Gai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | Hansard source

I rise today to support these two 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. The first bill works to establish the Australian Small Business and Family Enterprise Ombudsman, including its functions and powers. The second bill deals with any overlap between the existing statutory office of the Commonwealth Ombudsman and the transfer of the information to the new Small Business and Family Enterprise Ombudsman. Labor of course welcomes and supports any measures that strengthen the small business sector. Labor recognises the significant contribution small business makes to the Australian economy, because 96 per cent of all Australian businesses are small and micro businesses. Small businesses contribute about 47 per cent to private sector employment and in excess of $330 billion annually to our GDP.

The reason I am so keen to speak on these bills is that in my former life, prior to coming to parliament, I had my own microbusiness. I had it for 10 years, and I loved every minute of it, despite many challenges at times. Since I have been in parliament I have been very keen to ensure that the issues I had to address when I had my own microbusiness were being discussed from a public policy perspective, particularly on government procurement. Most of my business was with government agencies here in Canberra, and there were times when I was tearing my hair out at the requirements of government procurement. I will come to that later, based on my own experience of having my microbusiness and my conversations with many businesses around Canberra since I have been elected. I have a meeting this morning with the Australian Industry and Defence Network, and I know from my discussions with them the challenges they sometimes face from a defence procurement perspective.

So, I do understand, having had 10 years of experience in my own microbusiness, the challenges that small businesses face, particularly in navigating their way around the system. The real challenge is the fact that these people want to comply, they want to do the right thing by the law, they want to do the right thing by the tax department, and quite often that can be difficult in terms of navigating their way through. So, as I said, later in my speech I will come to some of the issues I think the Ombudsman should be looking at, but I will say here now that I speak from experience and from lengthy conversations with Canberra business people particularly and defence industry.

As I mentioned before, Labor has a proud tradition in terms of the initiatives introduced when we were in government for small business. That is why we commissioned the first national small business commissioner in this country. We knew that small businesses needed a direct national voice to government. We provided funding of $8.3 million over four years to establish the Australian Small Business Commissioner to provide a voice to advocate for and represent the interests of small business directly to government.

Mark Brennan was announced as the inaugural Australian Small Business Commissioner in October of 2012 and commenced in this role on 2 January 2013. Mr Brennan is doing an outstanding job advocating for small business and has done so since he commenced in the role. The commissioner's role is to: provide information and assistance to small businesses, including referral to dispute resolution services; represent small business interests and concerns to government; and work with industry and government to promote a coordinated approach to small business matters. Essentially, the commissioner works in consultation with key small business stakeholders, including industry organisations, small business operators, state small business commissioners and other government agencies to ensure that small business concerns are heard and are taken into consideration across government.

The commissioner was not a statutory appointment and has no formal investigative or regulatory enforcement powers under any legislation and the commissioner does not have direct involvement in resolving individual small business disputes. The commissioner's role is to raise awareness of existing, effective services available at the federal government and state and territory levels to assist businesses in resolving disputes.

Labor's proud track record on small business does not end there. Labor established the Small Business Support Line and the business.gov.au website as a one-stop shop for information for small business people in a simple and accessible way. That is vitally important. Just speaking from experience, I remember when it came to the end of the financial year and I wanted to get a number of issues resolved. I had to navigate my way through the labyrinth that is the Australian tax office website, going through pages and pages to find out how much superannuation I could contribute. It was quite extraordinary. It took a lot of time. Particularly the end of the financial year, as you know, Madam Speaker, is the time when the rubber hits the road, so to speak, for small and micro business. It was incredibly frustrating. That is why a one-stop shop for information for small and micro business is an incredibly useful tool and is vitally important to help businesses work their way through the system very easily.

Labor also established the Small Business Advisory Services program delivered through business enterprise centres and chambers of commerce, and it was us that established the National Business Names Registry, saving money and reducing red tape for small business. Again, that was a really important initiative. In our glorious Federation, if you set up your business in Victoria, you had to get your business registered in Victoria and pay $100—I cannot remember what the figure was—and then your business would be registered for five years. If you went to, say, Canberra, it would cost $70 and that was for three years. Then, if you went to New South Wales, it was a separate amount for a separate length of time. Having one register was incredibly useful, not just in terms of saving money—from memory, the figures were in the hundreds—but also in terms of the hassle of having to remember that your Victorian business registration expires in five years time and your ACT one expires in three time. You had to remember when to renew on all the different dates. So, as you can see, Labor has a proud track record on strengthening the small business sector.

The new Australian Small Business and Family Enterprise Ombudsman, as set out in this bill, will have an advocacy function as well as an assistance function. Under the assistance function, the ombudsman may respond to a request for assistance by an operator of a small business or family enterprise. The ombudsman must transfer a request for assistance to another Commonwealth, state or territory agency if the agency could deal with the request and if it would be more effective and convenient for the agency to do so. Where the assistance requested relates to a dispute with another entity, the ombudsman may recommend that an alternative dispute resolution process be undertaken. As set out in this bill, the new ombudsmen will: undertake research and inquiries into legislation, policies and practices affecting small business and family enterprises; report and give advice to the minister on those matters; contribute to inquiries to others on those matters; contribute to developing national strategies on those matters; review proposals relating to those matters and advise the minister on them; and promote best practice in dealing with small businesses and family enterprises.

I just want to focus here on the report and on giving advice to the minister on those matters, whether on issues confronting microbusinesses—because micros really are the very large proportion of small businesses in this country—or those confronting family enterprises, going back to what I mentioned before about the advice being vitally important. Should the Ombudsman be appointed, should this position be created, I would encourage that person to focus on that issue of advice to government, particularly when it comes to government procurement.

As I said, about 50 per cent of my business was with government agencies, and, again, I had so many experiences where I was tearing out my hair. One of them was about the fact that government agencies are by their nature risk averse. I understand that. They are dealing with taxpayers' money and they have to be careful in the way they spend it. But as a result of that you see them contracting with primes, large organisations, who then go and subcontract to small and micro businesses, quite often at a fraction of the cost they are charging. Also, in the process, they really drive down, in my view, the cost of small and micro businesses. It means that essentially government agencies are paying primes at premium prices. There is nothing wrong with that, but those primes are then subcontracting to smalls and micros, who are charging a lower price to the prime.

I think government agencies should, rather than go through the primes, who then subcontract, go straight to the smalls and micros—have some mechanisms established whereby you are getting value for money and getting a quality product at possibly a cheaper price without having to go through the prime. That is just one area I think the Ombudsman should be looking at in terms of providing advice. I also am concerned about the ability of micros and smalls to actually get into government procurement. As I said, government agencies by their nature are risk averse, and rightly so, because they are dealing with Australian taxpayers' money. But it does mean they are missing out on the innovation and the flexibility and the new ideas that are usually generated from the small and micro business sector. So, again, if the Ombudsman could take a closer look at that, then that would be terrific.

Finally, in terms of contracts, again, government agencies are risk averse, and as a result of that you get this huge contract that is 70 pages long for perhaps a $5,000 job. You have to pay professional indemnity and public liability of $10 million, I think it is in the Commonwealth at the moment. It costs a lot. It is usually in the vicinity of between $6,000 and $10,000 a year. Quite often, with the contract that you have, the risk is minimal to the Commonwealth, so you have this huge public liability and professional indemnity, imposing a huge impost on small and micro businesses for something that is probably not terribly risky at all. So, again, I encourage the Ombudsman to take a look at government contracting. As I have said many times, it is quite often sledgehammer to walnut. A 70-page contract for a $5,000 job is just ludicrous.

In terms of tendering, another bugbear of mine but also of other businesses around town is that getting access to panels for micros and smalls is very challenging. And the way the tenders are constructed, they are in a way geared towards primes, which excludes smalls and micros. It makes it very difficult for a small or micro to get into the government procurement process in the first place, and the way the tender process quite often is constructed means that businesses large and small are required to get their tenders in over the Christmas break, on 4 January or something. So, everyone works very hard to get their tender in during what is traditionally a holiday period, which again ignores the fact that small and micro business owners are people. They require time out over Christmas as well. There is a bit of a blind spot, I think, in some government agencies on what small businesses and micros are all about. You bust a gut to get this tender in just after Christmas and then you do not hear from the government agency for eight, nine or 10 months—I have heard of cases of 12 months. There is no word on how the tender is going. So, again, there are just a few areas that I think the Ombudsman should be looking at in terms of providing advice.

In conclusion, we are supportive of the move to establish a new Australian Small Business and Family Enterprise Ombudsman, but we do hold some concerns, particularly relating to the Ombudsman's independence and impartiality. However, as I said, being a former small business owner myself I understand how vital it is to have someone advocating for the rights and interests of small business, and that is why I welcome this legislation. In continuation of the good spirit and bipartisanship that Labor has shown when it comes to small business, I commend these bills to the House.

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