Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

Let me right up-front object to Senator Whish-Wilson's suggestion that I was somehow threatening the Senate. That is just a ridiculous, juvenile, union politics type proposition. What I was doing was presenting very clearly the government's position. In the same way that Senator Whish-Wilson is quite entitled to express the view of the Australian Greens, I am entitled to present a view on behalf of the Australian government. It is the Australian government which is proposing this reform, this additional protection for small business from unfair contract terms. What I am doing, Senator Whish-Wilson, is providing some advice to the Senate about what the implications of certain courses of action would be. Obviously it is entirely up to the Senate to make its judgement, but it would be very remiss of me not to be very clear about what the implications of different courses of action would be.

The second correction I have to make is that all of Senator Whish-Wilson's commentary and all of his questions seem to suggest that somehow we are excluding from this legislation some small businesses that otherwise come within the scope of this legislation. That is just not true. If you qualify as a small business under the definition of 'small business' in this legislation—that is, if you have fewer than 20 employees in your headcount—then you qualify for the protections that come, in terms of protections so far available only to consumers, from unfair contract terms.

It stands to reason that you do not want to offer that protection on an open-ended basis. It is a level of interference in the free market, and you ought to do that in a cautious and balanced way. In the way that we have determined these thresholds, based on extensive consultation, we are confident that our additional protection will cover 80 per cent of small business transactions by relevant and eligible small businesses. It would be bad economic policy if we were to increase the threshold by too much, because the message we would be sending to small business is that they do not need to do their homework in relation to some of their larger contracts. We would be suggesting that small business do not have to do their due diligence when it comes to these larger contracts: 'Don't worry; the government is here to protect you.'

We have said that a certain category of transactions—transactions of up to $100,000 in value for contracts of 12 months or less or up to $250,000 in value for a period of more than 12 months—will come within the scope of this extended protection, which historically has been available only to consumers. We are making that available to small business, consistent with the commitments we made in the lead-up to the last election. We are keeping faith with the commitments we make to small business in the lead-up to the last election. So, as well as having delivered a tax cut for small business, as well as having pursued wide-ranging reforms to strengthen the position of small business in our economy, this is another part of our broader economic plan to strengthen growth, create more jobs and create better opportunity for people to get ahead.

In the end, when you put in this additional regulatory mechanism, you have to draw the line somewhere. We have made judgement, based on consultation, having considered all of the outcomes of that consultation very carefully. Senator Whish-Wilson is entitled to disagree with the judgement the government has made. All I would say is that the government is very confident that we have got this right. This will be subject to review down the track and there might well be some adjustments once we see how this operates in the market. But, if this does not proceed through the parliament based on the proposition that the government has put forward, you are preventing small business from getting access to this additional protection from unfair contract terms. That is a matter of fact. That is not a threat; that is a matter of fact. In the end, I would say to the Senate: please consider this as you are making final judgements on which way to vote in relation to the Greens amendments.