The Franchise Owner's most trusted news source

Log In / Register | Mar 17, 2018

Genius in South Australia Bill

Last week the South Australian Small Business Commissioner Bill passed through the Lower House. The genius in this Bill comes from redrafting of another Bill to increase positive impact to greater stakeholder and gain that stakeholder support.

In Australia there have been rumblings of discontent from small business for decades. When confronted by a financially more powerful adversary in a dispute typically the big business always wins and small business simply has had to survive or fail in that reality.

Small business in Australia has gradually been devoured by big business using free market principles to justify the erosion of healthy competition. At a federal level big business lobbyists are in favour and the long term cost to taxpayers and government has been ignored. Small business industries are disappearing as big business swamps the market with cheap imported product.

The Small Business Commissioner Bill in South Australia brings to the table the ability for all small business to have disputes heard by the Commissioner where the outcome will not be decided on the basis of the size of legal teams and defence budgets.

The Commissioner’s role has been given muscle with an obligation for all parties to act in good faith with added take up of recommendations from three franchising Inquiries to deal with the federal Code loopholes that allowed the abuse which instigated the move for franchise reform.

The Bill introduces deterrents and rewards by way of pecuniary penalties and a public register for those found to have breached the Law. As investors and consumers learn to refer to the register the rewards will go to those who prosper on the side of good faith principles and therefore, do not appear on the register. 

The deterrents are designed to promote that, where unscrupulous business practices need change, they will likely undergo change.  In so doing the Bill educates against bad faith practices and brings down the cost of the Commissioner’s Office and the costs to Courts. Pecuniary penalties also offer potential funding to reduce the cost of the Commissioner’s role.

But the Small Business Commissioner Bill began life as the South Australian Franchising Bill 2009 and that evolution has brought together all small business industries in support.  That is the political genius to best ensure safe passage of 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".  SmartCompany

Tony Piccolo MP fought long and hard to bring the plight of franchisees to the South Australian Parliament and was effectively on its way to changing unfair franchising practices in South Australia.  The Bill’s new life seems to have come about when the original Bill went to the Small Business Minister Tom Koutsantonis.  Problems common to all in small business were being addressed for franchisees in the Piccolo Bill so why not create a Bill to best satisfy dispute problems for all in small business.

The scope of the Bill was expanded and the Small Business Commissioner Bill was born bringing with it support from all small business in South Australia.

With small business as the economic and employment backbone to the vast majority of Australian electorates opposing the Bill virtually becomes political suicide.  And yet in South and West Australia there are elements within the Liberal Party seemingly determined to follow the financially powerful lobbyist lead.  Common sense, momentum and numbers are against them.

It would be remiss to ignore the role of the Franchise Council of Australia when considering the determination behind small business and franchising reform. Apart from small pockets of questionable political support it is difficult to find anyone who the FCA has not upset. Arrogance, dirty tricks, personal attacks and misinformation have seen the FCA essentially shut out.

The Shopping Centre Council of Australia has essentially called on FCA to review the franchise business model giving the example of the franchisee retailer needing to generate 65% more sales than an independent retailer if they are to generate the same net result.

FCA continues to cry foul suggesting the SA Bill is a backdoor introduction of franchising legislation. That claim has generally been dismissed with contempt given that the SA legislation deals with acknowledged power imbalance problems taxing the very existence of much of small business.

Like the West Australian Franchising Bill, the South Australian Small Business Commissioner Bill must now pass through detailed Upper House scrutiny before passing into Law.

Once passed the Bill will provide Mum and Dad business owners with a quick and fair process to protect themselves from predatory behaviour from other businesses.  Tony Piccolo MP

More on this Topic:

South Australia Aims to be Safest Place for Franchisees

WA Franchise Legislation Goes to Committee

All Or Nothing At The Cheesecake Shop

Fair Go Legislation Website Release

Koutsantonis: South Australia Law Is Go!

Australian Franchise Investor Uncertainty

ACCC Supports Dedicated Franchise Dispute Resolution

National Franchisee Coalition Pushes WA Bill

Franchise Council Gets Desperate

FCA in West Aus

No votes yet

About Ray Borradale

Ray Borradale's picture

Public Profile

Over forty years experience in Small Business and more than twenty-five years in franchising operations as a franchisee and employed by three franchisors, mostly in operations.

I have dedicated more than ten years and over 15,000 hours in the pursuit of quality franchising and exposing franchisor abuse of franchisees while advocating for the introduction of franchise relationship Law and the levelling of the dispute processes between bigger business and small business.


Area of Interest
Franchise Operations