Senate debates

Thursday, 11 May 2017

Bills

Competition and Consumer Legislation Amendment (Small Business Access to Justice) Bill 2017; Second Reading

11:17 am

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | Hansard source

There you go: we have proof here of the evidence of not only the quality of the product but also, hopefully, the quality of his staff—through you, Deputy President, to Senator McKim.

These are the initiatives being taken by this coalition government in the services sector and the commodities sector to encourage small business even more. An ombudsman being appointed—and reference is made to the ombudsman in the bill being proposed by the Labor Party, and I will speak some more about the ombudsman's position. It is proposed in the bill to enable the ombudsman to provide assistance, as I understand it, with advising a private litigant on the arguments that might be made and the evidence needed to satisfy a court to grant a no-adverse-costs order. That of itself sounds all right. The only problem is: to what extent might it compromise an ombudsman who afterwards may have been seen to have given advice to an applicant or to a private litigant only to find out that that advice is now the subject of a challenge? We cannot really have a circumstance in which the ombudsman could themselves be the subject of a court action as a result of incorrect or inadequate advice given to a litigant. So there are, I think, difficulties associated with that particular element.

I applaud the Labor Party for putting this bill before the chamber. It recognises that they do have an understanding of some of the challenges associated with the issues of small business in Australia—expanding small business.

For those of us who have been in business all our lives, we actually do not like the term 'small business' all that much. It suggests that you want to remain small. Of course you do not want to remain small; the whole objective of business is to grow that business and move, perhaps, towards medium business and, in so doing, to employ more people.

I come back to the employee share scheme: imagine the scenario as long-trusted employees are part of an opportunity to expand a business and then indeed the next step—not always the best step for a business in my own experience—to move into export markets and be able to develop both your services and/or commodities along those lines.

Mention is made in this legislation—and I come to the decision of the coalition government in accepting the recommendations of the Harper review on the repeal of section 46 of the Competition and Consumer Act and replacing it with a provision that prevents firms with substantial market power from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition. I join with Senator Dastyari in the concept of the capacity of a larger company to be able to use its market power, market strength, to be able to dominate a small business. I have no difficulty with that argument; he just chose the wrong example in my humble opinion.

I will give you an example of some of the big retailers who will proudly announce to the retail market that they are going to undertake a huge discount of some product, only then to go back to the farmer, the supplier or the horticulturalist and say, 'Oh, by the way, we're undertaking a big discount on milk'—or a big discount on chicken or a big discount on some other product, be it almonds or whatever—'and, by the way, we're going to pay for most of it by reducing the payment to you in that scenario.' That is abuse of market power. It places the small business in a situation where they cannot negotiate their way out of that, as they are locked into supply and of course they have no alternative. So there are definitely circumstances where we have to ensure that big business does not have that unfair competitive advantage.

Legislation that we have introduced in this space, the Fair Work Amendment (Small Business—Penalty Rates Exemption) Bill—which we introduced into this parliament in 2015—is directed at protecting the interests of small business and indeed protecting the interests of employees in small business. We have also of course seen the involvement of the ACCC. In November of last year they released their report going to the whole concept of unfair trading relationships between large and small business, particularly where small businesses are, in a sense, forced to sign contracts or are at least influenced to sign contracts. Under the provisions of the ACCC, which the government accepted, we now know that a small business can challenge a term in a standard form contract, which is also a small business contract, on the basis that it is unfair. Big business were not happy with us, and they lobbied very, very hard against us. But the decision was taken to ensure the protection of small business.

As we all know, most small business people are their own accountant, their own person associated with marketing and they are their own person associated with sales. As I said earlier, at the end of every quarter they are the person sitting down trying to work out the BAS, trying to work out revenue and expenditure and trying to make sure they get superannuation liabilities paid et cetera. They are not the sorts of organisations that have huge teams of lawyers, accountants and others.

The coalition will continue to support small business by way of entrepreneurship, by way of innovation and by way of start-up and particularly by protecting small business when it comes to competition with big business and indeed with big unions. Whilst the Labor Party's bill is there to be debated, it does miss most of the elements important to small business.

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