Market News Archives

Why cash flow problems are one of the biggest cybersecurity risks for small businesses

Posted on August 5, 2025 by Russell Walsh

Cyber attacks are increasing – and small businesses are in the firing line. When a cyber criminal strikes, there’s more than compromised data at stake. For many businesses, a successful cyberattack can rapidly evolve into a cash flow crisis.

Cybercrime is now estimated to cost Australian small businesses $300 million annually. It’s no wonder then, that cyber incidents – including ransomware, data breaches and IT outages – were ranked the number one global business risk in the Allianz Risk Barometer.

While cyber attacks on large corporations like Optus, Medibank, and Qantas dominate the headlines, it’s the 2.5 million Australian SMEs that are being hit the hardest.

“Small businesses are often prime targets for cybercriminals due to their limited resources and expertise in what is deemed ‘best practice’ with regards to cyber security,” says Evan Vougdis, Head of Cyber Intelligence and Cyber Response & Recovery at NSB Cyber.

The Australian Cyber Security Centre (ACSC) advises businesses to treat cyber incidents as a “when” – not an “if” – and ensure a robust cybersecurity incident response plan is in place.

Why SMEs are more vulnerable to cyber attacks

SMEs are consistently among the most targeted – and least prepared – for cybercrime.

“Unlike larger organisations, small businesses typically lack dedicated IT security teams, advanced tools, or comprehensive defences, making them easier to breach,” says Evan.

According to the ACSC, the average cost of an attack on an Australian small business is $49,600, up 8% from the previous year. Larger firms may face higher dollar losses but usually have insurance and systems in place to absorb the impact.

But the damage isn’t just financial. It takes an average of 7.3 months to recover from a major cyber event – often involving downtime, lost productivity, and reputational harm.

The latter is one of the biggest risks for businesses, with 40% of consumers saying they would often or always stop business with a company after learning of a data breach – even if their own data hadn’t been compromised.

What are the most common cyber threats facing small businesses?

The most common cyber security risks for small businesses? Email compromise (20%); business email compromise fraud – where the email compromise includes a direct financial loss – (13%); and online banking fraud (13%), according to the ACSC.

Some industries are targeted more frequently than others. In 2023–24, the top sectors reporting cybercrime in Australia included:

Retail – 15%
Professional, scientific and technical services – 13%
Construction & engineering – 12%
Financial and insurance services – 8%
Other services – 7%

“Cybercriminals are increasingly using supply chain attacks to exploit financially unstable businesses as weak links,” says Evan. “IT providers are prime targets, especially during downturns when security investments lag, enabling widespread downstream breaches.”

Despite this, nearly three-quarters of small businesses lack enhanced cybersecurity measures. Many still don’t have basic protections against phishing, ransomware, or invoice fraud.

“Financial instability plays a critical role by forcing businesses to cut costs, often prioritising short-term survival over cybersecurity,” says Evan. “But this creates a dangerous cycle – weaker defences heighten the risk of attacks, which in turn worsen financial strain.”

Evan Vougdis, Head of Cyber Intelligence and Cyber Response & Recovery at NSB Cyber, says small businesses are often prime targets for cybercriminals

The financial fallout from a cyberattack

A cyberattack can quickly escalate into a cash flow crisis, with businesses facing immediate expenses and delayed revenue at the same time.

Direct financial losses may include stolen funds, fraudulent transactions or regulatory fines. But the indirect costs – like operational downtime, data restoration, reputational damage and lost clients – often have the biggest long-term impact.

“While ransom payments or data recovery are often highlighted, subtler financial impacts are frequently overlooked,” says Evan. “Insurers may increase premiums or deny coverage if vulnerabilities were missed – leaving businesses exposed to legal, forensic or third-party costs that exceed policy limits.”

This financial strain can put working capital under pressure. That’s why cybersecurity planning must go beyond technical defences – it needs to include financial readiness too.

For businesses that remain operational but are feeling the cash flow pinch after a cyber incident, invoice finance can help eligible businesses unlock funds tied up in outstanding receivables to cover short-term gaps.

Beyond immediate cash flow gaps – and where there is suitable security in place – debtor finance or trade finance may provide additional flexibility to support ongoing operations while insurance claims are processed.

Why cyber security must include financial readiness

Cybercrime is now a daily operational risk for Australian SMEs – one with substantial costs and long-term consequences. For small businesses, even a short disruption in operations or delay in receivables can cause cash flow problems.

That’s why cybersecurity planning shouldn’t stop at firewalls and password policies. Managing cash flow during a crisis needs to be part of the conversation. Financial readiness is just as important as technical resilience.

When cash flow is vulnerable, business continuity is at stake. A strong financial buffer and a working capital strategy that can flex under pressure can make all the difference between short-term disruption and long-term damage.

Talk to Octet’s supply chain finance experts today to explore how we can support your business with tailored working capital solutions.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Minimum wage increase: How will it impact cash flow for Australian businesses?

Posted on June 16, 2025June 16, 2025 by Russell Walsh

The new financial year will bring a fresh round of cost increases for Australian businesses. From 1 July, the national minimum wage will rise by 3.5%, and the compulsory superannuation guarantee will increase to 11.5%.

While the changes will deliver a welcome boost to the take-home pay of around 20% of Australian employees, many business owners are facing the reality of higher wage bills, squeezing margins and placing renewed pressure on cash flow.

“Small businesses are facing a cost crisis across energy, rent, insurance and input costs,” said Luke Achterstraat, CEO of Council of Small Business Organisations Australia (COSBOA).

“[The] decision of a 3.5% increase – which is above the current rate of inflation – will have ramifications for our small business engine room, many of whom are struggling to make a profit on already razor thin margins.”

Wage and super increases will drive up costs for award-reliant industries

The food and beverage and retail sectors, which employ large workforces on or near the minimum wage and typically operate on narrow margins, are expected to feel the sharpest pressure from the minimum wage increase, making them more vulnerable to any disruptions in cash flow.

A single delayed customer payment or an unexpected expense may be enough to trigger a short-term cash shortfall – particularly for businesses with seasonal income patterns or irregular payment cycles. A recent survey by Xero found 87% of Australian small businesses were already facing cash flow challenges.

In some cases, the squeeze on profitability may force business owners to reconsider their expansion plans, delay investments, or pass costs on to consumers through higher prices.

Consumer spending may increase, but short-term cash flow challenges remain

While wage increases will create immediate financial pressure for many business owners, it’s not all bad news.

Rising minimum wages often support household consumption and broader economic stability. In its recent Annual Wage Review decision, the Fair Work Commission (FWC) noted that increases to the modern award minimum wage are likely to have a positive national economic effect by strengthening consumer spending and sentiment.

When wages rise, lower-paid workers typically have more disposable income – and much of that additional income flows back into the very businesses that employ them. The FWC highlighted that sectors such as retail and food services are “well-placed to benefit” from any uplift in consumer activity generated by the higher minimum wage.

However, while this broader stimulus may help offset some pressures in the long run, it does little to ease short-term cash flow challenges.

Proactive cash flow management strategies for small businesses

The minimum wage and superannuation increases represent a permanent shift in employment costs for many Australian businesses. Understanding the full impact on cash flow – and addressing it early – will be key to maintaining financial stability as operating costs rise. Business owners should update their cash flow forecasts to reflect the full cost impact and identify any potential funding gaps.

One of the most immediate actions businesses can take is to revisit payment terms across their supply chains. Negotiating longer payment windows with suppliers can offer breathing room, allowing more time for revenue to flow in before payments are due.

Another option is Debtor Finance (also known as Invoice Finance), which unlocks cash tied up in outstanding invoices to smooth out working capital fluctuations and ensure businesses can meet rising wage and superannuation obligations without disrupting daily operations or long-term plans.

For growth-focused businesses, Trade Finance can offer valuable flexibility when cash flow is tight, allowing businesses to invest in stock purchases, equipment upgrades or marketing activity without draining their cash reserves.

A finance partner to help you navigate rising employment costs

With wages and superannuation on the rise, many businesses will feel a strain on cash flow. But with the right cash flow management strategies and working capital finance solutions, SMEs can manage higher costs while staying on track for growth.

Talk to Octet’s working capital experts today to explore how we can support your business through these changes, and beyond.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

ATO tax crackdown on small business: Are you ready for stricter compliance?

Posted on June 7, 2025June 15, 2025 by Russell Walsh

From 1 July 2025, Australian small and medium-sized businesses will face intensified scrutiny under the Australian Taxation Office’s (ATO) $1 billion compliance crackdown. While the initiative is designed to target tax evasion and level the playing field, even honest SMEs will come under the microscope.

ATO Deputy Commissioner Will Day says only a small portion – around 5% – of small businesses are deliberately avoiding tax. But that still leaves a significant $17.7 billion tax gap, largely driven by mistakes, opportunistic behaviour, and poor record-keeping.

With audits set to increase and data-matching tools becoming more advanced, even businesses doing the right thing may find themselves subject to greater scrutiny. That’s why now is the time to double-check your records, revisit your tax strategy, and act early if support is needed.

The majority of SMEs are already doing the right thing. Staying proactive will ensure they’re not caught off guard as the ATO’s new measures take effect.

Carrying ATO tax debt is getting more expensive

From 1 July, managing tax debt will become more costly for SMEs. “Small businesses’ tax debts continue to be too high,” said Day. The ATO reported $53 billion in collectable debt at the end of FY24 – $35.6 billion owed by small businesses.

New legislation removes tax deductions for ATO interest charges, including the General Interest Charge (GIC) and Shortfall Interest Charge (SIC). With GIC already exceeding 11% and compounding daily, the cost of carrying tax debt is rising sharply.

“Many businesses underestimate their tax liabilities, leading to significant debt,” says Olga Koskie, Principal at Tax Assure. She notes it’s crucial for business owners to take a proactive approach to managing their tax debts.

The ATO also wants to shed its image as a lender of last resort, which means SMEs relying on ATO payment plans should reassess their strategies, with tighter repayment terms coming into force from 1 July.

Alternative finance options may offer relief. “Working capital finance can help businesses repay debt and meet ongoing obligations – especially when revenue is lumpy,” says Campbell McCallum, Octet’s CFO. “Supplementary Trade Finance, for example, offers a revolving line of credit to pay suppliers, freeing up funds for tax.”

Tax minimisation schemes under the microscope

Many SMEs use legitimate tax strategies to manage cash flow – but under the ATO’s new compliance push, some of these approaches will face closer examination.

The ATO has flagged that strategies involving income diversion for personal use, inflated deductions, or artificial losses could fall into risky territory if not properly substantiated. “If you look at both the tax gap and the debt book, they are symptoms of a system operating less than optimally,” said the Deputy Commissioner.

Tax practitioners are also on the radar. The Tax Practitioners Board has received an additional $27.3 million in funding to investigate high-risk advisors who may be promoting overly aggressive schemes.

The ATO is clear that most businesses are doing their best to comply. But with greater scrutiny ahead, it’s a timely reminder to review any existing strategies, seek trusted advice, and ensure they align with the letter of the law.

Shadow economy in the crosshairs

The ATO is also cracking down on the “shadow economy” – cash-in-hand dealings and undeclared income. While only a handful of SMEs are believed to engage in deliberately dishonest behaviour, the ATO says the ripple effect on compliant businesses and public services is significant.

“Deliberate shadow economy behaviours contribute nearly 60% of the gross small business income tax gap – or around $11.2 billion,” Day explained. “Approximately $8.9 billion of this is associated with underreporting of income and over-claiming of deductions. The remainder is hidden wages and people operating completely outside the tax system.”

To fight back, the ATO is enhancing its anomaly detection tools – such as flagging unusually low sales for a sector – and sharing intelligence across agencies via the Shadow Economy Taskforce.

Industries most exposed to cash transactions – like construction, hospitality, cleaning, and ride-sharing – should expect closer scrutiny.

Prepare for a new era of tax enforcement

The 1 July changes mark more than the start of a new financial year – they signal a shift in how the ATO engages with small business compliance.

Audits will become more targeted, digital surveillance more sophisticated, and there will be less leniency for practices that push the boundaries of what’s acceptable. The ATO is also tightening expectations around debt management and placing greater responsibility on advisors to guide clients responsibly.

For compliant businesses, this isn’t cause for alarm, but taking steps now to review your tax position and stay informed can help you navigate the changes with confidence and avoid unnecessary disruption down the track.

Stay ahead of ATO debt while keeping cash flow intact

With the ATO stepping up enforcement and interest costs rising, SMEs can no longer afford to treat tax debt lightly.

Octet’s innovative working capital finance solutions, such as Trade Finance and Debtor Finance facilities, can help to optimise your cash flow, enabling you to efficiently repay ATO debt and minimise its impact on your business. By securing tailored finance, you can clear their ATO debts and focus on what you do best – growing your business.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

What tariffs on Australian exports mean for trade, currency, and confidence

Posted on May 29, 2025 by Russell Walsh

As the United States implements its new protectionist trade policies and China races to offset export pain with internal stimulus, the global trade map is shifting fast – and businesses are bracing for the impacts on Australia.

But an expert on the markets says “it’s not as doom and gloom as the papers make out” when it comes to the tariffs. Peter Dragicevich, Currency Strategist (APAC) at Corpay, notes that, while “there are headwinds, there are offsets, too.”

Peter acknowledges uncertainty still looms large, but notes conditions on the home front are gradually improving, with interest rates easing and targeted federal support available for trade-exposed sectors.

For businesses navigating international trade, these shifts in decades-long norms may require new approaches. But they also present opportunities – for those willing to grab them.

Tariffs on Australian exports: The pros and cons

While the imposition of a 10% tariff on Australian exports does add pressure for some sectors – notably beef, gold, and pharmaceuticals – the broader picture is more muted. Even for affected sectors, it’s likely exporters will be able to find new markets, says Peter.

“If there’s less demand in the US because of high prices, those products could be redirected into other countries where the supply would be absorbed,” notes Peter.

At the same time, China – Australia’s largest trading partner, making up 32% of our total exports – is investing in its own economy, ramping up construction and infrastructure development. Peter says that could be a boon for Australian commodities like iron ore, Liquefied Natural Gas (LNG) and coal.

“If the Chinese authorities are trying to stimulate their domestic economy to offset the tariff pain, that’s actually a net offset for Australia,” Peter says.

Australian dollar forecast 2025: Will the AUD strengthen?

Few areas of the economy reflect global uncertainty more directly than the dollar. In 2025, the Australian Dollar (AUD) has already swung widely in response to global disruption – including its largest single-day drop in 15 years.

“The Aussie’s traded in a very wide range this year, and that’s a function of what’s happening offshore, not domestically” says Peter. He notes the volatility is unlikely to fade in the short term, with markets continuing to react sharply to trade deal announcements and political rhetoric.

“We will see more bursts of volatility coming through over the next couple of quarters, particularly before more definitive trade deals are struck,” Peter explains. “You’re one tweet away from things just kind of unwinding very sharply.”

Still, the broader trajectory could work in Australia’s favour. As China and Europe look to stimulate growth internally and the US economy slows, the Australian dollar may strengthen. Peter expects the AUD to trend upwards towards the high 60s or even low 70s against the US dollar over the next 12–24 months.

He also points out that, historically, the AUD is still below its long-term norm. “The average for the Aussie since it floated in the 1980s is 75c. Right now we’re still below where purchasing power parity suggests it should be,” says Peter. “From a business perspective, it’s about hedging your risk and hedging your exposure.”

Risk, resilience and preparing for global trade uncertainty

For Australian exporters, the next year won’t be without challenges – but those that act decisively will be best placed to thrive.

“There’s a lot of push-pull factors people need to consider, but overall, the main economic hit to Australia won’t be overly large,” Peter concludes.

Combined with lower interest rates and zero-interest government loan facilities for affected exporters, there’s growing potential for cautious optimism. But seizing that opportunity requires more than waiting for conditions to improve – it means taking action now to manage exposure and maintain control.

In this environment, Trade Finance isn’t just a safeguard – it’s a smart strategy. It empowers businesses to reduce uncertainty, unlock working capital, and move forward with confidence.

Whether it’s Trade Finance, cross-border payments in collaboration with Corpay, or our market-leading supply chain technology, Octet gives Australian businesses the tools and support to trade smarter – whatever the economic outlook. Talk to us today about how we can help your business.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Business as usual? What Labor’s re-election means for SMEs

Posted on May 12, 2025May 15, 2025 by Russell Walsh

With Labor securing a second term in Australia’s 2025 federal election, business owners can expect a sense of continuity — but that doesn’t mean things will stay exactly the same.

The Albanese Government is largely sticking to its existing direction: steady trade relationships, incremental financial relief, and long-term investments in skills and sustainability — commitments reflected in the 2025–2026 Federal Budget.

But not everyone is content with the status quo. Industry voices are urging the Government to go further in supporting SMEs. “With the majority of our members being small business owners, we also encourage the Government to continue to expand on support for small businesses,” said Anja Pannek, CEO of the Mortgage and Finance Association of Australia (MFAA), speaking to The Adviser.

David Bushby, CEO of the Commercial and Asset Finance Brokers Association of Australia (CAFBA), echoed this sentiment: “Australia faces many global headwinds, and it is vital that the Government seeks the views of small and medium sized businesses, who are collectively the major employers in Australia.”

Policies SMEs can plan for now

While Labor’s re-election signals stability, several policy updates are set to impact the way small and medium businesses operate in the coming months and years. Here’s a reminder of Labor’s key business initiatives now that election day is behind us.

$20,000 instant asset write-off (extended — but not yet made permanent)

After months of uncertainty, Labor passed legislation for the $20,000 instant asset write-off just days before the election. The policy has been extended for 12 months to encourage near-term investment, but is not yet permanent.

Apprenticeship wage support

A $10,000 wage subsidy will be available for apprentices in construction and housing, paid in stages over their training period. It comes into effect from 1 July 2025.

Ban on non-compete clauses

From 2027, employees earning under $175,000 will be free to change jobs or start new ventures without being held back by non-compete clauses. Treasury estimates this reform could boost GDP by $5 billion annually, though some employers have raised concerns about talent retention.

‘Buy Australian’ classification

For the first time, businesses bidding for Commonwealth contracts must meet a formal definition of an ‘Australian business’. This includes being majority Australian-owned or principally traded on an Australian equities market, being a tax resident of Australia, and having a principal place of business in Australia.

Energy bill relief

From July through December 2025, eligible small businesses will receive a $150 electricity rebate — less than last year’s $325 but still a nod to ongoing inflation and cost of living pressures.

Franchising Code of Conduct enforcement

The Australian Competition and Consumer Commission will receive $7.1 million from 2025-26 to strengthen its oversight of the franchising sector and ensure fairer conditions for operators.

Tackling illegal phoenix activity

Labor has allocated over $365 million to ASIC and the ATO to step up enforcement and modernise systems to target illegal phoenixing practices.

Strategic signals to watch closely

Labor has also released frameworks and strategies that will influence future reform. From procurement to clean energy, they can help businesses plan ahead and stay aligned with Government priorities.

$20 million ‘Buy Australian’ campaign

A national consumer-facing campaign to promote Australian-made goods is in the works, with $20 million committed in the budget. Details on exactly how the funds will be spent are still to come.

Energy transition investment

Labor is pushing toward 82% renewable energy in the grid by 2030 and has expanded the Clean Energy Finance Corporation to unlock an additional $8 billion for clean tech investment. While not targeted at businesses directly, these initiatives are expected to drive down energy costs over time and open up new supply chain opportunities in future-focused industries.

National Small Business Strategy

Framed as a “collective vision for the small business sector”, this 62-page strategy outlines goals such as cutting red tape, improving digital access to government services, aligning regulatory definitions across states, and streamlining dispute resolution. It’s not binding — yet — but could shape future reform efforts.

A moment for business confidence

While Labor’s re-election doesn’t bring dramatic change for SMEs, its steady policy direction may offer something equally valuable: certainty.

With major disruptions off the table, and modest reforms underway, now could be a good time for businesses to consider growth investments or explore new markets.

Octet helps businesses prepare for the future. We offer fast, flexible funding solutions, including Trade Finance and Debtor Finance, to manage cash flow, drive growth, and support your goals.

Talk to us today to explore how we can power your business.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Key changes will increase costs for ATO tax debt repayments – are you prepared?

Posted on May 4, 2025May 6, 2025 by Russell Walsh

From 1 July 2025, managing ATO tax debt is going to cost businesses more, with the ATO seeking to reduce the record-high $53 billion in collectable debt it reported at the end of FY24.

Under the newly passed legislation, taxpayers will no longer be able to claim a tax deduction for ATO interest charges, including the General Interest Charge (GIC) and Shortfall Interest Charge (SIC).

With the change it appears clear that the ATO is looking to change the perception that they are like a small business bank. But it was never actually the case. With interest cost well over 11% compounded daily, it is already both expensive and dangerous to carry ATO debt in this climate.

These changes, coupled with stricter ATO payment plan requirements are a wake-up call for those relying on ATO plans as a cash flow buffer.

Here’s what’s changing, why it matters, and how businesses can meet their tax debt obligations.

What are the ATO tax debt changes?

Currently, businesses that incur interest charges on tax debt can deduct these costs from their taxable income, reducing the overall financial burden of carrying tax debt. That will no longer be the case for General Interest Charge (GIC) or Shortfall Interest Charge (SIC) incurred on or after 1 July 2025.

“This is not a new cost – businesses have always paid interest on tax debts, which was tax deductible,” explains Campbell McCallum, Octet’s Chief Financial Officer. “Now, it’s not, which means it’s more expensive for businesses to carry that debt.”

Businesses may still apply for interest remission under existing ATO guidelines if there are valid grounds, but the criteria for ATO payment plans will be stricter. Payment plans for smaller debts (under $200,000) now require a 10% upfront payment and a 24-month repayment cap. Larger debts (over $200,000) will demand significantly more paperwork for businesses applying for payment plans, including multi-year financial statements, cash flow projections, and even collateral.

What do the ATO tax debt changes mean for SMEs?

For SMEs, and the financial advisors and brokers who support them, the removal of interest deductibility and tougher repayment terms could have consequences for those who’ve leaned on ATO arrangements as part of their cash flow strategy.

Without the tax deduction safety net, deferring tax obligations will become more expensive (well over 15% after tax) for the businesses that depend on them. For companies operating on thin margins or managing seasonal revenue flows, that could significantly constrain working capital.

“Many businesses underestimate their tax liabilities, leading to significant accumulations of debt. It’s crucial for business owners to maintain a proactive approach to their tax obligations,” says Olga Koskie, Principal at Tax Assure.

In August 2024, the ATO reported that small businesses owed approximately $35.6 billion in unpaid tax debts, accounting for about two-thirds of the total collectable debt.

The stricter payment plan approval process also reduces flexibility. Businesses may now be faced with administrative hurdles, or even see their applications declined.

Then there’s the enforcement. “If businesses aren’t in a payment plan, the ATO can take further action – even winding them up or holding directors personally liable,” warns Olga.

Impacts of removing interest deductibility on tax debt repayments

The ATO’s new approach sends a clear message that tax debts are no longer a low-cost way to smooth out cash flow. For businesses that rely on deferrals or late payments to manage liquidity, this marks a fundamental shift. It appears much riskier for businesses to have tax debt now than it was a year ago.

The example below shows the effect of the changes from 1 July 2025. Based on GIC for April to June 2025 of 11.17%, the additional cost to the business would be approximately $17,724 from 1 July 2025 onwards.

Scenario	Before 1 July 2025	From 1 July 2025
Profit before interest and tax	$300,000	$300,000
Deductible Interest Rate (GIC) at 11.17%	$59,079	$0
Taxable profit	$240,921	$300,000
Taxation	$72,276	$90,000
Effective GIC % with tax deduction on interest removed		15.36%
Additional cost to the business with tax deduction on interest removed		$17,724

Note: The above table is based on an annual tax rate of 30% and assumes no change to the GIC after 1 July 2025.

The ATO has also increased the issuance of Directors Penalty Notices (DPNs) in the instances when a company fails to meet its tax obligations. This can have severe implications for a business.

“DPNs can trigger insolvency proceedings, leading to the liquidation of the company,” explains Campbell. “This not only affects the business’s operations but also impacts the directors’ personal finances and creditworthiness.”

Working capital solutions can help your business manage tax debt

While the changes bring more challenges for businesses, they also present an opportunity for businesses to reassess their financial strategy. Getting ahead of the changes now means SMEs can protect their bottom line and improve their financial resilience through smarter funding options that are less than 15.36%.

Paying down existing tax debts before the 1 July 2025 cut-off date will soften the transition. At the same time, looking beyond the ATO for support through tailored working capital finance could offer a smarter, more sustainable alternative for managing debt and improving cash flow.

“Working capital finance can help businesses not only repay existing debt but also meet their ongoing liabilities and accelerate cash flow, especially if their revenue is lumpy,” says Campbell. “Supplementary Trade Finance, for example, provides businesses with a revolving line-of-credit to pay suppliers, freeing up funds to separately meet tax debt obligations.”

Whether you’re a business owner navigating day-to-day operations or a commercial finance broker supporting clients through complex decisions, now’s the time to act.

Discover Octet’s working capital solutions today

Olga Koskie is a lawyer and business advisor with more than 20 years’ experience. Tax Assure is a specialist tax debt advisory firm, working with the ATO and state revenue offices to support the management of accumulated tax debt.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Election 2025: How the major parties’ policies compare for SMEs

Posted on April 22, 2025April 22, 2025 by Russell Walsh

With the Australian federal election looming on May 3rd, Australia’s major political parties are sharpening their pitches – not just to voters, but to the country’s 2.5 million small and medium-sized businesses.

From tax write-offs to workforce reform, the policies proposed by Labor and the Coalition reflect different visions for the future of Australia’s economy.

In this guide, we break down the headline business policies from each of the major parties.

Labor – Short-term relief and workforce reform to support a sustainable economic recovery

Labor is leaning toward short-term financial relief and structural workforce reform when it comes to supporting businesses, with longer-term incentives tied to sustainability and skills development. Here’s what’s on the table:

Instant asset write-off: Many small businesses were surprised when the budget didn’t include an extension to the instant asset write-off. But Labor has said it will extend the policy by 12 months if it wins the election. The party’s rationale for an extension rather than making the write-off permanent – which the Coalition has proposed – is to encourage businesses to invest in growth now.

Power bill relief: Labor plans to reintroduce the $150 electricity rebate for households and small businesses, paid in two instalments from July 2025. This is part of a wider plan to ease energy cost pressures amid ongoing cost of living and inflation concerns.

Apprenticeship wage support: A $10,000 bonus wage for apprentices in the housing and construction sector is on Labor’s agenda, to be paid over the course of training to tackle skills shortages and support its housing targets.

Ban on non-compete clauses: Labor announced plans to ban non-compete clauses for workers earning under $175,000 in this year’s budget, which will come into effect in 2027. The treasurer, Jim Chalmers, said the clauses were “holding too many Australian workers back from going to better-paid opportunities or setting up small businesses”.

Investment in energy transition: Labor continues to support clean energy policies, including funding for renewable infrastructure. While less directly tied to SMEs, these investments aim to lower long-term energy costs and create supply chain opportunities in emerging sectors.

Coalition – Tax cuts and deregulation to boost growth and confidence

The Coalition’s business policies centre on tax relief, deregulation, and incentives that aim to stimulate economic activity and reduce red tape for SMEs. Here’s a breakdown of the key proposals:

Instant asset write-off: The Coalition has committed to lifting the instant asset write-off threshold to $30,000 for businesses with an annual turnover under $10 million, and making the scheme permanent.

Meals and entertainment deductions: Under this proposal, eligible businesses will be able to deduct up to $20,000 annually for dining and entertainment expenses (excluding alcohol). The policy is pitched as a way to support the hospitality sector.

Fuel excise cut: In response to cost-of-living concerns, the Coalition proposes halving the fuel excise for one year, reducing it from 50 to 25 cents per litre, which could lower transport and logistics costs for SMEs.

Apprenticeship hiring incentive: The Coalition plans to implement a $12,000 incentive for SMEs to hire new apprentices or trainees in priority sectors, such as construction. The payment would be staggered over the apprenticeship term, providing ongoing support for employers.

Right to disconnect repeal: The party wants to reverse newly implemented “right to disconnect” laws, which allow employees to ignore unreasonable after-hours work communications without penalty.

Vehicle efficiency standards rollback: The Coalition wants to scrap the New Vehicle Efficiency Standard (NVES), which requires automakers to meet emissions targets. They argue the NVES raises costs for popular vehicles used by individuals and small businesses.

Industrial relations deregulation: The Coalition has indicated it would repeal several of Labor’s recent industrial relations changes, although specific reforms haven’t been fully detailed.

Australian Greens – Support for small businesses and local economies

The Greens policies for small businesses are “focused on giving small businesses and cooperatives the support they need to thrive in tough economic times”. Key policies include:

Grants for small businesses: The Greens want to support small business growth and innovation by establishing an incubator, which will provide 1,000 grants of $250,000 and 10,000 grants of $50,000 – $75,000 for startups and cooperatives that “enhance local economies and create jobs”.

Instant asset write-off: Like Labor, the Australian Greens have proposed extending the $20,000 instant asset write-off and the Small Business Energy Incentive Scheme to 1 July 2026.

Teal Independents – Focused on simplifying regulations

The Teal Independents haven’t announced any specific policies for small businesses, however, they are pushing to reduce “red tape”.

Small business definition: Late last year, eight independent federal MPs signed a letter to Employment Minister Murray Watt, calling on him to change the definition of “small business” from 15 employees to 25.

Tax reform: Allegra Spender, independent member for Wentworth, has also advocated for tax reform. “I don’t have any particular views on the answers, but I am saying that we need to put [proposals to increase taxes including the GST, superannuation and abolishing negative gearing] on the table and properly consider them,” Spender said to the Financial Services Council.

What should businesses take away from the election policy debate?

Both Labor and the Coalition have made clear overtures to SMEs – but their strategies reflect different philosophies. There are some clear winners, including the construction and hospitality sectors.

No matter which party wins the Federal election, businesses will need to stay agile. Changing policy landscapes create both opportunities and risk. Being prepared – and well-informed – will be key to making the most of what’s ahead.

While the election outcome is yet to be decided, Octet helps businesses prepare for uncertainty and risk. We offer fast, flexible funding solutions, such as Trade Finance and Debtor Finance, to manage cash flow, drive growth and support your goals. Connect with our team today to explore how we can power your business.

How Trade Finance can help businesses navigate supply chain volatility

Posted on April 11, 2025April 12, 2025 by Russell Walsh

Global supply chains have never been more unpredictable. From industrial disputes and global trade tensions to climate-related events like Queensland’s recent Cyclone Alfred – which temporarily closed the Port of Brisbane and disrupted shipping routes nationwide – Australian importers are facing uncertainty on a day-to-day basis.

Around 47% of Australian businesses see themselves as vulnerable to supply chain disruptions, found research by NAB, with rising raw material costs (71%), upstream supply issues (70%) and the need to meet customer expectations quickly (67%) being key challenges. The top five industries most affected by supply chain disruptions include retail trade, food and beverage, wholesale trade, manufacturing and construction, according to NAB.

“Australia is heavily reliant on imports. There’s so much going on globally that impacts us – from ships getting stuck in the Suez Canal to massive disruptions caused by weather events,” says Joshua Richards, Director at Twin Peaks Finance. “Longer lead times and increased costs mean businesses need support, and Trade Finance is the natural solution.”

Why supply chain volatility isn’t going away

The assumption that supply chains are stable has been completely upended in recent years. Many businesses underestimated just how fragile global logistics could be until COVID-19 brought much of the system to a halt.

“Pre-COVID, everyone thought the system was rock solid. You’d buy from China and, three weeks later, your goods were here,” says Rudy Messerschmidt, Director of Working Capital Solutions, QLD at Octet. “But now, businesses are often facing delays at almost every step. It depends on where the disruption hits, but it can blow out your lead time from six weeks to twelve or more.”

McKinsey found that, once companies experience a supply chain disruption, it takes an average of two weeks to plan and execute a response, leaving many businesses exposed to costly delays.

Businesses are facing added complexity, as some suppliers are disappearing altogether, notes Joshua. “That forces business owners to find new suppliers, bringing a whole new set of challenges.

One of those challenges is sourcing from countries businesses hadn’t worked with before COVID-19. While diversification is smart in an uncertain market, it often requires navigating unfamiliar regulatory environments and payment terms – placing further pressure on working capital and impacting business agility.

Building financial resilience through Trade Finance

The risks of supply chain disruption are particularly acute for SMEs, with Australian business confidence reducing in February despite a reduction in interest rates. Fewer Australian businesses feel they could weather the loss of a major supplier or client without financial damage, believing such a loss would put them at risk of insolvency.

The findings underscore just how fragile supply chains remain for many businesses – and why robust financial strategies are essential.

In this landscape, Trade Finance has become an indispensable tool for managing uncertainty. “Trade Finance helps protect the whole system. Businesses face risk at every stage of their supply chain, and Trade Finance takes some of that risk out of the equation,” says Rudy.

“One thing that’s constant in business is that nothing is constant,” notes Joshua. By unlocking working capital tied up in inventory or goods in transit, Trade Finance gives businesses the flexibility to plan ahead.

Proactive finance for proactive supply chain management

For Australian businesses navigating global and local market uncertainty, Octet Trade Finance is more than just a funding tool. It’s a way to manage risk and seize new opportunities in a volatile market.

Trade Finance unlocks working capital tied up in international and domestic trade, enabling businesses to stay responsive in the face of delays and disruptions. As a buyer, you can pay suppliers upfront and repay later. As a seller, you get paid faster – keeping your cash flow healthy and operations moving.

But resilience isn’t just about liquidity – it’s about control. In a period of economic instability and ever-changing exchange rates, Trade Finance can also safeguard against currency fluctuations with upfront FX transparency and locked-in, competitive rates.

Security is another key piece – particularly when navigating the complexities of working with new suppliers in unfamiliar markets. Global trade introduces a host of risks, from data exposure to payment fraud, making robust security and compliance measures essential. Increasingly, businesses are turning to digital supply chain platforms that offer built-in safeguards and full transactional visibility – helping them monitor every step, from procurement to payment.

“Australia is a heavy importing nation,” says Rudy. “As long as we’re importing a substantial portion of what our consumers consume, we’re going to need this kind of funding and security.”

Your global supply chain partner

Octet’s innovative working capital solutions provide the flexibility and support to navigate supply chain management challenges, strengthen supplier relationships and optimise cash flow. Our Trade Finance and intuitive Supply Chain Platform help businesses across a range of industries build resilience in an unpredictable environment.

Get in touch to discover how we can power your business.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Will the Australian federal election affect business financing?

Posted on April 4, 2025April 7, 2025 by Russell Walsh

With Australians heading to the polls on 3 May 2025, business owners are once again grappling with an age-old question: how will the election impact business confidence?

Business confidence often dips in the months leading up to an election day, driven by policy uncertainty and cautious decision-making, making some business leaders hesitant to apply for finance. But Dan Verdon, Director of Working Capital Solutions NSW at Octet, says there’s no reason for businesses to delay funding decisions.

“There is absolutely always a bit of hesitancy in the market around election time, but it’s really the borrowers, not the lenders, who hold back.”

And the data backs him up. While election periods often spark business uncertainty, the numbers tell a different story about their real impact on the economy.

Data shows pre-election lending slowdowns are more perception than reality

The pre-election slowdown in business activity often comes down to feelings, not facts. As Dan puts it, “I don’t think anyone’s ever really been able to put their finger on exactly why there’s that perception that ‘we should do nothing.’ Yes, there’s an election brewing, but we all get up the next morning and go to work.”

Businesses, especially SMEs, often adopt a wait-and-see approach during election periods, delaying key investment and funding decisions. Ahead of the 2019 election, Westpac found 50% of small businesses were worried or uncertain about the impact election policies will have on their operations, delaying decisions such as staffing and investment as a result.

But post-election, there was a quick recovery in SME confidence. Westpac’s post-election survey found that 55% of SMEs were optimistic after the election – up from just 19% beforehand. Ganesh Chandrasekkar, Westpac’s General Manager for SME Banking, described a “palpable shift in sentiment,” with delayed projects fast-tracked.

Dan explains, “Each time an election comes around, there’s always talk about hesitancy and delays. But for most SMEs, elections don’t usually have an enormous impact.”

The data supports this. A recent analysis by investment bank Barrenjoey concluded that Australian federal elections have limited impact on the economy, RBA policy, or confidence. Over the past 35 years and 12 elections, Australia’s domestic equity market has delivered an average annual return of 9%, with only two down years coinciding with elections.

Why the election shouldn’t put business financing plans on hold

For lenders, it’s business as usual. “I’ve never seen the handbrake go up from the lenders themselves,” Dan explains. “It’s more about market sentiment. People are unsure what’s going to happen, so that creates a delay in their decision to proceed.”

In Dan’s experience, the actual funding needs of SMEs don’t disappear during an election cycle. “If you need funds now, chances are you’ll still need a cash flow or working capital solution facilitated by a lender after the election as well,” notes Dan.

While certain industry sectors may be impacted by specific policy changes, such as new import regulations or environmental mandates, the vast majority of SMEs are insulated from major shifts.

“We don’t have a crystal ball, and we don’t know what legislation might change,” Dan says. “But history shows us that most SMEs won’t experience any significant impact.”

Don’t let uncertainty stall your business’s growth

For businesses considering finance in the lead-up to the election in May, Dan offers this advice: don’t wait.

“You’ll still need working capital, you’ll still need to fund growth, and you’ll still face the same opportunities and challenges,” says Dan. “Waiting until after the election to secure business finance may mean missing out on opportunities now.”

Talk to Octet today about flexible funding solutions, including Trade Finance and Debtor Finance, that keep your business moving, no matter what the political landscape looks like.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Is globalisation reversing? How US protectionist policies could impact Australian businesses

Posted on April 4, 2025April 12, 2025 by Russell Walsh

UPDATED 4 APRIL 2025

Trump’s new tariffs target 100+ nations – including a 10% tariff on Australian goods

On 3 April 2025, United States’ President Donald Trump has announced the country will impose tariffs on more than 100 of the country’s trading partners, including a 10% tariff on Australia.

Prime Minister Anthony Albanese said the new tariffs “undermine” Australia and the US’s existing free trade agreement. “Our existing free trade agreement with the United States contains dispute resolution mechanisms. We want to resolve this issue without resorting to using these.”

The sweeping tariffs also include:

34% tariff on Chinese imports on top of the previously announced 20% tariff
20% tariff on the European Union
24% on Japan
26% on India
10% on New Zealand.

In a bizarre move, a 29% tariff has been imposed on Norfolk Island, an Australian territory.

As a result of the tariffs, the market is now expecting a further four rate cuts from the RBA this year, according to the Australian Financial Review, taking the cash rate down from 4.1% to 3.1% by the end of 2025.

Albanese announces new policy measures to counter impact of new tariffs

The Prime Minister has announced five new policy measures to bolster the resilience of the Australian economy in the face of the tariffs. As reported by ABC News, these include:

strengthening Australia’s anti-dumping regime for key sectors like steel, aluminium and manufacturing
$50 million for affected sectors, provided through peak bodies such as the National Farmers Federation, to chase new markets, backed by five new trade missions
an “economic resilience program”, funded by the National Reconstruction Fund, to provide $1 billion in zero-interest loans
pushing Australian companies to the front of the queue for government procurement
and establishing a critical minerals strategic reserve.

Is this the end of globalisation? How US protectionist policies could impact Australian businesses

“The era of increasingly free and extensive international trade, built upon a rules-based system that the U.S. was instrumental in shaping, has drawn to an abrupt end,” Eswar Prasad, a professor of trade policy at Cornell University, told the New York Times. “Rather than fixing the rules that many U.S. trading partners admittedly took advantage of to their own benefit, Trump has chosen to blow up the system governing international trade.”

The International Monetary Fund (IMF) has previously wanted that increased protectionism could hurt global growth. “There is definitely a direction of travel here that we are very concerned about, because a lot of these trade-distorting measures could … ultimately be harmful not only to the global economy, but also hurtful for the countries who implement them,” commented Pierre-Olivier Gourinchas, the IMF’s Chief Economist.

While the impact of the tariffs on Australia’s economic outlook remains uncertain, supply chain disruptions, rising costs and increased competition are likely consequences – issues that businesses must navigate with agility, particularly when it comes to managing cash flow.

UNSW Economist Scott French cautions that even if Australia avoids direct tariff impacts, it will not be immune from the international fallout. “It’s difficult to predict exactly how Australia would be affected,” says French, noting that “trade policy uncertainty from just the threat of a trade war has similar effects on business activity as actual tariffs.”

US tariffs on Canada and Mexico could impact Australia

The US has officially imposed 25% tariffs on Canadian and Mexican goods. These tariffs are expected to raise costs for businesses and disrupt global supply chains.

For Australia, this could result in higher prices and supply delays for goods that pass through or originate from North America. Industries such as manufacturing, automotive and agriculture – which source machinery, components and raw materials from Canada or Mexico – may face rising costs.

Beyond direct costs, the tariffs could reshape global trade flows, with exporters seeking alternative markets, both in and out of the US. Canada and Mexico could redirect exports to Australia, increasing competition for Australian agriculture, energy and metals sectors.

French notes one positive effect for Australia of US tariffs is trade diversion. “Because they raise the price of other countries’ exports to the US, they may make some Australian exports more competitive. For example, the tariffs on Canadian aluminium would have shifted US demand toward aluminium produced in Australia.”

Joshua Richards, Director of Twin Peaks Finance, has already had clients raise concerns about the tariffs. “One of our clients is a major importer from Canada. Almost immediately, they were asking, ‘What does this mean for us? How will it affect our supply? And how do we pivot to domestic supply if we need to?’ They were already considering how to fund a shift to domestic sourcing. It might be more expensive, but it offers greater certainty in securing the product.”

For importers, securing working capital to manage potential rising costs and delays will be crucial. Octet’s supply chain finance solutions can help businesses bridge payment gaps, ensuring they can continue to source essential materials without straining their cash flow.

Australia fails to secure exemption on steel and aluminium exports

In February 2025, President Trump announced a 25% tariff on all steel and aluminium imports, aiming to boost US domestic production by making foreign metals more expensive.

However, AMP’s Chief Economist, Dr Shane Oliver, downplayed the potential direct impact on Australia to the Accounting Times. “Even if Australian exports are not exempted from US tariffs, the direct economic impact on Australia will be minor. Steel and aluminium exports to the US are just 0.03% of Australian GDP and total goods exports to the US are just 0.8 per cent of GDP.”

Instead, he warns of a broader economic risk, stating: “The main threat to Australia would come via Trump’s tariffs leading to less global trade and a hit to Chinese and global GDP, weighing on demand for our exports and hence our GDP.”

How US tariffs could affect Australia’s trade with China

The US has imposed a new 34% tariff on Chinese goods, on top of the 20% tariff announced earlier this year. China is Australia’s largest two-way trading partner, according to the Department of Foreign Affairs and Trade, accounting for 26% of our goods and services trade with the world in 2023-24. During that period, two-way trade with China increased 2.6 per cent, totaling $325 billion.

If the tariffs weaken China’s broader economy, Australian businesses could feel the heat. Diversifying trade relationships will be critical.

However, there are reasons to be hopeful: China absorbed the tariffs of the previous Trump administration and recent economic data suggests resilience in China’s economy. If China maintains steady industrial growth, the impact on Australian exports may be limited. For businesses exposed to these risks, diversifying supply chains and securing alternative funding sources will be critical.

Strengthen your supply chain to navigate uncertainty in global trade

Australia remains highly vulnerable to global shifts in trade policy, with limited influence over American trade policy.

As the new policies reshape global markets, agility and reliable funding are more critical than ever. Octet’s innovative working capital solutions, such as tailored Trade Finance and Debtor Finance, empower Australian businesses to navigate supply chain issues, manage rising costs and seize new opportunities – while optimising cash flow.

Connect with our team today to explore how we can power your business growth through uncertainty.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

2025-2026 Federal Budget: What does it mean for small businesses?

Posted on March 26, 2025April 4, 2025 by Russell Walsh

Treasurer Jim Chalmers delivered the 2025-2026 Australian Federal Budget on 25 March 2025, outlining measures aimed at stimulating economic growth, supporting businesses, and addressing cost-of-living pressures.

Despite global volatility, the government remains confident in Australia’s position. “It’s clear the rules that underpinned global economic engagement for more than 40 years are being rewritten. Our economic plan is about ensuring Australians are beneficiaries, not victims, of this churn and change,” said the Prime Minister and Treasurer in their press release.

However, aside from a surprise individual tax cut, the budget delivered limited new support for small businesses. Finance experts and business leaders have provided a range of perspectives on its impact on business owners. While some commend certain initiatives, others express concerns about the budget’s effectiveness and long-term vision.

With some targeted measures remaining – including energy bill relief and ‘Buy Australian’ campaigns – the broader SME community may feel underwhelmed, especially amidst ongoing global uncertainty.

2025–2026 federal budget: Key initiatives for business

The Albanese Government positioned the 2025 federal budget as a long-term investment in economic strength and resilience. The commitments to business and industry include:

$3 billion to support green metals production
$2 billion expansion of the Clean Energy Finance Corporation (expected to unlock $6 billion in private investment)
$20 million for the Buy Australian campaign
Energy rebates for around one million small businesses
$7.1 million to strengthen franchising code enforcement
$165 million in tax relief for hospitality and alcohol producers
$17.1 billion in infrastructure for roads and rail
Up to $3 billion to expand the National Broadband Network

The budget also outlines reforms to improve productivity and cut red tape for businesses and workers:

Banning non-compete clauses for low- and middle-income earners
$207 million to improve Australia’s business register system
Collaboration with states to streamline trade licensing, commercial planning, and construction approvals, supported by a $900 million National Productivity Fund

Energy bill rebates: How do they help small businesses?

As part of the budget, Treasurer Chalmers announced that energy bill rebates of $75 per quarter would continue for eligible Australian households and small businesses until 31 December 2025. This initiative is designed to ease the financial burden of rising energy costs, offering small businesses crucial relief. By reducing energy expenses, it helps businesses maintain cash flow, invest in growth, and sustain profitability. The rebate program aims to support small businesses during challenging economic conditions, ensuring they can focus on operations and expansion without the added strain of escalating energy bills.

Whilst the Clean Energy Council has welcomed the rebate as a necessary short-term relief measure, some experts caution that these rebates only provide immediate assistance, and do not address underlying structural issues in the energy market.

Instant asset write-off slashed: A budget shock for SMEs

One of the biggest surprises in the federal budget for small businesses was that the $20,000 instant asset write-off – a vital tax planning tool for SMEs – will lapse on 30 June 2025. Unless new legislation is introduced, the threshold will fall back to just $1,000.

This change could pose challenges for businesses planning equipment upgrades or expansion, especially in terms of timing and cash flow. “The policy’s future is in serious doubt… the instant asset write-off is now a hotly debated issue heading into the federal election,” said David Adams from SmartCompany.

This move could discourage investment in the second half of FY25 and beyond, or see more businesses turn to alternative finance options as they look to grow their businesses. Working capital finance, such as debtor finance and trade finance, can support affected businesses by providing liquidity for equipment upgrades, reducing cash flow pressure, ensuring operational continuity, and supporting growth.

‘Future Made in Australia’: Government commits to expanding initiative

While the budget provides limited broad-based support for small businesses, the government has reaffirmed its commitment to the ‘Future Made in Australia’ agenda, which aims to strengthen key sectors such as advanced manufacturing, clean energy, logistics, and local production.

This strategy builds on the existing $22.7 billion investment and focuses on ensuring Australians benefit from the global shift to cleaner, cheaper energy. As part of this agenda, the government has committed $20 million to expand the Buy Australian campaign, encouraging consumers to choose locally made products. Additionally, it will apply the Environmentally Sustainable Procurement Policy to $4.5 billion in public sector purchasing, driving innovation in sustainable goods and services.

The government is also prioritising trade diversification, with $16 million allocated to the new Australia–India Trade and Investment Accelerator Fund. This initiative aims to open new commercial opportunities for Australian firms in India, supporting broader economic engagement in the region.

What’s next? The year ahead for small businesses

While the 2025 Federal Budget presents an optimistic outlook and includes measures like energy rebates and tax cuts, many experts believe it lacks substantial, long-term reforms needed to drive economic growth and competitiveness. Calls for more targeted support, particularly for small businesses and the tech sector, highlight concerns that the budget may not fully address current economic challenges.

While the government’s ‘Future Made in Australia’ agenda provides a clear direction, many businesses may still be looking for more immediate, practical support. Rather than waiting for policy to catch up, business owners will need to stay focused on what’s within their control.

Octet’s innovative financial solutions offer Australian businesses the flexibility and control to manage rising costs, optimise cash flow, and seize new growth opportunities. Contact us today to discover how we can power your business.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Supply chain management issues and challenges: what lies ahead in 2025

Posted on January 13, 2025January 22, 2025 by Russell Walsh

Resilient supply chains are critical for business continuity. However, with global challenges intensifying in 2024, businesses head into the new year facing an ever-increasing list of potential risks to their sourcing and inventory strategies.

The COVID-19 pandemic highlighted critical vulnerabilities in supply chain operations, pushing companies to prioritise risk management as a strategic advantage. However, several years later, FTI Consulting research shows that nearly 40% of companies need greater contingency plans for supply chain disruptions.

So, what now? In this article, we explore the key global and local supply chain management issues and challenges projected for 2025 and provide strategies to enhance supply chain resilience now and into the future.

Key events creating supply chain issues in 2025 and beyond

So, what are the major local and global issues likely to impact supply chains and business operations in 2025? Let’s explore them.

Elections and summits

November brought significant global events with far-reaching implications for supply chains. The G20 summit prioritised social inclusion, global reform and sustainability, while COP29 reinforced international efforts to combat climate change. In addition, it’s still unclear how the re-election of Donald Trump in the US, and his “America First” policies, will affect trade around the world.

These events will undoubtedly create global supply chain challenges and opportunities. As we approach 2025, uncertainty looms over the impact of anticipated new tariffs, trade barriers, regulations, labour laws and environmental standards, posing both challenges and opportunities for supply chain managers worldwide.

Conflict and tension

2024 was marked by ongoing conflicts in the Middle East and Ukraine, trade disputes, geopolitical tensions and sanctions. Supply chain managers are bracing for more of the same in 2025.

Several key geopolitical flashpoints are located near critical shipping chokepoints, including the Suez Canal, the Straits of Taiwan, and Malacca. The absence of a unified US foreign policy has left no framework for mitigating or resolving these tensions. Combined with the growing nationalism of China, Russia and India (which has a trade agreement with Australia), conflict and tension are set to increase.

Economic uncertainty

Inflation, currency rate fluctuations, and changing interest rates are critical global issues affecting supply chains. These economic issues make it challenging to predict pricing and maintain profitability, and they are expected to persist well into 2025 amid global uncertainty.

2024 was the year of elections, with voters in more than 70 countries going to the polls. How these elections affect supply chains is still to play out, but election-driven policies can increase or decrease demand in certain industries. 2025 will undoubtedly be a year of economic uncertainty for many.

Climate change and weather events

Weather is forecast to be a key challenge of supply chain management in 2025. Economist Impact reports that a billion-dollar weather event (an event that causes US$1 billion in damages) occurs every three weeks. Forty years ago, a billion-dollar weather event happened every four months.

Extreme weather, climate change and environmental challenges increasingly disrupt supply chains, affecting the availability of raw materials, production and warehousing. Weather and climate events can disrupt transport routes, force factories to close, destroy crops and hamper manufacturing. Consumers concerned about climate action are also putting pressure on businesses to adopt more sustainable practices.

Labour concerns

This issue of sustainability goes beyond weather and climate.

Supply chain managers must also increasingly heed the concerns of investors, regulators, employees and customers to measure and mitigate the social cost of doing business. For example, if abusive or unsafe labour practices are discovered along the supply chain, there is mounting legal and consumer pressure to find alternatives or change those practices. The increasing cost of labour in some markets is also an ongoing concern for businesses across a range of industries.

Technology and cyber threats

Increasing cyber threats can significantly undermine supply chain resilience and cause disruptions. The Medibank and Optus breaches of 2022, and the recent MediSecure hack, in which the personal data of 12.9 million Australians was compromised, show how vulnerable even the largest organisations are to these threats. This not only leads to financial loss but also erodes trust among partners and customers.

But it’s not just direct attacks and threats that are a concern Outdated technology lacks the speed, integration capabilities, security features and advanced analytics required to manage supply chain complexities, resulting in delays, errors and inefficiencies. As legacy systems get left behind, we’ve seen organisations such as ANZ, Telstra and BOQ investing heavily in updates to their technology and systems.

Strategies to mitigate supply chain issues

Investing in supply chain resilience requires businesses to navigate geopolitical tension, adopt new technologies and diversify suppliers, which can be challenging and costly. But it is worth it. According to the Wall Street Journal, businesses that invest in supply chain resilience enjoyed a 23% growth in revenue from 2018 to 2023. This compares to the 15% growth their peers enjoyed.

So, how do you, as a business owner or supply chain manager, practically mitigate supply chain risks in 2025? Here are some thought-starters:

Develop a better understanding of your suppliers and the businesses that supply them. Conduct regular audits to identify potential vulnerabilities.
Adopt technology to increase visibility and simplify processes. Artificial intelligence and IoT monitoring can help make real-time data-driven decisions for efficiency. This information can be shared with stakeholders to improve coordination and reduce disruptions.
Build stronger partnerships with stakeholders, suppliers and logistics providers to ensure alignment on risk management.
Collaborate with internal finance and marketing teams to enhance logistics decision-making, helping to manage costs and customer expectations.
Source from multiple suppliers across different geographies to reduce dependency on a single region or supplier. Establish backup suppliers for critical materials and components.
Focus on renewable energy for operations and partner with eco-conscious energy and raw materials suppliers.
Create detailed risk assessments and emergency response plans for disruptions such as cyberattacks, natural disasters or geopolitical conflicts.
Protect supply chain data with multi-factor authentication, encryption and regular security audits.

Octet’s suite of financial solutions also enhances supply chain resilience by addressing key cash flow challenges and promoting operational stability. With our intelligent supply chain finance solutions, you can extend payment terms to suppliers while ensuring your creditors are paid promptly.

Trade Finance ensures smooth import transactions by funding inventory and service purchases upfront, reducing cash flow strain during critical trade activities. While Debtor Finance (also known as Invoice Finance) unlocks funds tied up in unpaid invoices, providing immediate cash flow to manage expenses and invest in growth.

Your global supply chain partner

The challenges in global supply chains are only likely to intensify in 2025 due to an increasingly unpredictable global landscape. However, businesses that proactively invest in robust supply chain strategies can safeguard their operations and position themselves for sustainable growth.

Octet’s innovative supply chain financial solutions provide the flexibility and support to navigate supply chain management issues and challenges, strengthen supplier relationships and optimise cash flow. Get in touch to discover how we can help power your business.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

AI in finance: what you need to know

Posted on January 13, 2025January 14, 2025 by Russell Walsh

Artificial Intelligence is rapidly transforming the finance sector, driving innovation in analytics, decision-making and operational efficiency. This evolution isn’t about replacing finance workers but rather enhancing productivity by harnessing AI to tackle repetitive, time-consuming tasks.

Justin Kabbani, an AI implementation coach and keynote speaker, explains: “It’s about getting rid of that 30% of the work people are doing that is mundane, and giving them space to get back to high-value tasks.”

From accounting to procurement and commercial finance broking, AI in finance has the potential to elevate your work and unlock new opportunities. In this article, we explore how AI can be used in finance and its implications for the industry.

AI in finance: core applications

Justin identifies several areas where AI can significantly enhance the finance industry. “Tools like Copilot or ChatGPT help finance teams handle tedious tasks, from generating insights to simplifying client evaluations.” Examples include:

comparing inconsistently formatted datasets from different software systems

quickly performing complete financial analyses, including generating graphs and tables and providing data-driven insights for financial planning

evaluating new clients using discovery questions and providing rationale for decisions

supporting first-stage evaluations of financial or business scenarios

analysing large datasets to detect patterns consistent with fraudulent activity

chatbots and virtual assistants that provide 24-hour customer service, reducing the operational costs of a business

monitoring and ensuring compliance with financial regulations through automated audits

forecasting market trends, cash flow and business outcomes

automating invoice generation, approvals and payments

automating tasks like note-taking during meetings or phone calls, then generating follow-up notes and action items

Justin says harnessing AI doesn’t have to be expensive or difficult. “A lot of the work I do is with off-the-shelf software, Copilot and ChatGPT. These can seem like simple tools, but my clients are applying them to problems and consistently saving hundreds of thousands as a result.

“For example, an accountant-client of mine uses AI to organise and categorise transaction data really efficiently, turning complex tasks into streamlined processes.

“Smaller firms can leverage simple tools like chat functions that translate and document client conversations in multiple languages, enhancing service for non-English-speaking clients.”

Justin reiterates that AI in banking and finance isn’t about replacing staff but rather elevating their roles so they can move from administrative or repetitive tasks to focus on creative and strategic work. “The real promise of AI is in helping us be more human by eliminating menial tasks and unlocking our cognitive potential.”

The challenges of AI in the finance industry

Justin also sees many challenges with AI, but not necessarily from the technology itself. “The biggest roadblock is data privacy concerns,” he says.

“However, Microsoft stands behind the security of information that is processed in the Copilot environment. And the ChatGPT Team and Enterprise versions don’t learn from user data by default and have attained SOC-2 compliance to give businesses further confidence to use confidential data. Companies often apply excessive security standards to AI tools in a way they wouldn’t with other pieces of software they’re using.”

Lack of training is also an issue that limits the potential of AI tools. “People also need to move beyond a 10-word prompt and invest in creating structured inputs that deliver meaningful results.”

The perception that AI adoption is expensive is another issue that is holding businesses back, says Justin. “We’re talking about taking those really menial tasks or administrative tasks and using a program that’s pretty affordable and really quite reliable.”

Harnessing and understanding AI

If you work for a financial firm or are a finance broker and are eager to learn more about AI technology in finance, Justin’s advice is to start from the top down.

“I think the most important way to embrace it and get the most out of it is to start with the CEO and executive team. They need to understand the tools, see their capabilities and experience it themselves. Even half a day of training is enough to get to a level of confidence and competence to use these tools. I think it’s realistic for a team or individual, with three days’ worth of training, to build up that level of competence to be using it on appropriate projects.”

In the years to come, Justin believes the future of AI in finance will involve integrating multiple datasets – such as Google Analytics and CRM data – to uncover unique insights.

Here are some other ways we might be using AI in finance in the future:

AI will enable highly personalised financial services by analysing individual customer data. This will allow for tailored financial advice and products, improving client engagement and satisfaction.

Fraud detection will become even better as AI not only identifies patterns that indicate suspicious activity but also takes action to block that activity in real time.

Predictive analytics will become more sophisticated as AI analyses multiple indicators and datasets to anticipate risks such as economic downturns and geopolitical events. It can then offer strategies to mitigate potential threats.

Octet: your future-ready finance partner

AI is revolutionising the finance industry, offering powerful tools to streamline operations, enhance decision-making and uncover new opportunities. For businesses navigating this transformative era, having a smart finance partner like Octet can make all the difference.

With a deep understanding of business finance and innovative working capital solutions tailored to your needs, Octet is here to support CFOs, business owners, brokers and accountants. Discover Octet’s smarter supply chain finance solutions today to power your business growth.

Justin Kabbani is an in-demand keynote speaker and AI implementation business coach with more than 20 years of experience helping businesses and individuals harness the power of AI.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Financing trends: business game-changers in 2024 and beyond

Posted on September 30, 2024October 17, 2024 by Russell Walsh

The world of finance is evolving rapidly. Disruptive technologies, an increasingly connected financial landscape, and global uncertainty are challenging traditional finance models. The financing trends that have shaped previous years are evolving, while innovative new products are forcing businesses to rethink their approach to funding.

So, what are the trends in financial services that will shape the rest of 2024 and beyond? We explore six key trends that could change the way we all do business.

6 financial services trends in 2024 and beyond

1. Blockchain technology in financial services is on the rise

Blockchain technology, often associated with cryptocurrencies, extends beyond digital currencies to a range of industries and users.

In 2024, its application for supply chain management in small-to-medium-sized businesses is gaining traction. Blockchain-based invoice financing is transforming cash flow management by offering increased transparency, security, and efficiency, which can lead to a reduction in costs and a streamlining of processes.

“A prominent application of blockchain technology is decentralised finance,” says Octet’s Co-CEO, Brett Isenberg. “In traditional centralised finance, consumers and businesses borrow from a bank or via a broker. Decentralised finance challenges this by allowing peer-to-peer exchanges.”

While blockchain tech is currently used in the finance sector, Brett believes its use will increase exponentially in the years to come.

2. The industry is embracing AI and data analytics in financial services

Artificial intelligence (AI) and machine learning (ML), which provide insights and solutions at unprecedented speeds, are being used in tasks such as research and fraud detection. In 2024, there has been an even greater uptake of these tools with AI-driven supply chain management tools being used to help businesses predict disruptions, optimise logistics, and manage inventory more effectively.

“AI and data analytics have transformed the finance industry,” says Brett. “AI algorithms can analyse large data sets to identify anomalies that detect fraudulent activities and measure risks with greater accuracy than ever before.”

These technologies will also be increasingly used to enhance efficiencies, make decisions and improve customer service. “AI-powered chatbots and virtual assistants are getting better and better,” adds Brett. “The technology is also enabling more accurate and dynamic credit scoring by considering a much broader range of factors.”

3. Global growth has remained weak

In late 2023, the resilience of the global economy exceeded expectations, but global economic growth continues to face challenges in 2024. Political tensions, interest rate fluctuations, and economic policies are impacting financial services worldwide. China’s recovery has been weaker than forecast, global core inflation is rising, and high public debt continues in many countries. These factors had led the OECD to project lower global growth in 2024 compared with 2023.

In Australia, the Reserve Bank has kept interest rates on hold since November 2023, despite political pressure for cuts.

“This decision reflects ongoing concerns about inflation and economic stability”, states Brett. “Globally, many countries have cut rates to stimulate growth, but Australia’s unique economic conditions have led to a different approach.”

As such, businesses of all sizes must navigate these complexities to manage their cash flow and investment strategies effectively.

4. Increasing cybersecurity concerns

As financial transactions become more complex and frequent, cybersecurity remains a critical concern.

In 2024, Australia has seen a significant rise in data breaches, with notable incidents affecting millions of individuals. The Office of the Australian Information Commissioner (OAIC) reported a 9% increase in data breach notifications in the first half of 2024 compared to the previous six months.

Enhanced cybersecurity measures, such as multi-factor authentication and advanced threat detection, are essential to protect assets and maintain trust in financial services.

When combined with disruptive technologies such as AI and a shift to cloud-based systems, financial service providers will have to become more adaptable to protect their customers and offer the best services. Business leaders are being compelled to develop new strategies and explore innovation to counter challenges to security systems.

5. Innovative financial products are more readily available

While challenges are increasing, so too is innovation. The range of financial products available to businesses and consumers is growing, and as more businesses and consumers adopt digital solutions, new technologies and financial services have emerged.

“For example, a growing environmental awareness has increased the focus on sustainable financial products. So, there are now green bonds and sustainable investment funds,” says Brett. “Healthcare supply chain financing is an emerging area too.”

“Another innovation is the tokenisation of assets, which involves converting real-world assets into digital tokens on a blockchain. This has led to the creation of tokenised securities and other asset-backed tokens.”

6. Banks are being forced to embrace change

The banking industry is facing challenges from a slowing global economy, divergent economic conditions and disruption to their general business models. evolving financial landscape. Traditional banks must adapt amid higher interest rates, stricter regulations, climate change and technological advancements. Banks are now having to invest in robust platforms and adopt open banking requirements to collaborate with third-party providers. This shift is essential for improving customer service and engagement, helping banks retain important business customers.

“Traditional financial institutions have obviously been embracing tech for years, but it’s only in more recent times that it’s really pervaded certain products based upon business demand,” explains Brett. “At Octet, we have fundamentally changed the way buyers and sellers engage with each other on one platform — both in a local and international trading context. Traditional banks are also starting to invest in robust platforms and adopt open banking requirements to collaborate with third-party providers.”

Brett says banks are increasingly being forced to improve their customer service and engagement to retain important business customers.

The future of finance

Our innovative working capital solutions help you unlock the power in your business to thrive. Need a cash flow injection without the need for personal asset security? Our Debtor Finance facility allows you to convert up to 85% of your unpaid invoices into immediately available funding.

If it’s a revolving line of credit you’re after, our Trade Finance facility offers up to 60 days interest-free and 120-day repayment terms to pay local and international suppliers.

You can also unlock additional working capital to expand operations, acquire new assets or consolidate existing debt by activating an Octet Term Loan as part of your Debtor or Trade Finance facility.

Discover how Octet’s team of working capital specialists can help power your business growth today.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Federal Budget 2024-25 snapshot and what it means for businesses

Posted on May 15, 2024November 20, 2024 by Russell Walsh

The Australian Federal Budget announcement for 2024-25 presented a number of initiatives aimed at alleviating the cost of living pressures, driving innovation through the ‘Future Made in Australia’ initiative, and addressing various economic and fiscal challenges. Here we summarise the key highlights and provisions of the budget, along with a specific focus on its implications for Australian businesses.

The overall economic and fiscal outlook:

Forecasted real GDP growth of 2% in 2024-25
Expected average inflation rate of 2.75% in 2024-25

With the aid of a $9.3 billion surplus, some of the key measures designed to ease cost-of-living pressures include:

$300 electricity bill rebate for all Australian households
Stage 3 personal tax cuts from 1 July 2024, with an average annual tax cut of $1,888 (or $36 a week)
Personal income tax compliance program extended for one year from 1 July 2027
10% increase in Commonwealth rent assistance
Payment of $5,000 to help meet the costs of leaving a violent relationship
Payment of superannuation on paid parental leave
Investment of up to $3 billion to strengthen the pharmacy sector and keep medicines cheaper

What did the budget deliver for businesses?

The Budget offers little in the way of significant support for small businesses, with the extension of the instant asset write-off being a notable exception. Aside from this extension, it has been reported that business owners have expressed disappointment with the limited relief on energy costs ($325 electricity bill rebate for one million businesses) and the absence of initiatives to stimulate innovation and technology adoption.

Small business support – $20,000 instant asset write-off

Small businesses with aggregated turnover of less than $10 million will be eligible for the $20,000 instant asset write-off for an additional year. This will enable small businesses to immediately deduct eligible depreciating assets costing less than $20,000 that are first used or installed ready for use by 30 June 2025. From 1 July 2025, the asset cost threshold will revert to $1,000.

The $20,000 threshold will apply on a per asset basis, so small businesses can instantly deduct the cost of multiple assets.

Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter.

Future Made in Australia initiative

As part of the Budget, the Federal Government has allocated $22.7 billion over the next decade to the “Future Made in Australia” initiative. The bulk of this will be directed towards tax incentives for renewable hydrogen and critical minerals processing. This includes $1.7 billion to support innovation, commercialisation, pilot and demonstration projects in priority sectors. The Government has indicated that this measure aims to provide immediate relief and encourage investment in business assets.

In summary, the Labour Government has stated that the 2024-25 Australian Federal Budget strives to balance key economic priorities amidst challenging circumstances. While efforts to alleviate cost of living pressures and drive innovation are evident, the level of support for small businesses appears to have fallen short of expectations.

Maximising cash flow is crucial for business growth

In today’s uncertain economic climate, maintaining robust financial health is vital for businesses. Tailored working capital solutions not only empower enterprises to seize opportunities during peak seasons but also provide resilience to navigate through slower periods.

Are you seeking innovative working capital solutions to accelerate your business growth? Contact our team of finance specialists today to discuss tailored strategies that help to bolster your cash flow, enabling your business to thrive in any economic conditions.

Disclaimer: The following comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Global tensions impacting local supply chain management

Posted on April 17, 2024June 3, 2024 by Russell Walsh

When it comes to complex and interconnected global trade, robust supply chain management practices are increasingly important to ensure your business is operating as efficiently as possible. As your business navigates through current geopolitical turbulence and economic uncertainties, the importance of having strong supply chain strategies becomes even more important. These global issues need to be considered not only in the context of supply chain management, but also in terms of critical external funding and cash flow solutions including supply chain finance, trade finance and debtor or invoice finance.

Impact of recent geopolitical events: Iran Drone Strike on Israel

The recent Iran drone strikes on Israel have sent shockwaves across international borders, igniting concerns over heightened tensions in the Middle East. As geopolitical tensions escalate in this already volatile region, businesses worldwide are left to grapple with the potential repercussions on their supply chains and such critical items as oil, iron ore and other natural resources. With inflation and interest rate volatility still a key concern here in Australia and other countries, robust supply chain management will continue to be a vital tool for mitigating risks and ensuring operational resilience.

By integrating risk assessment practices into your businesses supply chain management, you can proactively identify vulnerabilities and implement contingency plans. From diversifying supplier networks in other regions (or locally where possible) to leveraging advanced technologies for real-time monitoring, you can help to protect your businesses supply chain against geopolitical disruptions. On face value most of these global events appear a literal world away, but the impacts often hit a lot closer to home on real world items such as fuel and shipping container costs.

Strategic importance of China ties in supply chain management

Navigating this scenario could become even more intricate due to China’s involvement. China appears to strive for a delicate equilibrium in its Middle East relations, maintaining robust connections with various stakeholders. Notably, its close ties with Iran have come to the forefront, with reports suggesting Chinese support for Iran’s actions against Israel.

China’s pivotal role in the global economy underpins the strategic importance of its trade relationships. As a leading manufacturing hub and a key player, particularly in Australia’s supply chain networks, China’s economic movements exert significant influence on our fortunes. The interconnectedness of supply chains means that any developments affecting China can reverberate across industries and continents.

For Australian businesses engaged in international trade, maintaining a resilient and diverse supply chain often means spending time understanding China’s economic policies, trade agreements, and geopolitical positioning. The often discussed ‘Chinese housing bubble’, long-term tensions with Taiwan and many other areas have the potential to materially impact the Australian economy, with SMEs particularly vulnerable.

By forging strategic partnerships and adopting agile supply chain management practices, businesses can navigate through uncertainties and capitalise on emerging opportunities in the Chinese market.

Adapting supply chains to global uncertainties

Amidst geopolitical upheavals and geopolitical rivalries, the question arises: How does this affect global and local supply chains? The interconnected nature of modern supply chains means that disruptions in one region can trigger cascading effects across the entire network. From transportation delays to trade restrictions, businesses must contend with a myriad of challenges in sustaining the flow of goods and services.

Effective supply chain management means taking a proactive approach to risk mitigation, encompassing scenario planning, supply chain mapping, and supplier diversification strategies. By fostering transparency and collaboration across supply chain partners, businesses can enhance their agility and resilience in the face of geopolitical uncertainties.

Navigating geopolitical risks: implications for Australian businesses

For Australian businesses, the evolving geopolitical landscape poses both challenges and opportunities. As a nation heavily reliant on international trade, Australia’s economic prosperity is directly linked to global supply chains. The ramifications of geopolitical events, such as the Iran drone strike and geopolitical tensions in the Asia-Pacific region, reverberate throughout Australia’s economy.

From the mining sector to the agricultural industry, Australian businesses must assess the geopolitical risks inherent in their supply chains and devise strategies to mitigate potential disruptions. One emerging trade partner outside of China is India. In 2023 Australia and India signed the historic India-Australia Economic Cooperation and Trade Agreement (IA-ECTA):

making Australian exports to India cheaper
opening up new import opportunities
creating a slew of new job prospects for Australian businesses

The IA-ECTA is but one avenue that your business can diversify its global trading partners, ensuring that global geopolitical risks such as those currently occurring in the Middle-East and from China through Asia Pacific have a minimal impact on the supply chain and ultimately cash flow and bottom-line profitability.

Easing cash flow challenges via smart working capital solutions

In times of supply chain disruptions caused by geopolitical events, your business will often encounter cash flow challenges due to delayed payments or interrupted production cycles. This is where working capital solutions such as trade finance and debtor finance play a crucial role in mitigating financial strain.

Trade finance provides a flexible line of credit to power your businesses international and domestic trade transactions. It helps you manage the complexities of buying and selling goods and services across borders by providing flexible finance solutions tailored to your needs. Trade finance ensures parties involved in the transaction can navigate issues like payment delays, currency fluctuations and credit risks, enabling smoother and more secure trade operations.

Similarly, debtor finance, also known as invoice financing or receivables finance, offers businesses immediate access to cash by leveraging their accounts receivable as collateral. In the event of delayed payments from customers due to supply chain disruptions, debtor finance provides businesses with the liquidity needed to maintain operations and seize growth opportunities.

By integrating working capital solutions into your business’s financial strategies, you can effectively manage cash flow fluctuations arising from geopolitical events, thereby enhancing resilience and enabling cash flow for long-term growth.

Detailed and strong supply chain management practices are critical for businesses seeking to navigate the complexities of global commerce amidst geopolitical uncertainties. By embracing innovative technologies, forging strategic partnerships, and adopting agile supply chain practices, businesses can enhance their resilience and thrive in an increasingly competitive and global economy.

Octet’s tailored working capital solutions have supported many businesses with supply chain finance strategies. Contact our team of experts today for more information on how we can help power your business.

Supply chain issues: trends and predictions for 2024 and beyond

Posted on October 24, 2023May 20, 2024 by Russell Walsh

There’s no doubt global supply chains continue to face a multitude of challenges that demand innovative solutions. As we head into 2024, continuing disruptions caused by the COVID-19 pandemic, ongoing global tensions, inflationary pressures, supply uncertainty and environmental concerns are all forcing companies to re-evaluate their traditional supply chain models.

So, what are the future supply chain issues facing Australian businesses and their global trading partners? We explore the complex challenges confronting supply chains into 2024 and beyond, and touch on strategies to help organisations adapt and thrive.

6 global supply chain issues and trends in 2024

Many global issues have highlighted the vulnerabilities in supply chains over the past few years, says Octet’s Supply Chain Finance Manager, Joe Donnachie. So, what are the major supply chain challenges and trends as we move into 2024 and beyond? Here are our top six.

1. More circular supply chains

Manufacturers continue to move towards a circular supply chain model as we enter 2024. Gartner reports that in 2023, 20% of tech hardware vendors’ products were associated with circular initiatives. By 2030, that figure will increase to 80%. As businesses in various industries look to re-use and re-manufacture end-of-life products, vendors in the tech hardware industry will be particularly aware of mitigating the environmental impact of their products.

Every business has a different focus on creating a more sustainable supply chain. For some, it’s about making packaging more sustainable. Others will concentrate on the product and incorporate recycled materials into their manufacturing processes. While some businesses will repair, refurbish and recycle their goods to increase product lifetimes.

“Consumer demands have definitely changed,” says Joe. “While inflationary pressures mean most people have less cash to spend on disposable goods, there’s a lot more focus on where the goods come from and the sustainability of those end products.”

2. Ongoing skills shortages

Those in the distribution industry continue to experience talent shortages, affecting production and service delivery. Companies are having to employ technology to help workers access systems easily and securely, while automating routine tasks and creating a positive work culture to attract and retain employees.

As the skills shortage and increasing labour costs continue to affect output, margins are being reduced, and businesses will have to look to AI, digital transactions, robotics and automation to remain competitive.

Joe says an increase in automation and digital documentation requires workers along the supply chain to adapt and gain new skills to incorporate this new technology into their work routines.

3. Increased consumer pressures

While traditional supply chains were a relationship between a business and its suppliers, a recent, more active addition has complicated that relationship — the consumer. According to Forbes, thanks to digitisation, consumers are now more aware of how products are made, where they come from, and other options available to them. This new relationship adds further complexity to supply chain management, and that will only increase in the future.

“There’s a lot more pressure from the consumer,” says Joe. “They’re substantially more conscious of the source of products. I see it in items such as clothing, food and alcohol. For example, there’s now a big shift towards low- or non-alcoholic drinks, and that industry has just boomed over the last three years. All driven by consumer demand and using social media and other tech-driven forums to amplify word of mouth.”

4. Rising inflation and economic instability

The Reserve Bank’s efforts to ease inflation through numerous steady rate hikes have led to economic uncertainty for consumers and a reduction in spending, which will no doubt continue into 2024. Adapting to a changing economy is vital for businesses to stay competitive in the years ahead. All businesses will need to be flexible and prepared to change their services, products and marketing plans to meet consumer demand.

It’s a pressure felt around the globe as other central banks’ efforts to tame inflation continue to dampen economic growth. The IMF reports the factors that could potentially hinder economic growth in the future include the risk of inflation staying high or rising further, the chance of further extreme weather events, China’s economic recovery slowing and an escalation in the Ukraine war, which could lead to even more restrictive economic policies.

The global financial pressures causing supply chain disruptions will not likely ease in 2024, particularly when we consider the current Israel/Palestine conflict in the Middle East.

5. Ongoing supplies shortages

From minerals to medicine, building supplies and grocery staples — supplies of materials around the world failed to meet consumer demand during COVID-19 and in the years that followed.

While the semiconductor supply to the automotive industry is finally improving, chip shortages could still affect manufacturers in 2024 as demand outstrips supply.

Closer to home, medicine shortages are still affecting Australians. The TGA reports that hundreds of medications are in ‘short supply’, with the nation’s pharmacists forced to offer substitutes to their customers.

6. Easing of shipping pressures

Shipping delays, bottlenecks, container shortages and Russia’s war on Ukraine have heavily affected shipping in the past few years, but the outlook is more positive for 2024. International Cargo Express predicts the industry will return to normal in 2024 with new capacity coming into the market, while carriers will balance their supply with new procedures, and ships will become more reliable. There will also be a steadying of freight rates.

DHL predicts a steadying of rates later in 2024, and reports that as new containers enter the market, the industry will enjoy more capacity and an improvement in the reliability of schedules.

Allianz reports the world’s container fleet grew by 6.3% in 2023 and will continue to grow by 8.1% in 2024. Considering congestion at ports is also easing, supply will likely rise.

How to overcome supply chain challenges

As we head into 2024, geopolitical uncertainty, economic pressures and ESG demands are forcing a rethink of conventional supply chain models, which will need to better balance sustainability, speed, responsiveness and cost. So what can businesses do to alleviate supply chain issues, protect their supplier relationships and ensure longevity?

Diversification

Relying on limited suppliers left businesses vulnerable in the years during and after COVID-19. “A solution is to diversify that risk to multiple supply chain sources, and that’s what has really happened over the last few years,” Joe says.

Diversifying a business’ supply base is, in theory, a great idea, but Joe warns it’s not as simple as it sounds. “It comes back to how dependent businesses are on a particular product or component coming into the country and whether or not they have the ability to, say, start setting up a workforce in another country, which obviously has its own tax implications and regulations. What is the competition in that area as well? These factors make it very challenging, but necessary, to diversify your supply chain.”

Analytics

All businesses should be looking to implement a digital supply chain that takes advantage of analytics and uses consumer data to inform decision-making. By aligning supply with real-time demand, businesses can ensure more products are delivered on time while offering exceptional customer service and minimising costs, such as warehousing and storage.

AI and Robotics

Forecasting has always played a role in supply chain management, as it enables businesses to plan for increases in demand, supply shortages and unforeseen events. Now, AI is allowing predictions to be made from massive amounts of data faster and more accurately than ever before. The pandemic showed just how important it is to plan for unexpected circumstances. AI has the potential to become an essential risk management tool.

As the world’s businesses continue to grapple with worker shortages and inflation, they are turning to automation and robotics. Prices of robotics are dropping, and when coupled with AI, can become a powerful and viable business tool.

Other technologies

New technologies are being embraced along the supply chain. 3D printing is allowing businesses to print parts or whole products and reduce reliance on overseas suppliers or vulnerable supply chains. Blockchain solutions are also providing increased accountability and responsiveness along complicated networks. Blockchain technology could centralise and streamline processes in an industry such as shipping, which requires considerable documentation and complex procedures.

Maximise your supply chain performance with Octet

Octet’s supply chain finance solutions power your business to thrive, no matter what supply chain issues you’re facing. With our secure supply chain platform, you can use your credit or debit cards to ride fluctuations in commodity prices and exchange rates and make cross-border payments easily.

With our Debtor Finance facility, you can access up to 85% of your unpaid invoices to boost cash flow in your business and capitalise on opportunities. Need to increase your purchasing power? Our Trade Finance facility is a convenient line of credit that allows you to pay both local and global suppliers with up to 60 days interest-free and 120-day repayment terms. Contact our team of working capital specialists to discover how Octet can help accelerate your cash flow and improve supply chain dynamics today.

Agriculture finance: embrace opportunity and overcome uncertainty in your agribusiness

Posted on September 18, 2023May 20, 2024 by Russell Walsh

With the breaking of the three-year east-coast drought in 2020, many agricultural regions shifted from poor to good conditions in a single season – and years of record-breaking production have followed.

However, the challenges and uncertainties for agribusinesses remain, and climate variability isn’t the only thing Australian primary producers, and the businesses that support them, need to manage. In this volatile and unpredictable environment, the right agricultural finance is vital for agribusinesses to manage the numerous challenges and thrive.

Here, we examine the key obstacles facing Australian agriculture and explore the agriculture finance options that can best support agribusinesses into the years ahead.

Agribusiness finance: the unique needs of Australian agribusinesses

Australian agricultural activity covers 427 million hectares of land, which equates to more than half of Australian land use. The sector accounts for 11.6% of goods and services exports, and the most recent data suggests it employs about 239,000 people nationally.

It’s an extraordinarily diverse industry that plays an important role in the broader Australian economy – and those operating in the sector face a unique set of challenges.

Agriculture is an inherently seasonal industry. It’s also vulnerable to risks ranging from the weather to supply chain disruptions and natural disasters. There can be high upfront and ongoing costs for insurance and maintenance, as well as long investment cycles.

We spoke with Octet’s Supply Chain Finance Manager, Joe Donnachie, to gain a deeper understanding of the key agriculture industry challenges.

Joe describes the challenges as “incredibly complex and multifaceted. Australia has recently gone from fires to floods and back again. We’ve had population change, volatile food prices and record price peaks. Then you’ve also got shifting dietary demands, which plays directly into the agri space.”

Something that has also significantly impacted agribusinesses in recent times is staffing issues. “Australia’s closed borders during COVID meant that the regular stream of backpackers couldn’t emigrate, and particularly in the Northern Territory and Far North Queensland, they simply didn’t have enough workers to properly staff farming operations.”

In addition, farm loan interest rates in Australia have obviously been rising, and inflationary pressures and tariffs have been wreaking havoc.

“In 2020, China imposed tariffs on Australian barley and a range of other agricultural commodities,” Joe says. “That alone wiped out around $1.2 billion worth of trade a year. In August 2023, the barley tariff was lifted. However, wine, seafood and red meat are all still subject to those restrictions.”

An intelligent supply chain finance partner can add some certainty to the equation in these highly variable and volatile conditions. “It can give a degree of certainty for an agribusiness when it comes to managing cash flow. A tailored working capital facility can assist with the uncertainty and ensure there is sufficient funding to tackle cash flow issues and take advantage of growth opportunities when they arise,” Joe explains.

Agriculture loans: the limitations of traditional finance

Banks were traditionally the first consideration for agribusiness lending, with an overdraft providing a general line of credit.

Traditional bank lending can come with several limitations, however, including:

Speed: Banks often have slow loan approval processes, meaning you could miss out on time-sensitive business opportunities due to delayed funding.
Restrictions: Traditional bank loans can come with restrictive covenants and fixed limits on funding. These limitations might not align with the dynamic nature of your business, especially in a rapidly changing sector like agribusiness.
Security: Banks typically require specific forms of collateral, which might not fit well with the unique structure of your business. This can be particularly relevant for agribusinesses with complex ownership arrangements.
Technology: Many traditional banks lack user-friendly and streamlined digital platforms for financial interactions. In contrast, non-bank lenders often provide innovative technology solutions that better suit a business’ supply chain needs.

Joe also explains that the challenges most agribusinesses face “make consistent profits year in year out unlikely, and annual profits difficult to forecast”. This can then act as a barrier when applying for traditional bank finance.

Better finance solutions for agribusinesses

These days, innovative finance products and non-bank lenders are available to help agribusinesses both survive and thrive. Octet provides a range of working capital solutions to power Australian agribusinesses, including:

Trade Finance: This solution is a great way to bolster your business’ purchasing power, with a revolving line of credit, allowing up to 60 days interest free and 120-day repayment terms.
Debtor Finance: This facility enables you to access unpaid business invoices as an immediate cash injection quickly and efficiently. Octet can help you convert up to 85% of invoices to immediately boost cash flow.
OctetPay: This allows you to use your credit or debit cards to pay any supplier invoice to an extensive list of countries and currencies. Access market-leading FX rates, Octet’s supply chain technology, plus standard credit card rewards points with this intelligent solution.

When exploring an agriculture finance solution, Joe recommends simply choosing a product that best suits your business. “Don’t be pigeonholed into one product if it’s not suitable – especially where a lender has only one type of facility available. Understand the working capital requirements and the total cost of the facility. Make sure that when it boils down to marginal cash flow, that the facility works for you, and is commercially viable.”

Case study: Trade Finance solutions for a grain trader

One of Octet’s loyal clients, a prominent grain trader, had the opportunity to procure substantially more stock. The business had existing bank loans, however, to obtain another line of credit to purchase the additional grain, their bank would take about six months to provide an answer. Given the cyclical nature of the business, that just didn’t work.

So they discovered Octet, who, in a matter of weeks, provided a $2 million Trade Finance line of credit that didn’t impede upon the client’s existing bank facility. The business used the funds to efficiently pay their grain suppliers and local transport companies that moved the grain.

Weather the storms and make hay with Octet while the sun shines

Your agribusiness needs a strong and flexible finance partner to grow and flourish. Explore Octet’s range of working capital solutions to find the right product for your fast-growing operation. Contact our team of supply chain finance specialists today.

Working Capital Solutions

Trade Finance

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Supply Chain Accelerate

OctetPay

Industries

Why Octet

Digital wallet

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Security

Rewards

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Wage and super increases will drive up costs for award-reliant industries

Consumer spending may increase, but short-term cash flow challenges remain

Proactive cash flow management strategies for small businesses

A finance partner to help you navigate rising employment costs

Carrying ATO tax debt is getting more expensive

Tax minimisation schemes under the microscope

Shadow economy in the crosshairs

Prepare for a new era of tax enforcement

Stay ahead of ATO debt while keeping cash flow intact

Tariffs on Australian exports: The pros and cons

Australian dollar forecast 2025: Will the AUD strengthen?

Risk, resilience and preparing for global trade uncertainty

Policies SMEs can plan for now

$20,000 instant asset write-off (extended — but not yet made permanent)

Strategic signals to watch closely

A moment for business confidence

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What do the ATO tax debt changes mean for SMEs?

Impacts of removing interest deductibility on tax debt repayments

Working capital solutions can help your business manage tax debt

Discover Octet’s working capital solutions today

Labor – Short-term relief and workforce reform to support a sustainable economic recovery

Coalition – Tax cuts and deregulation to boost growth and confidence

Australian Greens – Support for small businesses and local economies

Teal Independents – Focused on simplifying regulations

What should businesses take away from the election policy debate?

Why supply chain volatility isn’t going away

Building financial resilience through Trade Finance

Proactive finance for proactive supply chain management

Your global supply chain partner

Data shows pre-election lending slowdowns are more perception than reality

Why the election shouldn’t put business financing plans on hold

Don’t let uncertainty stall your business’s growth

Trump’s new tariffs target 100+ nations – including a 10% tariff on Australian goods

Albanese announces new policy measures to counter impact of new tariffs

Is this the end of globalisation? How US protectionist policies could impact Australian businesses

US tariffs on Canada and Mexico could impact Australia

Australia fails to secure exemption on steel and aluminium exports

How US tariffs could affect Australia’s trade with China

Strengthen your supply chain to navigate uncertainty in global trade

2025–2026 federal budget: Key initiatives for business

Energy bill rebates: How do they help small businesses?

Instant asset write-off slashed: A budget shock for SMEs

‘Future Made in Australia’: Government commits to expanding initiative

What’s next? The year ahead for small businesses

Key events creating supply chain issues in 2025 and beyond

Elections and summits

Conflict and tension

Economic uncertainty

Climate change and weather events

Labour concerns

Technology and cyber threats

Strategies to mitigate supply chain issues

Your global supply chain partner

AI in finance: core applications

The challenges of AI in the finance industry

Harnessing and understanding AI

Octet: your future-ready finance partner

6 financial services trends in 2024 and beyond

1. Blockchain technology in financial services is on the rise

2. The industry is embracing AI and data analytics in financial services

3. Global growth has remained weak