Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

It was very interesting listening to the member for Greenway, with her new-found enthusiasm for small business. I would ask the member for Greenway: where were you during the last six years of the Labor government when no less than 500,000 jobs were lost in the small business sector? Where was the member for Greenway then? And where was the member for Greenway's new-found enthusiasm for the unfair contracts legislation applying to small business?

Member for Greenway, I can well remember that that was actually a promise of the Labor Party, back in 2007. I remember what happened in the chamber here. Although I was not here I was following it very closely from home. I can remember that the now member for McMahon was rolled by one Craig Emerson. They deceived small business. They promised that they would introduce the unfair contracts legislation and extend it to small business, but when they got into office they rolled back on that promise and never did it.

This government has achieved a lot. I would rate the achievement of this unfair contracts legislation as perhaps the third most important achievement of this coalition government, behind stopping the boats and repealing the carbon tax. The genesis of this goes back to 1997—to the 'finding a balance' inquiry held under the Howard government, where it was recommended that unfair contracts legislation be brought in. For all the great things the Howard government did, unfortunately the recommendation from that committee was watered down and, instead, they extended it only to unconscionable conduct. Over those 17 long years we have seen the unconscionable conduct provision in our Trade Practices Act prove inadequate.

It is important that we give small business in this country, the entrepreneurs of this country, the job creators of this country and the innovators of this country protection if they know they are going to put their own capital on the line, as small businesses normally do. If they go into a market and are exposed to a larger company that is misusing its market power against them and is trying to extort them for unfair rebates, unfair discounts, unfair trading terms, unfair common-law penalties or changing contract terms, we will now have legislation in this country that prohibits that. To those people in small business, this is one of the greatest achievements of this coalition government, something we should be very proud of.

Often we criticise the process of this government, but, in this case, we have to give credit where credit is due. We should give credit to the Senate for raising the threshold to which these contracts apply to $300,000. Personally, I believe that there should have been no threshold limit because this is not about the value of the contract; it is about the imbalance of market power that enables those unfair terms to be put into a contract where that small business, because of the market power, does not have the ability to negotiate fully. Our contract common law has long recognised this. For over a century, we have had provisions against unfair penalties. Where a contract term implies a liquidated damages term and that liquidated damages term is greater than the genuine pre-estimate of the loss, our common law allows our courts to rule that term out and deem it unfair. That common-law provision has no threshold of $300,000.

I welcome the amendments from the Senate. I welcome what it has done. I welcome the way the parliamentary processes have worked. I thank the crossbenchers, who went forward and enabled the raising of that threshold from $100,000 to $300,000. Those crossbenchers should be congratulated on their efforts. Ultimately, it is about the imbalance of power. In our country, we have so many markets that are overly concentrated, where one or two large players have immense bargaining power. This is exactly the type of legislation that we need for our small-business community.

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