Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

As I was saying last night about the Australian Small Business and Family Enterprise Ombudsman Bill 2015, the ombudsman will need to be—and be seen to be—impartial in this process. The advocacy and assistance functions are entirely separate, and there will be no conflict between the two.

The ombudsman's assistance function will include a concierge role, responding to requests for assistance by referring requests to another agency of the Commonwealth, state or territory; by working cooperatively with another agency of the Commonwealth, state or territory; and by making recommendations where the request for assistance relates to a matter within the ombudsman's remit about how a dispute may be managed. This includes making recommendations that an alternative dispute resolution process be used—another ADR. Of course, the availability of an alternative dispute resolution process can certainly help preserve business relationships and avoid unnecessary and expensive litigation.

I think back to my time post the deregulation of the dairy industry and some of the challenges that faced us as dairy farmers. That is just a simple example of a group of people who were in a new environment. For example, at the time there were very few buyers in our market and a whole lot of sellers. There were some very interesting business practices applied, including third line forcing, and a range of matters took us before the ACCC. I can remember very clearly representing a group of dairy farmers at a hearing of the ACCC and officers saying to me that they were particularly disappointed in the quality of my presentation on behalf of dairy farmers. The officers were quite scathing, and that is something that has stayed with me to this day. I was appalled at their attitude and their approach to people who were trying to do the best they could in small business—which is where I see the ombudsman's role being important. It may not have been able to have been applied in that instance, but when I sat there and the commissioners looked at us as if we had crawled out from underneath a rock, I wished I had had an ombudsman—especially when an ACCC officer said to me, 'I am quite disappointed, Mrs Marino, in the quality of your presentation and the submission you have made to us.' I asked why that was, and he said, 'We were expecting something more along the lines of what we got in our previous inquiry—what we got from Air New Zealand and Qantas.' Shame!

I was working with a group of dairy farmers that had lost a third-plus of their income overnight in a deregulated environment. We were in a very difficult position, with very few buyers and a large number of sellers, and of course we also had the wolves at the door—Coles and Woolworths. In Western Australia they have an enormous impact over the market and the prices received by growers because it is basically a domestic market. To hear that comment from an ACCC person was extraordinary and showed an incredible level of disrespect for people actively out there, as small business people, getting on with the job and doing their very best to not only survive but also drive an industry and drive a local economy. Deregulation had a massive impact—we saw businesses disappear, not just farmers but other small businesses in our community. I remember driving through the small town of Brunswick, which was very dependent on the dairy industry, and seeing shop after shop closed. We saw businesses exit that small community—even the dairy farmers themselves, who were the ones who had supported not just the school but the local shops. The local store lost $10,000-$12,000 in the first weeks following deregulation. There was a $30 million exit of income out of the Harvey Shire alone, overnight. To have this sort of response from the ACCC at the time was appalling. I am really hoping that the ombudsman will take a very active role in a range of ways and that the ombudsman will be able to make inquiries and obtain information in relation to requests for assistance. This is a very important role. There are so many small businesses out there who find themselves in a David and Goliath situation, and often feel great frustration, as I felt, when dealing with any form of Commonwealth or other agency.

This Australian Small Business and Family Enterprise Ombudsman Bill and its accompanying Australian Small Business and Family Enterprise Ombudsman (Consequential and Transitional Provisions) Bill will fulfil one of the coalition's key election commitments, to establish an Australian Small Business and Family Enterprise Ombudsman. It is another example of how we value small business. That was very strongly reflected in the budget and it has been very strongly reflected in the fact that our small business minister sits within cabinet, sits within Treasury and is at the table for every discussion. The minister himself, as we know, is a very energetic and passionate advocate for small business. I think every small business around Australia knows that they have a champion within the government—but not just one. So many of us on this side are small business people ourselves, so we understand the issues facing small business. We have been the ones, like them, who have borrowed money, taken a risk and often pursued a passion, but, equally, with a very commercial focus. But there are times when we need that assistance from someone like the Ombudsman, someone who says: 'We will look at this for you in a practical, useful way. We will assist you in your dealings.' I am looking forward to what the Ombudsman can and will achieve for small business.

Australian governments historically, particularly the previous government, have not understood the challenges and needs and small business and family enterprises. We certainly do, and this is another plank in our continuing efforts to support such an important part of the Australian economy.

Gai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | Link to 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.

Karen Andrews (McPherson, Liberal Party, Parliamentary Secretary to the Minister for Industry and Science) Share this | Link to this | Hansard source

I rise in support of 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 bills fulfil yet another of our 2013 election commitments, which is to establish an Australian Small Business and Family Enterprise Ombudsman. In fulfilling this commitment we have set about ensuring that it is done properly, because we are not in the business of setting up another agency or bureaucracy just for the sake of doing it. Our approach is always to simplify, to ensure that government does not get in the way or hamper the growth of small businesses. This has certainly been evidenced over the last 18 months or so by the slashing of red tape through our repeal days, and that has delivered a staggering $2.4 billion in savings. So we are certainly a government that wants to get out of the way of businesses and knows how to do it.

The fact is that the Ombudsman is all about streamlining and providing a better process of dispute resolution for small businesses and family enterprises, and that is just so important. There was a public consultation process with 53 submissions received and a discussion paper that canvassed a range of options for ensuring that the Ombudsman would be effective, would not duplicate current services and would achieve our stated objectives. This legislation is a result of that process, and I would like to take this opportunity to congratulate the member for Dunkley, the Minister for Small Business, for the way he has championed the needs of small business. He has certainly been a tireless advocate and a strong voice in cabinet. This has been strongly evidenced by the Jobs and Small Business Package which was the centrepiece of the recent budget and the biggest small business initiative in Australia's history. It has been very positively received. I have spoken with many of the small businesses in my electorate of McPherson on the southern Gold Coast, and they appreciate the recognition and the assistance this package represents. It is a very clear, practical way to acknowledge the primacy of small business to our economy.

In my electorate of McPherson there are some 15,000 small businesses, and there are more than two million actively trading small businesses across the nation. Ninety-six per cent of all Australian businesses are small businesses. Many small businesses are also family enterprises, representing 70 per cent of all Australian businesses. Combined, small businesses produce more than $330 billion of total economic national output and employ over 4.5 million people.

The coalition has always believed in creating the right economic climate for small business to thrive. It is the central tenet of our policy approach: paying back debt, getting the budget back into surplus—these are all mechanisms for ensuring that we create the right conditions to allow small business to create jobs and contribute to the economic wellbeing of our local communities. We know this task is ongoing, and we know there is always more to be done, and this legislation represents yet another step in the plan.

The Australian Small Business and Family Enterprise Ombudsman will have two primary functions: advocacy and assistance. In this way the Ombudsman will meet our commitment to establish a role that is a Commonwealth-wide advocate for small businesses and family enterprises; a concierge for dispute resolution, who will also offer an outsourced alternative dispute resolution service; and a contributor to making Commonwealth laws and regulations more small-business friendly.

As I said at the start, this is very much about making life easier for our small business owners. The Minister for Small Business has recognised and acknowledged that:

… small businesses are often treated as if they were big businesses, with all the resources of a big business. Important compliance demands faced by small businesses include the workplace relations framework, competition policy, contract law, business and tax law and business processes and communications. Big business, with their accountants and their legal departments, are better equipped to deal with such matters. For small business people, time spent on compliance demands is time away from investing in the success of their enterprise.

The minister intrinsically understands the challenges of small business—as do many on this side of the House, including me, because we have owned and operated small businesses. I know what a tough gig it is. We certainly have a lot of sympathy for, and a great understanding of, the time pressures on small businesses. Just having to comply takes them away from the day-to-day business of actually growing their business or even just making ends meet.

Not all governments have understood the needs of small businesses and family enterprises. Under the former Labor government, small businesses were pretty much left off the agenda. There was a revolving door of small business ministers, including five in the final 15 months of Labor's term in office. Sadly, over the six years of the former Labor government, 519,000 jobs were lost in small business. At the end of Labor's term, fewer small businesses were employing people than when Labor started, with the small business share of the private sector workforce falling from 52 per cent to 43 per cent of all employees. That is a really sad statistic but it is perhaps not surprising. Many representatives on the other side of the House do not have a small business background. While I acknowledge the contribution by the member for Canberra in this debate and her small business experience, that is not common on the other side of the chamber.

If you have not been in small business, you do not really understand the constraints and the issues and how hard it is to be a small business owner and operator. You do not understand the sacrifices, courage and hard work that owning and operating a small business requires. This bill is further evidence that we on this side of the House do understand small business and that we thank them for having a go. Looking through the submissions made by various stakeholders in small business groups on the establishment of the ombudsman, there were a lot of very positive submissions from representative organisations, including the Australian Association of Convenience Stores, the Australian Newsagents Federation, the Australian Sporting Goods Association, the Council of Small Business of Australia, the Franchise Council of Australia, the Housing Industry Association and so on. These are just a few of the many who contributed to the public consultation process.

I also note that one of the most common concerns expressed in the submissions was the duplication of roles between the ombudsman and various other agencies. Of course, the minister has expressly addressed this by ensuring that the ombudsman will not duplicate the functions of other officials. The ombudsman will work collaboratively with Commonwealth officials such as the Commonwealth Ombudsman and the state small business commissioners as well as other relevant officials across all jurisdictions. As part of this collaboration the ombudsman will identify systemic issues that warrant a national approach and advise the government about such matters.

To assist with our ongoing deregulation agenda the ombudsman will provide advice on proposed an existing legislation, regulations and practices. This will help ensure we can continue to have our highly successful repeal days twice a year to cut red tape and remove unnecessary legislation. The ombudsman's brief is to help ensure that, wherever possible, red-tape burdens are minimised, removed or prevented from being imposed in the first place. The small business minister will also be able to refer matters to the ombudsman for inquiry. This part of the advocacy function is similar to that available under the Productivity Commission Act, and is designed to provide a formal framework and supporting powers that allow the ombudsman to undertake a public inquiry into matters of significant interest to small businesses or family enterprises. The minister will be required to table reports of such inquiries by the ombudsman in the parliament.

The ombudsman will also fulfil an important alternative dispute resolution role, providing improved access to justice for small businesses at the Commonwealth level. The ombudsman's assistance function requires the ombudsman to give assistance in relation to relevant actions if requested to do so.

A key requirement of the Ombudsman is to not duplicate the functions of Commonwealth, state or territory officials. Instead, under the ombudsman's concierge role, small businesses and family enterprises will be referred, where appropriate, to existing agencies that can deal with their issues. The concierge role acknowledges that there are already a number of services for small business issues, complaints and disputes, but that small businesses often do not know where to turn for support. This means that, small businesses can approach the ombudsman for assistance for any dispute or complaint they may have. The ombudsman must then transfer a request for assistance to another Commonwealth, state or territory agency, if that agency could deal with the request and it would be more effective and convenient for that agency to do so. The point is that the ombudsman will be in a better position to know who the small business should go to and to provide initial advice.

The ombudsman will also provide an outsourced alternative dispute resolution service. As part of this facilitated dispute resolution function, the ombudsman may recommend that an alternative dispute resolution process be undertaken. To support the facilitation of early and cost-effective dispute resolution, the ombudsman may publicise the failure of a party to participate in a recommended alternative dispute resolution process. This approach is intended to incentivise parties to genuinely participate in an alternative dispute resolution process.

Just from the functions I have outlined so far, we can see how the Small Business and Family Enterprise Ombudsman will work to further the interests of small business and be of genuine assistance to small businesses requiring advice, particularly in relation to dispute resolution. It is no wonder that the submissions to the public consultation process were overwhelmingly in support of the establishment of the ombudsman. For example, the Australian Newsagents Federation said in their submission:

The ANF strongly supports the introduction of the role of Small Business and Family Enterprise Ombudsman. We believe it will be of great assistance to our members and to strengthening small businesses in Australia more broadly.

The Australasian Association of Convenience Stores wrote:

We are hopeful that the establishment of the Small Business and Family Enterprise Ombudsman, and its capacity to extend the activities of the Australian Small Business Commissioner to create a more purposeful, empowered and effective role, will support these businesses—owners and employees—into the future … the AACS supports the establishment of the Ombudsman and is positive about the outlook for small businesses in Australia.

The Housing Industry Association said:

HIA notes the Government's commitment to transform the current office of the Australian Small Business Commissioner into a Small Business and Family Enterprise Ombudsman …

They go on:

HIA supports the Commonwealth Government's overall focus and agenda on better representing the interests of the small business community.

The Australian Chamber of Commerce and Industry noted the brief to fight red tape as a significant positive, saying:

In relation to reducing red tape, ACCI argued that the Australian Small Business Commissioner should become a "warrior to fight red tape". We are therefore encouraged by the proposal that red tape reduction will be a priority for the newly formed Ombudsman.

Overall, our submission supports the principles that underpin this policy announcement …

So I do think there is widespread support for the establishment of a federal advocacy and assistance body for small business—the Australian Small Business and Family Enterprise Ombudsman will be a very welcome addition to the range of services currently on offer. On behalf of small businesses on the southern Gold Coast I am very pleased to express my strong support for this legislation and to commend the bill to the House.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Australian Small Business and Family Enterprise Ombudsman Bill 2015 and consequential and transitional provisions. I had intended to focus particularly on the benefits that come from this, but after the member for MacPherson's contribution I feel I need to respond on behalf of the Labor Party. I am loath to do this on a day when she is wearing maroon and I am wearing maroon. Everybody in the chamber would be supportive of the Maroon's endeavours tonight. Nevertheless, I will return to some of the statements made by the member for MacPherson—not only by the member for McPherson but by other members opposite—about the Labor Party and small business. I will touch on the initial part of the legislation because it makes an important contribution to establishing a small business and family enterprise ombudsman. The ombudsman will assist small businesses in both advocacy and assistance functions, and Labor is supportive of that legislative endeavour. The ombudsman will have extensive powers, including to research and inquire into legislation, policies and practice that affect small business and also to compel persons to give evidence at hearings and provide information and documents to assist in the ombudsman's work.

It is an ombudsman's role that I have looked at in terms of child protection. It is something we do not have yet. What the government has laid out in this, in terms of supporting small business, is certainly something I would like to see rolled out in some other areas that I am involved with because of my shadow policy work. The small business and family enterprise ombudsman can respond to requests for assistance from small businesses and then refer those requests to the appropriate Commonwealth, state or territory agency. There is a strong focus on dispute resolution in the bill, with the ombudsman having powers to publicise that one entity has refused to engage in or has withdrawn from a recommended alternative dispute resolution process. I am all for alternative dispute resolution, even though I have had my own small business and then worked as a lawyer, where most of my clients were small businesses. Obviously, lawyers need to make money. Nevertheless, any sensible person working in government or with legislation wants to avoid legal disputes wherever possible. So alternative dispute resolution is to be commended.

I want to take people to one of the roles. If there are two small businesses, the ombudsman may publicise, in any way that the ombudsman thinks appropriate, that an entity has refused to engage in an alternative dispute resolution process recommended by the ombudsman or has withdrawn from such a process. I understand the intention: to bring parties together to sort out their disputes. That is a good thing. But it would certainly be a strange process if the person responsible for government red tape named a small business because of its behaviour or they decided to go through a legal avenue or something that the ombudsman had not recommended. We will see how that plays out in the future.

I return to some of the comments made by the member for McPherson and other people on the other side about Labor and small business. I know how important small business is, as does the Labor Party. We understand that the number of private sector jobs in Australia connected with small business is nearly 50 per cent. If small business is humming, the Australia that we love and value is humming as well. If small business is lacking in confidence, scared and people are not spending money in small businesses, that is bad. Even if they are putting the money into their mortgages and saving and the like, it is better if money is being circulated through the economy. We understand that. We saw that particularly through the global financial crisis, when Labor responded particularly by going to small business. We saw it towards the end of the six years of the Labor government as well—by supporting small business where we could. For almost the last month, we have the government trying to drive a wedge between what the national interest is and their own interest by suggesting that Labor is not supportive of small business. On so many occasions in this chamber we saw the government suggest that the small business measures in the tax laws amendment were being held up by Labor.

We saw the Prime Minister in question time on 1 June, saying:

With the economy in transition, it is important that these budget measures to help small business get through the parliament as quickly as possible, some small businesses are reluctant to invest until the measure has passed the parliament. I say to the Leader of the Opposition, let us not let politics get in the way of economics. Let us not let self-interest get in the way of national interest. Let us pass this bill straight away.

Those were the actual words of the Prime Minister about small business. But, always, when it comes to the Prime Minister it is not what he says, it is what he does.

We did not have legislation in the chamber at the time. In fact, when the legislation did come into the chamber and the Leader of the Opposition said, 'Let's vote on it right now and get it through,' the government then voted against its own legislation! Why? Because, like security, small business was being used as a political vehicle to create political gain for the government and damage for the Labor Party. There was no focus on the national interest; instead, it was only self-interest. I guess the guy who had 39 people decide to vote against him said, 'I will do anything I can to reach to the extreme and divide the nation rather than lead the nation.'

I understand small business. I know that the member for Lingiari here has run his own small business as well. I come from a small business family: my father was a butcher and a grazier, and he ran abattoirs. Small business is in my blood, like it is for so many people. Whether it be as a lawyer, running a small business, or a lawyer working for a small business, so many people on this side and the other side of the chamber understand small business. So they should not try to carve out that false dichotomy and suggest that only the government supports small business. That is not the case.

We know that when we were in government we did so many things for small business. For example, so many of our policies were then embraced by the government after they got rid of them. That is the reality. I do remember the Prime Minister—the then Leader of the Opposition—saying on the night before the election that there would be no new taxes and no cuts to pensions et cetera. And what did he do? There was a $3.8 billion cut to small business. There was $3.8 billion taken away from small business. The government abolished the tax loss carry back provisions—I think it was at MYEFO, within a month or two of coming to office, that they abandoned those loss carry back provisions and the special depreciation rules for motor vehicles, and they unwound the instant asset write-off. I have not heard one speaker opposite who has stood up to talk about small business apologise to the small businesses in their electorates for what they visited upon their small businesses without warning—without a mandate at all! They just ruled that out and said—

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

We took the policy to the election!

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

They mugged small business! And that 2014 budget which, surely, put a foot on the throat of small business more than anything else this government has done: confidence collapsed—you can track it. It collapsed straight after that 2014 budget. There was the $845 million cut to industry and small business programs—programs like Commercialisation Australia, Enterprise Solutions and Enterprise Connect. They are programs that I know the member for McPherson would be familiar with. They vandalised the Tools for your Trade program, which was about investing in the workers of the future in small business. There was $1 billion in support for apprentices abolished and then another $1 billion worth of skills and training programs gone.

When I talk to the nearly 19,000 small businesses in my electorate—admittedly, some of those are quite large—the main thing they talk about is not red tape. I am sorry, I must be talking to the wrong businesses! It is not about red tape, it is about getting skilled personnel and getting the right personnel—the appropriate personnel. That is the main problem for small business—getting the right people—because it is crucial for a single-person, a two-person or a three-person enterprise to get the right people being able to step up. That is why training was so important.

I heard the Prime Minister say about small business on 1 June:

Let us pass this bill straight away.

The Treasurer then said in question time:

So here is a challenge for the Labor Party. This legislation is going to go through the House of Representatives this week—

absolutely right—

Then it goes to the Senate—

which only has two weeks to sit—

I lay down the challenge—

to the Labor Party—

help us get that legislation through as quickly as possible.

They were obviously trying to reach out to what they saw as their core audience and also drive a wedge between the Labor Party and the government when it comes to small business. The Prime Minister has an inability to sit down and see what is in the nation's interests. He has been the most perfect opposition leader—unfortunately, he has carried that behaviour, that form, that radar into government. That is not in the best interests of this nation. If he has the sort of character that means he can rise to the top of the writhing, seething heap of aspirants in the Liberal Party to become Prime Minister, he should be able to focus on what is in the nation's interests and leave that oppositional politics, that 'Nope, nope, nope' approach, to when he is in opposition. Small business needs more support.

We support the small business legislation; we are supporting this Small Business and Family Enterprise Ombudsman Bill. As I said, I had some concerns about some of the public naming and shaming aspects of it, but that will be sorted out in the process. No doubt the minister might address that when it is time to respond. But to use small business as a weapon in Australian politics is disgraceful behaviour. It is almost as if the focus is on having power rather than using power. That is the sign of a leader with a fundamental flaw, an Achilles heel. If they are only going to focus on wedging, you then have to ask what is the purpose of the Liberal Party—what is the purpose if it is only to oppose? That works when you are in opposition, but not when you are in government. If you are going to be the party of small business, you must focus on all small businesses that benefit the nation, particularly with the jobs of the future. We are not, to paraphrase Napoleon Bonaparte, a nation of shopkeepers—we must be a nation focused on innovation; we must be a nation that reaches out to Asia; a nation that uses the National Broadband Network to create the jobs of the future.

I know the member for McPherson has a strong track record in this area, because I have seen some of her speeches. I know she believes in innovation—but it must be done in a strategic way, by reaching out to our near neighbours, reaching out to those 250 million customers in Indonesia, and not by creating barriers between us and them; reaching out to that emerging middle-class in China and India and Malaysia and Vietnam and selling them Australian services. I visited a small business in Salisbury in my electorate last week, barely a kilometre from my home, and I was able to see a fender manufactured that then goes onto a Volkswagen that is sold in Europe. If a Volkswagen has a crash in Europe and the fender comes off, you will see on the fender that it says 'Made in Australia.' You can see the photograph on my Facebook—how proud I was to see that business holding its own, holding its head up high and selling our products to the world. I know our labour costs and some of our other costs are higher, but Australian innovation is what should be supported.

The reality is that if the Liberal Party focuses only on division and only tries to cling to power rather than focus on the nation's interests, it will be a hollow party and any victory will be hollow. It will be a soulless husk of a party encasing only the idea of power rather than the good that comes with power. I urge those opposite to stop trying to divide this chamber on small business, stop trying to divide this chamber when it comes to all those things that are in the national interest, including security, and focus on what is best for Australia and the small businesses throughout the country—particularly those 18,000 to 19,000 small businesses in the electorate of Moreton.

Karen McNamara (Dobell, Liberal Party) Share this | Link to this | Hansard source

I must say that it is a pleasure to return the debate to the actual bill before the House. I rise to support the Australian Small Business and Family Enterprise Ombudsman Bill 2015. The bill fulfils yet another commitment by this government to the Australian small business community. This government recognises the vital role small businesses play in this trade and economy. I recognise and applaud small business on the New South Wales Central Coast for the role they play in the Central Coast economy. Australia's two million small business produce more than $330 billion in economic output and employee over 4.5 million people. Seventy per cent of all Australian businesses are family enterprises, and they deserve the full support of the government.

When introducing the Australian Small Business and Family Enterprise Ombudsman Bill 2015 the Minister for Small Business, the Hon. Bruce Billson, said:

These businesses and their enterprising women and men are the foundation on which Australia's economy is built and our future prosperity will be realised. The ability for small businesses to remain innovative, grow and deliver new jobs is dependent on reducing costs and increasing the time that owners have to invest in their business. We understand that small businesses do not have the same level of resources available to big businesses when dealing with compliance and regulation.

I know firsthand from my role, before I came to this place, as a compliance manager with a New South Wales government regulator that the majority of businesses want to do the right thing but they do struggle with compliance. So it is important that they know where to go to get that important information so they can comply. Small businesses must ensure that they comply with the workplace relations framework, competition policy, contract law and business and tax law. This is all in addition to meeting the needs of their customers. There is no doubt that small business operators are time poor and, as I mentioned, they need to know where to go for advice and assistance.

Since the coalition was elected we have delivered a suite of measures to ensure that the small businesses of Australia are operating within an environment that is focused on supporting success. The Australian Small Business and Family Enterprise Ombudsman Bill establishes the position of an ombudsman who will assist the small business and family enterprise sectors. The concept of the Australian Small Business and Family Enterprise Ombudsman was first proposed by this government prior to the 2010 federal election. In 2013 the government announced the creation of an Australian Small Business and Family Enterprise Ombudsman with real power. Importantly, the office of the ombudsman will serve as a single entry point to access federal small business programs and support. The ombudsman will have two key primary functions—as an advocate and to provide assistance. The ombudsman will serve as a Commonwealth-wide advocate for small business and family enterprise and a concierge for dispute resolution who will also provide an outsourced alternative dispute resolution service and as a contributor to ensuring Commonwealth legislation and regulations are more small-business friendly.

These functions have been welcomed by the Australian Chamber of Commerce and Industry, who have stated:

Small businesses lacked the financial and logistical resources to pursue any formal legal action on their own.

They suggested that the new ombudsman be given powers to perform investigations and refer disputes to authorities. The ombudsman will provide an alternative dispute resolution role providing improved access to justice for small business at a Commonwealth level. An example of a dispute resolution service provided by the ombudsman may be in relation to interstate and international commerce. As part of the dispute resolution function the ombudsman may recommend that an alternative dispute resolution process be undertaken. This may include referring parties to a relevant provider to independently perform the alternative dispute resolution process. The ombudsman's alternative dispute resolution service will complement the concierge role and will not replace existing systems across the Commonwealth, states and territories. Ultimately, the government's aim is to help improve business productivity, preserve business relationships and avoid expensive litigation. Therefore it is important that the ombudsman facilitate the timely resolution of disputes.

This builds upon the role of the Australian Small Business Commissioner. The former Labor government established the commissioner without a commission or legislative backing, therefore reducing their capacity to assist our small businesses. It is essential that positions such as the commissioner and ombudsman receive appropriate legislative authority to act and are equipped with the proper tools to assist small businesses. Unlike the Australian Small Business Commissioner, the Australian Small Business and Family Enterprise Ombudsman will be supported by legislation. Significantly, the ombudsman will be a strong advocate for small businesses and family enterprise in relation to relevant legislation, policies and practices.

This government takes small business seriously. Unlike the former Labor government, which had six ministers for small business in as many years, we understand the importance of having a strong, constant voice advocating for small business. This is why our Minister for Small Business has a seat at the cabinet table. Building upon this strong foundation, the ombudsman will listen to small businesses and family enterprise and operate within the Treasury portfolio to ensure that small business perspectives and views are considered by all areas of government when developing programs and policy. Furthermore, the ombudsman will be granted information-gathering powers to enable investigation into the wide range of issues impacting small business and family enterprise. This is particularly important if we are to understand the issues confronting small business as they interact with the public sector and elements of the private sector.

Importantly, the ombudsman will not duplicate the functions of other officials. The ombudsman will be directed to work collaboratively with Commonwealth officials such as the Commonwealth Ombudsman and the state small business commissioners to deliver outcomes for small businesses. As Minister Billson highlighted in his second reading speech, the government acknowledges that a number of services already exist for small business issues, complaints and disputes. Not all small businesses know where to turn for support. The ombudsman will provide small business with a point of contact when an issue arises. This means that a small business can approach the ombudsman for assistance in regard to a dispute or complaint. However, the ombudsman will be required to transfer a request for assistance to another Commonwealth, state or territory agency if that jurisdiction is best placed to resolve that complaint.

The government will ask the ombudsman to identify issues that warrant a national approach. It is important that we collaborate with the states and territories to ensure that it is as easy as possible for small businesses to operate across state borders. This bill will also allow the Minister for Small Business to refer matters to the ombudsman for investigation. The ombudsman can be requested to undertake a public inquiry into matters of significant interest to small business or family enterprise. In instances where this authority is used, the minister will be required to table the report of the ombudsman's inquiry in each house of parliament.

As a member of this government, I am proud to have supported efforts to tackle overregulation and the burden of compliance on small business. Cutting red tape is building a stronger and more prosperous economy. This has been particularly important for our small businesses, which currently spend far too much time dealing with regulation. As I have highlighted previously in this place, the average Australian business deals with eight regulators in a given year, spends close to four per cent of its total annual expenditure on complying with regulatory requirements and spends approximately 19 hours a week on compliance related activities. This is valuable time that could be better utilised growing its business and delivering more jobs.

Last year, I had the pleasure of hosting a delegation of business stakeholders from the Central Coast for the government's first regulation repeal day. John Mouland, CEO of Regional Development Australia Central Coast, welcomed the government's commitment to cutting unnecessary red tape and green tape. He said, 'It's great to see the Commonwealth introduce measures to simplify or completely remove unnecessary or duplicated regulation that directly adds to the spiralling cost of compliance that local Central Coast businesses face.' Our subsequent repeal days have continued to deliver relief for Australian businesses, ensuring that they spend their time focused on growing their business rather than complying with government requirements. To date, the government has delivered a total deregulatory saving of $2.45 billion.

The ombudsman will assist the government with our deregulation agenda by providing advice on proposed and existing regulations, legislation and practices. This ensures that small business and family enterprises are at the centre of policy and program design. Furthermore, it will also ensure that the burden of regulation and red tape is minimised, removed or prevented from being imposed.

As I previously mentioned, this is a government that listens to and understands small business. Our $5.5 billion Jobs and Small Business package was welcomed with open arms by the small business community. The New South Wales Business Chamber stated:

The engine room of the national economy, the small business sector, has received a much needed boost in the Federal Budget …

The Business Chamber also highlighted the difference between this government and the former Rudd-Gillard-Rudd Labor government in regard to support for small business. New South Wales Business Chamber CEO Stephen Cartwright said:

Five years ago, the small business community wasn't even mentioned on budget night, but now it is front and centre of Budget commentary.

This bill continues to build upon the great support delivered through this year's budget. Importantly, the Business Chamber stated:

These measures will be particularly well received in regional Australia where unemployment is at its highest and job opportunities are limited.

These are the results when you have a government committed and determined to ensure the success of Australia's small business.

We are already seeing the results of this government's determination to help Australian small businesses. When the Hon. Bruce Billson MP, Minister for Small Business, said, 'Australians are well known for their enterprising spirit and their willingness to have a go,' he was absolutely correct. In 2013-14, Australians started over 280,000 small businesses. Our $5.5 billion Jobs and Small Business package will create the right conditions for small businesses to thrive and grow. This bill, the result of extensive consultation with the small business community, continues to build upon this government's strong record of achievement for small business.

Small businesses and family enterprises in my electorate of Dobell will benefit from the introduction of the Australian Small Business and Family Enterprise Ombudsman. And we are determined to make life as easy as possible for small business operators so they can spend their time growing their business, spending time with their families and taking that well-earned break. On behalf of the 8,703 small businesses in my electorate of Dobell, I thank our Minister for Small Business, Mr Billson, for his commitment to small business. I commend this bill to the House.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

Can I say from the outset that I support this bill and I support what the government is trying to do. In question time yesterday the Treasurer was answering a question in relation to small business and the economy, and he said, 'We've made a good start but we have a lot of work to do'. Can I suggest: this is a good start but we have a lot of work to do when it comes to small business.

There are some real issues around small business, particularly around subcontractors, that I would like to concentrate on in my contribution here. The nature of unfair contracts and the nature of work in the construction industry seems to have changed. Once upon a time, the contractor would tender for a job and do the job. It seems to be the case now that someone tenders for a job and they become the lead contractor but they do not do any of the work. They are the developer. The person who carries all of the risk is the subcontractor; they are the one that carries all the debt and all the risk.

I can give you an example. We had a flight simulator built at RAAF base in Townsville. It was a fantastic job. People line up to do government work because they are assured of being paid. This was just after I was elected. The developer, as opposed to the winner of the tender—and it was a fair and open tender—had numerous other projects going on around the country. One of the projects they had a real issue with was a swimming pool complex in South Australia. Because of their bad work on that—or supposed bad work or technicalities on that job—that bloke went into receivership and liquidation. He was wound up. My subcontractors in Townsville, thinking that they were doing government work, were fully exposed. At the end of the day, you cannot get your concrete back. You cannot pull out the steel you put in the concrete foundations. You cannot do it.

So, I was a brand new member of parliament, a brand new person in the role, and someone is coming to me and saying, 'We've done this government work and we aren't getting paid'. I thump the table and say: 'That's what we're here for, Mate. Bloody Labor! They'll stick it to you every time.' But, when I go back and talk to my guys, they say: 'Mate, unless they've got a contract signed by the government, they don't have a contract with us. They're not doing government work.' So, whilst we are talking about this sort of thing—people being screwed for price on government work because you are assured of getting paid—they carry everything; they carry all the risk. There are two things we cannot legislate for in this place. We cannot legislate for greed and we cannot legislate for stupidity. So we have to make sure that it is part of the broader part of the nature of business and the nature of construction.

I am an auctioneer by trade, and the auctioneer's creed is to leave a dollar in it for the next guy. You cannot just wipe him clean every time he comes in, because he cannot make any money out of it. It seems to me that the way the big contracts are done—the construction of government roads and that sort of thing—instead of being left over at the end, the profit is taken at the front. They have structured in how much profit they need to make at the front. I say these words with absolutely no factual base whatsoever. But these are the sorts of things that are coming to me in the pubs, in my office and in the streets when I am talking to subcontractors.

There is the big end of town that takes the profit first, and the subcontractor down the bottom is left to accept the price or not get the work. The problem we have when we get into that space is—and the member for Flinders is in here, and he is a good man; he has driven trucks and done all this stuff—when you are that lone driver-owner-operator and the bloke from the big contractor comes up and says, 'That's the price'. You are promised about $1,200 a day to run your truck and that sounds alright; so you commit to the work, knowing that that is alright. But then they change the goalposts and say, 'That's the price.' You are already in so far; how do you get out? How do they get out? If the developer or winner of the major contract is struggling for cash and the subcontractor is not getting paid, how long does the subcontractor leave it before he walks away? When is he prepared to make the complaint? Who is going to make the complaint?

I had an owner-operator come and see me the other day. It was about a job in Townsville and it was reasonably close to the quarry. His end rate—and he could not really work out how much an hour or how much it was—was $1.84 a tonne to deliver. He was not paid an hourly rate; he was just paid a tonnage rate.

I have situations in Townsville where truck drivers—with a dog and trail, with a quad dog tipper—have to modify their trucks to make sure they have automatic curtain things that go over the top, covers and all that sort of stuff; they have to do all of that. These guys are signing up for about $80 an hour, knowing full well that their break-even is about $140 an hour, and knowing that to make a profit they need to make at least $160 an hour; yet they are signing these contracts and doing these things in the hope that, because they are turning wheels, something will happen and they will end up better off. This ombudsman here is a great idea but it is not going to fix that. It is not going to fix the nature of that thing. What we have to do is go back and have a look at the very nature of the tender process and the way business is conducted in this country.

As I said before, when I was a young bloke, my dream job was to be a final trim grader driver. I figured that was a bit of art; you could use your fingers and everything like that. But technology changes the nature of all these things, and changes the job. What we have done over a long period of time is change the rules about how business runs. We have just had a builder—not on a government job, but on a private job—for a very large not-for-profit church-based organisation. The builder or developer has gone under, and every subcontractor in Townsville who has worked on that is basically going to walk away with very little. This happens a lot.

People go broke. As an auctioneer I worked a lot in the insolvency industry and the companies for whom I worked made a lot of money out of these things. The Keating recession was a fantastic time for auctioneers. And when the economy is going well it is an even better time for auctioneers, because people have more money to buy the stuff from you. But what we have done is make the tender process so convoluted, conflicted and confused that it is no longer about driving value for the tax dollar and driving the value through our economy more than once.

I can give you one example here—it is not particularly related to this bill. The logistics hub at Lavarack Barracks is a $120 million job. It is a fantastic facility. Baulderstone, which are now Lend Lease, won the tender fair and square. But their major subcontractor was an organisation called Shamrock Civil Engineering. Shamrock have an office in Townsville—they have about six people working in that office. But their blokes were fly-in fly-out, and they brought all their equipment up from Brisbane. The local guys, even though they live there, could not match their price to do the work.

Minister David Johnston was the Minister for Defence at the time, and he said, 'You'd be really happy with that—that $120 million going into your economy.' I said, 'Well it is not, really. The $120 million-facility gets built, but there are no apprentices or tradies going through. So that $120 million flushed through our economy just once. The only person who is making money and putting people on is the bloke who runs Hungry Jacks across the road.' He was the only one making money out of it.

What we have to do here as a parliament, especially when it comes to government work, is to make sure that the money flushes through our economy more than once. I think that the tender process in this space has become convoluted and confused. It becomes harder and harder for someone to take a bite out of it and become the principal contractor for that part of it. That is where it leads to our subcontractors being exposed.

What we have to do is to understand the nature of business and how people get desperate when times are tough. There is a lot of stuff happening in Townsville—there is a lot of building going on and a lot of federal government money going in—and we are a very good town. But confidence is brittle, and a lot of what this government has done in relation to the small business package has been fantastic for Townsville. But small business is more than just the instant asset write-off. We understand that getting rid of red tape and everything like that is very important in this, but what we have to do is to understand that the way that business is being conducted these days is very different.

As I said before—and I want to make the point again—it just seems to me that the person who never loses is the person with the least risk. Surely, we have to look at these things? When these things go bad and these guys go to the Small Business and Family Enterprise Ombudsman they will not be able to get their money in every case. And we are not guaranteeing that they are going to get their money. No-one can guarantee that they will get their money because that is not the way that business works. That is not the way the world works. But the subcontractor in today's day and age—the concreter, the truck driver and the chippy—the bloke who does the work, cannot participate in the tender process anymore. So he cannot get the guarantee of the work, he cannot get the guarantee of the payment and he is exposed, she is exposed and their families are exposed.

These are the people who live in our electorates. These are the guys who we have to look after. And if we are to talk about unfair contracts: if someone is offered a job at $1.84 a tonne, goes and complains and says, 'That's an unfair contract,' so that they have to up their payments, what chance does he have of getting the work? They will find some way of getting rid of him. At the moment we have blokes driving around in rags in their trucks because although they are getting income and turnover they are steadily going backwards. We have to look seriously at the way we are doing these things in this country at the moment.

The tender size for a job like this is now very thick. There are all these things that go into it and you have the state and federal governments turn it over, open it up and see $1.1 million or $1.05 million—and $1.05 million gets it. So while it is weighted 100 per cent on price but not on value for money we have a real issue.

So this is good legislation; this is a good start. We have a very good Minister for Small Business, who understands this. We have a very good Treasurer, who understands this. But what we must do is drive this reform through COAG, because until we can get to the stage where people can actually bid for work—where the tender can reflect the part that they want to make—they are not guaranteed payment at any stage for government work. And they are the ones who are carrying the risk.

There is not a person in this place who wants subcontractors in their electorates, their state or their country to continue to be exposed. There is not one person in this place who does not understand the nature of business. There is not one person in this place who does not get that we must be better at this. This has happened over a long period of time and it is something that not one of us is happy about, getting belted in the street by people who hit us up about them having done all this work and, because something happened on the other side of the country, they are out of pocket by $100,000.

Now, $100,000 on a $120 million-job is not a lot of money. But $100,000 to an owner-operator of the truck with a quad dog is a massive amount of money; $100,000, or even $50,000, to someone who has three kids in school, loan payments or an overdraft is a lot of money. And when you have no chance of getting that back and you have no chance to alter your circumstances in the first place—you have no chance to participate where the money is guaranteed—that is where the fault lies. And that is what we as a parliament and what this country must do through COAG. We must work to the place where we can be better at making sure these things comply—that people can have a go.

The Treasurer stood up there on budget night and when he announced the small business package I almost ran down there and hugged him.

I thought it was bloody spectacular. But unless we are doing what we need to do, unless we can fix this up for people to have that go, unless we can offer some sort of protection, unless we can increase participation and make it easier for people to have a slice at it—the taxpayer must always be protected. I do not believe that the current tender situation is actually producing a great result for the taxpayer. There are too many examples out there of too much going wrong. So I support this legislation but I support it because it is a step in the right direction. As the Treasurer, the Minister for Small Business and the Prime Minister have all said, this is a start. We have a long way to go but we are up for the job—and we have got to be up to the job.

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

The Australian Small Business and Family Enterprise Ombudsman Bill 2015 is one of the steps that the coalition is taking to restore health and vitality to the small business sector of Australia after the previous six years of damage under the Labor government. We should never forget that under the six years of the Labor government we saw 519,000 jobs lost in the small business sector. More than half a million fewer people were employed in the small business sector after the six years of damage by the previous Labor government. The small business sector went from employing 53 per cent of the private sector workforce down to 43 per cent. We saw, despite the growth in our population and the growth in our economy, a decline in the number of small businesses employing people. So we have a lot to do to turn around: to get small business back on track, to encourage entrepreneurial activity and to get innovation again happening in the economy the way it should be. This bill is just one of those steps.

One of the reasons for this bill is the breakdown in the rule of law. The rule of law is one of the most important aspects that protects our liberal democracy and our free market system. The rule of law should mean that we are governed by pre-existing rules so that those participating in the economy simply know what is and what is not permitted. The rule of law should ensure that, when business decisions are made, the ground rules are known and can be enforced. Businesses must be protected from thievery and plunder, for our economy or any economy can never be fully productive if we have a legal system that does not protect the incomes, properties and contracts of those who produce our nation's wealth. If the rule of law breaks down it not only causes wealth to grow more slowly than it otherwise would but also decreases the living standards of some and often leaves some segments of the population in poverty. So it is essential that we have a rule of law that protects commercial activity, enforces existing laws and ensures fair dealing between those who buy and sell. But we have allowed a legal system to develop in this country that has resulted in the breakdown of the rule of law. We have allowed an order to develop where small businesses today are vulnerable to the depredations and thievery of larger businesses. We have created a legal system with a structure that provides privilege to a larger firm in a commercial dispute and puts a small business in a subordinate position. In a commercial dispute today between a large business and a small business, the small business simply does not have a chance. Small business can lose a commercial dispute. They can be right on the facts. They can have all the evidence. But they will often lose in commercial disputes because the larger competitor, the well-financed adversary they are often up against, simply has deeper pockets and can outspend them in a legal battle. That leads to a breakdown of the rule of law and a breakdown in access to justice.

That is one step this bill takes. By creating an ombudsman it provides one small mechanism that allows the ombudsman to step into the small business's shoes and help negotiate a dispute. This is one step but we should go much further. We should look at bringing triple damages, which were removed many decades ago, back into our competition laws. Unlike in the USA, where they have a triple-damages provision that encourages private enforcement in the law and allows small business to take on a larger competitor in a dispute, we had those triple-damages provisions taken away many years ago. We need to look at reinstating them as something we can do as well as creating the small business ombudsman.

Another reason why a small business ombudsman is needed in this country is another aspect of the rule of law, and one of the essential elements in the workings of any free market system. It is that all contracts need to be entered into freely. You need a willing buyer and a willing seller—and that word 'willing' is important. Through the failure of our competition laws we have seen the growth of duopolies and oligopolies fostered. We have reached a situation where the ability of one party to contract negotiations to say 'get stuffed' has been taken away. Take, for example, a small business supplying our supermarket sector. He would have assets invested in plant and equipment. He would have ongoing finance commitments to his banks or his other financiers. He would have ongoing commitments to his highly trained staff. He may have a lease on premises. These are all ongoing obligations and liabilities. And where he faces the situation that we have allowed to evolve in Australia, where we have allowed two players to capture 80 per cent or more of the market, that supplier will often find that 50 per cent or more of his sales are going to a single customer. So when he sits down in a contract negotiation with that customer, if that supplier finds that he is being put under undue pressure and being asked to do something unreasonable, he simply does not have the ability to say 'get stuffed'. Because if he cannot say that, if he walks away from those negotiations and loses 50 per cent or more of his business overnight, he is actually committing suicide in his own business. Very few businesses can continue to operate with a structure where overnight they lose 50 per cent of their business when they have investments in plant, equipment and an ongoing lease. This is the situation that we have allowed to develop in Australia. It is not only harmful to consumers; it is harmful to innovation in our country and we need that innovation. Everyone along the supply chain needs to get a drink along the supply chain.

If we allow our food producers to be squeezed to where their profits are so small, they will not have the money to invest in the innovation that they need, to expand into new products, to look at new markets, to tackle those developing markets in China and Japan where we have signed free-trade agreements, and to expand into all those new markets throughout South-East Asia. That is why what we see in the Harper competition review is very disappointing.

I note the small business minister walking into the chamber, and I would like to publicly say what an absolutely fantastic job he has done not only in getting very important legislation through to give small business actual practical results but for restoring confidence in the small business sector that has been so badly damaged and also for putting small business back front and centre of the political process.

This morning I was at a breakfast for the Master Grocers Association and they were talking about one of the recommendations of the Harper committee, the introduction of the effects test. But my concern with the so-called effects test is it simply has all the characteristics of a classic bait and switch. While similar to the effects test that was argued about long ago, the recommendation actually tacks another requirement on the end of the act 'that has the effect of substantially lessening competition'. Those words may not mean very much but they are the tests in our merger provisions. And by inserting those words, it will not strengthen the act; it will make the act completely ineffectual.

The other point that disappointed me in the Harper review was the recommendation on what was known as the old section 49, our price discrimination provisions. The old section 49 did not work; it was ineffective because it had that test tacked on to the end with a substantial lessening of competition, unlike the Robinson-Patman Act in the USA, unlike what they have in European competition law. European competition law talks about providing discriminatory prices or favours which puts one firm at a competitive disadvantage against another. We have those templates from overseas that could have been looked at. They have been unfortunately rejected and that is something I hope this government gives serious consideration to when we actually review this and decide what we are going to do and how we are going to take our competition laws forward.

Perhaps one of the greatest issues of price discrimination in this nation and one of the greatest problems small business face is the discriminatory position on retail rents. If you go to any major shopping centre across the nation, on average you will find the larger chains are paying around between 2½c and 3c or perhaps 4c in every dollar of sales towards their rent. Yet they are competing against small business competitors that can be matching them in sales per square metre dollar for dollar but, because of the discrimination in price, those small businesses are paying 20c and upwards in rent for every dollar that they make.

Imagine if we had a GST system where a small business had to pay 20 per cent GST but their larger competitor would pay five per cent GST. Imagine the distortions that would flow through the economy because of that. Those distortions are happening today and they have been happening for decades simply because of the price discrimination in retail rents. This is an unnatural market situation. It only occurs because of the protection from competition that we give our retail shopping centres through our zoning laws. For some reason we think it is a good idea to protect them from competition, which gives them special monopoly powers which have enabled them to screw the small business sector. It has been one of the major reasons why we have had such market concentration in this country over the last 30 years and why the supply chain has been squeezed so hard.

The other issue we hope that the small business ombudsman will tackle is unlawful penalties. It is part of our common law that where you have a liquidated damages provision, where one firm breaks a contract and they must pay a penalty, that the penalty agreed to must be a genuine pre-estimate of the loss for that company. But what we are seeing in bank fees, in contention fees and many other aspects throughout the economy are penalties put upon small business that simply are not genuine pre-estimates of the loss but are simply nothing else other than a price gouge, a got-you moment that is an unlawful penalty. And these companies have been able to get away with this because of the breakdown of the rule of law in this country where small businesses do not have the opportunity to bring these cases before the courts.

We hope that a small business ombudsman takes these issues up. We also have provisions still to be legislated over unfair contracts. While we believe in the importance and the sanctity of contracts, the provision of penalties, a common law provision going back almost 100 years, understands that there are times when firms can exploit their market power in negotiating that contract unfairly. That it is why we must recognise that today. We have so many firms that are basically placed where they do not have the ability to say 'get stuffed'. In contract negotiations, if a market is so concentrated and the smaller player does not have the ability to say 'get stuffed' to a demand and walk away, we have a breakdown of our free market system.

These are the things that we need to protect. We need to ensure that we do everything that we can in this country to encourage those that want to have a go in their own business, that want to be an entrepreneur rather than a unionised employee, to get out there and have a go. That is what has made our country great in the past: the individual citizen getting out there, taking risks and fighting against the odds. We need to ensure that this parliament gives them every support that we can.

Nickolas Varvaris (Barton, Liberal Party) Share this | Link to this | Hansard source

It gives me great pleasure to be able to speak today on the Australian Small Business and Family Enterprise Ombudsman Bill 2015, because of the many positive ebbs and flows associated with this bill. Small businesses are vital to our economy because they are the backbone of our nation. Every time a small businesses is created job opportunities are created, and this contributes to our nation's bottom line. Starting a business converges into our national ethos of having a go. It represents that unwavering Australian trait of giving it your best shot and creating something for your children and your family and in leaving a legacy. We must do all we can to ensure that small and family businesses have the best access to resources when they need it and that they have the confidence of government to take necessary risks for their enterprises.

The coalition has always been committed to the small businesses and family enterprises of Australia because we understand that all businesses start off small, often family run, passing on from one generation to the next. In fact a quick snapshot of this sector shows that family businesses account for around 70 per cent of all businesses in this country, with an average turnover of $12 million. Small businesses represent approximately 97 per cent of all Australian businesses and employ around 4.6 million Australian people. Their tireless contributions, perseverance, hardship and success are felt in every electorate across this country.

In Barton alone there are over 13,000 small businesses, which employ locally and provide vital goods and services to the good residents of the St George region. In Kogarah, for example, family-run small businesses include Eve's Apple is consistently busy because they work long hours to meet the demands from customers and to ensure that the products they sell are of the highest quality and offered at the lowest prices. Eve and George have operated this business for more than 22 years and are hoping to pass it on to one of their four children. As Eve has said, no-one in this family is unemployed, and it is unlikely that they ever will be as long as this business is there.

Across the road is a popular women's boutique, a clothing store called Something Nice. This is a second-generation business started by two sisters in 1975. It has continued to support up-and-coming Australian designers whilst being a top destination for local shoppers, my wife included. Around the corner from Something Nice is Kaimaki Cafe, which is a thriving family-run business that operates six days a week. Owner and manager Nick runs the business and the team, while his daughter provides customer service to a never-ending line of customers. The only time the family takes a break is over Christmas and New Year. Over in Earlwood, Cafe Frappe, Christina's Pharmacy and Ray White Real Estate are all family owned and run businesses that are highly successful, well regarded amongst the community and thriving with local patrons.

I know from my visits and from what they have told me how hard they must work to ensure that they stay afloat, keep the staff employed and turn a profit. They are often competing with well-known franchises, bigger supermarkets or the threat of other one-stop-shopping destinations. As their federal representative, I want to advocate on their behalf to help them run their businesses without unnecessary red tape and bureaucracy. Businesses cannot survive if they spend more time doing paperwork than running the operations. They also cannot survive or remain viable long term if they do not have the assistance needed. Small businesses do not have access to resources such as human resources, compliance, legal and so forth like larger businesses do, although they are often treated as though they do. Instead they rely on staff and often themselves, working late into the night and on weekends to wade through the hundreds of pieces of legislation and awards at both state and federal levels to ensure they comply with the law. If they run into issues, they often have to search for a phone number or government department hotline to try to obtain the relevant answers to their questions.

Therefore, a good regulatory regime can make a difference to the productivity of businesses and decisions about potential investment or further costs associated with a service or product in hopes of return on investment. A university study in 2012 found that small businesses in Australia were spending around $28,000 and nearly 500 hours a year working on red tape and compliance burdens. Navigating through the legislative framework governing taxation, human resources and industrial relations is a full-time job in itself, let alone something to attempt after 12 hours of working in the business. Yet this is something that all small and family business in Barton and right around Australia have to do every day.

There is no doubt that legislation is necessary, but the need for compliance should not be at the detriment of running a business. Similarly, where businesses have trouble with interstate and international commerce and certain disputes relating to Commonwealth government agencies, they often do not know where to turn or simply lack the resources or the time to do so. I note that , when the Coalition implemented a dedicated small business support line within Fair Work Australia, it was inundated with calls within the first eight months. This clearly demonstrates the need for support for this vital sector. That is also why it is high time that family enterprises and small businesses have access to the relevant legislation, policies and practices within reach, so needs can be readily identified and solutions provided.

The ombudsman bill up for debate today fulfils a key election commitment to provide support for the multitude of small businesses and family enterprises of Australia. The ombudsman set up under this bill has two key functions: an advocacy function and an assistance function. The advocacy function provides an avenue for small businesses and family enterprises to have an appointed individual to appeal on their behalf. The advocacy function expands the current role of the Australian Small Business Commissioner and has increased legislated powers. Furthermore, the ombudsman may make inquiries on the ombudsman's own initiative, or the minister may refer matters to the ombudsman for advice. The ombudsman will take a collaborative approach on systemic issues affecting small and family businesses and will consult on proposed and existing legislation and regulations to guarantee that red tape burdens on small businesses and family enterprises are minimised or eliminated.

We have already cut $2 billion in red and green tape costs, but we can do more. The ombudsman will be equipped with assistance functions through two streams, one being a concierge and the other being a referral service for alternative dispute resolution services. The concierge role is one that I wish to highlight as being extremely beneficial for small business owners, like Eve and George, whom that I mentioned earlier, and Nick at Kaimaki Cafe. The ombudsman can provide them the support and the guidance they need for existing services which they may be unaware of.

Another important function that I wish to highlight is the ombudsman's provision of an outsourced dispute resolution service as well as referral to other alternative dispute resolution services. There is a real need for ADR services that are fast, low-cost and accessible to small businesses and family enterprises. Unresolved disputes can significantly impact the ongoing viability of small businesses and family enterprises, hindering them from contributing to the economy. The choice and availability of ADR services can help preserve business relationships and avoid unnecessary and expensive lawsuits.

I want to reiterate that the ombudsman's role is not about duplicating existing functions within the Commonwealth, states and territories. Importantly, the expanded powers of the ombudsman will reinforce our philosophy that small and family businesses do not have to understand government in order to ask for help. Rather, we are here to assist businesses and help facilitate better access for the issues they face.

Australia's economy would not move without the men and women behind the small businesses and family enterprises sprinkled across our country. These businesses contribute enormously to the economy and play a key role in growth and economic opportunities. Without them, Australians would have no jobs. We said during the election campaign that we are here to help them and support them and that we will implement policies that enable them to do what they have set out to do, without unnecessary red tape and bureaucracy.

The ombudsman represents a positive opportunity to establish a highly-regarded advocate who will act as a medium for issues that small businesses and family enterprises face at the Commonwealth level. This is also an opportunity for the ombudsman to play a leadership role in collaborating with state and territory channels as well as industry bodies to voice concerns of the small business sector that can be underrepresented due to a lack of resources or knowledge. I would hope that this legislation will garner support from both sides of the House, because it should be bipartisan. Supporting the engine room of our economy is in the best interests of all Australians and should be endorsed by both sides. The coalition firmly supports the small businesses and family enterprises in Barton and around Australia. I commend these bills to the House.

Michelle Landry (Capricornia, National Party) Share this | Link to this | Hansard source

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, are about providing a better service to our nation's small business owners. This sector is the backbone of the economy. Today's bills outline the appointment of an Australian Small Business and Family Enterprise Ombudsman. I will talk in more detail about this shortly. But first, let me highlight how the ombudsman's role will further complement the great things our government has already announced in the recent federal budget.

A few weeks ago the federal coalition government announced that mum-and-dad businesses will benefit from the biggest small business initiative in our nation's history. It is called our Growing Jobs and Small Business package. Small businesses, including Capricornia tradies, sole traders and partnerships, will get a tax cut to help boost the local economy. These tax cuts form part of the $5.5 billion Growing Jobs and Small Business package to help small businesses in places like Capricornia invest more, grow more, and employ more local people.

Significantly, small businesses with a turnover below $2 million can claim an immediate tax deduction for every asset they acquire that is valued up to $20,000. This is a substantial increase from the previous $1,000 threshold. For example, if a small takeaway shop in North Rockhampton needs to buy new kitchen equipment, a new coffee machine, hot food display boxes, gas stoves or fridges, the owner can take advantage of this generous tax-related incentive. Any item under $20,000 is immediately 100 per cent tax deductable in its first year.

A business is not restricted to just one item but can purchase multiple items of up to $20,000 each. From 1 July, the government will cut the company tax rate for incorporated businesses with annual turnover up to $2 million from 30 per cent to 28.5 per cent. From 1 July, the government will also provide a capped tax discount of up to five per cent for sole traders, trusts and partnerships which are unincorporated businesses and have an annual turnover under $2 million. As a result, small businesses—including those in Capricornia—will have the lowest company tax rate for public and private companies since 1967. These and other measures are significant in a time when small business has been doing it tough.

As a former bookkeeper, I have been a small business owner myself. I know, as any other small business owners do, that the maze of paperwork and recordkeeping, not to mention the various business laws that one must follow, can be confusing. In particular, the differences between state and Commonwealth jurisdiction and legislative requirements can sometimes cause conflict between a small business and government bureaucrats, particularly at a state level. That is why our government is delivering legislation to the House that will create an Australian Small Business and Family Enterprise Ombudsman.

I commend to the House 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. These bills fulfil an election promise to help small business further. Let me borrow from my colleague, the Minister for Small Business, and his outline of this legislation during its second reading in the House. The minister indicated that there are more than two million actively trading small businesses in Australia. He said that 96 per cent of all Australian businesses are small businesses. This sector produces more than $330 billion of economic national output and employs over 4.5 million people. However, the minister acknowledges that small businesses are often treated as if they were large organisations with all the resources of major corporations. They face the same compliance demands in areas such as workplace relations, competition policy, contract law and business and tax law; but, while large corporations have teams of lawyers, accountants and experts, small business operators—which are often run by a mum-and-dad partnership—have to wade through this maze on their own. That is why the Small Business and Family Enterprise Ombudsman is an important role.

In short, the Small Business and Family Enterprise Ombudsman will be: an Australia-wide advocate for small enterprises; a single entry-point agency allowing access federal small business programs and support; an adviser to help ensure Commonwealth laws and regulations are more user friendly for small business; and a mediator for dispute resolution. One of the big benefits from the appointment of the ombudsman is in addressing inconsistencies and duplication of Commonwealth, state and territory laws, and state red tape that impacts on small business.

Government reports on this legislation indicate ways in which the bill will assist. Under an advocacy umbrella the ombudsman: undertakes research and inquiries into legislation, policies and practices affecting small business; reports and gives advice to the minister on these matters; contributes to inquiries by others into these matters; contributes to developing national strategies on small business matters; reviews proposals relating to small business matters and advises the minister on them; and promotes better practice in dealing with small business. The ombudsman will also have the power to require people to give evidence at hearings and provide information or documents to assist with research and inquiry activities. The ombudsman will respond to requests from small businesses for assistance by referring them to the appropriate Commonwealth, state or territory agencies.

The ombudsman will also play a role in dispute resolution by referring conflicting parties to mediation. This is expected to result in fewer costly disputes being pursued through the Federal Court system. As a result, the net economic savings from the ombudsman's function is estimated to be $18.395 million per year. In short, such a role will provide a strong advocate for small business owners in the 'David and Goliath' battles they sometimes face while trying to adhere to the complex laws and regulations that apply to the business world.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

It is a pleasure to speak on the Australian Small Business and Family Enterprise Ombudsman Bill 2015 and related bill. Because I have an abiding interest in small business, I note that the minister is in the House and I want to congratulate him on being a minister for small business rather than a minister who talks about small business. The minister came to my electorate before the last federal election and outlined a number of things to my small business owners. I am very grateful that he has delivered on those outcomes, and this bill is one of those outcomes. The changes the government are proposing are yet another example of our commitment and the minister's commitment to providing small business with the right regulatory and legislative environment to grow and prosper.

Small business is of interest to members on this side, and, if we have a look at the speaking list, we find that only a handful of people from the other side are interested in talking about small business. It just demonstrates which side of the House is the friend of small business. When I spoke on the small business bill last time we were in this chamber it was the same thing. I mentioned that this side of the House has a diverse background in terms of its members and many of them are from a small-business background. There is only a handful on the other side. Of course we are interested in making sure that people in small business know who their friend and their advocate is—and it is the coalition, the government.

The member for Oxley was in here touting that he was some sort of hero of small business. That is an absolute joke because Labor's record on small businesses is woeful. I will bring a few statistics to the attention of the House. After six years of the chaotic Rudd-Gillard-Rudd rule, we saw 519,000 jobs lost in small business—that is an indictment. That means that 1,500, or thereabouts, hard-working Australians per week lost their job due to Labor's inability to culture, provide the environment and nurture small businesses to operate and flourish in this country. They had six different ministers for small business. They would have said, 'Oh, my God, who's got small business this month? Don't tell me I've got small business. How're we going to deal with that? I don't know anything about it. What are they giving me small business for?' That is the difference.

Those opposite, for years, talked about cutting the company tax rate, but they never did, yet they made promises. You guessed it, the company tax rate was cut a grand total of zero times while Labor were in office. As usual, they did not back-up any of their policies. It might have been in the third term of the chaotic Rudd-Gillard-Rudd rule, but they never got there, as we know. It is interesting to note that, when Labor took office in 2007, they were left with a country that ranked 68th on the global competitive index in terms of the level of government regulation imposed on business. After six years of Labor's mismanagement Australian businesses were well and truly suffocating under red tape and bureaucracy and, unsurprisingly, Australia slipped from 68th to 128th on that register. The statistics speak for themselves. In fact, Labor introduced more than 21,000 new and amended regulations during their time in government. It was a very busy time, that six years, to be putting in that number of regulations. Yet, they have the audacity to stand here and tell us that they are the friend of small business. No, thank you, you are not—we are.

This bill creates the Australian Small Business and Family Enterprise Ombudsman. The role is multifaceted and will provide a range of services for Australian small businesses, especially the mum-and-dad investors who do not have time to deal with and manage complex regulation and red tape in addition to operating their business. The ombudsman will consult with small business and family enterprises for the purpose of better informing the government on policies to ensure that our reforms have the greatest impact to those on the ground. So, it is an information and a regulatory function. The ombudsman will also work to identify systemic issues in the small business sector requiring a national approach and provide advice to government on these matters. This new ombudsman, who is properly funded to run his operations, will have real power. It is not lip-service.

I stand here, as I have said previously in this place, as somebody who has tried the small business route. My wife and I had a bakery. I will not go on about that too much. At the end of the day when you are in small business you are at the mercy of so many people. The shopping centre management are probably the worst. If you are in a major shopping centre, the management can up your rates and tell you to paint your shop or put on a new shopfront because you have signed on the bottom line. In our case they decided to redevelop the shopping centre and we lost two-thirds of our customers because no-one could park. When we went to the shopping centre management and said, 'We need some relief, as happens in other shopping centres,' they told us to read the contract. We actually had a ratchet clause in it, so not only were we not getting relief but we were actually paying more while we were losing money. We could not get any help or assistance.

How do you get relief there? You go to SAT, the tribunal. It is meant to be a non-legalistic tribunal. Their threat to us was: 'Take us on, sunshine, because we will take you all the way to the Supreme Court. We never lose. We will deliberately do it so we can make an example of you. No other small business in our shopping centre will take us on.' This ombudsman would be able to give advice and show some direction. Dare I say, if the ombudsman had rung the shopping centre management and let them know that he was watching our case, it might have made them pull their head in a bit.

I suspect this legislation, through the ombudsman's function, will have a mind to the poor old franchisees who are suffering at the hands of large franchisers, who package them up with a whole range of terms and conditions. Many people go into it starry-eyed and looking at the blue sky. They have no idea before they start but suddenly find they have a huge amount of compliance and a whole lot of delivery outcomes they never dreamt that they would have.

I have personally represented some of these people. I have rung their companies and told them I am a member of parliament trying to help my constituents and they said, 'We don't care who you are.' If they are saying that to me as an elected representative of the people, how does the poor little businessman trying to turn a quid in their franchise go when they take on the huge multinational? I will give you an example, and this is in the Hansard from some years ago. Lenard's chicken are a prime example. In my office I had a meeting with the Perth franchisers of Lenard's chicken, a company based in Queensland. They are real standover merchants. People were essentially going broke because the franchisers would come into their business and demand they sell chicken at a price that was less than they were buying it for and those sorts of things. Eventually it got to the extent that I had to bring these people into my office to have a meeting with them. I sat them down to try to get some resolution and an outcome going forward. I suspect this legislation now is going to provide a resolution for that.

In this case one of the ladies was a policewoman who had invested in a Lenard's chicken franchise. They were really threatening people, and you will find out why in a moment. I had to get the state protection security police to sit in my office while this was going on because even the policewoman was scared of being in this intimidatory position with her master franchisor. Interestingly, as history will tell you, the two people were gay lovers and one killed the other one. He is in jail now. That is the sort of people they were dealing with.

At the end of the day small business needs protection from predatory people like this, from shopping centres and from financiers. A lot of people go into these things underfinanced and suddenly start using their own bankcard to pay the wages of their people. It accumulates. They need some advice on how to get through the maze of regulation that hits them in a shopping centre in terms of their lease. There is a whole lot of taxation. After they have spent all week working they spend the weekend sitting at home doing their books. These are the sorts of people we are talking about. We are going to give them protection under this legislation.

I stand here today to say to the people in my electorate of Canning: 'We have a resolution for you.' In Canning we have something like 10,000 small businesses. You will see quite often a sign go up saying that they are in business. Some of them do not last more than six or 12 months, and that shop never gets filled again. Those people have essentially gone broke. I feel so sorry for them because quite often they have put their house on the line as collateral and then they lose their house and have to start again.

I congratulate the minister for bringing this legislation to the House today. It will provide protection, guidance and a way of getting disputes resolved for people who do not know where to go for help. I have a message for the people of Australia, particularly those in the electorate of Canning. I know the minister is soon going to come and talk to some of my constituents and the local chambers of business. We are going to be able to say to the small businesses: 'We know how you feel. We know what is hurting you. We know what you need in terms of protection and advice, and this legislation gives it to you.' I commend the bills today and I thank the House.

Bruce Billson (Dunkley, Liberal Party, Minister for Small Business) Share this | Link to this | Hansard source

I am thrilled to sum up from some really eloquent contributions from both sides of the House on 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. I was particularly pleased that Liberal and National Party members were very engaged with this topic. They have been so, right the way through from the policy formulation stage through to the preparation of our election commitments. I am thrilled this is delivering on those commitments. It is the foundation of those more than 20 election commitments that we are faithfully and sure-footedly implementing. We have then built upon that platform with the outstanding jobs and small business package in the budget. These are the commitments that we took to the electorate, and we are implementing them.

To recap for those who have joined this discussion. This Australian Small Business and Family Enterprise Ombudsman Bill 2015 will establish the position of ombudsman to assist the small business and family enterprise sector. The ombudsman will have two key functions: an advocacy function and an assistance function. That assistance function focused on two key areas: the reliable and timely access to information and also facilitation of early dispute resolutions. We know when a small business is involved in a commercial dispute with a big business, no matter what the virtue of the case, far too often it is the small business that loses out. Our ambition is to resolve those disputes fairly and equitably and get people back to business, get them back to engaging in seeking to delight customers and providing that enormous boost to the economy that so many colleagues in this chamber have spoken about.

I thank those members who covered a range of very clear and easily understood examples about why this initiative, a first-time initiative for our country that is being implemented by the Abbott coalition government, is so necessary. I also want to thank the opposition and particularly the member for Oxley for his comments and for his indication that the opposition will also support these bills. We welcome that support. I am happy to and it is my duty to clarify some of the questions and matters of interest that were raised during the debate and, with your agreement, I would like to do that.

The member for Oxley raised some concerns about the independence and the impartiality of the ombudsman. The government agrees that the ombudsman needs to be and be seen to be independent. That is why we are establishing the ombudsman as a statutory position appointed by the Governor-General. This stands in quite stark contrast to the current nearest, neatest correct entry to this role: the very capable Australian Small Business Commissioner. Mr Brennan is doing some excellent work, but he is actually engaged as a contractor. So it is quite a different type of engagement and footing for his work. As I was saying, he is doing a good job independently representing small business interests but without the backing of a statutory appointment. The statutory appointment process offers the clear, unequivocal independence that an ombudsman of this kind truly requires, and that is why we have gone down that pathway with this bill.

The government also agrees that impartiality is particularly important with respect to the assistance function. We have prepared these bills with these requirements of independence and impartiality in mind. Whilst appropriately acknowledging that the ombudsman's functions and powers are necessarily limited by the Commonwealth Constitution, this does provide some constraints but shapes the way in which the ombudsman will interact with state ministers and state agencies. Part 4 of the Australian Small Business and Family Enterprise Ombudsman Bill 2015 outlines the ombudsman's assistance function. This will allow the ombudsman to transfer requests for assistance to other officials under whose jurisdiction those requests fall or to refer the request to the ombudsman's own outsourced alternative dispute resolution service where the subject matter of the dispute comes under the appropriate head of power under the Commonwealth Constitution. This is a fairly simple idea that the Constitution sets up the reach and scope of the Commonwealth's powers and of course through cases like Williams et al we need to stay within those boundaries to be constitutionally sound, and that is what this bill will do.

There was some comment on clause 67 subclause (2)(b)(c) of the main bill, which precludes the ombudsman from dealing with complaints concerning the actions of Commonwealth state and territory ministers and state and territory agencies. In relation to requests for assistance involving decisions of Commonwealth ministers, the bill rightly and understandably precludes the ombudsman from being asked to review the actions taken by a minister in carrying out the agenda of the government of the day. Actions taken by Commonwealth agencies and officers could be investigated by this ombudsman. To fully illustrate this, a small business or family enterprise could be assisted by the ombudsman if it were in dispute with a Commonwealth government department or agency. In relation to requests for assistance regarding state and territory ministers and agencies, it would be inappropriate for any Commonwealth official such as the ombudsman to take action in response to such requests. Such requests would be referred to relevant state and territory officials. That is keeping the jurisdictional reach in mind and making sure those officials dealing with state and territory concerns or requests for assistance are the ones responding to such requests.

In relation to clause 69 subclause (1), the requirement of the ombudsman to refer requests to other Commonwealth state and territory agencies where those other agencies can more conveniently or effectively deal with the request is intended to prevent the duplication of services or forum shopping. We are not wanting to create a situation where a small business or family enterprise with a concern can hop around a range of agencies for assistance and support services. Our role with this ombudsman is to land that concern or request where it is most appropriate and where the agency that is conveniently and most effectively able to deal with the request is provided the opportunity to do so.

The member for Ryan alluded to how pointless it would be to duplicate the work of existing officials such as the state small business commissioners, and this is the idea behind that provision. Preventing forum shopping means that businesses will be directed to receive assistance from officials who can deal with their complaints and not go from one official to another without matters being resolved. The member for Ryan correctly noted this when she commented on the role of the ombudsman and how it will complement the roles of existing officials and not duplicate them. Duplication would be a waste of public money and add another source of frustration and confusion for small business and family enterprise people and would not advance their interests anyway.

We have framed this legislation in such a way that the ombudsman will work cooperatively with those other officials and refer all matters which fall within those officials remit to them. To facilitate this and to ensure that the ombudsman can work cooperatively with other officials, the consequential legislative amendments are part of this cognate package. These will be required to allow the transfer of matters from the Commonwealth Ombudsman to the Australian Small Business and Family Enterprise Ombudsman.

The comprehensive policy formulation processes have helped the government settle on an appropriate alternative dispute resolution model. This model recognises that the Commonwealth Constitution reserves judicial decisions to the Federal Court system and that low-cost alternative dispute resolution outside the court system represents an effective and practical access-to-justice remedy for small business and family enterprises. Binding decisions have a judicial character, and the ombudsman will therefore not make binding decisions, as the ombudsman will not be part of the Federal Court system. Importantly, it is worth highlighting that seeking the assistance of the ombudsman will not curtail the rights of people to take their matters to court. This is about aiding and assisting early dispute resolution, not about displacing a judicial conclusion where other mechanisms are more appropriate.

The member for Oxley mentioned the termination clause relating to the ombudsman. This clause is typical of termination clauses in other Commonwealth legislation, and there is nothing unusual about this clause. The government wants the ombudsman to be the independent advocate that we have long envisaged. This clause neither limits the independent role of the ombudsman nor compels the ombudsman to curry favour with the government, since the ombudsman's appointment may only be terminated in very specific circumstances.

There were some questions regarding statutory immunity. It would be most unusual for a Commonwealth official to be granted a blanket immunity. Commonwealth officials should be accountable for their actions. Where the ombudsman acts within the boundaries of the ombudsman's remit under the legislation we are discussing today, the ombudsman would have no need for immunity. It would not be appropriate or even possible to give an official immunity to act outside that official's remit.

Part 3 of the Australian Small Business and Family Enterprise Ombudsman Bill outlines the ombudsman's advocacy function. This will grant the ombudsman power to conduct inquiries, to advocate on behalf of small businesses and family enterprises to government. This can be on the ombudsman's own initiative or on referral from the minister. The ombudsman may require a person or entity to produce information or documents for the purposes of an inquiry. Noncompliance with such requests may attract a penalty.

Mr Albanese interjecting—

Mr Fitzgibbon interjecting—

I thank the opposition for their encouragement.

Another area of appropriate oversight concerns the publication of reports and advice prepared by the ombudsman. This was a topic of some discussion in the debate. The Australian Small Business and Family Enterprise Ombudsman Bill allows the minister to redact or decline to publish reports and advice produced by the ombudsman. It is important to stress that this power simply seeks to prevent information being released into the public domain where it is not in the public interest for such information to be released. We want the ombudsman to prepare the robust advice that government needs to hear, but we also want everyone, particularly small businesses and family enterprises, to be confident that any information they provide during an ombudsman's investigation or inquiry will not necessarily be released into the public domain.

Again, the government welcomes the opposition's support, and I trust that these points will provide the clarification requested during debate and the careful consideration we have given to each of those matters throughout the consultation process. I want to particularly thank the officials, who have been very diligent in working through the implementation of this election commitment and have consolidated a very effective, collaborative and consultative network in working up the provisions that are here today. I sincerely thank them for that work. The ombudsman's legislation fulfils an important election commitment and shows the commitment of the Abbott government to small businesses and family enterprises. I commend these bills to the House.

Question agreed to.

Bill read a second time.