Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Hansard source

As I continue to be very objective and very balanced in accounting for the history that has led to where we are, it was during 2006-07, long before the colleagues that are so vocal now were making any contribution in this place, that the opportunity for regulatory reform and red-tape reduction in the area of business names registration was recognised by the coalition government and pursued. Stakeholder consultation was undertaken in September and October 2006. Market testing was completed, you might be interested to know, in October 2006. A discussion paper, always a great output from Treasury, was released to accompany consultation with industry associations in those halcyon months of September and October 2007—a time of feverish investigation and activity relating to business names.

On 3 July 2008 the Council of Australian Governments agreed to develop a single national system for registering and regulating business names, and that was not a bad conclusion to arrive at as it built on that outstanding impetus and early work the coalition had done. This proposal was identified as one of 27 regulatory reforms that form part of the National Partnership Agreement to Deliver a Seamless National Economy. Public consultation on the second exposure drafts of the bills took place in April 2011.

The Senate Economics Legislation Committee, equally captured by the excitement of this topic, investigated the bills and released its report in August 2011 on the second exposure drafts of the bills and recommended that they be introduced and passed. We think that is all perfectly reasonable—an orderly process instigated by the coalition that led to some good constructive work through COAG and to the government arriving at an improved bill, which we are now debating.

Currently, businesses are required to register their names in each state and territory in which they trade. Each state and territory jurisdiction has its own fees and processes. There is a useful comparison of those fees in the explanatory memorandum that shows that the anticipated national fees for registration and renewal should produce some savings across all individual jurisdictions with the exception of the Northern Territory. For those businesses operating in a number of jurisdictions there are savings to be had. If you are operating a business in every state and territory, you may well face costs of around $1,000 for three years worth of registration.

This legislation will establish a new national business name register operated by ASIC. To trade under a business name an entity will be required to register and include the business name in written communications relating to the commercial dealings of the business. An ABN will also need to be displayed on a smaller number of documents consistent with ACN requirements for incorporated entities under the Corporations Act. Interestingly, any new application for a business name will need to be accompanied by an ABN or a concurrent ABN registration application. The existing business name holders will be able to renew their business names without an ABN. However, they will require an ABN if they wish to register for AUSkey. The reason that is relevant is that, at the moment, this change will represent an added administrative burden for businesses that currently are not required to have an ABN under existing legislation. They will now be required to register their business name regardless of their turnover or current exemptions from holding an ABN. That is a new impost but we think on balance it is not a completely unreasonable expectation. For those microbusinesses planning to establish under this new regime, there will be that additional action step and the administrative tasks associated with it.

If a business name is currently registered on a state or territory register, once transferred to the national system the entity's registered name will remain the same. There is provision in this legislation for duplicate names that may be perfectly valid in individual jurisdictions but when brought under a national framework create some confusion. Under this legislation a geographical identifier will be attached to that registration. Under the bills a business name will be available to an entity if it is not identical nor nearly identical to another business name, company name or a name on a notified state or territory register. There is still some illumination required of what those protocols about identical and nearly identical names will be and also of how to identify undesirable names. We could all probably think of a few and a few come to mind occasionally, but there is still a bit of work to be done on that determination. We are very interested in seeing how that is handled, given some practical experiences where names have slipped through that have certainly raised my eyebrows and those of many others. A useful step in the right direction and one that really opens up a whole new conversation is the positive idea of linking business name, trademark and domain name registration systems to facilitate efficient identification of suitable identifiers. Basically, the bill is saying, and we think it is a positive step, that if you are contemplating a business name and you find that there is already a trademark or a domain name in that space—as I understand it and as has been conveyed in the material available to me—you will be notified that you are not far off or that you may even be treading on the toes of someone who already has a trademark or a domain name. Because of jurisdictional issues about what the Commonwealth in Australia can do, that in itself may not stop the registration of the business name. The business name may still proceed, although you will be doing so having been informed, hopefully, that you may well face civil action, some litigation, for you to desist from doing that by those who feel that their trademark or domain name has been infringed upon.

My colleagues have asked me to mention that they wish the reverse applied, that if someone were actually registering a domain name there would be some reference back to registered business names. Ambush marketing, or opportunistically spotting domain names that may be of interest to a company and then making that name available at a considerably inflated price, is an enterprise that some carry out. I am particularly familiar with that as it has affected me. It is very difficult to deal with that and no streamlined, satisfactory process has been put in place. I am flagging that in the context of the connections that are drawn here to make sure that business names are entered into in an informed way, with an awareness that you might be infringing upon trademarks and domain names. It would be nice, particularly in the domain name space, if the reverse applied. I understand there are some jurisdictional issues that would need to be resolved. That is a cause of great concern for many small businesses which feel that ambush marketing is being directed at their business, and there is concern at the detrimental impact on their reputation and on their commercial prospects. It is a problem that would require considerable expense to turn around. It was flagged that this bill may be an opportunity for that. I am not sure that that is quite the case but I put on the record that concern.

Another issue I touched on earlier is where a name is not available because it contains words or expressions that are identical, restricted or undesirable, as per a plan determination. We are particularly interested in how that will operate. The determination is not available as yet for us to know what may offend in terms of an undesirable or a restricted name, but no doubt we will get to see that at some point.

Some strict liability offences are established under the bill, such as carrying on a business under an unregistered business name, failure to include a business name in written communications, failure to display a business name at a place if the business is open to the public, carrying on a business while disqualified and a failure to comply with a request from ASIC to provide some of that information.

Also noteworthy is that there has been some thoughtfulness and sensitivity towards home based businesses. I can understand the detail and the specific location of a commercial premise being identifiable in publicly accessible information. I am not certain that is the greatest idea for a home based business and some regard has been given to that by not including street addresses and details of that kind. Again, I think that is a thoughtful improvement in the legislation and I congratulate the government for doing that.

There is also a hanging question, which was identified in the Senate committee process—that is, the extent to which information held by the register and available for government use might also be made accessible to external agencies or even to private organisations where they are fulfilling a Commonwealth obligation. The example that was raised at the Senate inquiry process related to finance providers. You would be aware of the considerable obligations on finance providers to provide details to the government about financial transactions, AUSTRAC obligations, money laundering and the like. A lot of the back-end mechanics of identifying who is involved in those transactions could well be assisted by access to the material being held by the register. On balance I accept the government's advice from its department that that was not the reason for which that information was provided and that, under privacy principles, it would therefore be unwise to expand its use, given that the material was provided for business name registration purposes not for some financial service compliance obligation. I understand that point and we accept on balance the conclusion that the government has arrived at. We are just highlighting where the Commonwealth is imposing obligations on organisations and individuals. If it can assist those people in fulfilling those obligations, that is probably not a bad thing. We will keep an eye on that. We will just see how that plays out, because there seems to be some opportunity there was well.

The only other things I would touch on relate to some questions that I posed to the responsible minister. I have identified a number of those areas already, and I have touched on the issue of trademarks as well. Trademarks are quite a challenging area for small business. At the moment we are seeking to assist a small business which operates in the electricity space—measuring and monitoring technology, energy efficiency and all of that. The business has been doing a great job for a number of years; business is fine. But a multinational has come along and decided that it wants to do something where the name it is using includes an acronym, and the acronym has two of three letters which are the same as the second word in this business name. Now, they are not even in the same space. One operates in agriculture; the other operates in electricity and energy efficiency. But, because the small businessman does not have the deep pockets of the multinational, he is being subjected to an action demanding that he desist from using a business name that he has been operating under for nearly a decade.

Now, he has come to me saying, 'I do not have this money.' He knows what area he is working in and things are going okay for him as a small business. But, faced with a multinational agricultural and food processing company that seeks to use the acronym GAP to talk about a quality process for manufacturing food and saying, 'Well, your three-letter word that finishes with AP is very similar to GAP,' what is he supposed to do? Where does he go? He is pulling his hair out; he has been given these deadlines and a pile of paper you cannot throw your leg over which has obviously been produced at great expense. But where is his justice? It is just another example in my mind of how often legal processes and even government decision making is very much shaped through the eyes of big business and big parties, with which you can negotiate and consult, while the small and microbusiness communities are just left to deal with it—and deal with the collateral damage, almost, of being expected to be a multinational, to compete fairly on a question where they have been drawn into this having committed no wrong. But someone thinks they might take them out because they can.

This is an area of some concern. This space touches on it; I mentioned the domain name example earlier. I would encourage the government to turn their minds to these kinds of practical challenges that are being experienced by small and microbusinesses to find some remedies that are affordable and accessible. We had some ideas prior to the election about a small business and family enterprise ombudsman and some dispute resolution processes. I am pleased that the government that took no new specific small business commitment to the last election has decided to outsource its policy development. It has picked up a few of ours. Wherever they might come from, if they are a good idea and they help small business, I say to the government, 'Knock yourselves out; there are probably a dozen more good small business and family enterprise ideas they might want to pick up on the way through.'

Finally, I touch on another one of these interconnected issues. If you are denied an ABN for whatever reason, you are then denied a business name under this framework. Now the problem is—and I know that the portfolio involved would of course be very judicious in the way it is exercising the discretions these bills provide them—that if you run into an obstacle and you do not get an ABN from the tax office, ASIC and the departmental officials responsible for this area would basically say, 'Well, you take that up with the tax office; that is a decision made somewhere else.' But the cascading effect is that you cannot actually trade. And at this time when the government has instigated the most appalling attack on independent contractors I have seen, when two million Australians, legitimate small businesses, derive their livelihoods from independent contracting, the government has asked the tax office to give independent contractors a bit of a hard time, to try to push them more into this traditional employee-employer type of relationship. I can understand the government wanting to do that when the Prime Minister talked about—

Mr Tehan interjecting—

See this speech in context