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Legislative Council - Fifty-Second Parliament, First Session (52-1)
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SMALL BUSINESS COMMISSIONER BILL

Committee Stage

In committee.

Clause 1.

The Hon. G.E. GAGO: As indicated in my second reading summary, a number of questions and issues were raised during the second reading debate that I committed to providing answers for, and I will use clause 1 as an opportunity to provide those answers. In response to a question asked by the Hon. Ann Bressington, I have been advised that it is clear that section 51AEA of the Competition and Consumer Act 2010 allows the state to enact a law provided that the state law is not directly inconsistent with the Competition and Consumer Act 2010.

As a matter of constitutional law, any South Australian regulation must and will be directly consistent with the Competition and Consumer Act 2010. South Australian regulation will be directly consistent if it directly replicates or complements the Competition and Consumer Act 2010. There may be areas at the commonwealth level in which there is no equivalent code of conduct, such as, for example, farm machinery, and, in these areas, the state may introduce codes dealing with these areas given the absence of a commonwealth code.

In the event that industry consultation regarding an existing commonwealth code or codes reveals or confirms that there is a gap, for example, in the protection afforded franchisees, the state reserves its right to protect those franchisees in a manner that complements the commonwealth code following advice from crown law. It would not be appropriate for the South Australian parliament to restrict its ability to protect its South Australian franchisees where it has the constitutional power to do so.

In response to a question asked by the Hon. Rob Lucas regarding the commissioner having the power to require any further information, I am advised that the commissioner, under these reforms, will administer the Retail and Commercial Leases Act 1995. Under this act, there are clear functions, legislation and parameters which the commissioner must adhere to.

The commissioner's aim for parties in dispute is to attempt to resolve the complaint using the various powers that the commissioner has. It is expected that the commissioner will request information voluntarily in the first instance with a view to trying to resolve a dispute. We would expect in the vast majority of cases that this will be provided voluntarily, given that one would expect parties to act in good faith to resolve the dispute. In any mediation process, there will be disclosure of information if it is necessary for a mediation to be successful.

Under the mediation processes, any statements or admissions made in the mediation are not admissible before a court and are protected through standard confidentiality agreements entered into between the parties and mediators before mediation commences. The commissioner and staff are also bound by strict confidentiality requirements under provision 13 of the Small Business Commissioner Bill 2011, and there are strict penalties if the commissioner divulges information improperly.

In relation to the question asked about restrictions on the commissioner in terms of sharing information with parties to the dispute, I am advised that when a party requests the commissioner to investigate and mediate a dispute and make the written application to do so then there will be information provided to the party that will outline along the lines of, and I quote:

The details that you provide in this application and any accompanying documents may be forwarded to the respondent. Submission of this referral form indicates your agreement to this.

Parties will also be advised that they may wish to obtain legal advice in a mediation context. Participants will be expected to sign confidentiality arrangements pertaining to the information that they are provided with prior to mediation. All of these details and information on the processes to be used will be provided on the commissioner's website and other information literature that will be made available.

In relation to the question asked about the commissioner's restrictions to require information, I am advised that as a general principle it is expected that the parties will willingly assist the commissioner. This will depend upon the individual circumstances. Any formal requirement for information by the commissioner would normally only occur as a last resort. Parties have a clear choice: they can act reasonably and with good business conduct or, if the commissioner deems it necessary, be required to provide the information so that the commissioner can carry out his or her functions. If a party thinks that the request is unreasonable, it can be challenged by judicial review or they can request the Ombudsman to look into the matter.

In relation to questions asked about franchisor and franchisee disputes, I am advised that the commissioner will at first seek voluntary disclosure of information by each party as it relates to the matter before the commissioner. Any request for information must be relevant and necessary to the commissioner assisting the parties or enforcing a code of conduct. Each matter before the commissioner will vary and the information that the commissioner may seek will vary according to the circumstances.

The commissioner will only be seeking the minimum information required to help resolve a dispute or enforce a code. The commissioner, as a matter of administrative law, cannot ask for information that is irrelevant or unconnected to the matter before the commissioner and any attempt to obtain such irrelevant information could lead to a court challenge of a complaint to the Ombudsman.

In relation to the question asking if the commissioner can require tax records and other information from a tenant in a residing tenancy dispute, I am advised that it is not expected that the commissioner would be seeking tax records as such records are generally not in dispute between a franchisor and franchisee, but rather is a matter between the relevant party and the Australian Taxation Office. The commissioner does not have any role in a matter involving a party and the Australian Taxation Office. The commissioner can only deal with local and state government bodies, he or she has no jurisdiction over commonwealth matters.

In relation to the question about obtaining information on potential offers for the sale of a business, I am advised that one would not ordinarily expect that this information is relevant to an individual dispute. It is recognised that there is a possibility that the landlord may have represented to the tenant that a rent increase is due to other potential offers on the site. In these circumstances, it would be expected that the landlord would voluntarily verify their statement to the commissioner in confidence, as per clause 13 of the bill. Such information must be kept confidential to the commissioner and not divulged to the tenant unless, for example, the landlord agrees.

In relation to the question about the commissioner having the power to direct a landlord to deliver a nine-year lease arrangement, I am advised that, no, it needs to be made clear that the small business commissioner is not an arbiter of individual disputes. The commissioner cannot impose on the parties a commercial contract. The commissioner can assist the parties towards a commercial agreement but whether a commercial agreement is entered into (and the precise terms and conditions) is a matter for the commercial parties.

In relation to the question about specific powers in the bill, I am advised that there is no guarantee that the commissioner can successfully assist to resolve any commercial dispute. At the moment there is no easy process for businesses if they cannot resolve a dispute themselves unless they have, obviously, deep pockets and want to pursue litigation.

The significant evidence from the Victorian commissioner over eight years is that the commissioner's office can help to resolve about 80 per cent of all disputes. This is very significant as not only is it less costly, it is more timely than a court process—not to mention reducing the stress and anxiety that often disputes cause to all parties. It also often ensures that the party can continue to trade, employ people, pay taxes and so on. So there is, obviously, a wider economic benefit, as well.

In relation to the question about a code of practice for farm machinery and SAFF, I am advised that it is important to understand how industry codes of conduct will be developed. If a proposal is put forward from an industry participant or groups that there is a need for an industry code in a particular area to be developed, then obviously there needs to be an evidence base to support that proposition. In the case of farm machinery there is a body of work, especially the 79th report of the Economic and Finance Committee from 2009, to draw upon, as well as the submissions made to the inquiry and any new submissions made to the commissioner.

The development process is likely to have a number of common elements and a consultation process will be critical. It is proposed that the commissioner develop a discussion paper regarding the process envisaged for the development of industry codes as early as possible so that there is clarity and detail of the process to be used to consult and engage stakeholders.

It should also be noted that initially, once a code is developed, it may not be prescribed as historically many codes that have been developed are initially voluntary to allow a sector to work through any issues before they become mandatory or prescribed. This is consistent with the general approach that the commissioner would take in performing his or her functions in a way that promotes better relationships and conduct between business and between businesses and government bodies.

The ministers for small business met with the South Australian Farmers Federation and discussed the development of industry codes with that organisation. It is anticipated that the commissioner will commence consultation with the South Australian Farmers Federation and other industry participants to start the process of industry code development in a timely manner once the legislation is passed.

The government intends for the commissioner to work with the industry in a timely and meaningful way. The Hon. Robert Brokenshire and the Hon. John Darley have indicated their willingness to be involved in the industry codes for this sector of the economy. Obviously, the commissioner will engage with other members in either chamber who might wish to participate in the industry development process. All industry codes that are developed will be monitored by the small business commissioner, if it is a mandatory or prescribed code, and enforce that code under the Fair Trading Act.

In relation to the question about the type of codes of practice that are envisaged by the government, I am advised that industry codes seek to set out the appropriate standards of conduct with which all industry participants will comply. This may involve disclosure requirements, online specific practices or conduct that is expected to be adhered to, and dispute-resolution processes. Areas are likely to include franchising, the farming sector and the services sector. This legislation provides the framework for the industry code reforms.

In relation to the question about negotiations between parties, if there is to be a code of practice for farm machinery, I am advised that it is expected that the major farm machinery manufacturers will adhere to their mission or customer statement where, for example, they represent that they exceed customers' expectations, quality and value, expect more from us, etc. Large companies are renowned for protecting their good name. We would expect that any codes would be consistent with these self-imposed standards of conduct. The government is confident that all stakeholders will contribute in good faith to the development of any code.

Finally, in relation to the question about power to require information and appeal rights, I am advised that, if a party feels aggrieved or believes there has been an abuse of power, then a complaint can be lodged with the Ombudsman and the commissioner will be subject to the adjudication of the Ombudsman. There is also the option of judicial review.

The Hon. T.J. STEPHENS: In relation to clause 1, I want to make the chamber aware of the most recent update from the federal Minister for Small Business (Hon. Nick Sherry). Nick Sherry is extremely confused as to why South Australia is heading down this path. He has issued a press release which states:

...Nick Sherry, has today welcomed the comments on franchising of the Chairman of the Australian Competition and Consumer Commission, Mr Rod Sims, at a Senate Estimates hearing last night.

Mr Sims elaborated to the Economics Committee on his comments during a speech to the Franchise Council of Australia on October 10. These comments have been used by the South Australian Government to support its state-based franchising legislation.

Mr Sims told the hearing:

'The point I was trying to make to the Franchising Council was a little bit different than the way that that was used there.

I was really trying to say that there are issues of imbalance of power between franchisees and franchisors, that this was a sector with new audit powers and within the ACL [which is the Australian Consumer Law], that we can take more action on.

I was really trying to signal that I thought there was more the ACCC could and would do. So, to find that line of argument used to support more powers in South Australia was I guess the almost opposite reaction to the one I thought I'd get.

What I'm saying is we've got more powers and we can do more and I think we can effectively deal with the issues.'

Mr Sims also agreed with the Commonwealth's policy of bedding down the new national franchise regulations.

The new enforcement powers under the ACL came into effect on 1 July this year and the Commonwealth's amendments to Franchising Code of Conduct—giving the sector greater protection, transparency and certainty—came into effect on 1 July 2010. The Commonwealth will undertake a review of the new laws in 2013.

Mr Sims was asked:

'Are you of the view that States should go on their own in terms of franchising policy—

this is the chairman of the ACCC—

The ACCC is I think on the record and it would also be my view that where you've got what is really already a national franchising code, many of these franchises do go beyond states. I think this is something that is better regulated nationally rather than different state regulations.'

Senator Sherry said today, 'The Government has no intention of revisiting franchise legislation until the new system has been give a chance to bed down.'

'The new national laws follow extensive consultation review and are the best chance yet to address concerns within the franchising sector. States acting alone will only create instability and uncertainty for a $130 billion growth industry,' Senator Sherry said.

I want the crossbench members to be aware that here we have the federal Minister for Small Business firing an absolute shot across the bow of this state government.

I want to know from the minister also, with regard to a question that I think the Hon. David Ridgway put regarding farming and purviews with regard to small business and does farming come under the banner of small business (which has always been the belief of the Liberal Party—small business is farming: farming is small business), whether there is a recognition of that?

Just on the minister's answer on clause 1, does the minister believe that farm machinery dealers are in any way going to be held to account if there is some sort of breakdown within their machinery and plant and they make their best endeavours to get it sorted? Are the minister and this government trying to force farm machinery dealers out of South Australia?

The Hon. G.E. GAGO: We know that Senator Sherry has expressed concerns about franchising in particular, but I draw to members' attention the fact that this bill goes much further than just franchising. There are a lot of people who do not share his point of view. For instance, a number of key national groups, such as the Council of Small Business of Australia, the Independent Contractors of Australia (ICA), and key local groups, such as the Motor Trade Association of South Australia and the South Australian Farmers Federation, have all published statements applauding the South Australian government for this initiative and strongly suggesting that the Liberals have abandoned their constituents.

Other states have a similar small business commissioner structure in place that has been shown to be highly successful: Victoria and New South Wales and, of course, soon WA. Just in relation to Mr Rod Sims, the ACCC chairman, his speech at the Franchise Council of Australia's national convention on 10 October made some key points, including things like 'the franchising sector has some image problems', 'dubious franchising practices give the franchising sector as a whole a bad name and discourage potential franchisees from investing in the sector', 'the level of franchising complaints to the ACCC is something that can't be ignored', 'there were 600 complaints to the ACCC last year, which shows that there are problems in the franchising sector', 'franchisees fear retaliation if they make complaints' and 'there is much that the ACCC cannot do; in particular the ACCC cannot mediate and does not get involved in individual business disputes', and finally 'the state-based small business commission has an important disputes resolution role to play'. Farming is indeed captured by this bill.

The Hon. T.J. STEPHENS: I would also make crossbench members aware of part of the transcript of last night's proceedings of that committee. We are not talking just about Senator Sherry. Senator Doug Cameron, another ALP stalwart, said:

Mr Sims, I would like to ask you some questions about your speech to the Franchising Council back on 10 October 2011. You indicated that you had 600 complaints from the sector as a whole—

sounds like a lot—

I understand there's about 70,000 franchises nationally. So that's quite a small number of complaints. Is that correct?

Chairman Sims:

Oh well, Senator, my arithmetic at this time of night…there's probably less than 1 per cent.

I repeat, less than 1 per cent.

But nonetheless, I mean this is a sector that does attract a certain number of complaints, but yes those are accurate numbers.

Minister, we are talking about 70,000 franchises nationally and less than 1 per cent complain. Why are you trying to crack the peanut with a sledgehammer?

The Hon. G.E. GAGO: There is a wide range of indicators that demonstrate that this role is needed and would be very valuable. A parliamentary inquiry identified a need for this. There are examples of individuals who have lost their home and their health has suffered, potential suicides, people not investing for fear of retaliation. There is a lot of this sort of evidence that people are adversely affected by the problems that they have in this sector. There is, in fact, significant evidence. I know that the honourable member has a different point of view and that he does not support this, but we support all the evidence that suggests there is a serious need for this.

The Hon. T.J. STEPHENS: I have a question with regard to the minister's comments on clause 1. If two parties enter into a legally binding contract, what powers will this small business commissioner have to set aside a contract? If a dispute is not resolved by mediation, what powers does this small business commissioner have?

The Hon. G.E. GAGO: I have been advised that there are no powers contained in this bill that enable a contract to be set aside. I guess the real issue is the success rate of the small business commission; that is, it is able to successfully resolve 80 per cent of disputes that come before it using the powers it has. It is about creating greater fairness. If the dispute is based on a bad commercial decision made by the applicant, then they have to wear that. However, if the dispute is about an irregularity that occurs, then the powers afforded in this bill apply.

The Hon. T.J. STEPHENS: I think the minister has just hit the nail on the head with all of this. We are told that the majority of complaints arise from people making bad commercial decisions. My crossbench colleagues will have to understand that people make bad commercial decisions, often when they have taken legal advice and then have chosen to ignore it. This small business commissioner—which will cost some millions of dollars—will do nothing for those people, and I suspect that they are the people who are generally the most vocal.

Again, we are trying to crack a peanut with a hammer, with no real power other than an added layer of bureaucracy. Of the 600 complaints that the ACCC has, out of the 70,000 national businesses, the vast number of them are dismissed as not being proper complaints.

The Hon. R.I. LUCAS: I return to the minister's answers to the questions I posed in the second reading in order to clarify the responses, starting in particular in relation to commercial tenancies. If a landlord refuses to be involved in the processes of the proposed small business commissioner's mediation, that is, there is a dispute between a landlord and a tenant and the landlord says, in essence, 'Get nicked, I'm not going to be involved in this,' what if any power is there to require the landlord to be part of the process?

The Hon. G.E. GAGO: I am advised that there are no powers in this bill that would require a landlord to participate in mediation. The powers that are involved are those to require information and certain documentation and also the power for the minister to basically name and shame, that is, to take that information into parliament and make it public.

The Hon. R.I. LUCAS: That was my understanding, but I do not think that is the belief or understanding of many of the supporters of the legislation, because this is a common occurrence where there is a dispute between a landlord and a tenant. A number of the tenants believe under the government's legislation that this mystical small business commissioner will resolve these sorts of disputes. The minister has now made it quite clear that, if a landlord says no, that is the end of it—the small business commissioner will have no power to resolve it.

To clarify the second part of the minister's response to that question: where the landlord refuses to be involved in the processes, is the minister saying that, under his or her power under clause 12—Power to require information, the commissioner can still require information from that landlord and, as the minister indicated, the minister can name and shame using that information in the parliament if the minister so chooses?

The Hon. G.E. GAGO: I am advised yes.

The Hon. R.I. LUCAS: What the minister is saying is that, where there is a dispute between the landlord and tenant and the landlord refuses to be part of the process, the government is seeking to give the power to the small business commissioner to demand documents from the landlord, including potentially tax records.

When I asked that question earlier, the minister responded, 'It is not expected that tax records would be able to be accessed.' There is no denial there and it is quite clear when one looks at clause 12 of the bill which simply says that the commissioner can require:

...within a reasonable time specified in the notice, information in the person's possession that the Commissioner requires for the performance of the Commissioner's functions...

If you look at the functions, they are indeed very broad. What the minister is conceding is that this bill is going to give this commissioner—this unelected bureaucrat, potentially with no legal training at all—the authority to say to a landlord (who has refused to be involved in this particular dispute and cannot be compelled to be involved) that the government has given the commissioner the power to demand whatever the commissioner deems to be within the terms of the functions of the act that the commissioner wants, including potentially tax records, profitability records and all those sorts of details which hitherto have been confidential to a landlord, and, as the minister said, the option is then available to the minister to use that information in the parliament to name and shame the individuals concerned.

The ACTING CHAIR (Hon. Mr Hunter): Would the honourable member direct questions to the minister rather than making a second reading speech?

The Hon. R.I. LUCAS: I am not making a second reading speech. I do not have to ask questions, Mr Acting Chairman. I can ask questions and make comment in relation to the clauses of the bill. It is clear that that is the intention of the government in relation to this particular issue, that is, that that sort of information can be accessed.

In relation to the other question that I put that the minister responded to partially, I just want to clarify the minister's answer. I put the circumstances where a government department was negotiating with a tenant and the government department's position was, 'All I'm going to give you is a three-year tenancy. That's it.' The tenant wanted a three plus three plus three tenancy—that is a three-year tenancy with an option to renew for a further three years and another three years after that. That is a significant issue for that particular tenant in terms of the potential saleability and profitability of that tenant's business.

Is it correct that the minister is saying that if, at the conclusion of the previous lease arrangement, the landlord says, 'That's it. I'm only going to offer a three-year tenancy,' or indeed says, 'You're not going to get a further tenancy at all,' and the tenant is unhappy with that, the small business commissioner has no power under this bill to resolve that particular dispute between the landlord and the tenant? That is what I understood the minister's answer to say. I just wanted to clarify that that is the case.

The Hon. G.E. GAGO: I have been advised that, in relation to the first issue that the honourable member raised, in the current Retail and Commercial Leases Act 1995, the same powers to obtain information already exist. Section 77(1) provides that:

an authorised officer may require any person—

(a) to answer any questions, orally or in writing; or

(b) to produce books or documents.

So those powers already exist. In respect of the second question, the powers of the commissioner are those powers pertaining to their powers to mediate.

The Hon. R.I. LUCAS: I am seeking clarification from the minister. Is the minister saying in the example that I have given that the commissioner would not have the power to intervene in that particular dispute?

The Hon. G.E. GAGO: Only through mediation.

The Hon. R.I. LUCAS: Can the minister just clarify what section it is? I thought she said section 77 of the Retail and Commercial Leases Act. Is that what she quoted?

The Hon. G.E. GAGO: I beg your pardon; I have been advised that it is the Fair Trading Act. We will get the section.

The Hon. D.W. RIDGWAY: Just a couple of questions in relation to how the small business commissioner will operate in relation to the newsagent industry. A number of country newsagents have contacted me; in fact, one from my own home town in Bordertown. I was privileged to have a meeting with a country newsagent this morning just prior to us sitting. I will just outline some of the issues he raised with me in relation to contract negotiations he had with News Ltd. I think that is when the Hon. Mr Darley became involved. I think it was a couple of years ago. This particular contract, in the eyes of the newsagent, was not generous enough, provided no opportunity for incremental increase in revenue, had a set date to sign the particular contract, and News Ltd was somewhat aggressive, seeking that he should sign at that particular time and really gave him no room to negotiate.

The newsagent will, I assume, present to the small business commissioner. At that point, what takes place? I think there are a lot of people in the community who expect that this will be the panacea to dealing or negotiating with, in this case, News Ltd in relation to The Advertiser. How exactly does the minister understand this will work?

The Hon. G.E. GAGO: I have been advised that the commissioner can assist a newsagent in a variety of ways, either directly or through their industry association. At one level, there may be an individual dispute between a newsagent and a publisher. The response by the commissioner will depend upon the nature of the particular dispute but, in general terms, the commissioner will seek to find out the necessary information from both parties in relation to the dispute. This would involve discussions with the newsagent and the publisher. The commissioner would expect that each party would be voluntarily forthcoming with their viewpoint and relevant information about the dispute.

Minor disputes may be able to be resolved quickly, either by telephone, email conversations or via a reconsideration by one or both of the parties after assistance is provided by the commissioner's office. In larger disputes, the commissioner would work towards a formal mediation with an external mediator appointed by the commissioner. Mediation has a high success rate; as I have said, up to 80 per cent, which the government expects the commissioner will be able to achieve here in South Australia. In the event that the matter fails to be resolved through mediation, the commissioner may seek to continue the dialogue between the parties with a view to maintaining dialogue, which is essential to resolve any dispute.

At another level, the commissioner may identify particular trends in relation to recurring disputes in that industry and may seek to engage relevant bodies with a view to exploring other possible industry processes for dealing with such issues. This could involve the commissioner convening an industry working party to explore the possibility of a voluntary code, a mandatory code or a review of existing legislation, for instance, on whatever the issue might be. These consultations may lead to the development of a voluntary code or recommendations to the minister of the day that a formal process be commenced towards prescribing a mandatory code under the Fair Trading Act 1987 or that a review of existing legislation be undertaken.

The Hon. A. Bressington: For how long?

The Hon. D.W. RIDGWAY: The Hon. Ann Bressington almost stole my thunder in relation to how long this process will take. In most cases, I suspect small businesses will attempt to negotiate themselves initially. It will only be at a point when they think, 'Hang on, I need a bit of assistance here.' The minister has talked about mediation and getting the parties together and, if that fails, the small business commissioner may continue dialogue and then may have some engagement with the parties and maybe the industry associations. Then there will be a process where maybe there will be some consultation. Then there will be an industry working party and then maybe we might end up with a voluntary code of conduct.

Minister, how long do you think that process will take? What I was trying to point out in my second reading speech is that the current government has very little understanding of how small business actually operates and the pressures that are on small business people. If the government believes this bit of legislation will be the panacea to the problems faced by small business, I would like to know how long this timeline of events and activities is likely to take.

The Hon. G.E. GAGO: I have been advised, as long as it needs to. Disputes can be very difficult things and they can be protracted, but we have clear evidence that there is a success rate of 80 per cent and we are confident that we can achieve a similar rate of success. Without this, parties are left to their own devices and disputes and the fallout from disputes can go on indefinitely. So, with this in place we have a far better chance of resolving disputes than without it.

The Hon. D.W. RIDGWAY: I will use the newsagents, if neither party is prepared to give ground then what role will the small business commissioner play in any legal proceedings that the small business operator wishes to instigate?

The Hon. G.E. GAGO: I have been advised that the commissioner would not play any role in legal proceedings.

The Hon. A. BRESSINGTON: In the issue of the newsagents, what if News Limited refused to participate in any way, where do those newsagents then go for some sort of reconciliation or solution to this problem? If it is through that process that the minister has just talked about, which sounds to me like it could take 20 years, then that will still end up in court, it will still end up with those businesses having to fight this out in court anyway. I thought the idea of this commissioner was to bypass all of that and to provide solutions to those businesses that are having these problems, but from what I am hearing this is not going to shorten any road to court or eliminate the need for that if News Limited, or some such, refuses to participate.

The Hon. G.E. GAGO: I have been advised that if parties such as the honourable member refers to refuse to participate then the other course of action would be that of litigation. Currently, that is all that is available to the parties. They have no other potential for any other course of action. This would offer an alternate course of action. If the parties refused then they would go to litigation. However, as I have put on the record, evidence shows that the small business commissioners in other states successfully resolve 80 per cent of disputes.

The Hon. A. BRESSINGTON: It is my understanding that 70 per cent of those disputes are about rental agreements, not about this sort of stuff, so how many of the rest of the 10 per cent that are not about rental agreements are solved without litigation?

The Hon. G.E. GAGO: I do not have a breakdown here of the classes of dispute. I have been advised that they are broad ranging.

The Hon. A. BRESSINGTON: I have another question, and we probably need to go back five steps because I missed my opportunity. On the issue of the commissioner being able to call for documents, profit and loss and taxation records and all of that sort of stuff, if the landlord refuses to come to the table he can still request all of those documents. What would be the need for that? What would be his course of action if he has those documents if there is nowhere left to go? Why does he actually need to be able to request those documents and get them if there is no further action that he, as a commissioner, can take to solve this problem?

The Hon. G.E. GAGO: The commissioner, once he receives a complaint, must attempt to resolve the dispute and to obtain relevant information that will assist in doing that. However, ultimately, if there was a complete breakdown, one use for information could be to determine that there was some sort of irregularity and to, for instance, name and shame.

The Hon. T.J. STEPHENS: Just for crossbench colleagues, if anybody would gather sympathy from this group I suspect it would be your local newsagent and, certainly in our case, generally country newsagents who are highly respected in the community. It has been a bit of a heart tug to listen to their particular situation and their dispute with News Corporation.

Today I sat in with the Hon. David Ridgway and listened to the story from a country newsagent who was desperate for this bill to be passed. It was his hope that this was going to be his salvation from the unfair way that he and his colleagues were being treated by their one supplier. You heard today that this is going to do absolutely nothing for any of those people—nothing. They are clinging to a false hope that this government has given them.

As far as name and shame goes, what sort of article do you reckon News Corporation is going to print about this government shaming them? I would like to see that front page—it will never happen. For all of you who have been attracted to this bill because of the pleas of good honest people, you have heard today what we have been saying all along, that is, this is a load of steaming stuff; it is not going to fix their problems.

This is legislation for political purposes. It is not going to fix the problems of small business people. Heaven forbid, most of us here were actually small business people and still have small business interests and we bleed for small business. However, I can tell you that this is a crock—and do not fall for it.

The Hon. G.E. GAGO: I have been further advised that if a publisher like News Ltd does not participate and is uncooperative then it runs the risk of having a mandatory code prescribed under the Fair Trading Act which it then must comply with.

The Hon. D.W. RIDGWAY: I am glad the minister is—

The Hon. J.M. Gazzola interjecting:

The Hon. D.W. RIDGWAY: I beg your pardon, the Hon. John Gazzola. You are off the phone and you are with us again now.

The Hon. J.M. GAZZOLA: Are you going to declare your interest as well? Terry did.

The Hon. D.W. RIDGWAY: I am interested in codes and in particular I used the example of a newsagent who contacted me. He is a tenant in quite a large shopping centre. Obviously, it is a newsagency, it has an instore banking facility, it runs an Australia Post agency and an SA Lotteries agency. I assume that they have to have some sort of legal arrangement or potential industry code with newsagents and publishers, and an industry code when it comes to banking. I am not sure where Australia Post fits—whether it is banking, telecommunications or postal retail I am not quite sure—and SA Lotteries, of course, is gambling. Will we see these particular types of premises and businesses having to adhere to or operate under several industry codes with the small business commissioner?

The Hon. G.E. GAGO: I am advised that the specific code development, and the areas, will depend on an evidence base and on consultation with the industry, as I have said in some of my answers to members' questions.

The Hon. D.W. RIDGWAY: Clearly, from all the correspondence—the Farmers Federation, the newsagents, etc.—they have reached the point where they think industry codes are the next step. I do not think there is any expectation within the industry that there will be the long process that we have heard about of mediation, dialogue, engagement, working parties and voluntary codes. I think the assumption in the community, whether it is the Farmers Federation, newsagents and other small business owners, is that we are at that point. I have asked you some questions about the relevant codes and their development, but they should almost be in draft form now. That is the assumption out in the community. The minister needs to make it very clear that the operation of these codes, voluntary or mandatory, is many years away.

The Hon. G.E. GAGO: I have already put on the record what the process will be and that it will be dealt with as expeditiously as possible, but members of the industry have to have an opportunity to be involved.

The Hon. D.W. RIDGWAY: That brings me to the next point: members of the industry. In one of her answers, the minister mentioned agricultural machinery dealers, resellers and manufacturers, and most of these machinery companies are big international companies. Unfortunately, very little farming equipment is made in Australia these days. While I do not wish to mention them because I do not know the specific details, I know that the member for Light raised some concerns in the Economic and Finance Committee about particular machinery companies, and they were big international companies. I know from other examples that farmers have had machinery issues with very large international companies.

Am I right that the minister says the code of conduct would basically embrace that particular manufacturer's mission statement that they would provide high quality service, high quality machinery, etc., or are we going to see the small business commissioner in dialogue with companies like New Holland, Massey Ferguson, John Deere, Case International, Gleaner—all the big manufacturers that we see around the world? Are we likely to see the small business commissioner negotiating with them to have mandatory codes of practice or will it just be, as the minister said, a repeat or a reprint of the company's mission statement?

The Hon. G.E. GAGO: I have been advised that the codes of conduct are where the teeth are in relation to these reforms, and that negotiation with all relevant stakeholders will take place to achieve those.

The Hon. D.W. RIDGWAY: I suspect that is where the teeth will be—in the codes of conduct. I use the example of a piece of farm machinery that a farmer has bought in good faith and has been supplied probably by his local dealer in good faith. It causes some problem and either he misses the window of opportunity for sowing his crop, harvesting it or earning income from contracting. The industry codes of conduct are not in place, and I do not believe they will be in place, from the way the minister is talking, before the end of this government. How on earth will the small business commissioner be able to bring about a resolution when we do not have any codes of conduct in place?

The Farmers Federation has talked about them and says it wants to work with the government. My understanding is that, out of frustration, this is where people are at. They expect that this bill will pass the parliament today and industry codes of conduct will be in place next week. It is simply not the case.

The Hon. G.E. GAGO: The honourable member has touched on the very reason why these are needed and that is that they currently do not exist and therefore problems occur. This bill will allow codes of conduct to be developed. That is where the teeth will be in relation to powers of the commissioner and the codes will cover those matters that are relevant to that industry or that particular sector.

The Hon. D.W. RIDGWAY: These codes of conduct will be specific to South Australia. I assume that if the machinery company does not wish participate or the small business commissioner is not comfortable that it has participated and negotiated in good faith and it is not prepared to submit to a voluntary code, then there will be a mandatory code imposed upon those machinery companies. Will that only apply to them in South Australia? Clearly we are doing the South Australian legislation. Will it apply to interstate-based companies or firms that retail equipment in South Australia? Will it only apply to those that are based and registered for business in South Australia?

The Hon. G.E. GAGO: I have been advised that once a prescribed mandatory code is in existence it will apply to all transactions made in South Australia, irrespective of where that company might be based.

The Hon. D.W. RIDGWAY: A transaction. As members would recall, I have farmed on the South Australian–Victorian border. If I went to Horsham and bought a piece of farming equipment and the financial transaction took place in Horsham, and then I had an issue with it when I was operating it in South Australia, how does this piece of legislation give any comfort to a farmer who does that?

I might just add for the record, while the minister is getting her answer, that of course in our wonderful country, the land of droughts and flooding rains, there are often bad seasons and there are often good bargains and opportunities to purchase equipment interstate: Western Australia, Queensland, New South Wales. Farm machinery is not always just bought at the corner shop. There are a tremendous number of transactions done right across the nation with the internet these days. You do not just wander into your local village and buy a new tractor, a new harvester or a new piece of equipment. You can buy it from anywhere in Australia.

The Hon. G.E. GAGO: I have been advised that, under the Fair Trading Act 1987, extraterritorial provisions apply. Section 4A states:

(1) This Act is intended to have extraterritorial application insofar as the legislative powers of the State permit.

(2) …this Act extends to conduct either in or outside the state that…is in connection with goods supplied…affects a person…results in loss or damage.

The Hon. D.W. RIDGWAY: Under the Fair Trading Act that would be covered, so the small business commissioner really has no impact on transactions that happen outside of the state. Is that correct?

The Hon. G.E. GAGO: I have been advised that the code can also have an extraterritorial application.

The Hon. D.W. RIDGWAY: What discussions has the government had with international machinery companies, the big manufacturers—John Deere, New Holland, Massey Ferguson—those types of big companies? Most tractors we see in the field today are green or blue or red; sadly, there is not a huge range to choose from.

The Hon. R.L. Brokenshire: Orange.

The Hon. D.W. RIDGWAY: Orange, of course.

The Hon. R.L. Brokenshire: There are white ones, too.

The Hon. D.W. RIDGWAY: Yes, but the number of manufacturers has diminished over the years, like a lot of industries. What discussions has the government had with those big companies? In my view, the farming community has had a problem—and we do not deny that there have been problems—and I think they believe that these codes of conduct are on the next page of the book and are about to be implemented.

The Hon. G.E. GAGO: I have been advised none directly, but in a general sense consultation occurred quite broadly, involving a range of peak organisations such as the Farmers Federation and the Motor Trade Association.

The Hon. D.W. RIDGWAY: I have read a copy of a letter that was sent to minister Koutsantonis from the Farmers Federation, and in it the Farmers Federation spoke not only about machinery dealers but also about grain handling. How does the minister envisage that a code of practice will operate in relation to the grain handling industry? I assume that this is in reference to Viterra, virtually a monopoly operator in our South Australian grain industry these days. How will disputes between Viterra and a farmer be resolved by the small business commissioner?

The Hon. G.E. GAGO: It will be done in consultation with that particular sector.

The Hon. R.L. BROKENSHIRE: With respect to Viterra, we are in the process of a select committee because we had no other way of trying to sort out the problems, concerns and issues of up to 4,000 farmers regarding the way they were treated at the last grain harvest. First, can the minister confirm that a small business—and hopefully farming—commissioner would, under the relevant part of this clause, act as an arbiter who could go in and mediate on behalf of that individual? At the moment the only way many of them are able to do it is through members of parliament.

Secondly, can the minister confirm that, through consultation between the industry sector, a code of conduct with sufficient teeth would enable the commissioner to apply pressure above any pressure that is currently available in South Australia with respect to trying to get a reasonable outcome for a farmer done over by Viterra?

The Hon. G.E. GAGO: I have been advised that I can confirm both of those matters.

The Hon. D.W. RIDGWAY: I will use the last harvest. During harvest there is a lot of pressure and stress on people. I just do not understand how the small business commissioner's role will play in any mediation between farmers and Viterra. Harvest is a very time-sensitive operation. If there is an issue—whether it be with the harvest, the handling of the grain or the marketing, which is usually within the four to six months after harvest—the mechanism the minister described earlier seems to be very long and protracted, and it is all sort of voluntary. She talks about the codes of conduct having teeth, but it is just like a gummy shark for the first six or 12 months, it appears.

The minister clearly does not understand or has no capacity to explain to the chamber how this will benefit the farming community. I am at a loss to think that we have had this development. I see the member for Light, Mr Piccolo, in the gallery. I think he likes to claim a lot of credit for starting this whole process. He introduced a bill before the last election, which then lapsed, and the point we are at today is probably due to some of the work that he and the Economic and Finance Committee did.

The minister just said that the teeth will be in the codes of conduct: we do not even know what the codes of conduct will look like. We have had some lovely letters from the Farmers Federation and contact from newsagents saying, 'That will be great; we are going to get these codes of conduct.' I would like to know a time line from the minister on when these codes of conduct will be available for the industries to peruse and to sit down and say, 'Yes, this is how we want to operate; this will give the farming community, the newsagents and the small business community some comfort.' The people they deal with will know the rules under which they have to operate. When will we see these codes of conduct?

The Hon. G.E. GAGO: In terms of the question of how this works, the commissioner provides an alternative to litigation, which is the only course of action currently available to farmers. We know that litigation can be extremely costly and time consuming, which would have an even greater impact on farmers and their families. We know that small business commissioners in other states resolve 80 per cent of disputes. I know the honourable member is trying to filibuster. I have already answered the question: the codes will be done as expeditiously as possible and in consultation with the appropriate sectors.

The Hon. D.W. RIDGWAY: I realise this minister is not the minister responsible, but I am sure she or her officer have been briefed. Surely there is some sort of time frame in the mind of the minister. We saw a lovely photograph of the minister at the market with a bunch of oranges and looking pretty happy. There surely must be some time frame within which these industry codes of conduct will be published so the community can actually look at them. This is all just window-dressing. Surely there have been some discussions about how long this will take and when they will be in place.

The Hon. G.E. GAGO: I have answered the question.

The Hon. D.W. RIDGWAY: The minister is not able to tell us when any of the codes of conduct will be in place. Am I right in understanding that she said that it will be done in a timely manner as expeditiously as possible, but after mediation, dialogue, engagement of process and industry working parties—maybe that is when we will get to a voluntary code? Will the minister confirm that there is no actual time line, for whichever industry it may be, for there to be a code of conduct in place? Can she confirm that there is no actual time line?

The Hon. G.E. GAGO: I have already answered the question a couple of times.

The Hon. D.W. RIDGWAY: Clearly the minister has no idea when these codes of conduct will be available—neither minister Gago nor minister Koutsantonis. I suspect that even the member for Light (who is watching), if he was able to come in and answer questions as the father of the legislation, would not be in any position to tell us when these industry codes of conduct will be in place.

That is the really essence of the problem with this piece of legislation. An expectation has been built up in the small business community that we have this document, this industry code of conduct for whatever industry you are in, and you will be able to go to News Limited, a machinery dealer or your landlord and say, 'Here it is: these are the rules and you have broken them and I have some recompense because of it.' Clearly that is not in place and that is the reason that this legislation is window-dressing. It certainly does not have teeth yet and the minister is not able to tell us when it will have teeth.

The Hon. R.I. LUCAS: The minister has confirmed in response to my earlier questions, certainly in relation to retail and commercial leases and tenancies where the landlord does not wish to be involved and says no, that there is going to be no greater power and no way of resolving those particular disputes between a landlord and a tenant.

However, in relation to the other areas that I raised in the second reading debate which have now been explored and which might be subject to an industry code (and they cover the examples of News Corp and the newsagents, farm machinery and grain handling with farmers), the minister is saying that there are going to be potentially these codes.

In relation to the industry codes and, looking at the first example, the dispute between News Corp (or The Advertiser) and the newsagents, the minister's response has been, based on advice, that even if The Advertiser objects to being involved in the process, even if The Advertiser objects to all of the discussions in relation to a voluntary code of practice, the small business commissioner—an unelected bureaucrat—will be able to impose a mandatory industry code on the operators of The Advertiser (News Corp) in relation to the issues in dispute with the newsagents. Can I clarify, having looked at this bill, that there is no restriction on what can be put into the industry code that might relate to that particular issue?

The Hon. G.E. GAGO: I have been advised that there are no restrictions to the matters that can be contained in the code, that it is the minister who prescribes the code and not the commissioner, and that the code would be prescribed in regulation and therefore can be disallowed by parliament.

The Hon. R.I. LUCAS: The minister has just made it quite clear that the small business commissioner will in essence make the recommendations to do the work for the mandatory code which would apply to The Advertiser or News Corp in relation to this, which would have no restrictions at all. Then the minister can issue that industry code which would in essence restrict the operations of The Advertiser and News Corp in any way that the minister and the commissioner see fit.

Can I just clarify that, under clause 6 which says that the minister 'may not give a direction in relation to the investigation, mediation or resolution of a particular complaint or dispute', that particular provision does not restrict because this would be a dispute between The Advertiser and all of its newsagents but it does not restrict the minister in relation to ultimately disagreeing with a conclusion arrived at by the small business commissioner? So the small business commissioner comes down with a mandatory code. I just seek to clarify that clause 6 will not restrict the minister in relation to whether he or she might vary that decision of the commissioner as it does relate to a specific dispute between The Advertiser and newsagents?

The Hon. G.E. GAGO: I have been advised that, under section 6, the minister cannot interfere in an individual complaint. As I have said previously, the code would be prescribed in regulation and therefore could be disallowed by parliament.

The Hon. R.I. LUCAS: I understand that, but that is not my question. My question is: if the small business commissioner goes through this long process that has been discussed—and I will not repeat it—and arrives at a mandatory code of practice which would govern what The Advertiser is allowed to do in its dealings with newsagents, can the minister, under the government's proposed bill, change or vary the decision of the commissioner before the minister issues the regulation?

The Hon. G.E. GAGO: I have been advised that the commissioner's role is to facilitate the code, but it is ultimately the power of the minister to prescribe that code, not the commissioner. Again, that is done in consultation with the industry, and it is then prescribed in regulation which then comes to parliament.

The Hon. R.I. LUCAS: That still does not answer the question. It is a simple question. If the commissioner arrives at a decision for a mandatory code—he or she has been through the whole process and comes to the decision of a mandatory code—does the minister have the right to change that decision or conclusion, whatever you want to call it? Before the commissioner proclaims it by regulation, does the minister have the right to change it or refuse to issue it as a regulation?

The Hon. G.E. GAGO: I have been advised that the commissioner does not have the power to make decisions about codes. He might make recommendations or such like, but he does not have the power to make decisions. The content of the code is a matter for regulation and the Governor makes regulation on the advice and consent of the Executive Council.

The Hon. R.I. LUCAS: What the minister is making clear now is that the commissioner could go through a process, could provide advice to say, this is the tough (in his or her words) industry code that should be imposed but that ultimately the minister is the person to make the decision in Executive Council. The minister can say, 'No, that's not the case. We're not going to accept any of those recommendations', or could agree, obviously.

The minister also has the power to not implement anything; that is, the commissioner can do all of the work, he can come up with a mandatory code which might apply to Viterra, the agricultural machinery manufacturers or The Advertiser and the minister and the government can not implement that particular industry code. Ultimately, it is a judgement for the minister and Executive Council. I thank the minister for clarifying the position there and the fact that the powers are unlimited for the industry code.

Can I now turn to a similar dispute with newsagents that involves a government agency, and that is the Lotteries Commission. As the minister would be aware, with both of her hats, newsagents have expressed concerns about the dealings between the Lotteries Commission and newsagencies in relation to various conditions that might apply to the long-term lease of the licence of the Lotteries Commission as it relates to the potential for online selling of tickets for lotteries products.

Briefly, the newsagents' concern is that if, as a condition of the sale, a new owner of the Lotteries Commission can go to online selling, that this would have a very significant impact on the profitability of the businesses of the newsagent. Clearly, it is in Treasury and the government's interest to maximise the value of the Lotteries Commission, so that conditions like that, and there are others which might impact on newsagents, are obviously of interest to Treasury and the government.

Based on what the Governor said in relation to it is possible for the commissioner, through the process that we are talking about, to ultimately end up with a mandatory code with unlimited powers to restrict the operations of News Corp, with unlimited powers to restrict the operations of Viterra and with unlimited powers to restrict the operations of agricultural machinery manufacturers through a mandatory code, is it also possible, within this bill, for the process to come up with a mandatory code which would place similar restrictions on a government agency, such as the Lotteries Commission?

The Hon. G.E. GAGO: I have been advised that it would be a matter for the government of the day, given that I have already outlined what the process is, to make a decision about whether a code would apply or not. I draw members' attention to the fact that these are the same processes and powers that are involved in most other codes. This is not unusual, particularly in consumer codes like the sport and fitness and funeral codes. This is exactly the same process and powers that are used.

The Hon. T.J. STEPHENS: After 40 years of franchising we are breaking new ground here so there is the opportunity for precedent. I do not know that the referral to other codes has any reference to this particular bill.

The Hon. R.L. BROKENSHIRE: I move:

Page 3, line 2—Delete 'Small Business Commissioner Act 2011' and substitute:

Small Business and Farming Commissioner Act 2011

I will try to be brief given the time of day, but I do want to advise the chamber why I am moving this amendment. As has already been said, Family First supports the Small Business Commissioner Bill. It is a two-faceted bill: first, to set up the small business commissioner and to allow that commissioner to have the powers of mediation and negotiation in dispute resolution; and, secondly, to develop codes of conduct for each industry sector.

Some would argue that that satisfies the farming community, but the reason I am moving this amendment is because farmers, in particular, find it more difficult to negotiate through the supply chain than many other business sectors. Other business sectors have opportunities that are not necessarily available to farmers.

We saw with the mining amendment act that it was almost impossible, through the parliament, to get anything in the way of strength or teeth for farmers. In fact, I stand by my opinion that farmers got very little or next to nothing out of that. Farmers are price takers, not price makers. We are seeing the situation now where from paddock to plate, to get to the plate, there is one obstacle before the plate called the duopoly—namely, Coles and Woolworths—and it is becoming more and more of a pressure cooker situation for farmers.

There has been some positive turnaround of late. We have the Small Business Commissioner in Victoria. I understand that the Barnett Liberal government in Western Australia is setting up a small business commissioner, and I also understand that the new Liberal government in New South Wales is in the process of drawing up a small business commissioner bill. What we have, just to summarise, are two Liberal states that are now going down the track of setting up something similar to what we are debating here today. We have a Labor government in South Australia—

An honourable member interjecting:

The CHAIR: Order!

The Hon. R.L. BROKENSHIRE: We have a Labor government in this state which has a bill that we are debating here today with the same principles as the two Liberal governments are looking at. The federal Leader of the Opposition, Tony Abbott—which is a very refreshing stance; we have not seen it from the Gillard government thus far—has indicated his concerns about the duopoly; he has indicated his concerns about foreign ownership of farming land and water; and he has indicated that, under an Abbott government, he would certainly be investigating and hopefully introducing legislation that would give fairer opportunity for all sectors, from paddock to plate, or from manufacturing to retail to purchaser, etc.

I say that because we are starting to see a change and we need to see that change, but from a farming point of view it is still very, very difficult for farmers to be able to go anywhere to seek strength of support when they are unfairly dealt with by a processor. I can give an example—and I will not mention the region—in respect of the wine industry and the last grape harvest. There were issues that colleagues would be well aware of that, in my opinion, were incredibly detrimental to the wine grape growers of this state. Some of it was to do with the weather but some of it was to do with a range of other issues that I will not go into now.

I have been trying to help those constituents but I do not have a tool like this, as a member of the Legislative Council, to be able to help those constituents. I would love to have had this tool in legislation now. As a legislator I am looking more and more at the title of the bill. I will be honest and say that, over quite a lot of years, I did not really focus on the title of the bill much at all; I focused more on the framework and structure of the bill.

To give one example of where things can get off the rails, the natural resources management bill—and I will have more to say about this during another debate—in theory should be a bill that focuses on sustainable farming and natural resource management, but because the title of that bill was not structured properly the focus now is on natural resource management at the disadvantage of the farmers. For it to work properly you need your farmers and your natural resource management to be cohesive, and that is not happening at the moment in the area of NRMs.

Farmers have not got the strength of the mining giants. We saw in this house the chamber of commerce and mines or whatever it is out here—

The Hon. D.W. Ridgway: SACOME.

The Hon. R.L. BROKENSHIRE: SACOME; you know it very well. They only have to start to bark and both the major parties' ears prick up like you would not believe, but if the farmers come out and bark not much happens.

What I want to see and my reason for pushing this is that, if the title says 'Small Business and Farming Commissioner', then it actually says that this commissioner is focused on small business and farming. I have said enough about where I see changes are starting to occur but I strongly believe that this would be of enormous benefit to farming. Farming has some real issues when it comes to getting any opportunity to negotiate or have someone come in as an arbiter with respect to what is happening with exploration, let alone mining, right now.

To conclude, we can see what is happening with the Labor government in Queensland currently. It is bringing in legislation to start to address some of the problems concerning the loss of so much valuable cropping land to mining.

I see this as an important change. It does not change the rest of the bill. I will not talk about it any further because all the other amendments are consequential, but it would be a win for country people and farmers, and it would send a message to the dealers who my honourable colleagues have been questioning interstate and overseas and the processors—from paddock to plate—'Hey, small business and farming has a commissioner and therefore has an opportunity to get a fair deal and a fair go.' That is all we can ask for. With those few words, I encourage colleagues to support the amendment.

The Hon. G.E. GAGO: I rise on behalf of the government to oppose this amendment. These 34 amendments seek to change the name of the small business commissioner to small business and farming commissioner. When developing the policy position for having a small business commissioner, the government decided that it should have a uniform approach as it was aware that Western Australia and New South Wales had intention to implement, or were in the process of implementing, a small business commissioner model.

These were all, as is the case in South Australia, modelled on the Victorian experience. The government received representation early in the piece for the name of the commissioner to be small and family business. This was not endorsed, as the specific sector approach was not envisaged. This is also why, as in the case of the Victorian legislation, there is no definition of small business. This is for two reasons. Firstly, there is no agreed definition of a small business. It is relative to the size of the parties. Secondly, the aim was to allow the commission to assist in resolving matters between any parties on a case-by-case basis to maximise the impact of the commissioner and the role that they could play in assisting a variety of businesses.

Farmers and farming activities will be a critical area of work for the small business commissioner, so I can reassure the honourable member of that. The strong endorsement and support by the South Australian Farmers Federation of the initiative has been appreciated by the government. However, other areas such as family business, newsagents, grocers, hardware stores and so on are equally important, and they are also equally covered by this. We believe to place the farming sector above all these other sectors is not warranted and therefore we would like to leave it as a more generic name.

The Hon. T.J. STEPHENS: I rise to indicate the Liberal Party's opposition to the amendment. I made it clear earlier that we always believe that the farming community is part of the small business community: no more, no less. I would not say that I was a jeweller by trade, because I was not that talented, but I was involved in a jewellery business. I say to the Hon. Robert Brokenshire: why isn't it called the small business and jewellers commissioner bill?

The CHAIR: Shearers.

The Hon. T.J. STEPHENS: Shearers? Sharers? I do not know. It depends what country you are from. We do not support the amendment. We believe that farming is very much an integral part of small business. We do not see that there should be a distinction.

The Hon. D.W. RIDGWAY: I have a question for the mover. Obviously we have heard discussion this afternoon that there is similar bill in Victoria. My understanding is that it is a similar commission and the title is just small business commissioner. What evidence does the mover have that the farming community in Victoria has been disadvantaged by not having farming included in the title of the Victorian Small Business Commissioner?

The Hon. R.L. BROKENSHIRE: At this point in time I do not have evidence, because it is still early days with respect to what has been passed and what is being developed with respect to this model in Victoria. I do not have evidence, but the fact that I do not have evidence is irrelevant. The bottom line is that you have one chance only at the title.

We can go a step further than Victoria and we can put a stamp here now that highlights the importance of farmers with respect to this structure. It is not like the jewellery area, where a lot of the jewellers today are franchisees. A couple of the traditional jewellers are still around, but a lot of them are franchisees. They have other contract-specific arrangements.

The Hon. T.J. Stephens interjecting:

The Hon. R.L. BROKENSHIRE: There are; a lot of them are franchisees.

The Hon. T.J. Stephens: Name one. Who is a franchisee?

The Hon. R.L. BROKENSHIRE: The ones that I used to receive up until recently from Victor Harbor, where you had the promotion and the marketing—

The Hon. T.J. Stephens: That's a buying group.

The Hon. R.L. BROKENSHIRE: Well, buying group. Buying group or franchisee: the fact is they have a structure. With agriculture, it is very disjointed. For example, in grain alone you have 4,000 individual farmers in this state. Yes, they have SAFF, but that is more to do with association matters, not areas of litigation and the breakdown of opportunities for farmers to get a fair go.

So they may not have the title in Victoria, but simply because something is not on a title in another state does not mean that we should not be ahead of the pack. That is why I have moved the amendment.

The Hon. D.W. RIDGWAY: The mover might be interested to know that Victoria has had a small business commissioner for seven years. I guess things do move slowly at times, but that would hardly be early days. Now that we have a proposed title of 'Small Business and Farming Commissioner', does that mean that a big corporate farm, owned by a superannuation fund, is entitled to protection through this small business and farming commissioner?

The Hon. R.L. BROKENSHIRE: The Leader of Government Business, the minister responsible for the bill in this house, said that there was a broad definition with respect to small business and you, as Leader of the Opposition in this place, have been 1½ hours on half of clause 1, questioning all those issues specifically. The bottom line is that whether the person is a farmer with 1,000 acres or 7,000 acres or 10,000 acres, or whether they are a family trust, a sole trader, a partnership, or they happen to be a corporate body, if they are being done over by someone like Coles or Woolworths, as I understand it they would have the opportunity of being able to go to a small business and farming commissioner for support.

The Hon. D.W. RIDGWAY: The mover says that he does not place any restrictions on the structure, and, clearly, we do not have a clear definition from the government on what small business is. By rolling in the small business and farming commissioner, you put no limitations on the structure or the size of the farm.

The Hon. R.L. BROKENSHIRE: As I understand it, the response of the minister to, I think, the Leader of the Opposition, or the Hon. Rob Lucas or the Hon Terry Stephens, was that it was broad in respect of who could actually request the small business commissioner to assist them. That is how I understood the answer.

The Hon. R.I. Lucas: Coles wouldn't do that.

The Hon. R.L. BROKENSHIRE: Coles is a different scenario. The point is that if you look at farming—and you know this as well as I do—by and large, farmers are families, small businesses. There are very few corporate farmers in this state, and the challenge is to keep it that way. How can you help keep it that way? By having a small business and farming commissioner that looks after farmers when they are being done over.

The Hon. J.A. DARLEY: I also oppose this motion. However, I have asked the minister to provide an undertaking, on the record, that it is the government's intention that this bill will include farmers and that they will be consulted in relation to the code of conduct applicable to them. Further, I have asked that members of this parliament, representing their constituency, be able to have some input into that process as well.

The Hon. R.I. Lucas interjecting:

The Hon. R.L. BROKENSHIRE: Filibustering? I see; so I am now filibustering. I have been up for 10 minutes. This is an area I am passionate about, and a member of parliament has the right to, on the public record, see how a vote is recorded. I indicate that I will be pushing this with as much vigour as I can. I also want to say that I have spoken about the principle of farming in this with the minister, and the minister has made a commitment to me that, when codes of conduct are developed, farming will be the first code of conduct. I thank the minister for that at least, because that is important from the point of view of—

The Hon. R.I. Lucas interjecting:

The Hon. R.L. BROKENSHIRE: Farming will be one of the first to go through as a code of conduct, because it is important. I leave the debate at that.

The Hon. R.I. LUCAS: The member has just indicated that he has a commitment from the government and the minister that farming will be one of the first codes of conduct. Can the member indicate the nature of that commitment, whether it was given by minister Gago, minister Koutsantonis or some other minister to the member? This is important information he has now put on the public record. Can he indicate his understanding of the nature of that commitment he has been given by the government in relation to farming being an industry code?

The Hon. M. PARNELL: In the event that there is a division on this amendment, I feel the need to put the Greens' position on the record, and that is that we will not be supporting this amendment. Our reasons are similar to those described by other members. We also note the assurances the minister has already given in relation to the fact that the vast bulk of farming will be included under the description (I say description rather than definition) of small business. It is also important to note, as other members have said, that we have some of the wealthiest people in South Australia who would fall within this definition if we were to approve this series of amendments. Mr Tom Brinkworth of the South-East has been mentioned. We have the tuna barons of Port Lincoln—more millionaires per head of population than anywhere else in Australia—who would all be included by this.

I note that, whilst farmers are a very important part of our economy and we need to give them every opportunity to help them resolve their disputes in the simplest possible way—I am looking forward to farmers being able to take advantage of this legislation—the point is that we have not added the name 'newsagent', 'lawn mowers', 'ice-cream salesperson' or 'jewellers', as has come up. This is not to diminish or demean the importance of any of these sectors or to say that it is some competition between farmers and the others, but leaving it generic is the best thing to do.

I note in closing that we have not been inundated with submissions from farmers or from the South Australian Farmers Federation urging us to make this change and suggesting that the bill will somehow be diminished if the change is not made. On that basis I cannot see that it really adds much value, given the assurances that the minister has already given, so we will therefore not be supporting the amendment.

The Hon. R.I. LUCAS: I want to conclude that I think it is extraordinary that the Hon. Mr Brokenshire has refused to answer the question I put to him. He placed on the record a very important piece of information that the government and the minister had given him a commitment in relation to this bill that one of the first industry codes would be farming. Farming covers a multitude of areas, through the wine industry, through grains and dairy farmers like the Hon. Mr Brokenshire—right across the board. I will not list them all.

The Hon. Mr Brokenshire is saying that he has a commitment from the government and the minister that farming under that broad definition will be one of the first industry codes that will be brought down. That is an extraordinary proposition: that the government and the minister have given the Hon. Mr Brokenshire a commitment to get his support for this particular legislation. So, all the farmers out there have obviously had this commitment that farming will be one of the first industry codes that will be brought down. So all the farmers right across the board—aquaculture, wine, dairy farmers—will all say, 'Okay, we're going to have an industry code.' It will be one of the first things brought down by the minister and the government that will govern all those nasty people with whom they deal in relation to those industries.

The Hon. Mr Brokenshire has listed, with regard to wine, dairy farmers and a range of others, the combatants those farmers have in those sectors. Somehow this magical mystery tour in terms of solving every problem that exists for all farmers everywhere, will be resolved by a commitment the Hon. Mr Brokenshire—and I thank him for it—has put on the record that he has been given by the minister and the government that farming will be one of the first industry codes that will be brought down. That is an extraordinary proposition that the government and the minister have given the Hon. Mr Brokenshire. It is also extraordinary that he was not prepared to provide further detail to the house in relation to that particular commitment.

The committee divided on the amendment:

The CHAIR: There being only one voice for the ayes, the motion is resolved in the negative.

Amendment negatived; clause passed.

Clause 2 passed.

Clause 3.

The Hon. T.J. STEPHENS: I move:

Page 4, lines 6 to 8 [clause 3, definition of industry code]—Delete the definition and substitute:

industry code means a code regulating the conduct of participants in an industry towards other participants in the industry or towards persons to whom goods or services are or may be supplied by participants in the industry and a code under Part IVB of the Competition and Consumer Act 2010 of the Commonwealth relating to franchising.

There is a suite of amendments that all relate to this particular amendment, so I would like to use this as a test. If it gets up, then obviously the indication is that all the others that pertain to this amendment will pass and, if this fails, then of course I will be withdrawing my other amendments.

Basically this is about codes of conduct. This is about the minister having the ability to impose codes of conduct. Given that this legislation goes further than anything we have seen before and given that we have had 40 years, for instance, of franchising history, if this chamber is going to pass this particular legislation, then it is our view that this parliament should take some responsibility with regard to the codes of conduct.

I will give you an example relating to the codes of conduct. We have had a discussion today about the newsagents—a great cause, I guess, and a great case in point. What we are going to do is pass legislation. We are going to give the newsagents some hope that their dispute with News Corp may well be solved by the small business commissioner. In fact we have found out that it is actually not going to make any difference whatsoever, so we might want to have a code of conduct to assist those particular newsagents.

I think that responsibility for those codes of conduct should rest with the parliament, because this is a one newspaper town. Can you imagine the pressure that a minister could perhaps be put under by an extremely influential group to have a pretty soft code of conduct? It is our view that, if we are going to go down this path, we think the codes of conduct should be passed by the parliament and not by regulation.

The Hon. G.E. GAGO: I rise to oppose this amendment. The Liberal Party is, by this amendment, trying to water down and deny small businesses in South Australia the full benefits of the government's small business reform legislation. This amendment would remove reference to the industry codes under the Fair Trading Act 1987. This is unacceptable to the government. It is the core and the whole thrust of this bill, given that the codes of conduct under the Fair Trading Act 1987 are essential and an integral part of these reforms. We remind members opposite that the leading small business groups have called for industry code backing by financial penalties and this, with the other amendments by the opposition, will remove the ability of the government of the day to prescribe industry codes under the Fair Trading Act 1987.

The Hon. M. PARNELL: The Greens are opposing this amendment.

The Hon. A. BRESSINGTON: I am also opposing this amendment. I had amendments drafted to do exactly what the Hon. Terry Stephens has done, mainly because I do not have too much faith in the disallowance process and, as I said in my second reading contribution, the minister did provide me with a letter that I tabled that there was a guarantee that, if I was not satisfied with a code of conduct and I moved a disallowance, he would not reinstate the next day and we would have a discussion about that code of conduct and it would be open for amendment. So, I am taking the minister on his word, and I hope that, if he is still the minister tomorrow—

The Hon. R.I. Lucas: Which minister is this?

The Hon. A. BRESSINGTON: Koutsantonis.

The Hon. R.I. Lucas: He's the one who bet me 50 bucks and still hasn't paid 10 years later.

The Hon. A. BRESSINGTON: Well, that is your issue; I would have got my 50 bucks well before then, or my 50 bucks worth.

The ACTING CHAIR (Hon. J.SL. Dawkins): I think it might be worth returning to the bill that we are discussing.

The Hon. A. BRESSINGTON: As I said, I hope that letter is still relevant even if Mr Koutsantonis is not minister tomorrow. That will just be a test case for me, I guess.

The Hon. J.A. DARLEY: I will be opposing this amendment.

The Hon. R.L. BROKENSHIRE: For the record, Family First will also be opposing this amendment. It is not unusual for codes of conduct to come through the regulatory process, and we do have an opportunity of disallowance, as the Hon. Ann Bressington has said. The government is on notice about that. We will not be supporting these amendments.

The Hon. T.J. STEPHENS: We are obviously short of friends on this one, so when it is put, we will be withdrawing the other amendments which are consequential.

The Hon. R.I. LUCAS: Before putting a question to the minister, I might just note in relation to my aside to the Hon. Ann Bressington that I have had commitments from minister Koutsantonis before. Personally, I would not trust him as far as I could drop-kick him. I would also instance that this government, of which the minister is a member, gave a commitment in writing, signed by the Treasurer, to the Australian Hotels Association upon which they received a donation to their election campaign of $100,000.

Members interjecting:

The Hon. R.I. LUCAS: You did not get one. The commitment in writing from the government—no less than the former treasurer—was that it guaranteed it would not introduce any increase in gaming machine taxation for the following four years of parliament and, within 12 months, in the state budget, the government introduced the super taxes on gaming machines and broke that particular commitment. I just indicate that I am a little cynical about commitments that I am given by any member of this government, including the Hon. Mr Koutsantonis, on not only this issue but, indeed, on a range of others.

My question to the Leader of the Government is: how many codes currently exist? The minister has referred to the fitness industry and the funeral industry, I think; I stand corrected on that. How many existing codes are there at present?

The Hon. G.E. GAGO: I only know of two, and they are obviously areas for which I am responsible. I do not know of others, but I can attempt to find out.

The Hon. R.I. LUCAS: I am happy to take that and not delay the proceedings of the committee. Would the minister take on advice and provide an answer in writing as to the number of existing codes under the existing arrangements?

The Hon. G.E. GAGO: I will.

Amendment negatived; clause passed.

Clause 4.

The Hon. T.J. STEPHENS: It is stated that the commissioner will be a senior executive with a salary of up to $250,000, according to the Minister for Small Business. What sort of qualifications and experience will the government be looking for in the person appointed? Will you give us an assurance that it will be somebody with significant small business experience?

The Hon. G.E. GAGO: I have been advised that minister Koutsantonis has stated in another place that a nationwide search will be conducted for the commissioner once the legislation is passed. It is a senior executive role. There are a clear set of competencies that the successful candidate will need to demonstrate. Some of these are derived from the functions as outlined in the legislation: representative educative ADR knowledge or skills, understanding of investigation process, legal knowledge, legislation interpretation ability, and so on. There are also other capacities and experience needed: strategic thinking capacity, change management, a person who has a track record for achieving results, relationship development and stakeholder management, personal integrity, obviously an understanding and experience in small business issues, and understanding of government administration is also necessary.

The Hon. R.I. LUCAS: Subclause (2) states, 'The Commissioner will be appointed by the Governor and is an agency of the Crown.' Can the minister outline the significance of making it clear that the commissioner is going to be an agency of the Crown? Does this make the commissioner subject to other important pieces of legislation, or not, and, in particular, what is the relationship of the Freedom of Information Act to the small business commissioner and the operations of the commissioner? Also, what is the relationship of the Public Finance and Audit Act and the role of the Auditor-General and the operations of the small business commissioner?

The Hon. G.E. GAGO: I have been advised that, being an agency of the Crown, it provides for clarity, especially for application of the Public Finance and Audit Act, the Freedom of Information Act and also the Public Sector (Honesty and Accountability) Act.

The Hon. R.I. LUCAS: Can I clarify the minister's answer? Is it intended to convey the answer that the small business commissioner and his or her operations will be subject to the Freedom of Information Act and will be subject to audit by the Auditor-General under the Public Finance and Audit Act?

The Hon. G.E. GAGO: I have been advised, yes.

Clause passed.

Clause 5.

The Hon. T.J. STEPHENS: The clause uses the term 'commercial dealings'. This is a lot broader than the Victorian legislation, which uses 'unfair market practices'. If the commissioner is there as a mediator there must be a dispute and alleged unfair practices. Commercial dealings, on the other hand, could involve anything from a completely legitimate and amicable business deal to almost extortion, and we think this is ridiculous. Why does the government want to broaden the scope of the commissioner to such an extent?

The Hon. G.E. GAGO: I am advised that this definition was broadened in relation to commercial dealings. I am advised that it was used because it allows greater flexibility for the commissioner to investigate complaints or to assist in their resolution, as compared to the Victorian legislation which uses unfair market practices. It allows the commissioner to assist the parties to preserve their commercial dealings through the timely resolution of disputes. The expression of commercial dealings is also common to other functions and this ensures consistency across the commissioner's functions.

The Hon. T.J. STEPHENS: If the minister says that the commissioner is there merely as a mediator, then why not reduce the scope to the extent of the Victorian legislation and keep it to only unfair practices?

The Hon. G.E. GAGO: I have been advised that that was a government policy decision.

The Hon. T.J. STEPHENS: In the use of the term 'fairly and in good faith' there is no explicit definition of this. Why was it changed from the original draft of 'fairly, honestly, reasonably and in a cooperative manner,' given that you are merely promoting just a mediator here?

The Hon. G.E. GAGO: I have been advised that it should be made clear to the council that the wording in clause 5(2) is not an enforcement power; it is a broad statement encouraging parties to business transactions to act cooperatively, objectively, fairly and reasonably in their dealings with each other. The law is very similar with the word 'reasonably'. It is one of the great leverage points of the law. In this instance, however, it is simply a statement of what the commissioner encourages in business-to-business transactions but it is not an enforcement power.

The statutory definition of good faith may be included in an industry code at some time in the future but the wording in clause 5(2) is not a defined statutory duty which is to act in good faith, and we need to be very clear about this. A concise definition of what it is to act in good faith is something that will be looked at should it require any potential industry code in the future.

The Hon. R.I. LUCAS: In relation to paragraph (a)—'to receive and investigate complaints by or on behalf of small businesses'—I take it that 'on behalf of small businesses' is there to allow advocates, including members of parliament, to advocate on behalf of small businesses in the first instance with their agreement, but, secondly, can I ask the government: does paragraph (a) allow a member of parliament or, indeed, any other advocate to claim to be advocating on behalf of small businesses without the express agreement of particular small businesses? That is, as a third party, take an issue up with the small business commissioner and indicate that they are speaking on behalf of the small businesses within that particular industry?

The Hon. G.E. GAGO: I have been advised no.

The Hon. R.I. LUCAS: I assume the answer no was to the second question. In relation to the first question—that is, does it allow for members of parliament, for example, with the agreement of small businesses, to act and advocate on their behalf?—I am assuming the answer to that is yes.

The Hon. G.E. GAGO: I am advised yes.

Clause passed.

Clause 6.

The Hon. R.I. LUCAS: Did the government consider in clause 6 a provision which exists in a number of other pieces of legislation that any ministerial direction to the commissioner, in addition to being included in the annual report, must also be tabled within a certain number of sitting days (six sitting days) of the issuing of that direction? If it did consider that as an option, why did the government reject that as an option?

The Hon. G.E. GAGO: I have been advised it is considered to be a sufficient safeguard.

Clause passed.

Clause 7.

The CHAIR: There is a clerical error in subclause (3) at line 32 which reads 'Parliament of the State' and it should be 'Parliament of a State'. I intend to make that clerical correction to the bill.

The Hon. T.J. STEPHENS: The Minister for Small Business has stated that parliament would have oversight of the agency via scrutiny of the annual report. Will there be any kind of performance review of the commissioner conducted annually or after any other prescribed period of time?

The Hon. G.E. GAGO: I have been advised that the appraisal or scrutiny will be made through the annual report and there has been no specific policy decision made in respect of any further, for instance, performance review of the commissioner at this point.

The Hon. T.J. STEPHENS: If I have got this right, we could be appointing somebody—again, I put on the record that I hope it is someone with extensive small business experience, not perhaps an ex-treasurer or somebody like that—for five years on $250,000 a year and all they have to do is come up with a glossy annual report and there is nothing that anybody can do about it.

The Hon. G.E. GAGO: The annual report is obviously a very important public accountability document and it is a process that is consistent with other positions.

Clause passed.

Clauses 8 and 9 passed.

Clause 10.

The Hon. T.J. STEPHENS: The Minister for Small Business expects the operating costs to be around $1.3 million annually, at the most. Can you guarantee this figure?

The Hon. G.E. GAGO: I have been advised that it is an indicative figure. It is one that we believe is achievable, but obviously guarantees cannot be made because you cannot predict all of the challenges or situations that might occur over time.

The Hon. T.J. STEPHENS: Just on that, can you give me again the breakdown of the staff that you would expect in that office? I think I have heard or seen that number before.

The Hon. G.E. GAGO: I understand that the minister has indicated that it would somewhere between five and seven, but the exact level of detail has not been resolved at this point in time, I understand.

The Hon. R.I. LUCAS: Is there already a transitional office called something like 'transitional office' for the small business commissioner which is operating within one of the government departments and agencies? If it is, what number of staff is within that office, what has been their role and will they be the staff that will automatically transfer to the small business commissioner's office?

The Hon. G.E. GAGO: I have been advised that there is no office for a small business commissioner, that a small project team of three was derived to do work around putting this proposal together.

The Hon. R.I. LUCAS: And will those staff go into the office?

The Hon. G.E. GAGO: I do not believe that decision has been made at this point in time.

Clause passed.

Clause 11 passed.

Clause 12.

The Hon. R.I. LUCAS: I raised this in the second reading and the minister responded and we discussed this issue at clause 1. The minister indicated that the powers under the Fair Trading Act, section 77, were exactly the same as clause 12 of the bill. When one looks at section 77 of the Fair Trading Act, there are legal notions of reasonableness in the powers under the Fair Trading Act, which do not exist under the proposed bill. For example, under the Fair Trading Act, in essence, the person demanding the information must have a reasonable requirement to do so. The person who is resisting the provision of information can use this notion of reasonableness to refuse.

In this bill, there is the word 'reasonable' in relation to a reasonable time, but it does not relate to the issue of the demanding of information; that is, this particular bill does not use the notion of reasonableness in terms of what information can be demanded and does not provide that similar defence for someone who wishes to argue against the information that is being provided. Can the minister indicate whether that is a key difference between section 77 of the Fair Trading Act in relation to the provision of information and clause 12 of the bill?

The Hon. G.E. GAGO: I have been advised that these powers are designed to support the more general functions of the small business commissioner, that the information must be required for the performance of the commissioner's functions such as it must be reasonable to require it for that purpose.

The Hon. R.I. LUCAS: There is no indication of reasonableness in clause 12, and the minister cannot refer to any words there which refer to it being reasonable in terms of the type of information that needs to be required. It has to be within the terms of the performance of the commissioner's functions, that is true, but the minister was earlier waxing lyrical about the importance of the word 'reasonable' in terms of defending an earlier clause of the bill.

It is a notion that exists within section 77 of the Fair Trading Act. It does not exist in clause 12, other than that there has to be a reasonable time specified in the notice. In section 77 there is a restriction placed on the commissioner in terms of the information that he or she demands. There is no similar restriction under clause 12. There is a much wider and unfettered power in clause 12 of this bill for the commissioner to demand information than compared to section 77, contrary to the indication given by the minister in response to my earlier question.

The Hon. G.E. GAGO: I have been advised that it is not unfettered power because it is ultimately subject to judicial review.

The Hon. R.I. LUCAS: Respectfully, that is a nonsense, and the minister knows it. Yes, it is subject to judicial review but that is not the issue I am raising. Everything is potentially subject to judicial review, but that is not the issue I have raised in relation to this. It is clear by that answer, based on advice, that the minister does not have a specific response to my assertion, which is quite clear from a reading of section 77 of the existing Fair Trading Act that it is a restricted power compared to the unrestricted and unfettered power, other than the general protection of potential judicial review.

The notion of reasonableness is not within this particular power to require information, and this is the power that this commissioner will have: to demand tax records, profitability records, indeed anything that he or she wishes in relation to the performance of the functions of the act.

Clause passed.

Clause 13 passed.

Clause 14.

The Hon. T.J. STEPHENS: During consideration in detail in the other place the Minister for Small Business could not give detail of the fee model for usage of the commissioner as he had not yet read it. Can that detail now be provided?

The Hon. G.E. GAGO: No, I have been advised that it has not been completed.

Clause passed.

Schedule 1.

The Hon. R.L. BROKENSHIRE: I move:

Clause 14, page 11, after line 34 [clause 14, inserted section 28F]—After subsection (2) insert:

(2a) If a Minister initiates a proposal for regulations prescribing an industry code or provisions of an industry code under this section, the Minister must, before the regulations are made, consult with each organisation that the Minister considers to be representative of an industry likely to be affected by the code or provisions.

I move this amendment on behalf of my colleague, the Hon. Mr Hood. I will brief on this again, but this an important amendment that the Hon. Dennis Hood has put to the chamber. Basically this amendment enforces consultation before the codes of conduct are finalised and in their development and drafting, and to me that is really important.

The Hon. Ann Bressington spoke about disallowing regulations, and we have been involved in that before. Most of the time when we have had to move disallowance of regulations, for example, the pig fees, we had to do that because there was no consultation; it was just done through the bureaucracy. This amendment enforces consultation with all industry sector groups. I commend the amendment to the committee.

The Hon. G.E. GAGO: We support this amendment. It refers and applies to section 28F, page 11 of the bill, and seeks to further clarify the way a regulation concerning an industry code will be initiated, and seeks to ensure that the minister consults before a regulation is developed with the appropriate industry representative or representatives. The government always intended that there would be a transparent approach to the development of industry codes and that they would be developed with relevant stakeholders. This now clarifies that position and therefore we support the amendment.

The Hon. T.J. STEPHENS: The opposition supports the amendment.

Amendment carried.

The Hon. A. BRESSINGTON: I move:

Clause 14, page 11, after line 41 [Schedule 1, clause 14, inserted Part 3A]—

After inserted section 28F insert:

28G—Application of Part to franchising.

(1) If the regulations declare that franchising is to be taken to be an industry for the purposes of this Part and that franchisors and franchisees are to be taken to be participants in the industry, this Part applies to a franchisor whether carrying on business in or outside this State, but only in relation to a franchisee carrying on business in this State.

(2) In this section, franchisor and franchisee have the meanings assigned by the regulations.

As I indicated in my second reading contribution, my amendment seeks to limit the application of the proposed part 3A of the Fair Trading Act, which provides for the industry codes and penalties for breaching them, and where it applies to cases involving a franchisee carrying on a business in this state.

I move this amendment in response to the concerns of the franchisors based in South Australia who fear that the proposed South Australian code of conduct, which everybody accepts will be different from the national code, will apply not only to their dealings with South Australian franchisees, as per the intention of the bill, but also to their dealings with franchisees interstate. This would place them at significant disadvantage to those based interstate and would provide an incentive for them to relocate their headquarters, taking jobs and profits with them.

There can be no doubting that the intention of the bill is to regulate businesses based in South Australia. While this is not the explicit intention the Crown Solicitor talked of in his advice on my amendment sent to the minister, it nevertheless implies the bill's intent to capture conduct of South Australian businesses, regardless of whom they are dealing with or where they are based.

Further, as I stated in my second reading contribution, Mr Stephen Giles (partner in the prominent legal firm Norton Rose Australia) has pointed out in rebuttal to the Crown Solicitor's advice that, contrary to the Crown Solicitor's assumption, in almost all franchise agreements the applicable law is the law of the franchisor state, meaning that this bill will have effect feared by franchisors through its normal application, even if the concerns about its extraterritorial application are unfounded. I commend my amendment to the committee.

The Hon. G.E. GAGO: The government opposes this amendment. The concern with the amendment is that it will deny or restrict the benefit of these reforms in some instances, primarily in relation to prospective franchisees. This amendment has unintended consequences and will create a loophole that may be exploited by dubious franchisors. Most importantly this amendment is unnecessary as section 4A of the Fair Trading Act 1987 sets out the need for relevant connection with South Australia; that is, the extraterritorial application of the act. I referred to that earlier on.

Given this fact, the amendment is unnecessary and adversely affects intended beneficiaries of the reforms. The government therefore opposes the amendment. In addition, the notion that a franchisor will leave South Australia because of this legislation is without foundation. Similar arguments were made by the opponents of the then proposed federal franchising code in the late nineties and the sector has experienced considerable growth since then.

The bill will instil confidence in the South Australian franchising sector and will encourage greater investment by potential franchisees who will be given the comfort that this bill provides in its current form.

The Hon. T.J. STEPHENS: I rise to indicate support for the Hon. Ann Bressington's amendment. Having met with some of those franchisors that are South Australian grown and of whom we are extremely proud, I am fearful how they are going to react to this, so if they can take some small comfort out of the Hon. Ann Bressington's amendment then the Liberal Party will certainly support that.

The Hon. A. BRESSINGTON: I just have a question for the minister. She mentioned in her response that there were unintended consequences from this amendment. Can she give some examples of those unintended consequences?

The Hon. G.E. GAGO: I have been advised that the loophole involves that prospective franchisees will be excluded because of the requirement for them to be actually carrying on a business, and prospective franchisees are not carrying on a business; they are looking to carry on a business. So, they are going to not be covered.

The Hon. M. PARNELL: The Greens will not be supporting this amendment. We are satisfied that the existing provisions in section 4A in relation to extraterritorial application of these provisions will suffice, and we do not think this new provision adds any value. As the minister has described, if there are unintended consequences, if there is the ability for unscrupulous operators to avoid their obligations under the legislation, we should avoid putting such clauses into our legislation.

The Hon. J.A. DARLEY: I will not be supporting the amendment.

The Hon. K.L. VINCENT: I will be supporting it.

The Hon. R.L. BROKENSHIRE: I understand what the Hon. Ann Bressington's amendment is but, with investigations we have done and advice we have received, we have the same opinion as the Hon. Mark Parnell.

Amendment negatived; schedule as amended passed.

Title passed.

Bill reported with amendment.

Third Reading

The Hon. G.E. GAGO (Minister for Regional Development, Minister for Public Sector Management, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for Gambling) (18:06): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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