Zumbo’s wrap: What 2011 meant for small business

The proposed reforms were generally well received with a number of recurring themes. One was that something needed to be done about the lack of a one-stop agency offering South Australian small businesses and farmers access to low cost dispute resolution processes. The ACCC did not and could not offer dispute resolution services and the services that were available such as the Federal Office of the Franchising Mediation Adviser were restricted to one sector like franchising.

The clear gap in the provision of dispute resolution services across the full range of possible disputes involving small businesses and farmers meant that key small business groups welcomed the South Australian small business commissioner reforms. Such groups recognised the value of having a Small Business Commissioner to assist all small businesses and farmers across the State.

Another theme emerging from the South Australian reforms was that the Small Business Commissioner needed real teeth to deal with conduct issues that may emerge within the State. In this regard, there were calls from such groups as the South Australian Farmers Federation and the Australian Newsagents Federation to provide a legislative framework to deal with industry conduct issues as and when they arose.

Following such calls steps were taken to revamp and strengthen the provisions of the South Australian Fair Trading Act dealing with industry codes of conduct. Industry codes have long been accepted as an effective legislative mechanism for dealing with conduct issues and have long been relied on federally and in other States and Territories.

Industry codes are subject to parliamentary oversight and can be disallowed by Parliament. Through an appropriate consultation process industry codes can be developed with industry support and can be varied or withdrawn as circumstances change. The beauty of industry codes is that they set out standards of appropriate conduct for all industry participants to comply with thereby creating a level playing field.

Importantly, the South Australian legislative framework for industry codes is now available to assist industry participants in a range of industry sectors and is not restricted to any particular sector. Also, State based industry codes can deal with conduct issues in industries not dealt with at a Federal level and can be used to support or reinforce federal industry codes of conduct.

The year also saw the appointment of a New South Wales Small Business Commissioner. Here the New South Wales Government is to be applauded for promptly appointing a Commissioner. Having a Small Business Commissioner was a key election commitment by Barry O’Farrell and his team and it’s always good to see newly elected Governments delivering quickly on election commitments.

The New South Wales Commissioner, Yasmin King, was quick off the mark by undertaking a listening tour of small businesses across New South Wales. Regularly engaging with small businesses is essential to understanding their concerns and this is obviously central to the ongoing success of State-based Small Business Commissioners.

The New South Wales Small Business Commissioner certainly has a big job ahead of her and given her extensive negotiating experience we would expect to see a strong emphasis on implementing effective dispute resolution processes.

During the year Western Australia also moved towards a Small Business Commissioner bringing the number of Small Business Commissioners based on the very successful Victorian model to four.

In a further development Queensland appointed a Business Commissioner in 2011, but the Queensland model is different given its sole focus on reducing red tape. While there are benefits to businesses from reducing red tape such benefits are often less tangible than , for example, having effective dispute resolution processes in place. One would expect that over time the Queensland Business Commissioner will evolve into a more traditional Small Business Commissioner.

In other developments 2011 also saw a change in the Federal Small Business Minister. Nick Sherry made way for Mark Arbib and that obviously raises questions as to whether Arbib will bring a fresh perspective to the portfolio. Arbib is no stranger to the small business debate, especially in relation to franchising.

Arbib served on the Federal franchising inquiry chaired by Federal Labor Backbencher Bernie Ripoll. That Inquiry made a number of excellent recommendations including making penalties available for breaches of the federal Franchising Code of Conduct and enacting a statutory duty of good faith.

Significantly, these recommendations have formed the basis of the South Australian and Western Australian Private Member’s Bills on franchising. Such Bills would obviously not be needed if the recommendations from the Ripoll Inquiry on financial penalties for breaches of the federal Franchising Code and a statutory duty of good faith were enacted federally.

So as 2011 closes it’s clear that small businesses have progressed on a number of fronts with the strong push towards State-based Small Business Commissioners. These Commissioners will fill a clear gap left by both the ACCC’s inability to provide dispute resolution services and the absence of a federal one stop shop for dispute resolution services.

All eyes will now turn to 2012 where South Australia and Western Australia are expected to announce their Small Business Commissioners and with Queensland going to an election there may be moves towards revamping the current Queensland Business Commissioner into a more effective Small Business Commissioner.

Federally we look forward to Mark Arbib moving quickly to back so-called mandatory industry codes of conduct with financial penalties, as well as moving quickly to implement other recommendations from the Ripoll Inquiry into franchising on which he served.

Small businesses would also be looking to Arbib to create a Federal Small Business Commissioner so that small businesses can finally have access to a federal one stop shop for dealing with disputes with larger businesses.