Jacinta Collins (Victoria, Australian Labor Party, Shadow Cabinet Secretary) Share this | Link to this | Hansard source

I rise to speak on the cognate bills—the Australian Small Business and Family Enterprise Ombudsman Bill 2015 and the Australian Small Business and Family Enterprise Ombudsman (Consequential and Transitional Provisions) Bill 2015. Labor supports the passage of these bills, but not without emphasising our concerns and the concerns of stakeholders who recently submitted to the Senate Legal and Constitutional Affairs Legislation Committee inquiry—the report of which, fortunately, was just tabled.

These concerns are specifically in reference to the use of the title 'ombudsman' for this role, its defined powers and its degree of independence. Questions were raised in the inquiry as to the appropriateness of the use of the term ombudsman in this context. If these concerns remain unaddressed they have the capacity to undermine the widely-accepted and well-established functions and powers of the role of the ombudsman in Australia. Consequently, this may well lead to a loss of confidence in or under-utilisation of the role of the small business ombudsman by small-business people requiring assistance. While the Senate legislation committee report recommends that these bills be passed without substantive change, it also notes the need for regular review of the legislation to examine and monitor issues raised by stakeholders. Labor outlined four major concerns to the committee in our additional comments. I will address these separately, but I will now make a few comments regarding the history and the role of the ombudsman.

Labor believes the independence and impartiality of the role of an ombudsman is important to guaranteeing the trust of Australians in this role. The office of the Commonwealth Ombudsman exists to safeguard the community in its dealings with government agencies and to ensure that administrative action by Australian government agencies is fair and accountable. The establishment of the office of the Commonwealth Ombudsman was first moved under the Whitlam Labor government and enabled by legislation in 1976, commencing operation on 1 July 1977. The Commonwealth Ombudsman can investigate complaints about the actions and decisions of Australian government agencies to see if they are wrong, unjust, unlawful, discriminatory or just plain unfair.

The office of the Australian Small Business Commissioner, or the ASBC, was established by the Gillard Labor government in 2013. The principal functions of the ASBC are: to provide information and assistance to small businesses, including referral to dispute resolution processes; to represent small business interests and concerns to the Australian government; and to work with industry and the government to promote a consistent and coordinated approach to small business matters. These cognate bills would establish the office of the ASBC and replace the role of the new Australian Small Business and Family Enterprise Ombudsman—the ASBFE Ombudsman, which I will simply refer to as the small business ombudsman.

This bill, with the establishment of the office of the small business ombudsman, cannot fulfil the functions of an independent and impartial umpire and will, therefore, compromise the safeguard role that a traditional ombudsman plays on behalf of all Australians. The advocacy and dispute resolution functions of the small business ombudsman that are at the heart of this bill are inconsistent with an accepted set of criteria considered necessary to be described as an ombudsman.

Labor senators note the strong opposition expressed by numerous expert groups and peak organisations in the six submissions that expressed a view about the use of the term ombudsman in the title. The Commonwealth Ombudsman identified concerns with the suitability of the title of ombudsman for this role, and the Australian and New Zealand Ombudsman Association noted that the office proposed is not an ombudsman, and should not be called one. The Commonwealth Ombudsman expressed strong concerns that use of the term ombudsman in this context is misleading and has the potential to damage the ombudsman brand that has been developed by ombudsman offices throughout Australia over the last 40 years.

As noted in the main report, both Restaurant and Catering Australia and the Small Business Commissioner of Western Australia expressed concern that the title may actually prevent small businesses and family enterprises from approaching the new office. The Energy and Water Ombudsman New South Wales urged the committee to consider the name and replace it with a more accurate one.

Labor senators are concerned that the new small business ombudsman is described in the explanatory memorandum as a 'departmental official' who will receive corporate and staffing support from the department. One of the generally accepted core functions of an ombudsman is for the ombudsman to be able to independently and impartially investigate the actions of government agencies. This may prove difficult with the administrative arrangements and organisation of the small business ombudsman described in the bill as being structured within a departmental agency of government. Under clause 20 of the bill the minister may give written directions to the ombudsman, and the ombudsman must comply with these directions.

The activities of the Commonwealth Ombudsman's office are governed by a number of Commonwealth laws, principally the Ombudsman Act 1976. The Commonwealth Ombudsman's office delivers an annual report which provides details of the numbers and types of complaints dealt with and the ways in which they are resolved. The Commonwealth Ombudsman must provide the minister with an annual report under section 46 of the Public Governance, Performance and Accountability Act 2013.

Labor senators are concerned that this bill requires the small business ombudsman to provide quarterly reports to the minister on the research and inquiries undertaken. Our principal concern goes to the lack of an effective arms-length separation of the powers between the small business ombudsman and the minister's office. The bill describes arrangements that could reasonably be described as a close working relationship with the minister's office and one that is not far removed from ongoing oversight by or influence of the minister. This is rightly reflected in the views expressed by some of the stakeholders in the inquiry. The office of the New South Wales Small Business Commissioner, for example, queries whether the level of direction able to be given to the ombudsman from the minister aligns with the references in the explanatory memorandum to the objective of impartiality. If the ombudsman is truly going to be able to make credible inquiries into the concerns of small businesses and family enterprises arising out of the legislation, policies and practices, the ombudsman needs to have the certainty that the minister will not alter any findings or recommendations made by the ombudsman.

In its current form, the provisions of the bill diminish the ombudsman's independence from the government of the day and risk limiting the ombudsman's ability to be non-partisan. Business Enterprise Centres Australia expressed the view that it would be preferable for the ombudsman to report directly to the parliament rather than to the minister. Labor senators consider the operation of the existing Commonwealth Ombudsman, particularly in relation to the government of the day, to be a more appropriate association and one that should be considered as the model to be applied to the role of the small business ombudsman. Failure to address this fundamental issue will result in a lowering of expectations by the community and the potential for the diminution over time of the respect and high regard Australians have for the role of ombudsmen.

Labor senators note the views of those expressing concerns regarding the advocacy function to be performed by the small business ombudsman. These concerns go to the combined role of advocacy on behalf of a group or individual and the role of an independent and impartial investigator as an ombudsman. Labor does not consider the advocacy functions set out for the small business ombudsman as being the primary role or function of an ombudsman. Rather it is Labor's view that these functions could be provided by the existing Australian Small Business Commissioner. This would allow for a clear separation of the two roles and maintain the independence and impartiality of the new small business ombudsman.

In the Treasury's consultations on the exposure draft legislation for the small business ombudsman, the Australian and New Zealand Ombudsman Association, the Financial Ombudsman Service of Australia and the Association of Dispute Resolvers—LEADR and IAMA—all noted the advocacy function as being of considerable concern and inconsistent with the role of an independent ombudsman.

The Shopping Centre Council of Australia submitted that the use of the term 'ombudsman' in the title was misleading and should be changed to 'commissioner'. A similar view was expressed by the Telecommunications Industry Ombudsman. The Australian and New Zealand Ombudsman Association submitted to the Treasury and to the committee that it is clear that the role of the Small Business and Family Enterprise Agency is as an advocate, in both reality and perception. As such, it does not meet the independence criterion. They support the aims of the proposal to assist small business and family enterprise but strongly submit that it should be called something other than an ombudsman.

The minister has even acknowledged that the ombudsman who advocates a position regarding a particular issue would not be perceived as impartial in dealing with disputes relating to that issue. However, the minister maintains that the small business ombudsman or the ombudsman's staff will not conduct any dispute resolution processes but rather refer matters to outsourced alternative dispute resolution providers and that is this separation between dispute resolution and advocacy ensures the independence of the role.

Labor senators note the view expressed by the minister but consider nevertheless that the arrangements prescribed in the bill are inappropriate for an office being establish with the title of 'ombudsman' and fear that this will lead to confusion among small business owners, resulting in the underutilisation of the service.

Labor senators consider that the ombudsman must be truly independent if he or she is to have the confidence of the community. The small business ombudsman bill includes a dispute resolution function but the bill designates this role to a secondary function with an emphasis on the ombudsman primarily being a concierge for complaints. Dispute resolution services are allocated to a panel of dispute resolution providers, and any role the ombudsman plays in the resolution of disputes is only minor.

Regarding those able to provide dispute resolution services, the Mediator Standards Board noted in its submission to the consultations on the exposure draft of the legislation the need for those mediators that can perform dispute resolution services to be accredited under the National Mediator Accreditation System. Clause 72(1) of the bill provides that the ombudsman may publish a list of persons who have the qualifications or experience to conduct alternative dispute resolution processes to resolve disputes in relation to relevant actions. Clause 72(2) of the bill provides that the minister may, by legislative instrument, prescribe the qualifications or experience required for persons to be included on the list. Labor senators support the concerns of the Mediator Standards Board and urge the government to prescribe that those able to conduct alternative dispute resolution services are required to be accredited under the National Mediator Accreditation System.

The Abbott government has unfairly raised the expectations of the small business sector in election commitments and statements since the Minister for Small Business announced the new small business ombudsman that would be able to effectively deal with and resolve small business issues. Labor senators are not convinced that the new role of the small business ombudsman has the statutory independence of an ombudsman and consider that the role prescribed in this bill is not comparable to an ombudsman. The new role of the small business ombudsman is not consistent with the accepted definition of an ombudsman and would lead to confusion and unmet expectation from those seeking an independent and impartial umpire to investigate matters they seek to pursue in a fair and impartial way.

Labor senators support the views expressed by stakeholders in the report that the title 'ombudsman' should be reconsidered by the government. The dual roles of advocate and ombudsman are not consistent with the accepted definition of an ombudsman; nor is the regularity of the reporting requirements of the small business ombudsman and the powers of the minister to direct the ombudsman. While Labor supports the Senate passing these bills, Labor senators are mindful that Australian small business operators may underutilise the new office of the small business ombudsman as a result of these issues as prescribed in the bill.

Debate interrupted.