What a year it’s been for Australia’s business community. Here’s a look back at the major events of 2019, and how they could shape the market for 2020.
As was the case in previous years, 2019 began with employers keen to get a grip on matters of HR and employment law.
This year also began with a new precedent being set after an employer was sentenced to jail time over a workplace death, which lawyers believed was the first time a non-suspended sentence had been handed down over a fatal accident at work.
That case, and another involving worker’s compensation for an injured McDonald’s employee, sparked debate about where responsibility does and should lie between workers and their employers in terms of health and safety.
Meanwhile, with the federal election looming (but the date still months away from being set), Labor kicked things up a notch with several policy announcements, including that which would beef up existing unfair contract laws with plans to make them illegal for big business to slap onto SMEs.
Other political parties also began revealing their policy intentions as part of this months-long unofficial election campaign, such as One Nation proposing to slap penalties on corporates that use SMEs as “a cheap source of finance” by way of late payments.
All eyes were on the Reserve Bank early in the month for its first review of interest rates for 2019, given that this would provide a strong indication of the economy’s performance. However, it continued to hold rates steady for this month, before embarking on interest rate cuts later in the year.
A scam involving the theft of mobile phone numbers saw many bank accounts drained of funds, while beauty retailer Napoleon Perdis went into voluntary administration and Muffin Break’s general manager courted criticism for comments she made about unpaid work – demonstrating how quickly comments can spread through social media.
But biggest news of the month by far was the long-anticipated release of the banking royal commission’s final report, which emphatically threw the book at a long list of dodgy practices and poor governance by financial services giants, and also chewed out regulators for not being tough enough on compliance. It recommended sweeping changes to the way mortgage brokers operate and a bunch of measures to protect consumers in banking, superannuation and financial advice, but little in the way of change for SME lending.
The ATO was at the heart of several issues during March, including the revelation that annual payment summaries would be scrapped with the rollout of its Single Touch Payroll (STP) digital reporting measure, as well as the revelation that its tax inspectors would be doorknocking businesses on the lookout for black economy activity and undeclared income.
Labor announced one of its most controversial policies – a legislated “living wage” – that likely contributed to its election defeat two months later, particularly given some employers hit out saying they already earn less than their workers.
Also this month, the Fairness in Franchising inquiry released its long-awaited and delayed findings, which overall gave a scathing critique of the franchise sector for a power imbalance working against franchisees, insufficient transparency and disclosure provisions and the pressure that these and other factors had on franchisees to engage in wage theft to try and make ends meet.
The biggest news of April was the revelation of a small Aussie business embarking on a novel exit strategy – putting the business and adjoining family home to a public raffle. Sadly, though, the innovative approach ultimately proved unsuccessful, with a new owner for the business not secured and regulators getting upset in the process.
April also officially kicked off the election race, and with it came a federal budget packed with goodies to woo voters. For SMEs, that included an extension of the instant asset write-off, which rose to a $30,000 threshold and was significantly increased to cover businesses with a turnover of up to $50 million. It was speedily approved by both sides of Parliament.
The federal election helped My Business to its biggest ever month for readership traffic in May, as business owners and employers looked for the latest news and insights on election promises and their likely impact on operations.
It marked the culmination of one of the most drawn-out election campaigns ever, with the election date not officially set until practically the last possible moment, with business owners keen to look back on what was in store for them under a Coalition government. The Council of Small Business Organisations of Australia subsequently issued figures analysing the role small business played in determining the election outcome.
Also this month, My Business held a webcast featuring tax and accounting experts, including an ATO assistant commissioner, to help answer the myriad of questions business owners had about STP.
Away from politics and compliance, retail rents came into the spotlight after yet another retailer collapsed, citing “unsustainable rents” as one of the major culprits for its downfall.
Interest rate cuts made for big news this month, having been on hold for close to three years, amid rising concerns about Australia’s sluggish economy and wages, and unemployment beginning to rise. But the question on everyone’s lips was whether the banks would follow suit and pass on all – or indeed any – of the savings.
The June cut was followed immediately by a second in July and then a third in October, taking the Reserve Bank’s official interest rate to a new record low of 0.75 per cent. Banks were grilled later in the year about their failure to pass on the rate cuts in full.
June, of course, also marks the start of tax time, and what business leaders most wanted to know was how the type of car they drive could trigger an audit, the scrapping of tax deductions for cash-in-hand payments and the biggest bugbears of accountants.
And in some perhaps good news for the struggling retail sector, it was announced that Toys R Us would make a comeback in Australia, having been resurrected in a last-minute deal after stores were closed and stock liquidated in 2018.
Tax matters and STP continued to be much read and debated within the business community, particularly in light of the revelation that a glitch with accounting software provider MYOB saw several hundred payment summaries sent to the wrong people.
Meanwhile, the ongoing saga of worker underpayments – increasingly referred to as “wage theft” – gained considerable profile after MasterChef host and restaurateur George Calombaris became caught up in a $7.8 million underpayment scandal. That itself would soon be dwarfed by a string of larger underpayments being revealed at other major companies.
Some suggested the growing number of large businesses self-declaring wage underpayments was symptomatic of the complexity of the country’s modern awards and workplace laws.
Also this month, Carlton & United Breweries was sold to foreign owners in a $16 billion deal with Japan’s Asahi Group Holdings in one of the biggest takeover deals of the year, while a lingerie retailer protested against perceived double standards in advertising relating to products for men and women and the models portraying them.
It was a mixed bag of issues and topics generating headlines in August, on matters as diverse as NAB bracing for a possible 400,000-strong class action for allegedly dodgy sales practices, a former dentist successfully building a $10 million retail business in just two years with his younger brother, and a business losing $50,000 after hackers gained control of its invoicing system.
My Business also attended the National Small Business Summit at the end of the month and into September, covering everything from the ATO commissioner reassuring small businesses over tax gaps to NBN Co seeking to better engage with consumers and SMEs about its infrastructure rollout and the various plans available.
We also got an exclusive look at the inspiring mental health story of business owner and professional speaker Greg Ward – the Summit’s MC – who went to great lengths to outline how he now protects his mental and physical health and wellbeing following a suicide attempt in 2018.
The experience of Europcar also served as a strong warning to businesses not to inflate the card surcharges they charge consumers, with the rental car company fined $350,000 over the practice.
In other news, SMEs were advised against looking to compostable alternatives to plastic packaging until the infrastructure is made available to actually compost these materials.
There was plenty of criticism about the ATO’s clawbacks of R&D Tax Incentive funds, which again came to a head as the Small Business Ombudsman announced a review into these practices.
Business leaders My Business spoke with spoke of disastrous impacts on their business and personal finances and health, as well as job cuts and abandoned innovations. The review subsequently confirmed that these clawbacks were having a “devastating impact” on SMEs, and provided a list of recommendations to address what it found to be “inconsistent treatment” and “changing goalposts”.
Meanwhile, thousands of Aussie workers joined the global #ClimateStrike to call for action on climate change, with a group of employers also shutting down operations under the #notbusinessasusual campaign. My Business was even interviewed by ABC Radio ahead of the rally about employers’ involvement in the strike.
Also in September, My Business had a look at the business that went from garage to $8.5 million revenue in just two years, and uncovered some job advertisements from the 1970s that painted a very different view of the workplace of the day – including stipulating that women must be “attractive” and “like to spend their time all day speaking to important men” to be considered suitable for a role.
Payroll errors continued to make headlines in October, with possibly the highest figure to date – as much as $300 million – being confessed by Woolworths.
Meanwhile, consumer group CHOICE revealed its list of the allegedly worst products and services of 2019 as part of its annual Shonky Awards; interest rates were cut for the third time in five months; and the ACCC warned vehicle owners to immediately cease driving a range of cars, including a ute popular with tradies, over safety fears about recalled Takata airbags.
And Mexican fast-food chain Guzman Y Gomez outlined how its shift to a so-called “clean food” menu had delivered a marked and immediate sales boost.
November saw business owners from across Australia gather for the rebranded My Business Awards 2019, which proved to be a hit with the more than 600 attendees as Sydney-based Drive Yello was crowned Business of the Year.
And My Business itself was named a finalist for the US-based Business Innovation Brief Awards, for an exclusive two-part feature with former Australian corporate executive and IdeaSpies founder Lynn Wood about innovation roadblocks and how employers can better nurture and harvest new ideas in the workplace.
We also hosted a webcast on cash flow tips and tricks for business owners, which revealed insights such as the number of invoices paid late because of administrative errors and ways in which businesses can simultaneously mitigate cash flow risks for themselves and their business clients.
In other news, new laws and hefty penalties were introduced around the sale of gift cards in Australia, and concerns were flagged about the role that director loans are increasingly playing in business owners being declared personally bankrupt.
Rounding out the year was an insightful look at how unwary businesses could be caught in a 37 per cent tax trap on Christmas festivities, a look at the payroll changes set to come into force in the first part of 2020 and Myer being praised for its response to a technical outage that affected its store network on a busy Saturday in Christmas shopping season.
It was worse news for fellow department store Harris Scarfe, which fell into receivership just a fortnight out from Christmas, while employers in Queensland braced for the introduction of a new part-day public holiday on Christmas Eve.
My Business also found out about some of the most-read articles on Christmas Day 2018 – with many surprising findings, including that 60,000 people were perusing the Tax Office website!
No doubt that 2020 will also be an eventful year for business owners and operators, but we hope that it proves to be a happy, safe and prosperous year for you. Happy New Year!
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
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