Franchise Council to fight on after SA small business commissioner vote

The franchising industry is livid after the South Australian Parliament passed the much-debated small business commissioner bill through its lower house, saying that the current draft differs from the version originally put forward during a consultation period.

It has also continued to argue that the current legislation essentially acts as a back-door franchising bill that will create a state-based practice for the industry. The FCA has previously argued that a national code is sufficient.

“We are very supportive of the concept of a small business commissioner based on the Victorian model,” says FCA chief Steve Wright. “But we’re concerned because this bill has now been changed.”

“The bill seeks to annex existing codes, they will become the judge and jury on codes that are regulated by the Australian Competition and Consumer Commission. What happens here is that you have two judges.”

Wright says the bill should be subject to an upper house inquiry now that it has passed the lower house, and criticises the legislation for not containing more information on how penalties will work or how the commissioner will use its authority in conjunction with the ACCC.

“This Bill must now be put up for thorough scrutiny in the Upper House… and that means a committee inquiry which sources the most authoritative opinion available on a national and state basis – something which has not occurred previously.”

“This legislation goes way further than the Victorian model, and is quite different.”

South Australian franchising legislation has been debated for several years, but only in recent m`n the franchising sector.

However, proponents of the bill, which include SA small business minister Tom Koutsantonis, MP Tony Piccolo and advisor Frank Zumbo, say the legislation makes things less confusing by combining the small business commissioner and separate franchising code legislation.

They argue the bill is transparent, saying that it doesn’t apply to franchising specifically and that the commissioner will have jurisdiction over a number of other codes as well.

“There are more than 136,00 registered small business operators in South Australia and they need and want an advocate who can provide owners with the support they need and deserve when dissolving disputes,” Koutsantonis said in a statement yesterday, noting the legislation had received support from industry bodies including the Council of Small Business of Australia.

However, Wright says the Law Council of Australia has withdrawn its support for the bill.

“Business SA, the South Australian Farmer’s Federation, the Business Development Council, Motor Traders Association, the Regional Communities Consultative Committee as well as various industry associations, franchisees and other business groups have provided input.”

“The establishment of a Small Business Commissioner will build positive relationships between all parties, allowing the smaller businesses to have a non-litigation approach which will be timely, low cost and improve fairness.”

COSBOA has attacked the Liberal party this morning for failing to support the bill, saying the lack of support has made SMEs “second class citizens”.