Peter Hendy (Eden-Monaro, Liberal Party) Share this | Hansard source

I rise in support of the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015. It is part of the government's reform agenda to assist small business to be the best it can be. Indirectly, by strengthening small business, this reform will assist in providing additional jobs—and, because small business is the lifeblood of rural and regional Australia, this bill will assist in job creation in my rural electorate of Eden-Monaro.

This bill will amend the Australian Consumer Law, which is set out in schedule 2 of the Competition and Consumer Act 2010, and the Australian Securities and Investment Commission Act 2001. It will extend the consumer unfair contract term protections to cover standard form, small business, consumer-like contracts that are valued below a prescribed threshold. It is our view that, in many cases, small businesses have no more market power or ability to vary take-it-or-leave it standard form contracts than an individual consumer; however, those small businesses have lacked the consumer-style protections that provide for unfair terms to be struck out of such contracts. Thus, this is real reform.

Consumers have been protected from unfair contract terms since 2010. We said before the election that we would extend this provision, and now we are implementing it. This issue has been around for many years. I know that when I was the Chief Executive of the Australian Chamber of Commerce and Industry it was a matter of considerable debate. For many years, small business has been protected by unconscionable conduct provisions in legislation. However, small business associations have, for many years, put the case that these provisions do not go far enough and that an equivalent of the unfair conduct provisions afforded to consumers was needed to adequately protect Australian small business.

As the minister has noted, unfair contract terms can come in a variety of forms and can be used to unfairly shift risks to another party, who may not be well-placed to manage them. For example, they may permit one party to unilaterally vary terms, limit their obligations, terminate or renew the contract, levy excessive fees on outstanding moneys or affect the availability of redress. Under the new protections, a court will be able to strike out a term of a small business contract that it considers unfair. This will reduce the incentive to include and enforce unfair terms in contracts with small businesses. Under the new protections in this legislation, a contract will be a small business contract if at least one party has fewer than 20 employees and its value is below the prescribed threshold of $100,000—or $250,000 for a multiyear contract.

I am proud to be a member of a government that does not just talk the talk on small business—we walk the walk. We put the role of Minister for Small Business into cabinet, and what a champion the member for Dunkley has been. We are the party of small business people who have been on that journey, having a go, putting the family home on the line and putting in the hours—maybe failing, maybe falling over, but getting up again and having another go. This is the Member for Dunkley's story and it is the same for so many Australians creating livelihoods and creating communities, and, ultimately, creating an economy that is the envy of the world.

We are taking steps to boost the capacity of our small business sector. But have a look at the vandalism that those opposite engaged in for six years. Under Labor, 485,000 jobs were lost in Australian small businesses! Not just employees losing livelihoods but employers losing their business, homes and hopes for a better future. And Labor lecture us on how things should be done! Around half a million jobs down the drain on their watch, and they have the temerity to demand we do something. Well, guess what? We have done things that Labor have neither the imagination nor the inclination to achieve.

A few brief examples: as part of the 2015-16 budget, we delivered the nation's biggest jobs and small business package, worth $5.5 billion. It includes: a 1.5 per cent cut in the company tax rate for small business, to 28.5 per cent; a five per cent tax discount for non-incorporated small businesses; an immediate deduction for assets valued up to $20,000; expanding the FBT exemption for work related portable electronic devices; capital tax gains relief when a business changes its legal structure but keeps the same owners; the ability for start-ups to immediately deduct professional expenses incurred when they start a business; expanding the tax concessions for employee share schemes; and the removal of obstacles to crowdsourced equity funding

In the previous 2014-15 budget, we allocated $8 million over four years to transform the existing Office of the Australian Small Business Commissioner into a Small Business and Family Enterprise Ombudsman with additional functions and real powers to ensure small businesses can find answers to the questions that they have, quickly and efficiently. We have streamlined access to Commonwealth procurement contracts to ensure bills are paid on time. We have made changes to the way the government pays its bills: small businesses who contract with government and who have not been paid within 30 days will automatically receive interest on their invoices without having to separately apply for it. Under changes to the Commonwealth Contracting Suite, we are making it easier for small business to supply their products and services to the government. This includes a simplified process for tendering for contracts below $200,000.

There is more. An estimated 372,500 small businesses have benefited from administrative changes to the PAYG instalment thresholds announced by the government. As a result of the changes, around 32,500 small businesses that have no GST reporting requirements will no longer have to lodge a business activity statement. The remaining 340,000 small businesses with modest or negative income that were required to lodge a BAS no longer have to interact with the PAYG instalment system. Franchisees have also benefited from a new Franchising Code of Conduct. For the first time, breaches of the code will carry penalties—giving the code real tools and teeth. The government has also enacted the first ever Food and Grocery Code of Conduct, to protect small suppliers from the big supermarkets. There are other areas where real progress is being made—progress that is only possible under a government that prioritises small business, and has a dedicated minister in cabinet and, indeed, an entire leadership team that believe in it.

Small business will benefit from our wider policy actions on economic growth, productivity and deregulation, but we are also helping the sector in more targeted ways. That is because we recognise how important small business is to our economy. For example, even our rollout of base stations to fix mobile phone black spots will be a huge boost to small business in rural areas. In Eden-Monaro we have recently announced 12 new base stations, which will help address mobile phone black spots in 59 localities. I would like to particularly thank the member for Bradfield, who is at the table, who has been significant in providing this important rollout of our mobile phone black spot policy.

The coalition is committed to improving regulator reform and enhancing the way regulators engage with small business. And the government will continue to protect those who depend on independent contracting and self-employment for their livelihoods. The coalition is committed to the tax white paper process. We have introduced legislation to re-establish the Australian Building and Construction Commission. Nobody in the construction industry is more affected by the tactics of the unions than subbies and small businesses.

This will be a defining moment in this parliament. Will Labor join us in putting a construction industry cop back on the beat to rein in rogue unions? We actually know what the answer is. It is 'no'. We are very disappointed, but we are not surprised. Labor will not support disinterring the ABCC. They buried it when in government and they will not be joining us in reviving it. Because they are beholden to the CFMEU, there is no way they will help breathe life into the only effective mechanism for defeating lawlessness and intimidation in the construction industry.

Equally we can ask: will they join us in supporting real action against unfair terms in contracts? As I said before, consumers have been protected from unfair contract terms since 2010. However, the Rudd-Gillard-Rudd government, despite its initial interest, decided not to offer similar protections to small business. With this bill the government has moved on its election commitment to extend unfair contract term protections from consumers to small businesses and has provided $1.4 million to support this initiative.

As the minister has noted, in designing the legislative amendment, the government consulted extensively with stakeholders. State and territory governments were actively engaged in the development of this measure, and consumer affairs ministers—indeed, across all states, Labor and Liberal—formally agreed to the proposal to amend the Australian Consumer Law in April 2015, as required under the Intergovernmental Agreement for the Australian Consumer Law.

Finally, as the minister has also noted, with this legislation, the government is restoring time and resources back to Australia's two million small businesses to invest in their business success rather than navigating a costly and time-consuming maze of standard form terms. I commend the bill to the House.

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