SA Business Journal

What problem are we fixing?

Andrew Kay
Tuesday, November 7th 2023

In 1967, The Times newspaper in London famously wrote an editorial in support of Mick Jagger and Keith Richards of The Rolling Stones entitled Who Breaks a Butterfly on a Wheel”. The two rock stars had been imprisoned on quite minor drug charges and The Times felt they had been harshly treated. For the establishment press to come out in their favour at that time was quite a thing. Still, it was the Sixties after all…

The butterfly quote comes from an 18th century poem by Alexander Pope, and I find myself drawn to it these days in a very different context. Small business owners will know exactly what I mean. 

South Australia is often referred to as a small business state, but let’s face it, we are a small business country — 89.2% of businesses in Australia employ four people or less.

Nearly 60% of businesses in Australia turnover under $200K a year. If you take that turnover up to $2M, then that accounts for just over 90% of businesses in the country.

Which is why, we at the Chamber of Commerce fire up when the Federal Government brings in policy changes designed to address issues they perceive are problematic with big business or the so-called top end of town”.

As these changes trickle down to South Australia and the 98% of our business community classified as small”, they are more akin to a giant sledgehammer cracking a nut – or maybe that should be a butterfly?

For our SME community, these measures are seen to be addressing problems that don’t exist. Yet they create a whole new set of issues for the business owner, adding unnecessary red tape, complexity and compliance – and therefore costs, to their business.

The small businesses that make up 98% of our industry in South Australia, employee on average fewer than 20 people – that is our economy. It represents 40% of our workforce, with the bulk of the balance sitting in the public sector.

These small businesses tip in $49Bn a year into the state economy, representing 38% of our Gross State Product. They are diverse in gender, geography and multicultural influence.

This is a sector that should be celebrated and enabled, not burdened with costs and complexities that have little relevance to the individual business. For the owner, they take away their time, focus and the ability or incentive to innovate and grow.

Being a small business owner is tough. At a national level around 50% of these businesses don’t survive past their first four years. More positively, we punch above that in South Australia at around a 55% survival rate. But the message is clear. These people are the risk-takers, the dreamers and the backbone of our economy and their sustained success is as critical to our state’s future as AUKUS or renewable energy.

We know that Australia has a productivity problem. The last decade was as low as it has been in 60 years. Despite the good work we see coming out of the likes of Lot 14 and the Tonsley precinct, the SA Productivity Commission’s recent report showed our state is falling behind as well – with failure to innovate being one of the root causes. 

Many small business owners would like to do more in this space but are increasingly frustrated about the impact of regulatory pressures on their costs and time. For some, being asked to invest in transitioning to net zero while struggling to pay the electricity bill, seems like a joke without a punchline. 

In the coming months, you are going to learn more about the next round of IR changes being passed down from Canberra. We have been doing months of behind-the-scenes advocacy in partnership with other industry groups, to try and gain the best results we can for business. Despite these endeavours, the motivation for many of the changes will have small business owners scratching their heads and asking once again, What is the problem we are trying to fix?”.

Author

Andrew Kay

Chief Executive Officer
Recent Articles
27 Feb 2024
Businesses treading water as cost pressures continue to bite
27 Feb 2024
Five major companies have signed development agreements for SA's first large-scale clean hydrogen precinct
27 Feb 2024
Swagger state primed for property investment opportunities
27 Feb 2024
Breaking down the issues facing bigger businesses
26 Feb 2024
Public smoke and vape ban in force from Friday
23 Feb 2024
End of an era for Boileau Business Technology