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

This will be my final contribution on this point because, in the end, I think we might have to agree to disagree. With all due respect to the very honourable senator, who I hold in very high regard, it is not the same proposition. This is a new regulatory intervention in the marketplace. Right now, as I have indicated, there is no protection for small business from unfair contract terms, so called. This is something that is exclusively available as a consumer protection to consumers. What the honourable senator is suggesting is that we should start with a high threshold rather than cautiously test the impact on the economy will be by essentially putting an initial step forward of a carefully calibrated threshold of $100,000 and $250,000 respectively. These are not based on an arbitrary decision by the government and its advisers; they are based on extensive consultation. You have commended the small business minister on the extent and the quality of the consultations that he has conducted and, indeed, Minister Billson is an outstanding advocate for small business; Minister Billson works tirelessly to ensure that he gets these sorts of judgement calls right, based on balancing the various legitimate perspectives.

I would go back to where I started: it is very important to ensure that we have the right balance between giving small business that additional protection and giving them confidence to engage in contracts and protecting them from unfair contract terms, but this is not an open-ended proposition. We do not want to create a circumstance where small business does not think that for larger contracts they still have to conduct appropriate levels of due diligence—that they somehow think that the government's regulatory framework will be a blanket protection for them, no matter what. Obviously, when you have more significant contracts, it is important that small business, as any other business, engages in the appropriate levels of due diligence and makes relevant judgements in the context of that. I think I have contributed as much to this argument as I can; I have gone out of my way to put on the public record the government's reason for the judgements we have made.

In the end, I think it would probably be most useful if either Senator Whish-Wilson or Senator Day—one after the other, in whatever order—were to move their amendments and then the Senate could pass judgement. I would say again: the government has made a decision about the thresholds not on an arbitrary basis, but after careful consideration of the outcomes of relevant consultations. If the Senate were to increase the thresholds, the Senate would be preventing small business from getting access to this additional protection for contracts of a value of up to $100,000 for contracts with less than 12 months to run and of a value of up to $250,000 for contracts with more than 12 months to run. I would say that this is a cautious initial step pending a review in two years' time to look at how this new extension of the regulatory powers of the Commonwealth in this space has worked in the economy before we make further judgements down the track. I do not think we should start high and then be forced to bring it back. I think we should start at the appropriate level identified by consultation and then make judgements down the track on how best to proceed.