Kevin Hogan (Page, National Party) Share this | Hansard source

I rise tonight to speak on the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015. I commend the member for Reid for his anecdote, because all bills relating to small business and the treatment thereof go to the heart of what makes this nation tick. The member for Reid mentioned some employment statistics. We know that small business is the major employer in this country, and we need to do everything we can to support it.

In my maiden speech, I mentioned that small business is the lifeblood of our community. We have a very common saying in Australia—'Have a go.' There is nowhere that is more about 'having a go' than in the commerce of small business. There are many men and women out there in our communities in Australia having a go and wanting to make their own success in commerce by having a successful small business.

There are a couple of reasons why this is important. It is obviously important to the people who start a business. They are hoping to secure their own financial responsibility and security, and they may well then employ people as they grow. But it is also important because we know that all we do here in government is transfer wealth from one person to another. We do not create wealth in this chamber. We certainly want to encourage people and make it as easy as we can for people to create wealth and to employ people. We want to do that. We need to do that because, without a healthy private sector, we have nothing. We then tax successful small businesses and people who are doing well. What do we do with that money? We give it, in most cases, to worthy people who need the support of the public purse. Whenever I go and talk to people who want taxpayer dollars—I respect them and we need to give many of those people money—I say we should always be respectful and acknowledge those who are creating the wealth in this country.

If we do not have a healthy private sector and businesses employing people and creating wealth, we will have no money to give to the social welfare sector, the health system and the education system. That money does not come from government. That money does not come from me, the Prime Minister, cabinet or the minister; it comes from the private sector and those many small businesses out there in our country creating wealth, creating jobs and, obviously, paying taxes.

I had the pleasure on Saturday night of going to Clarence Valley Business Excellence Awards night at the Yamba Golf and Country Club. It is the time of year in my community when many businesses have awards, and I love to go to as many as I can. I missed a couple on Saturday night because they were at the same time. It is lovely to go to these events and to acknowledge those small businesses which have exceeded and excelled. They are acknowledged by their peers by winning awards. On Saturday night, many businesses were awarded prizes, and it was great to be there. In fact, the New South Wales Small Business Commissioner was also there. She talked about the work that they do and echoed a lot of what I have just said about the importance of small business in our community. I told her this is quite a big and important part of this government's commitment.

In the 2013 campaign, we spoke about our red-tape repeal days. Sometimes, when those days come around—and I think we have had two already—those on the other side of politics almost treat it with disdain or as a bit of a joke, saying, 'Yeah, right. It's not that important. We are all on side with this.' Obviously, they were not. We are talking about repealing legislation and red tape that cost businesses money. When you have regulation that is duplicated across three levels of government there is a lot of red tape and green tape that small businesses have to comply with. It means they have to employ someone, or use some of an employee's hours, to fill out these forms. It costs money. It is not without its costs. In fact, it has quite surprised me in the last two years that a lot of people who have been complaining to me about red-tape costs are not just from the private sector. They are, in fact, from the not-for-profit sector. They have an inordinate number of forms to fill out, t's to cross and i's to dot, which is costing them a lot of money. They say, 'We are just wasting the taxpayer dollar by filling out these forms and doing what we do.'

So I speak with great fervour in favour of this bill. We are committed, as I said, to ensuring Australia is the best place to start and grow a small business. That is why we are extending the consumer unfair contract term protections to small business. We took more than 20 small business-specific promises to the last election. We said we would extend the unfair contract term protections available to consumers to small businesses. With this legislation, we have met yet another small business election commitment. Consumers have been protected from unfair contracts for a while. However, the former government, despite its initial interest, decided not to offer similar protections to small businesses. In many cases, small businesses have no market power or ability to vary 'take it or leave it' standard form contracts, other than as individual consumers. However, they lack the consumer-style protections that provide for unfair terms to be struck out of such contracts. We know that it is time for small businesses, which often face the same vulnerabilities as consumers, to also receive these protections when offered 'take it or leave it' contracts.

The bill will amend the Australian Consumer Law, which is set out in schedule 2 of the Competition and Consumer Act, and the Australian Securities and Investments Commission Act to extend the consumer unfair contract term protections to cover standard form, small business, consumer-like contracts that are valued below a prescribed threshold. This is a long-sought-after and very welcome new protection for small business and one which the coalition has long supported.

Extensive consultations have indicated that small businesses across a wide range of industries have concerns with unfair terms. Unfair contract terms can come in a variety of forms and can be used to unfairly shift risk 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. We are supporting small businesses so they can confidently enter into standard form contracts for day-to-day transactions where the costs and time involved in reviewing these contracts and seeking legal advice can be disproportionately high.

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, 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 multi-year contract. In designing the legislative amendment, the government consulted extensively with stakeholders. This transaction value threshold was chosen so that the protections apply when small businesses engage in day-to-day, consumer-like transactions, while encouraging them to conduct due diligence on the larger contracts that are fundamental to the success of their business.

Beyond these values, it is right and reasonable for all enterprises to seek advice on these larger contracts. It is important to make it clear that we do not believe it is the government's role to be contract nannies nor to be injecting agency bureaucrats to pour over specific clauses of multimillion dollar commercial transactions that small businesses should only enter into after much thought, careful examination and taking proper advice. State and territory governments were actively engaged in development of this measure and the consumer affairs minister has 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.

In line with the Corporations Agreement 2002, the Commonwealth notified the states and territories that these legislative protections would be mirror in the ASIC Act. These protections will come into effect six months after the bill receives royal assent. The Australian Competition and Consumer Commission, who the government provided $1.4 million to in the 2014-15 budget, will support businesses transitioning to new protections. 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. On that note, I again acknowledge every small business in this country. I thank them for the risks that they take, I thank them for the capital that they invest in their small business, I thank them for the people who they employ, I thank them for the taxes that they pay and I thank them for the services that they fund to do what this country needs to do.

As has been often said in this chamber, small business runs through the DNA of this side of politics. In the last two years, as I have got to know many members of this side of politics, I have been humbled by their expertise, I have been humbled by the experience that they bring to this chamber and I have been humbled by the fact that they know how commerce works and about the types of risks and type of mindset that you have to have to make a business thrive and prosper. There is much expertise that they bring. We understand it, we acknowledge it and we want to support it.

See this speech in context