Retail and Commercial Leases Act 1995

Ms DIGANCE (Elder) (14:28): My question is to the Minister for Small Business. Can the minister update the house on the review of the Retail and Commercial Leases Act 1995?

The Hon. M.L.J. HAMILTON-SMITH (Waite—Minister for Investment and Trade, Minister for Small Business, Minister for Defence Industries, Minister for Veterans' Affairs) (14:28): I thank the member for Elder for the question. She has a very active small business group within her electorate, and I know it is a small business constituency. That's why the state government committed, in December 2013, to undertaking a review of the Retail and Commercial Leases Act 1995. That review was undertaken by former District Court judge Alan Moss. Mr Moss handed down his review on 14 April 2016.

The review of the Retail and Commercial Leases Act 1995 will now be released for a three-month period of public consultation, and information in relation to that consultation on the review is available online at www.sasbc.sa.gov.au. I have asked the Small Business Commissioner, John Chapman, to coordinate submissions on the review. Following the conclusion of the consultation period, the Small Business Commissioner will review the feedback and prepare a briefing to me with the intention of bringing detailed recommendations back to cabinet later in the year.

The review puts forward a total of 20 recommendations, and they include that the threshold for the application of the act should continue to be determined by the amount of the rental and not the lettable area. The SBC should monitor the marketplace and make recommendations for the alteration of the threshold amount—if necessary, every two years. Secondly, the rental threshold should be exclusive of GST. A shop leased for an amount under the rental threshold should be considered as small business, even if it is a part of a larger franchise, brand or group.

Certain classes of small businesses which rent premises from the state government or local government should be excluded from the act by regulation. The power of the minister and the Magistrates Court to exempt leases and licences from the act should be revoked and should instead lie with the SBC, with a possible appeal to the SACAT if needed. The term 'public company' should have the same meaning as under the Corporations Act 2001.

The act should provide for the mandatory registration of leases; however, the requirement to provide a survey to effect registration should not apply under the act. Shopping centre incentives should remain confidential. Section 12 of the act should be amended to make it clear that the disclosure statement must be provided to the lessee before any binding agreement can be made. The disclosure statement should be signed by the lessor, or agent of the lessor, and served upon the lessee. The disclosure statement should be signed by the lessee or his or her agent, and there should not be a disclosure statement required before exercising the right of renewal.

Independent condition reports, including photographs at the beginning and end of each lease, should not be made mandatory. The act should not provide a pro forma lease, nor should the cost of lease preparation be capped. References to stamping and stamp duty in sections 14 and 16 of the act should be deleted. There should be no change to land tax provisions. Security should be by way of three months' rental. All bank guarantees provided as security by lessees should be held by the SBC.

Section 20B(3)(b) of the act should be amended. The SBC should have the power to certify exclusionary clauses under section 20K. The act should be amended to provide a legislative pathway for an orderly exit from the lease by a failing business. The Landlord and Tenant Act 1936 should be amended. The role of the SBC should be expanded. No amendment to the act should be undertaken until the effect of the commonwealth unfair contracts legislation is understood, and penalties under the act should be increased.

The act is another that is of vital importance to the growth and development of small business. Some of the measures will be controversial, but they are necessary. I look forward to receiving feedback from stakeholders and interested parties on the recommendations put forward by Mr Moss, and I encourage all stakeholders to respond.

Ms Sanderson interjecting:

The SPEAKER: The member for Adelaide is warned.