Small Business Commission 2016 Bill

The purpose of the act is to repeal the Small Business Commissioner Act 2003, to re-enact the law in relation to the Small Business Commission with amendments and to establish the Small Business Commission. In terms of the commission, the bill says it is to enhance a competitive and fair operating environment for small business in Victoria, but that is really the extent of what the bill does to establish a fair and equal footing for small business. I think the government has indicated how important it feels this bill is as well by allocating it very little time for debate. Because it has been allocated such a small amount of time so late in the day on Thursday, I will be brief in what I have to say so that we can get more speakers on our side up to have their say about what they feel this bill lacks and whether they have been able to find anything in it that we should be supportive of.

The bill makes some amendments that will arguably address a greater range of disputes involving more organisations. It allows the commission to comment on legislation that may adversely affect small business if it is undertaken in consultation with the secretary and is requested by the minister. The other aspect that is added in — if it could be called 'added in' — is the bill enables the commission to work collaboratively with small business commissions in other jurisdictions. The small business commissioner — now commission — is a really important body and has historically been very successful in doing what it does. The majority of what it does really is mediation.

The Office of the Victorian Small Business Commissioner was established in 2003 to develop a competitive and fair operating environment for small and medium businesses throughout Victoria, and to a larger or lesser extent at various times it has done the job and done it quite well. It does it through initial assistance to businesses in start-up mode and in their early times, and it does it in terms of mediation when disputes arise. The body is an independent and confidential organisation. It is low cost — or no cost — wherever possible. It is a quick service, and it is generally successful in its approach, with the records showing that it has a percentage of success in the high 90s.

One of the commissioner's good purposes is that no legal representation is required. It does not rule it out — I think that is another opportunity lost — but it does not require it. It also allows the people in mediation to think outside the square and to come to solutions that to a large extent help business relationships to continue, and of course, as we know, when disputes go past the point of mediation and end up in a court or a tribunal, that is when those business relationships generally break down and the problems become irresolvable. That is a really big advantage to the way the organisation works. It is to avoid long and costly litigation and also obviously the mental anguish that businesses go through, particularly small businesses, when they are locked in a struggle with another organisation when they really should be focused on getting their work done.

The feedback from the industry has been, 'Is that all the bill does?'. They were looking forward to it having some really beneficial effects. We went out to 127 organisations to get feedback. It is fair to say that we did not get a response from all 127 of those, but we did get quite a good response.

I will take this opportunity to thank the department and the minister's office for the two briefings they provided to me. They were very helpful. One of the people who was responsible for that is sitting in the house at the moment. I am very grateful for the time that was taken and the attention given.

The bill really does zero for small business. One piece of feedback we got was that the only effect of the bill is that the commission will now have to redo all of its letterhead, signage and communications, because it will have to take two letters away from its name — going from 'commissioner' back to 'commission'. Other than that, people have struggled to find any great benefit from the bill. Clause 3 of the bill, which is the definitions, is quite generic in terms of the list of bodies that could be affected by the bill. It started off as generic, then it was changed to a list and now that list has been extended. As anybody would know, when you have a list you are really excluding everybody else from that list. No matter how long you make the list, it will still exclude someone. But the government has chosen to go with a list rather than going back to a generic listing.

Another concern is the definition of a non-profit organisation, with exceptions and extensions to that. Rather than just going with defining a non-profit organisation as one that does not distribute profit, the government has added a series of organisations that do come under that definition. Really, all that does is serve to complicate matters for schools, registered training organisations and the like. It could have been handled very easily with just a definition of what a non-profit organisation was.

There are exceptions that have been identified where the commission will not be able to act, and that includes where a dispute is with the Victorian Civil and Administrative Tribunal, the Victorian Auditor-General's Office or any organisation like that. What that does is ignore the fact that these organisations enter into commercial contracts with a range of providers, including cleaners, security staff and the like. I really do think that that shows complete ignorance of what the commission does and how it operates. It would have been very easy to have included those and to have allowed them to continue to mediate in those ways. But they have not been able to, and I think the proposed exclusion demonstrates a lack of understanding of the role it plays in commercial disputes.

The definition of a not-for-profit organisation has had more categories added. They appear to be in response to the problem of defining not-for-profits. As I said earlier, that could have been avoided by a simple definition of what not-for-profits are.

The government has also added a function through this bill — or it appears that a function has been added — and that is that the commission is to work with other such commissions and commissioners at the commonwealth level. But what has really happened is that the wording that has been chosen here would technically rule out any organisation that is not named in the same way. For instance, the Queensland Small Business Champion — there is a question mark as to whether that organisation would be included as a result of the wording that has been used. I would suggest that the minister's office have a look at that and consider maybe amending it in order to allow the commission to work with any like body.

The feedback we have received on the bill, as I said, is that basically the bill does very little. One piece of feedback we had indicated that really all this bill is about is the 'emergency room'. Labor made a commitment to reform and empower the commissioner, and it has now realised that after two years it has done nothing in that regard so it has decided to take away two letters and make out that it has actually done something. In reality, changing 'the commissioner' to 'a commission' adds nothing, because if you know what the commissioner's role and powers have been, you would know that they could already call a commission and already had the powers of a commission. I believe that change is not needed. Page 16 through to page 28 of the bill really just repeats ad nauseam the change of the two letters.

One of the really important aspects of the bill, and of course one of the most important aspects of the whole process, is the importance of the independence of this body. Not only does this body have to be independent, it is really important that this body is seen to be independent. When you have a close look at the functioning of the organisation and the way it is structured, it really is not independent by any stretch of the imagination. When you have the secretary and the department holding the purse strings, it makes it impossible for a true independence to be achieved.

Staff employed in the organisation are really employed by the department under the Public Administration Act 2004, and the commissioner is required to request for staff to be employed and to request extra funding. That funding comes through the department, and the department clearly is at the behest of the minister. It really does put in question the true independence of the commission and the commissioner. It is something that I think the government, through this bill, could have taken the opportunity to address more comprehensively, and it really means that the commissioner needs to go cap in hand to the department to get more money. When, for instance, there is an issue with needing to employ a new commissioner, it really is the minister who directly or indirectly appoints that person.

I would just take a moment to congratulate the new incumbent on taking on the role of commissioner, and that is Judy O'Connell. Certainly the opposition wishes Ms O'Connell well, and we will work closely with her to make sure that she is able to do her job as well as possible according to the legislation that she has been given to work with. In the end, a short list of people for that position is created, and then the minister gets to decide on the appointment. Of course the minister could potentially appoint somebody they believe they could control completely. It is unlikely that the government would appoint somebody they thought would give them political trouble, knowing the way that appointments have been made by the government. The end result is that the best person for the job, the person that could potentially be the best person for the job, is not necessarily selected, because that is not necessarily the criteria. I would suggest that there is a missed opportunity here, because independence is so critical for this body. The opportunity where they could have achieved that was missed.

Another concern with the bill is that there was virtually no consultation. There was a briefing given to the opposition, but some of the feedback from the industry was that they had not been contacted by anybody other than me and that the first opportunity for feedback for them was actually Monday of this week, after the bill had been brought to the house. It really does smack of a situation where the government has tried to bring this in under the radar. Not only was there no consultation but this was also brought in and developed at a time when there was no commissioner. The feeling within the industry was that if there were a problem with the bill, then that would be what you would want to do. The government has not done itself any favours by not consulting well and also by doing it at a time when there was no commissioner in place, so that it seems to have been done with no scrutiny at all.

It has also added a number of duties and obligations but no extra funding. Feedback from a number of people indicated that the commission was already in a situation where it had powers to do some things but not enough money to do them, and by adding extra things for it to do but still with no more money, you really are neutering an organisation that is capable of doing a lot of good work, but clearly not always the work that the government wants done.

The concern is that the commission could become more of an advisory service. Waiting times could be extended, and there could be a focus on results rather than on fair and equitable dispute resolution. That is a concern that the opposition has. If you look at, by way of comparison, the way the Victorian Civil and Administrative Tribunal developed, you will see that there was a similarity in the way it developed with increasing numbers of lawyers being present and not getting its job done as well as had been anticipated. I think we could have done more to discourage lawyers at this point. We do not want this organisation to turn into that sort of forum. The formalisation of it becoming an advisory service to the minister does put extra strain on it but does not give it any more funding to do that. We run a real risk that the original purpose of the act is being lost.

It sounds more like a plan to disempower the organisation than it is a plan to empower it, and I certainly had hoped that this was the way the government was going to go — to provide more power to the organisation and to allow it to do its job in a more efficient and effective way for small business. The minister had told us on numerous occasions that the organisation was running well, and if it was running well, why would you add additional obligations if they were already unable to satisfy all of the obligations that they had, without any commensurate funding, without stakeholder consultation and with no small business commissioner in place? It really does smack a lot of Labor policy. And why would the small business industry not be sceptical about what the government's intentions are and the government's ability to achieve what it says it is trying to achieve?

I have quite a bit more to say, but I know a number of other members would like to contribute to this debate. I will just quickly say though that small business really is a massively important industry. It is the backbone of our economy; there are 540 000 businesses in Victoria, 97 per cent of them employing under 20 people. Almost half of all non-public jobs come from the small business sector, 30 per cent of them in the regions. Really the health of our economy relies on having a healthy small business sector with growth, sustainability and productivity. If we are not putting in place the people and the organisations that can help that to occur, then we are damaging something that is really important to this economy and to the community, because small businesses are really just Victorians in business. Behind every small business is a Victorian, often a Victorian family. Economic health is reliant upon small business doing well, and the resilience of our community relies on the people behind it being happy and healthy.

It is a challenging field, because it is not enough just to do the rhetoric; it is really important that the government follow through on what it really does mean to the Victorian economy and the Victorian community. It is the true backbone, and the government should really have gone further with this legislation. I will leave my contribution there. I just repeat that it is disappointing that the government has chosen not to take the opportunity to strengthen this organisation. We looked hard to find a way that we could support rather than just not oppose, but in the end the opposition will not be opposing the bill.