Peace Has Broken Out on the Australian Business Front


Peace Has Broken Out on the Australian Business Front

It’s always a news event when two parties, who have been bickering for years, kiss and make up.

That’s what has happened in the Australian business scene this week. This week saw the signing of a historic Memorandum of Understanding (MOU) between the Council of Small Business of Australia (COSBOA), and the Business Council of Australia (BCA).

This pair of organisations represent the two opposite ends of the business spectrum in Australia—the big and the small.

Much of my business experience and my current work and writing revolves around the relationship between the businesses these organisations represent. While there is a clear advantage for both parties in working together, this doesn’t always turn out to be the case.

Small businesses can benefit greatly through having a big ‘name’ company as a client. Almost always, the first contract with a large company or government authority is the trigger for real business growth. Increased workload and cash flow allows for expansion and having a large, trusted company as a client gives credibility.

Big companies need small suppliers. These are the innovative companies that provide specialist products and services vital to their operations.

Why the conflict?

So why is there an underlying current of conflict between the two parties to what could be a highly profitable and mutually beneficial partnership?

Two issues that have constantly loomed large in the past have been unfair contracts and extended payment terms. After years of lobbying by COSBOA, and intervention by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), we have seen action on both these fronts.

The Unfair Contracts Legislation came into force in November 2016, and BCA introduced a voluntary 30-day payment code in May of this year. Both these initiatives are still in their infancy, and only time will tell whether they are effective in the long-term.

An outbreak of peace.

Now, peace has broken out between COSBOA and BCA. The MOU will, “Foster cooperation between the two business groups and (to) jointly advocate for policies in areas of interest, including tax reform”. So, it seems that the imminent prospect of unfavourable tax reform has prompted both parties to circle the wagons and create a united front.

Whatever the spark, this initiative has to be a giant positive for small business. Apart from COSBOA and the ASBFEO, Small Business does not have an active political voice in Australia and is traditionally drowned out by the big business lobby.

To have the whole of private industry speaking with one voice—a voice that represents 80% of our country’s output – can only bring good things for our businesses and our economy.

This fact was recognised in the joint statement released. “Australians know that a thriving business sector—small, medium and large—is the only avenue to our future posterity.”

What have they committed to?

The MOU binds both parties to:

There’s still a touch of realism.

The MOU isn’t all unicorns and puppies though. It contains the clause, “Both organisations understand that there will be differences of opinion in certain areas of policy and accept that these differences will be debated in an open, respectful and transparent way.” So, realistically, there is still room for minor skirmishes behind the front line.

You can read a full copy of the MOU here.

As a Small Business owner and Small Business advocate, I sincerely hope that this MOU is worth a whole lot more than the paper it is written on. Point #3 in action would be a great help.

Perhaps the combined voices of business can give Australia the direction and leadership that has been missing for such a long time. The upside for the Australian economy is enormous.

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