Small Business and Unfair Contract Terms BIll
August 18, 2015
I rise to speak on
the Treasury Legislation Amendment (Small Business and Unfair Contract Terms)
Bill 2015, which I believe will protect more than 13,000 small businesses in my
electorate of Durack. This bill further demonstrates my and the Abbott
government's passion for small business. Since this government came into office
in September 2013, employment has risen by 2.9 per cent, with some 335,000 new
jobs created. As of last month, employment is at a record high of 11,810,700
jobs. This growth is largely due to the government's sound economic management
and our policy platform, which is completely unmatched by those sitting
I have met with a number of small business owners who, of
course, have been very pleased with the opportunity for a $20,000 tax deduction
in this year's budget. This bill will now extend unfair contract term
protections available to consumers to small businesses.
This government took more than 20 small business promises as
part of our small business policy to the last election, and this is just one of
those promises. Small business, as we know, is the economic backbone of not
just Durack but Australia and, as one of the largest employers in Australia, it
deserves this protection of the law.
This bill extends the consumer unfair contract term
protections in the ASIC Act and the Australian Consumer Law to small business
contracts. It also makes provision for exempting small business contracts which
are subject to prescribed laws deemed equivalent to the unfair contract term
Consumers have been protected from unfair contract terms
since 2010. The government and I recognise that we need reform to ensure small
businesses are protected in line with consumers. Small businesses often face
the same vulnerabilities as consumers and should receive protections when
offered those 'take it or leave it' types of contracts. Extensive consultations
have indicated small businesses across a range of industries have concerns with
unfair terms. Under these protections, the legislation will apply to small
businesses which have fewer than 20 employees, combined with a transaction
value threshold of $100,000 or $250,000 for a contract longer than 12 months.
These protections will come into effect six months after the bill becomes law.
Protection of small business is something I have been
passionate about throughout my career of 25-odd years in the private sector.
Unfair contract terms are a significant concern to small businesses.
The bill will allow a court to
strike out a term of a small business contract that it considers to be unfair.
Once this bill passes, the government will have delivered every small business commitment
that we took to the last election—proof that this government is good for small
business and that we are the best friend small business will ever have. Again,
this bill illustrates this government's commitment to small business.
According the Australian Bureau of Statistics as of June
last year, agricultural small businesses make up nearly 30 per cent of small
businesses in Durack. This means over 3,600 agricultural small businesses will
benefit from having the extension of the consumer unfair contract terms
protections to small businesses. This, of course, is music to the ears of our
farmers, who have previously welcomed the government's assistance. This
includes the tax deduction available for water infrastructure, accelerating three-year
tax write-downs for fodder assets and the drought relief that we have announced
since coming to office. Agriculture is not the only industry that will benefit
from this bill once it is passed, with more than 2,200 construction small
businesses and over 2,000 distribution service small businesses in Durack also
benefitting from the legislation.
This bill will ensure that small businesses confidently
enter standard contracts for day-to-day activities, where the cost and time of
reviewing these contracts—as well as seeking legal advice—can be enormous. As
someone who used to advise small businesses, I know only too well how expense
that exercise can be. Under this bill, the government will reduce the incentive
to include and enforce unfair terms in small business contracts, providing a
more efficient allocation of risk in these contracts, and support small
business confidence in agreeing to contracts. This bill is fresh air to the
diverse small business sector within Durack.
To further assist small businesses with this measure, the
Australian Competition and Consumer Commission was provided with $1.4 million
in the last budget to support the implementation of this bill. This money will
support businesses' transition to the new protections. This will be of great
benefit to the hundreds of rural, regional and remote towns in Durack, who do
not have the same media coverage as those in the cities. This will be an
opportunity to learn about the assistance this bill will provide to them.
Following this, the ACCC will move to a more enforcement focused approach to
dealing with unfair contracts.
This bill goes to the heart of the Abbott government's
values in ensuring that Australia is the best country in the world to start and
grow a small business. Consumers have had these protections since 2010, and the
government believes in protecting Australian small businesses and consumers
equally as well. The government believes that a strong small business sector
leads to a strong economy, and only this government can deliver such confidence
in our economy. Since coming to office, we know that we have axed the carbon
tax, axed the mining tax, cut red tape and reduced the business tax rate, all
of which has led to job growth and a more prosperous small business sector.
This bill gives small businesses the protection they need
and deserve in order to flourish in the future. As a member of an electorate
which has over 13,500 small businesses, I am encouraged by the protection that
a diverse range of industries will receive under the Treasury Legislation
Amendment (Small Business and Unfair Contract Terms) Bill 2015. I commend the
bill to the House.