The federal government will introduce legislation within months to protect small businesses from unfair contracts imposed by large companies such as supermarket chains, shopping centres and franchisors.
Prime Minister Tony Abbott and Small Business Minister Bruce Billson revealed the plans in Melbourne this morning, saying it is very important there is a level playing field in the economy between smaller and larger operators.
The changes were first announced in the 2014 budget at a cost of $1.4 million, fulfilling an election commitment that Billson had been promising for some time.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
The legislation will see unfair terms in standard form contracts with small business void, although it will need the support of the states and territories to become law as it will involve an intergovernmental agreement.
This will likely occur in April, with the government hoping to introduce a bill in the spring session of Parliament.
Speaking to SmartCompany this morning, the Small Business Minister said the reforms are critical because small businesses are the backbone of the economy and deserve an extra level of protection.
“They’re very crucial for small businesses that are often faced with take it or leave it contracts from bigger businesses that can contain unfair terms that risk damaging the small business and have no place in a vibrant economy,” Billson says.
Billson says the timing of this morning’s announcement of fulfilling an election commitment was not strategic given the failure of the government’s higher education legislation in the Senate and the recent leadership ballot.
“We’ve got a comprehensive small business agenda aimed at energising enterprise and our goal is to get on with it, implement our commitments and work to make Australia the best place to start and grow and business,” he says.
“We’re working hard at that every day, just like small business men and women are working hard every day to create the jobs and the opportunities that are so crucial and contribute to our economy.”
Peter Strong, the executive director of the Council of Small Business of Australia, welcomed the announcement, telling SmartCompany it is about time small businesses received protection from unfair contracts set by big business.
“As always I’m sure it’s not going to be everything we wanted – that’s just the way it is,” Strong says.
“But what’s happening for the first time is we have a minister in the government who has a strategy and this is part of that strategy. When you look at their voluntary code for supermarkets and the competition area nothing’s come out of that yet, but when you look at what they’re doing with regulators, the ombudsman … we are getting all we want.”
Strong says in his view Billson is the “standout performer” in the government.
“My message for the big end of town is that if they have business models that are that bad that they will be impacted by these changes, they’ve got the problem,” Strong says.
“We need to treat our small business fairly. I believe that the development of their culture [the big players] they have an allergy to transparency and honesty.”