David Van (Victoria, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Small Business, Senator Gallagher. Minister, operating a franchise in Australia is almost impossible when we have legislation that allows franchisors to change the rules as they please. The recent decision handed down by Justice Beach in the Mercedes-Benz dealers case has exposed significant flaws in our current franchising code. Does the government acknowledge that the current franchising code allows for exploitation of franchisees?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I thank Senator Van for the question. We do acknowledge that the franchising sector plays an important role in our economy. We have also acknowledged the need to do an independent review of the Franchising Code of Conduct. This falls under the portfolio of the Minister for Small Business. She has appointed small business expert Dr Schaper to conduct this review. That review I think will assist essentially in getting to the heart of the question that you asked, which was around how the franchising code is working. I understand that consultation has already begun through that work and that the sector is engaged on it. We look forward to working with Dr Schaper as this review is undertaken.

In the meantime we have a range of measures to support small business, including franchisees, whether it be through our Small Business Energy Incentive or our energy bill relief. Of course, I think this week we introduced into the parliament the instant asset write-off of $20,000 for small business. I'm working with my colleagues Minister Husic and Minister Collins on ways to ensure that the procurement rules support small business and the important role it plays in the economy.

Sue Lines (President) Share this | Link to this | Hansard source

Senator Van, first supplementary?

David Van (Victoria, Liberal Party) Share this | Link to this | Hansard source

Minister, franchisees are not just workers in their business; they are investors and shareholders. Will the government undertake a thorough review of all legislation, not just the code, to ensure that franchisees are adequately protected?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I thank Senator Van for the question. The government's position is that the review of the code is the first step. As I said in my first answer, that review of the code is already underway. One of the questions that the Minister for Small Business has asked of that review is whether the code is fit for purpose. We will wait for that review to be done before we commit to any further review of legislation. We will be wanting to get that report.

We also acknowledge that there's a role for the ACCC here. We have committed to establish a designated complaints function within the ACCC, which will come into place from 1 July 2024 and will allow small business and advocacy groups to submit complaints. So that's another avenue, Senator Van.

Sue Lines (President) Share this | Link to this | Hansard source

Senator Van, a second supplementary question?

David Van (Victoria, Liberal Party) Share this | Link to this | Hansard source

VAN () (): Thank you, Minister. Given that franchisees are investors and shareholders in their business, and contribute to a sector worth over $184 billion—around 10 per cent of the Australian economy—do you think that franchisees deserve the protection of the Corporations Act, not just the consumer law?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

Thank you. I will see if there's any further information I can provide to Senator Van about that. I think, again, that whilst we're in the middle of an independent review, and it may be that the issues that he raised are explored through that review, that the government will wait for that review. But we have also passed a number of pieces of legislation which, I think, include—certainly for a small business, which would include franchisees—some changes in relation to unfair contract terms. That was specifically so that small businesses were in a better position to reach agreement with large partners. There were also penalties for unconscionable conduct and false or misleading representations. But I would say, Senator Van, that we'll look forward to Dr Schaper's independent review of the code before we make any further commitments.