of those as well which has been very popular and we've had over twenty-five thousand people actually go in and complete a number of the courses in that space where you can go in and take interactive courses with role-plays around topics such as having difficult conversations or hiring someone for the first time. Hiring someone for the first time can be really quite daunting but it is hopefully an exciting opportunity for a business, but it's important that you invest the time to get it right in the first instance.
We also hold a number of Compliance and Education Campaigns for small businesses every year across the country, going out into regional areas, working in metropolitan areas and helping small businesses get it right in the first place. And the other thing we do Mike is work with intermediaries with registered tax agents, with HR professionals or with local business advisors to help them help their clients get the right advice right from the start.
Mike Hawkins: Great. Look I'm most impressed again by the whole panel and Lynda thank you for that. Again you are showing that your staff at your agency is out there working with people, that you're not sitting behind a desk and you've got access again all hours by your website. Panel, I'd like to now throw to another question here and that is how are government agencies assisting small businesses to thrive in the marketplace? And can I ask Michael Schaper from the ACCC. Over to you Michael, can you give me some comments on that please?
Michael Schaper: Thanks Mike. One of the big issues coming up and I think every business operator needs to think about this over the next year is the introduction of so called unfair contract terms. This is something that's going to affect not only goods and services, it's also going to affect financial services and it's something that the both the ACCC and ASIC are going to have a hand in getting involved with and policing. Now it's wending its way through the courts so this is very much news coming rather than necessarily settled at the moment but watch this space.
What's an unfair contract? It's pretty simple really. I think almost all of us at some time or another have either hired a car, we've booked a plane ticket, we've taken out a gym membership, and certainly most of us have certainly taken out a phone or an internet access contract. Now all of those are basically what we think of as standard form contracts, they're pretty much take it or leave it. You get them plonked in front of you and you really get one or two choices, you can sign it or you can leave it alone. And it really is something where you don't have a capacity to negotiate. For several years now for consumers, you and I as members of the general public, if that is offered to us by a business, in other words a business to consume a contract, any term that is in there that is regarded as unfair can be struck out. Now an unfair term isn't something for example 'I don't like the price of it’. But it's rather something that falls into the sort of the category that is, it's not really necessary for the business to impose that term, it creates a big imbalance between the consumer and the business, usually obviously tilted in favour of the business that's offering it and if it was ever exercised would usually cause the customer to suffer some sort of loss or what we might think of us as a detriment.
Now for several years that's been applied for business to consumer contracts. The intention now is that that will apply to business to business dealings. So if you're a small business and you're offered a standard contract, and you can think of a number of them they might be for contracts or sub-contracting work for example, you've got with a larger firm, it might in regards to leasing or real estate it might be in a whole variety of different areas. If you're a small business that is you know less than twenty staff and the contract's worth less than $100,000 or less than quarter of a million dollars if it goes over more than a year then potentially this will also provide some protection for you. If a court finds that the term is unfair then that part of the contract, not the whole contract but just that part, will be struck out.
So what it will see I think is a couple of questions. First of all you might want to start asking, are the standard form contracts that I'm being asked to sign by another business, are they fair? And the second one is, are the contracts that I in turn are offering other businesses, indeed am I offering them fair as well? So it's going to be a bit of a two edge sword. It's also something that ASIC are going to have a hand involved in as well.
Mike Hawkins: Yes and thank you for that Michael. And look ASIC does have a role to play in that, and thank you for that very informative discussion about what's coming up. Brett could you give us a bit of an idea of what ASIC's involvement is going to be on this?
Brett Bassett: Yeah sure. As Michael said, we will certainly be working very closely with the ACCC in respect of actually not only educating small businesses but actually enforcing the law when it does come in. And I think it's fair to say that that will include from an educative perspective, talking at conferences, talking at events, getting around to small businesses doing some type of online education program no doubt, as well as using what we call a facilitative approach in respect of enforcing the law. And the facilitative approach generally involves actually getting out and checking for compliance where people may not necessarily have the compliance right, educating them to make sure that they are aware of what the compliance obligations are and then when necessary when in fact appropriate taking some type of enforcement action if somebody does get it wrong. But I think it's fair to say Mike that we will be working very, very closely with the ACCC.
Mike Hawkins: And look thank you very much for that Brett. And I do like both Michael and Brett they've said that they're going to work people through this so it's not going to be a heavy-handed approach, it's going to be a consultative and educational process. So thank you both for that. The Minister mentioned in his introduction here particular interest in franchising matters and I'd like to just have a little bit of a discussion about that if I may. And I think Michael probably back to you on franchising. I know you have a particular interest in this area.
Michael Schaper: We certainly do and in fact as Minister Billson mentioned at his introduction to this session, the ACCC has a responsibility for looking after what's called the Franchising Code of Conduct. Now that's a mandatory code that applies to anyone involved in franchising right around this country and it basically covers three aspects. Some rules about if you're thinking about going into franchise, what information you're entitled to receive, you're entitled to a cooling off period, making sure that you have all the facts and what we sometimes call due diligence before you get started. In addition to the start-up, it also looks at what happens during the life of the franchise agreement, for example if there's a dispute between the franchisor and the franchisee, how can we settle that effectively?
And finally it also gives franchisees certainly rights when a franchise comes to an end as they usually do after a certain time period. For example, am I allowed to renew the franchise? Am I allowed to strike out on my own but basically selling the same sort of products? Now franchising's gone through bit of a review in the last two years and last year we saw the introduction of a new Franchising Code. Essentially most of the big picture conditions remain the same but there are some important things that are worth noting.
There are now serious financial penalties that attach to breaches some parts of the Franchising Code, so that gives the ACCC some more teeth to police the code. Franchisors and franchisees are also now obliged to act in what we think of as good faith which means that when you're dealing with each other you've got to do it honestly, you've got to think about the needs and the concerns of the other party and you've got to give them time to have their side of the story heard to you. It doesn't mean you can't do and follow your own legitimate commercial interest but you've got to think about the needs of the other side as well. There's increased disclosure about marketing funds as well Mike and a variety of other measures. Importantly in this day and age for the first time it also specifically says that you have to spell out in franchise agreement, what happens to online sales, which as we all know whether you're talking about pizzas, fast food, clothing or even cars that also can be sold through an online franchise system.
Mike Hawkins: Absolutely, it's a real Pandora's box I guess. Thank you very much for that Michael. And look going over to Fair Work Ombudsman, Lynda, there's a lot of franchise to consider, a lot of franchisees, franchisors, what's the FWO going to be doing about this?
Linda McAlary-Smith: Certainly. At the Fair Work Ombudsman we recognise that franchisees employ a large number of Australians and picking up on Michael's point about the relationship between the franchisor and the franchisee, we're particularly interested in how the franchisors can support franchises to make sure that they're paying their employees correctly. I'll say firstly that the vast majority of businesses in this country, particularly small businesses are doing the right thing by their employees and they're paying them correctly. We do however see in some industries which tend to be franchised that when profits get tight for a whole range of reasons one of the things that businesses can choose to contract around their costing is labour costs and one of the really important things there is making sure that they're doing that appropriately and lawfully.
So we've been working with franchisors and franchisees in a number of ways, Mike, so we run a National Franchise Program and we have done for the last couple of years where we actually work with the franchisors about supporting them to support their franchisees to make sure that they understand what their workplace obligations are particularly around rates of pay, overtime on weekends, if you are needing to vary hours in the like, that's really important that they're doing the right thing. We've also been working with franchisors and franchisees where we have come across issues of non-compliance where people are not getting paid correctly and we're now moving more into the space of sitting down with franchisors and getting them to take us through their business model and making some assessments around for example, is the business model set up fairly to be able to ensure that the workers at the end of the day can get paid their money?
And we'll be increasingly looking to franchisors to take more responsibility for the business models that they choose which picks up on Michael's point about the Code, about treating the franchisee and franchisor, treating each other effectively fairly. We have a number of resources available in terms of our website at fairwork.gov.au that I mentioned before and we also have our dedicated small business helpline that's available at 131394 for small business operators and we're particularly keen to hear from franchisees if they are having any difficulties because we are here to help.
Mike Hawkins: Thank you Lynda. And again there's a contact number there, open all hours I would imagine, or is that sort of limited?
Linda McAlary-Smith: Yes, it's during business hours Australian Eastern Standard times but our website is available twenty-four seven.
Mike Hawkins: Absolutely. So if there's possibilities with Fair Work Ombudsman and thank you for the great work that you're doing there Lynda and I think it's a work in progress but it's certainly a work that has to be done. So thank you very much for that. Now Steve. I haven't forgotten about you. Can I just ask what the ATO is doing to implement new government initiatives that assist small business?
Steve Vesperman: Yes Mike. The Minister actually summarised the key points of the Small Business Package that was announced in the federal budget of 2015 in May and I will just go into a couple of those in some detail, but we are very keen to ensure that small business people understand their entitlements from the packages and the various elements. So it is very important that if you're looking for more detail other than what I cover here to use our ato.gov website to get that additional information. But the first one is the $20,000 instant asset write-off, so that applies to purchases from the 12 May where those purchases are first used or installed by 30 June 2017. That applies to both new and second-hand goods, that could be vehicles, machinery, furniture but again looking for more detail it is available on our website. It also is something that is claimed on the income tax return that is lodged at the end of the financial year.
Now from the 1 July the tax rates for small business corporate entities has changed from30% to 28.5% for those small business corporate entities that have a turnover of less than $2 million and also for unincorporated small businesses there's a tax offset against the tax liability which is related to small business income up to a maximum of a thousand dollars which will be applied at the time the income tax return is lodged and the assessment is made. Once again we will do the calculations once we receive the information on the income tax return for that concession to be provided.
And finally there's start-up costs for small business. One of the elements of the package was that certain start-up expenses associated with starting up a business including costs associated with raising capital, which would otherwise be deductable over a five year period and now able to be deducted in the first year. So that's again another change to the income tax legislation related to small business and costs and deductions.
There's two other measures that I won't go into detail but if you're looking for more information about it, go to our website. That's changes to the employee share scheme arrangement and also as the Minister mentioned, the small business rollover concessions that are available now as well.
Mike Hawkins: Excellent. Thanks Steve. No wonder the Minister was so excited. It is really interesting times and exciting times for small business and ATO is one of the lead agencies in that. So thank you Steve. I'd like to ask, and the Minister mentioned this in his introduction, about cutting red tape. What does that mean in practical terms for business people? And I guess the first person I'm going to ask about that is Brett from ASIC. Have you got a red tape reduction policy?
Brett Bassett: Let me start Mike by saying that from ASIC's perspective we see that red tape is anything that unnecessarily increases the compliance cost or the regulatory burden on small businesses and we certainly do take our responsibility as the Minister articulated to reduce the cost of red tape to the Australian business community. And every day we actually take steps to do that.
For example, ASIC administers a number of different laws and pieces of legislation and we on a daily basis provide wavers from the law where we think that the compliance with that law may actually create an unnecessary burden on the business that's actually needing to comply with that law. So that's one way that we certainly do seek to reduce red tape. We've also recently released our regulated performance framework which will see ASIC actually having to report on an annual basis about the steps that it takes to actually reduce red tape. So getting back to the question about the policy, that's probably the document that clearly articulates where we will be focused on reducing red tape and importantly we will be held accountable to that on an annual basis.
We also recognise that small businesses don't necessarily have a lot of time to comply with the law or to actually engage with ASIC so what we're doing is we're moving a lot of our forms online and we think that's a really important way of actually reducing red tape. As I talked about before business name registration is a clear example where it's a lot easier to actually engage with ASIC et cetera. And we've also recently enhanced the ASIC website. I spoke before about small businesses needing to understand the information that ASIC provides to them, we've updated our ASIC website to make it a lot easier and simpler for businesses to actually find information and that's another area.
And finally another key initiative for us relates to a whole of government initiative that ASIC is a part of with the Australian Taxation Office as well as the Department of Industry and Science which is a single online registration portal for business names and companies moving forward. That's another way that we're working across the whole of government to actually decrease the regulatory and compliance burdens on small businesses.
Mike Hawkins: Thank you Brett. I'm hearing simplification, ease of use, accessibility, all great things to reduce that burden on time-poor small businesses. So thank you Brett. And I'll move on to Lynda from Fair Work Ombudsman because I know that you're doing some exciting work there.
Lynda McAlary-Smith: We are indeed. We likewise are working towards the regulatory framework of reducing red tape and we've been implementing a number of initiatives recently to do our best to cut that. So in a number of ways what we've really done is brought small business into our co-design of initiatives and compliance policies that we have within the organisation. So we're getting small business people actually to come in and help us design what services they actually need which is so instrumental in figuring out what's actually causing them the most amount of annoyance when they're having to deal with organisations such as regulators.
We've relaunched our website as I mentioned earlier and our website over fourteen million visits last year, so there's some great information that's available there. What we're endeavouring to do is provide information in a time that suits small businesses or their advisors so that they can access it when and where they want. We've also have a number of templates which are available on our website around record keeping, letters of employment, contracts, requests for flexible work arrangements, return to work rights and requests around parental leave for example. We've also launched our hiring guide which I mentioned earlier which is designed to really cut the costs associated with hiring people by providing a guided framework for doing that, so you don't need to actually go out and secure a recruitment company to help you to do that, but you can do it right and it also helps you get the right person which will hopefully minimise any issues down the track.
We've also worked really hard at the front end of our business as a regulator about reforming the way that we deal with small businesses and employees when they come to us with an issue or they're responding to an issue. We now work very closely with businesses around mediations and trying to resolve things at an early point in a dispute before things explode out to a certain degree, so we have online, telephone, we've got online services available, we have telephone mediations to help employers and employees navigate some of these trickier issues themselves and we're continuing to reform the way we do business so that we can cut the time that business needs to worry about workplace relations so that workplace relations compliance can be something that bubbles away in the background rather than needing to be at the forefront of their mind.
Mike Hawkins: Wow. Thank you, Lynda. I'm most impressed by the number of website hits that your organisation gets, that's fantastic.
Linda McAlary-Smith: I'm shamelessly spruiking it as you can see.
Mike Hawkins: It segues into my nice question I'm going to stick with you on this. How will going online assist my business from the Fair Work Ombudsman's perspective?
Linda McAlary-Smith: Absolutely. As I've been mentioning quite a bit tonight, we have a number of resources available on our website. We're also continuing to evolve the way that we interact with small businesses and we're in the process of designing service delivery in a more online way so that businesses will be able to access our services and make requests for our help through an online space. We recently launched a new paying conditions tool which takes the number of calculations that sit within 122 different modern awards that apply to different industries across the country. And we've done all the hard yards of the calculations for small businesses and their advisors so that now small businesses can just jump onto our website, access that tool and go through and work out what they need to pay their staff on any given hour of the day.
You can save information in there, it gives you entitlements around leave and the like, we've also instituted an authenticated portal if you like within our website called My Account where people can set up a profile and can save information, bookmark pages, request alerts when there are changes so that businesses if they need to dip in and dip out of information they can save where they're up to, which is a really powerful tool for cutting some of the time that they have to spend in this space.
So we're continuing to do more work in this space. We're excited by what we've been able to achieve at the moment but importantly we're working with small businesses and their advisors to make sure that the decisions we make in the online space fit what they need not what we think they need.
Mike Hawkins: Excellent. Thanks Lynda. And again you've explained it very succinctly how businesses can really benefit by going online with the Fair Work Ombudsman and do a lot of business and interactions online. Get a lot more information. Steve, the ATO is also not shy in having an online presence. Can you indicate how businesses can benefit by going online with the ATO?
Steve Vesperman: As you say Mike there's enormous potential for small business in using the online services not only to help form their business perspective but also to access their many services that are available through government agencies and other service providers. And the ATO is certainly leading the way as we see it in terms of providing those services, so we do have those calculators and tools online that people can access to help in terms of finding out information and that's available not only through our ato.gov website but it's also available through the new ATO Small Business app. And we are encouraging small business people to download that free app because there's a whole range of services that you can access through that app.
One of the important initiatives that we've also undertaken at the moment is what we call 'voice authentication' and this is about using a voice sort of, voice print that we record and then when you need to contact the office again and talk about your specific tax matters you only need to use your voice as a voice printer to check your proof of identity, whereas at the moment there's people who haven't got the voice authentication protocol in place, they need to go through a proof of identity process. So we're trying to find ways of minimising the costs for small business people in interacting with the ATO.
Another exciting initiative that's coming up is that for those sole traders who've got a myGov account we will be actually making business activity statements available through the myGov account and you'll be able to use that online service to receive, lodge and pay your business activity statement and instalment activity statement obligations. So that's a great new initiative as well. So at the end of the day we are exploring a whole range of ways to use those online services to assist small business and we've got lots of initiatives in the pipeline that we'll be deploying over the next couple of years.
Mike Hawkins: We look forward to that Steve. That sounds great. I'm going to ask Brett from ASIC what you're doing in the online area.
Brett Bassett: Well if we're talking online we can't not talk about social media and our registry business is really leading the way for ASIC in respect of our online interaction with small business and businesses generally. We've got a Facebook account, we've got a Twitter account, we've actually got a YouTube channel and we think that each of those is really important to help get information out to businesses at a time that's convenient and accessible for them.
Within the interaction sphere, we're actually looking at introducing webchat next year which would actually from our perspective be a really exciting way for small businesses to interact with ASIC on a regular basis and at a time that's suitable to them. We're obviously very, very focused on making sure that we tie into the whole of government's initiatives and we've recently enhanced the ability for us to make free data more accessible via the data.gov.au website and we think that that's a really, really important point.
When we talk about small businesses unfortunately some small businesses do end up closing down and so what we recognised is that when those businesses do close down sometimes they actually want to reinstate or start up again. So to actually help with that we recently introduced an online reinstatement estimates tool and this online calculator is actually a means by which you as a small business owner before you actually make a decision to actually reinstate the company can get an idea of how much it's going to cost you. And we think that that's a really important way to help small business owners actually make decisions that are important to them.
We've engaged with the ATO led Small Business Fix-It Squad which is a fantastic initiative and as a direct result of some feedback from that squad, one of our online business names transfer processes was changed to make it a lot easier and more simpler and streamlined to actually help small businesses in the sale and transfer process. I've already spoken about business names but we've got a brilliant ASIC Connect website that is all about engaging with business names and the company names process that allows businesses to register business names, to renew the registration of a business name, to cancel or transfer a business name and of course to update any type of business name as well. And everything else we're doing at ASIC is trying to move online as much as possible. So we have a range of different tools that are available online Mike and we absolutely recognise that as businesses go online we need to keep up to date with where they are.
Mike Hawkins: Great. Thanks for being so contemporary Brett at ASIC. ACCC, now Michael we hear a lot, most people know what ACCC is and we're largely guided by those topical news events and news breaks but what are you doing online?
Michael Schaper: Yeah it's not all about petrol which is not really something you can really put online. Actually the really interesting thing I think Mike, first off is that about 92% of Australia's small businesses are online but it throws up a real challenge, if you're one of the 8% that aren't you really need to listen in to what's going on here and the sort of advice and the labour saving sort of tools that are being offered about whether or not you go online as well. From our point of view there's probably two issues that I want to mention to you and I don't want to scare you but I think they're ones that you need think about.
The first one is about online scams. We run Scamwatch, the national scam reporting website, that's scamwatch.gov.au and I can assure you that that is a legitimate URL. But we get more than 80 or 90 thousand contacts a year and one of our biggest groups are small business operators and increasingly small businesses are victims to scammers and in fact sometimes more frequently than members of general public. So it's an issue that you need to keep yourself up to date with and there's really simple tools, for example backing up your system, keeping the storing and copying offline to make sure you don't fall victim to ransomware, using basic security tools are really important and will augment the sort of things we're talking about here.
The other issue that businesses come to us about online trading is, are the rules different in the online environment to when you're dealing with a customer or another business physically, and the short answer is no. You've got to be really careful about that relationship and we see a lot of situations where businesses fall into difficulties, for example, they don't make it clear to a customer that they're offering a different price, for example online as opposed to across the counter. Fake online reviews are increasingly one that's a little bit of a concern for businesses, if you find your competitors for example posting nasty reviews about you and you're thinking that's really not the case.
As well as just what are the generals: what can I say online and what can't I say online? So I'm going to shameless plug like my colleagues here and mention our URL which is accc.gov.au and you can find, like everyone else can, information about some of those online courses that we mentioned before so as to educate yourself about some of those issues whether it be franchising, whether it be unfair business contracts, whether it be scams or whether it be fake online reviews. As well as that we've also got the usual array of material downloadable publications and so forth. That's probably enough.
Mike Hawkins: Look, I could listen to you all day Michael. That was fantastic stuff and again very well put and very informative for small business that ACCC has a really excellent website as all of our agency partners here. Please avail yourself of the resources that are on those websites. So thank you panel for those, answering those questions that arose from the Minister's presentation.
We now have time for some questions that have been coming through while the webinar has been running and thank you to people that have called in. I will just preface before I go to the panel with individual questions that we won't be able to get through all of them this evening, we only have a limited amount of time but I am informed that all enquiries will be answered in due course. So please if you don't get your question answered tonight, the agency concerned will get back to you. So let's have a look at some of the questions that are coming through and one to you first Steve and this is from Omcar. And Omcar has said, how does she go about lodging a BAS online? Can you give us a bit of information about that?
Steve Vesperman: Yes there's for a sole trader who has a myGov account, your next activity statement will be available online. So to actually be able to lodge it online, first of all you need a myGov account, you need to be a sole trader and then you will be able to use that facility at the time of your next activity statement. For those who are an incorporated entity that functionality through the myGov account will not be available until later on this financial year. However if you use the AUSkey credential and you sign up to the AUSkey credential and that arrangement, you are able to receive and lodge activity statements online as well. More information about that is available on our website.
Mike Hawkins: Excellent. Thank you Steve. And hopefully that answers the question but there is more information online. I have another question now, Tracy, and it's to ASIC, to you Brett, the question is phoenix seems to be a hot topic at the moment. Can you explain what's been done about it? And maybe what it is?
Brett Bassett: Sure. Thanks for that question Tracy. Phoenix for those who don't know is very much where one company goes into liquidation, the directors of that company move the assets of the first company into the second company and the reason that they do that is basically to deny the creditors of the first company access from those assets. Unfortunately from phoenix perspective, small businesses are often the ones who are the victims of phoenix. Why is it a big issue? It costs roughly 3.2 billion dollars a year and that was a result of a report that was done back in 2012. And so phoenix is a huge issue. Agencies like the Fair Work Ombudsman, the ATO, ASIC, the ACCC and the Australian Federal Police are very much focused on phoenix activity.
So what are agencies like ASIC doing? Well we're being very proactive in respect of five key area, five key industries: the construction sector, the labour hire sector, the cleaning sector, the security sector and the transport sector. And what we're doing is we're going out and targeting those directors who are still involved in companies, legitimate companies who have a history of illegal Phoenix activity. We're actually going out doing surveillance visits of them, doing compliance checks of them and then reminding them of their obligations and interestingly in the work that we've done at ASIC over the last eighteen months or so, we've identified seven live instances of illegal phoenix activity. Of those five we've got charges issued in respect of one person, we've referred two matters over to the ATO.
The other thing I'll say is that there is an inter-agency phoenix taskforce that is led by the ATO and that phoenix taskforce that came into effect in November last year has been put together to enhance the information sharing arrangements between the agencies so that we can actually engage at a more collaborative and a more strategic level. So there are a couple of key points.
Mike Hawkins: Yeah. Thank you very much for that comprehensive answer Brett and I hope that really answers the question that was raised and thank you for that again too. I have a question now for Michael at ACCC and Cathy has said is there anyone that small business can contact to check whether contracts contain unfair contract terms?
Michael Schaper: It's an interesting question, Cathy. As I mentioned before when I was talking about unfair contract terms, this is still a piece of law that hasn't yet been passed by Parliament so something's still yet to be enacted and so we're basing on this answer I guess on the proposition that it is going to be passed. Essentially if you think that something is an unfair contract term, the ACCC can give you generalised advice and that's what we're preparing at the moment but you ultimately if you think you are in an unfair contract situation you do need to go and see your own legal advisor. The situation with the ACCC is a little bit different to the tax office in many cases, the tax office in many situations can give what are called Binding Private Rulings and I've got that right, Steve?
Steve Vesperman: That's right.
Michael Schaper: Where a taxpayer can say these are my situation and provided all those are correct then the tax office will give them effectively some guidance and they can follow that with a fair degree of comfort. The ACCC doesn't have either the legal capacity to do that nor is it always as easy to work out the situation of every contract or every business to business relationship that quickly. So ultimately you need to go and talk to your own advisor. That's a bit of a long answer, Mike, I think it's an important issue that a lot of the advice that comes from the government, some of it can be specific but a lot of the times you are going to need to follow it up, making sure you talk to someone who's got a legal background, who can give you professional advice for your situation.
Hawkins: Absolutely. It's a complex area. And thank you Michael for that very sage advice on that. Fair Work Ombudsman question. Rob, who's an accountant, has asked, Lynda, what does he do if one of his clients is not paying their staff their proper entitlements?
Linda McAlary-Smith: That's a great question Mike. So thanks for reaching out Rob, first of all. You've got a wonderful opportunity to try and help your client set things right, right at this point in time. So I'd encourage you to work with your client to fix up what the issues are and as I've been talking a lot today, there are a lot of resources available on our website that can help you do that. We also have our dedicated small business hotline on 131394 that can help you work through any particular tricky issues. It's really important as an accountant and a trusted advisor to your client to help them work through this.
These sorts of issues rarely go away. We recently had a matter where due to a minor computer glitch a business was exposed to underpayments worth several hundred thousands of dollars because it had compounded over years, so it's great that you've picked it up now but it's important to fix it up. As an accountant and to other advisors who might be watching today as well, it's a great opportunity to make sure you're giving the best possible advice to your clients and that could include you seeking advice as well. Workplace relations can be a complex area so if you're not certain of the advice that you're being asked to provide, make sure that as Michael said perhaps you refer your client onto a legal advisor or you send your client or you contact us for that advice.
It's really important and particularly in relation to the accountancy profession we're continuing to work very closely with the key organisations in this area because from time to time we do see clients of ours who've run into trouble because they've received the incorrect advice from their accountant. So I applaud you for getting on the front foot to help them and I encourage you to help them fix it up and to others who are watching, a similar approach to your clients would be beneficial because moving forward, we're going to be taking a closer look at the role that accountants in particular play when providing advice to their clients and making sure that it's correct.
Mike Hawkins: Thank you Lynda and thank you Rob for an excellent question there. It's a difficult area. Thank you for being brave enough to bring it up. I would like to extend the questions but unfortunately we're on limited time here. So I do need to just remind you again that questions that haven't been answered tonight will be addressed by the agency concerned. Everybody who has asked a question will have a response made to it but unfortunately that's the only time that we have for questions. I now need to just ask our panel members to just give us a summation of their agency offerings and what they're doing and I'll start with Brett, over to you from an ASIC point of view.
Brett Bassett: Thank you Mike. I haven't used the ASIC website yet so asic.gov.au is the ASIC website and on the ASIC website are a whole range of tools including the small business hub, of course ASIC Connect, we've also got a wonderful website called Money Smart with a whole range of tools there. I'll just start to finish by saying ASIC is very, very focused on listening to small business. We've changed a lot of what we do as a result of direct small business feedback. We will continue to engage with small business and we're actually very, very much focused on listening to what you want us to do better. So that's it from me, thank you Mike.
Mike Hawkins: Thank you. Thank you Brett. Over to you Lynda, from a Fair Work Ombudsman's perspective.
Lynda McAlary-Smith: I would say to everyone watching, don't be scared to contact us. Although we are the regulator, we are here to help you get it right and that includes if you realise you've been doing the wrong thing as well. So if there are issues don't hesitate to contact us on our website of fairwork.gov.au or on our small business helpline of 131394. You have a wonderful opportunity not just to meet the minimum standards but to help grow your business or grow your clients' business by working above the line if you like and we have a lot of resources available on our websites such as courses around managing underperformance which is always tricky for everybody and as I've mentioned before, hiring, our hiring guide as well. So we would encourage businesses to seek out that information, there is a lot of information available on our website and through our Fair Work Inspectors and our Fair Work Infoline Advisors who answer our helpline. So please don't hesitate to come to us and we're here to help you.
Mike Hawkins: Thank you Lynda. From an ACCC perspective, Michael?
Michael Schaper: Simple one. As a business you've got rights as well as responsibilities and although we spend a lot of time talking about responsibilities you've also got rights. For example under the Competitions and Consumer Act in certain situations businesses can come together and collectively bargain. As a small business you've got rights the same as consumers when you're buying certain products under a certain value and so on and so forth. The ACCC website is the starting point, just as all of these agencies' websites are, accc.gov.au, 1300 302 021. We'd love to hear from you.
Mike Hawkins: Excellent. And finally word from you Steve from the ATO.
Steve Vesperman: Thanks Mike. And following on what Lynda said, I sometimes hear that people are reluctant to call the ATO but I really encourage people to contact us. We are investing increasingly our investment in our support and assistance we're providing to the small business community and I encourage you to contact us and test us out in terms of that assistance and support because I think in working in partnership, we are keen to ensure small business thrive and the more we can do to assist with that then I think the better outcomes for everyone.
I'd just like to wrap up and follow up what Michael said about scams as currently there's a scam under way where people pretend to be from the tax office and demand, with threats, money. I can assure you that we do not make phone calls where we are threatening and demanding money and if you do get a call that you are concerned about in any way, I encourage you to get their name and extension number of the person calling you, then use the phone number in the phone directory to call the ATO and ask to be put through to that person. It's very important that people are aware of the scams that are under way at the moment.
Mike Hawkins: Thank you very much Steve for that. That last point’s very much a point of contention so if you are aware, as Steve said, please get in touch with ATO and just advise them. There's been a common thread running through the whole evening and that is that all the agencies are approachable. Talk to us, they're listening. Become involved. Look at the websites, you can do that twenty-four hours a day. Some of the information platforms there where you require, where you may want to speak to a person are there for extended hours. All of the agencies are doing their utmost to make sure that they're approachable so that you as a small business in Australia can start off right and actually be of benefit to society, benefit to all of your employees, contribute back to the system and the agencies here can also assist you to do your best. Look ladies and gentlemen, thank you very much to listening to us this evening and I'd just like to say to all of our panel members as Steve, Michael, Brett and Lynda, thank you very much for your very valuable contribution to tonight's discussion about small business and how agencies can assist them to be better. Thank you very much.