WA franchise bill hinges on Labor support

WA Liberal MP Peter Abetz is relying on the Labor party to see his franchise bill become a reality, after it passed the second reading in State Parliament’s Lower House last night.

Abetz, who introduced the bill last year in a bid to eliminate rogue franchisors, says this means the bill has been agree to in principle. It will now move into the consideration in detail stage.

Consideration in detail is an optional stage in the passage of a bill, during which time the House of Representatives considers the bill in detail and may move amendments to the text of the bill.

Abetz has persevered with the bill despite failing to win the support of his party. He is now relying on the Labor party to see the bill progress further forward.

“I’m at the mercy of the Labor party as to whether they’re willing and able to give me time… As long as it gets time in Parliament, I’m confident it will go through,” Abetz told StartupSmart.

The bill has attracted widespread criticism from within the industry, including the Franchise Council of Australia, which claims state-specific franchise laws would take a “sledgehammer” to the industry.

“Peter Abetz has basically thumbed his nose at his own party… and said, I don’t care – I intend to proceed anyway,” FCA executive director Steve Wright says.

“The Labor party has shown its interest [in the bill] and that is causing trouble for the WA Premier, Colin Barnett.”

Meanwhile, the FCA has vowed to block the South Australian Government’s Small Business Commissioner Bill, claiming it would create a “de facto” franchising code.

Earlier this month, SA Small Business Minister Tom Koutsantonis introduced a bill into Parliament that would establish a small business commissioner and take measures to regulate the franchise industry.

The bill has been welcomed by Labor MP Tony Piccolo, who introduced his own bill into Parliament in 2009 to redress an imbalance between franchisors and franchisees. However, this bill lapsed due to a state election in 2010.

Piccolo said while Koutsantonis’s bill is structured differently to his, it “will ultimately achieve the same objectives”.

“The bill is a way of providing flexibility in achieving [Koutsantonis’s] objective of raising business behaviour standards in franchising,” Piccolo said in a statement.

According to Wright, the bill could create a de facto franchising code.

“[The new bill] is markedly different to the [original] Small Business Commissioner Bill, which [Koutsantonis] put out for public comment last year,” Wright says.

“It’s not clear why it changed or at whose suggestion… Mr Koutsantonis told Parliament that the bill was based on the Victorian model but this bill goes a lot further than the Victorian model for its small business commissioner.”

“What Mr Koutsantonis has done is bring forward elements of a bill which lapsed in 2009… It’s backdoor legislation.”

Wright said if the bill is passed, it will create confusion in the industry and lead to more disputes.

“It will provide, potentially, a new interpretation of the franchising law and a potential overlap with existing Federal law,” he says.