Better Support For Small Australian Businesses

The Small Business and Family Enterprise Ombudsman will soon receive increased powers to advocate in favour of small businesses.

The Government is transforming the Australian Small Business Commissioner into the Small Business and Family Enterprise Ombudsman, which will soon have the power to provide better support and advocacy to small businesses, including automotive dealerships.
According to the official Treasury Website, a major focus of the Government is ‘removing roadblocks to small business success.’ As part of this, the Government is seeking to build a stronger and more confident small business community and has identified the need to cut back current regulatory burdens and confusion as a major objective. The idea is to give small business owners more time to focus on their operations so that they can ultimately be more successful.

On 11 March 2015 the Australian Government released exposure draft legislation to create an Australian Small Business and Family Enterprise Ombudsman to: advocate for small businesses and family enterprises in relation to legislation, policies and practices (advocacy function); act as a concierge for dispute resolution (including providing a limited dispute resolution service) (assistance function); and contribute to the development of small-business-friendly Commonwealth laws and regulations.

The draft legislation runs to 64 pages and details the advocacy, assistance and other functions which are limited to a small business and family enterprise. It fulfils a key Government small business commitment.

As part of the draft, the Government recognises that small businesses often lack time and resources to understand complex government information and deal with business disputes.

From the Treasury Website:

‘Making sense of complicated government information can be a frustrating experience… what smaller businesses need is an informed point of contact within the Australian Government that can help businesses get the information and advice they need to help manage disputes.’

The Government also acknowledges the substantial contribution that small businesses make to employment and production in the Australian economy, providing key statistics:
there are more than 2 million actively trading small businesses as a group they account for over 97 per cent of all businesses they employ around 4.6 million Australians contribute more than 33 per cent of private sector production as measured by industry value added family businesses account for 70 per cent of all Australian businesses.

The Government anticipates that a more powerful Small Business and Family Enterprise Ombudsman will provide smaller businesses with the advice they need to avoid and manage disputes. Under the advocacy function the Ombudsman may, for example, help monitor and report on the efficacy of industry codes of conduct and fair trading provisions, the behaviour of regulators in undertaking compliance activities, and the responsiveness and effectiveness of agency complaints mechanisms.

The assistance function in respect of unresolved disputes and conflict will allow small businesses to shift their focus back to running their businesses as quickly as possible.

Small business defined

Access to the functions of the Ombudsman is limited by the definition of ‘small business’ or ‘family enterprise’.  For the purposes of the legislation a business is a small business or family enterprise if it has fewer than 100 employees or revenue of $5 million or less.
AADA’s submission to the Government in May last year advocated that the key function of the Ombudsman as Commonwealth-wide advocate should not be restricted by a definition of small business to ‘size’ but rather be based on ‘relative size’ where a significant imbalance of market power exists, giving rise to unfair contract terms and unjust or unconscionable conduct.

AADA’s suggestion that confidentiality be built into the legislative framework to allow representative industry bodies to openly bring forward was acknowledged. AADA’s submission on the Exposure Draft was lodged with the Treasury before the cut-off date of 7 April 2015.

Watch this space for further updates on the progress of this positive, new legislation.

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