WANTED: A tough cop on the small business beat

A clear theme in the debate surrounding the South Australian small business commissioner reforms has been the need for governments to stand up for small businesses in a real and meaningful way.

Small businesses are well and truly annoyed at governments and politicians who talk about the importance of small business to the economy, but who fail to pursue and implement real reforms.

There is no shortage of politicians who `walk both sides of the street’ trying to be everyone’s friend.

Of course, it would be nice for everyone to agree on small business policy issues, but the harsh reality is that when it comes to competition and contractual law reform the chances of big and small businesses agreeing on the same policy outcomes are very low.

Dubious big businesses won’t easily, if ever, admit that there may be a competition or contractual issue needing to be addressed. Admitting a problem would mean that there is a need for law reform.

The spin doctors for the dubious players in the big end of town stick to their mantra that their big business will vigorously defend all allegations or complaints. In other words, big businesses will come down on any complaining small business like a ton of bricks.

Small businesses that have the courage to speak up are dismissed as not being business savvy.

It doesn’t stop there as small businesses that speak up may find themselves being removed from supermarket shelves, or if they are franchisees, are threatened with termination by franchisors who expect franchisees to simply invest money and take whatever the franchisor dishes out.

Silence from big business about possible problems with small businesses means that someone is left to make the case for reform.

That’s fine, but the standard of proof required by some Governments and politicians is so high that problems affecting small businesses are left to fester with the inevitable result being that nothing really happens. Or there may be some token or window dressing law reforms to merely give the impression that something has been done.

Either way small businesses are often being ignored in a real policy or law reform sense by those very same politicians who say how important small business is to the economy.

Naturally, there are those politicians who do stand up for small businesses in a tangible and meaningful way.

South Australia provides a good recent example of where state politicians of different political persuasions can stand up for small business in meaningful ways.

In particular, we have seen this from the SA Small Business Minister Tom Koutsantonis; Labor MP Tony Piccolo; independent MP John Darley; Family First’s Robert Brokenshire and Dennis Hood and, finally, Greens MP Mark Parnell.

These politicians were the key players in the small business commissioner reforms passing the state Parliament. And they represent the type of policy leadership currently missing from the Federal Government.

Take, for example, Senator Nick Sherry who has vigorously criticised the South Australian small business reforms. Sherry is the federal Small Business Minister.

Sherry has consistently said that any small business reforms should take place at a federal level. Fine you might say, but the catch is that in relation to the SA small business commissioner reforms Sherry has said that he would not even think about aspects of the SA reforms until there has been another federal inquiry in… surprise, surprise, 2013.

Now 2013 is a particularly significant year as that’s when Federal Labor expects to go to a national election. Leaving aside any suggestion of an early election or the fact that there may be a ministerial reshuffle where Sherry loses the small business portfolio, why wait until 2013 when small businesses need support right now?

Sherry points to having recently made federal legislative reforms in the franchising area as a reason for not acting on franchising issues until 2013.

Those changes were to the Federal Franchising Code of Conduct. That’s the code that’s supposed to protect franchisees from dubious franchisors.

The only problem is that while the Franchising code is said to be `mandatory’ there are currently no financial penalties federally for breaching the code. So much for the Federal Franchising Code being mandatory!

So we currently have a Federal Franchising Code of Conduct that has no financial penalties for breaches of the code and Sherry wants to wait until 2013 to have a review to see if we need such financial penalties.

Franchising inquiries federally and in South Australia have already recommended having financial penalties for breaches of the so-called mandatory Franchising Code.

Despite Sherry’s loud objections, South Australian small businesses won’t have to wait until 2013. And until we have federal leadership on meaningful small business perform, SA is to be congratulated for having the vision and courage to stand up for small business in a tangible, and historic way.