Scott Buchholz (Wright, Liberal Party) Share this | Hansard source

Sound advice from the chair. Most on this side of the House come from a small business background so we intently know the sensibility, the heartache, the stress and the anguish that small business people experience. There would not be too many times during a small business person's life when they do not have the panic, the worry, about their bills getting so high that they wonder where they are going to get their next sale from to meet their expenses. My electorate is predominantly horticultural; farmers are another extension of a small business. This legislation goes some way towards addressing unfair contract terms, which they deal with on a day-to-day basis, so it gives me great pleasure to address the Treasury Legislation Amendment(Small Business and Unfair Contract Terms) Bill 2015.

The Abbott government are committed to ensuring Australia is the best place to start and grow a small business, because the choreographers of this bill have the mindset of small business. Mr Billson, our small-business minister—you would not find a more enthusiastic minister in this place—has held that portfolio for some time. When the other side were in government, it was like a roundabout of ministers holding that position. This is a senior position in our ranks and it is linked directly to Treasury and in direct communication with the Prime Minister.

The government took more than 20 small-business specific promises to the last election. A key promise was this commitment to extend to small businesses the unfair contract term protections available to consumers. So, with this legislation, we have met another small-business election commitment. That is because we are a party of small business, people who have been on that journey. Our party is not beholden to the big union movements. We run our own shows. Our members understand firsthand what it would be like to put their lives and sometimes their homes, if they are mortgaged, on the line to make sure that they provide jobs, opportunity and growth for our nation. The small-business sector is the engine room of our economy and provides more than 80 per cent of jobs. With more than two million actively trading small businesses, representing 96 per cent of all businesses, they are an important driver of the Australian economy. Australian small businesses are the drivers of enterprise, and, when the small business sector is performing well, the whole economy benefits. I repeat that: when the small business sector is travelling well, our economy is travelling well. Measures like this, measures that have been brought to this House, enhance small businesses and enable them to get the engine wheels of our economy moving.

It is those small-business men and women who are hit the hardest by poorly designed government policy by bureaucrats or politicians. While a solution might work for the big end of town, it could be completely removed from the real-life challenges for small businesses—and I see that firsthand in my electorate. Small businesses are personal. That is why Mr Abbott's coalition government are committed to ensuring small business is front of mind in every cabinet decision. That is why the coalition have moved the role of Minister for Small Business into the cabinet, as I alluded to earlier. We are committed to putting small business at the front and centre of policymaking, and that is why we have moved policymaking responsibility for small business to the Treasury portfolio.

As part of the 2015-16 budget, we developed the largest Jobs and Small Business package in this nation's history. It included $5.5 billion worth of incentives to help small business to start, grow, prosper and, importantly, create jobs. If we could get every small business to put on one more employee, our unemployment rate would not start with a six. With every policy incentive that we can bring to this House, we encourage that; that is the intent of this government.

The Jobs and Small Business package included a small business company tax cut to bring it to the lowest level in almost 50 years. That was enshrined in small business measures bill No. 2 or No. 3, which I had the opportunity to speak on. It also included an immediate tax reduction for all asset purchases by small businesses, up to $20,000. In my electorate, there is the Stark family at Warwick Cattle Crush who have an engineering firm, and they build livestock-handling equipment. Immediately after the budget, due to the amount of orders that flooded in because their price point is around $20,000, they put an extra five staff on. So that had the immediate effect that the government anticipated.

In addition, we understand that not all businesses are structured as companies, so the package included a five per cent tax discount for unincorporated businesses. I think that was in small business measures bill No. 4. That was a five per cent tax discount for every tax holder. So, if you have a tax system set up as a partnership, such as you and your wife, there was a tax deduction of up to $1,000 for each tax recipient. That measure was to try and match the tax deduction given to the incorporated sector with one for the unincorporated sector, of which 70 per cent of our small business sector is made up. The coalition understand small business and the vital contribution the sector makes to our communities and the economy.

Consumers have been protected from unfair contract terms since about 2010. However, the former government, despite its initial interest, decided not to offer similar protections to small business. In many cases, small businesses have no more market power or ability to vary 'take it or leave it' standard contract forms than an individual consumer but lack the consumer style protections that provide for an unfair term to be struck out of such contracts. We knew it was time that small businesses, which often have the same vulnerabilities as consumers, also received protections when offered 'take it or leave it' contracts.

This Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015 seeks to amend the Australia Consumer Law, as set out in schedule 2 of the Competition and Consumer Act 2010, and the Australian Securities and Investments Commission Act 2001. This legislation will extend consumer unfair contract term protection to cover standard form, small business consumer-like contracts that are valued at below the prescribed threshold.

This is a long sought after and very much welcome new protection for small business, and one that the coalition has long supported. Extensive consultation has indicated that small businesses across a wide range of industries have concerns about 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 it. 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 business to confidently enter standard-form contracts for day-to-day transactions where the cost and the time to review these contracts and seek legal advice can be disproportionately high. Under the new protections a court will be able to strike out a term for 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 protection the 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 multiyear contract.

In designing the legislative amendment the government consulted extensively with stakeholders. The 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 large contracts fundamental to the success of their business. It is right and reasonable for all enterprises to seek advice on larger contracts beyond these values. 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 pore 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 the development of this measure and consumer affairs ministers 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 of 2002, the Commonwealth notified the states and territories that these legislative protections would be mirrored in the ASIC Act. The protections will come into effect six months after the bill receives royal assent. The Australian Competition and Consumer Commission, which the government provided $1.4 million to in the 2014-15 budget, will support businesses transition to the 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's success rather than navigating a costly and time-consuming maze of standard form terms.

I take this opportunity to say that the coalition government are the champions of small business. Since coming to office we have reduced 50,000 pages of red tape, freeing up small businesses to be able to spend time with their clients rather than laboriously trolling over red tape until midnight. Our environment minister has approved just over $1 trillion worth of environmental approvals. That engine room will start coming through and small business will be the benefactor of those environmental approvals for our nation.

The horticultural sector, the agriculture sector and dairy farmers all rely heavily on contracts. This bill gives additional security. It gives additional protection to dairy farmers and to growers who may have an ongoing relationship with a multinational company or potentially one of two retailers. It allows them to then have an arbiter. It is our first step in getting away from take it or leave it contracts. The member for Forrest, the good government whip, has an electorate similar to mine. She is equally passionate about the regional and rural sector. Her electorate will receive an equal amount of benefit from this bill as mine will receive. I thank the House for its time.

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