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Legislative Council - Fifty-Fifth Parliament, First Session (55-1)
2024-11-28 Daily Xml
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Bills

Statutes Amendment (Small Business Commission and Retail and Commercial Leases) Bill

Second Reading

Adjourned debate on second reading.

(Continued from 17 October 2024.)

The Hon. N.J. CENTOFANTI (Leader of the Opposition) (15:24): I rise to speak on the Statutes Amendment (Small Business Commission and Retail and Commercial Leases) Bill 2024. While this bill seeks to bring some significant reforms to the role of the Small Business Commission, and in many respects aims to address the challenges faced by small business, it is important to carefully examine the bill to ensure that it does not add more complexity and red tape rather than easing the burden on small business owners.

When the Small Business Commission was introduced by the former Weatherill Labor government the opposition then raised concerns that the commission's purpose was to be a mediation service rather than to speak to the best interests of small business. The purpose of the Small Business Commission should always be to assist South Australian businesses, in particular helping them mediate disputes between other businesses and levels of government but also to advocate for the needs of the collective small business community.

As I have said before many times and in many ways in this place, small businesses are the backbone of our economy, yet they often face an environment that is too complex, slow moving and costly. The commission's role should therefore be focused on reducing the bureaucratic burden on these businesses, offering clear guidance and facilitating faster resolution of issues rather than adding another layer of red tape that might ultimately make it harder for small businesses to succeed.

This bill would establish the Small Business Commission as an agency of the Crown as set out in clauses 8 and 9 among other various functionality clauses. Our main concerns begin in clause 18, which would provide the commission a power to request information via email and would insert an expiation fee of $1,200 to the existing penalty for not providing information within that time. This is where Labor have proved they are more interested in revenue streams than they are in providing effective support to small business.

The designated alternative dispute resolution process in clause 19 is an innovative approach, but it also raises some concerns. The bill proposes expanding the powers of the commissioner, especially around alternative dispute resolution, which at first glance appears to be a positive step. Dispute resolution outside of court is essential for small businesses, which often lack the resources to engage in lengthy and expensive litigation.

However, the provisions that grant the commission significant powers to compel the production of documents and require parties to attend alternative dispute resolution sessions, as seen in new sections 12E and 12F inserted by clause 19, may have unintended consequences. These powers, while intended to expedite dispute resolutions, could place additional burdens on small business owners.

If the commission has the power to demand extensive documentation or compel attendance without careful consideration of the burden it places on businesses, we risk adding to the very red tape the opposition believes the Small Business Commission should be helping to reduce. If businesses fail to comply without a reasonable excuse they face penalties which include a hefty expiation fee of up to $20,000. This could turn what is meant to be a supportive process for small businesses into a significant financial burden whilst creating yet another revenue stream for government coffers.

Additionally, the bill proposes changes to the Retail and Commercial Leases Act 1995, particularly around dispute resolution processes and lease agreements. Small business tenants often face difficult lease terms and have limited negotiating power. While the intention is to help resolve lease disputes more effectively, we hope this does not add further layers of regulation that might make it harder for tenants and landlords to reach an agreement.

Moreover, the bill's amendments to the Fair Trading Act 1987, the Farm Debt Mediation Act 2018 and the Work Health and Safety Act 2012 are intended to align the commission's functions across different regulatory areas. Whilst this sounds like a sensible approach the breadth of these changes raises concerns about overextending the commission's resources and focus.

Whilst the Statutes Amendment (Small Business Commission and Retail and Commercial Leases) Bill 2024 is motivated by what we on this side hope are good intentions and aims to improve support for small businesses, it does raise some eyebrows. We hope the creation of the Small Business Commission as a Crown agency, the expanded dispute resolution powers and the changes to lease regulations streamline processes rather than add new layers of complexity. It is vital that we maintain the commission's role as a nimble responsive agency that focuses on cutting through government bureaucracy, not contributing to it.

We also hope to see other efforts from this government to support small businesses, particularly during a time when business confidence is alarmingly low. The opposition does support this bill as a matter of functionality, but we will be watching the implementation of its clauses closely, and I foreshadow that we will have some questions for the government during the committee stage.

The Hon. S.L. GAME (15:29): I rise to support the government's Statutes Amendment (Small Business Commission and Retail and Commercial Leases) Bill. Unfortunately, small businesses in South Australia continue to face many challenges in the current economic climate, and although this bill does not offer any direct assistance it does provide some clarity around the role of the former Small Business Commissioner and the increasing support offered by the new commission's dispute resolution services.

Small businesses and advocates identified the need for further assistance when faced with roadblocks in disputes over contractual disagreements and commercial leasing matters. Under the previous legislation, the commissioner's power to notify and compel parties to attend and participate in alternative dispute resolutions was limited to prescribed industries; however, this bill proposes to extend this support to all industries.

The amendment inserting new section 12E will enable the rebranded commission the power to require attendance at mediations, and to produce documents or other information relevant to resolving the dispute. A maximum penalty of $20,000 with an expiation fee of $1,200 applies where a person fails to comply.

The Law Society has raised concerns about the commission's power to impose mandatory participation for this type of dispute resolution; however, it is clear that the purpose of compelling parties to attend is to avoid the expense involved when a matter is escalated to court. Nevertheless, the Law Society also noted that the commission's power to enforce agreements reached in alternative dispute resolutions could disadvantage unrepresented parties.

It should also be noted that the government has responded to many of the requested amendments from the Law Society regarding the Retail and Commercial Leases Act, and overall these proposals indicate that some action is being taken to support small business. However, with the increasing rate of small business closures across the state, and many more fighting to survive, it is clear that more direct and strategic assistance is required.

The Hon. R.B. MARTIN (15:31): This bill demonstrates the Malinauskas Labor government's continued commitment to supporting small businesses, which are so fundamentally important to our state's economy. The figure that is cited is that 97 per cent of our state's total businesses are small businesses, employing around 300,000 people.

This bill represents the first major revision of the Small Business Commissioner Act 2011 since its commencement. It is an essential step in supporting the future strategic direction of the office and its work. It aims to provide clearer guidelines around the commissioner's roles in advocacy and in dispute resolution. By strengthening these functions, the bill seeks to help the commissioner offer more effective assistance to small businesses that are facing issues such as commercial disputes, late payment of invoices and contract disagreements.

One of the key changes proposed by this bill is to provide consistency in the office's alternative dispute resolution services across all industries. Currently, the Small Business Commissioner can only mandate dispute resolutions for businesses in specific industries. The bill will extend this level of support to all small businesses, regardless of the sector they operate in. This will ensure that every small business in South Australia can access the same level of support when they face disputes or challenges.

Additionally, the bill empowers the commissioner to require businesses to attend mediation sessions, and to produce relevant documents when necessary. A maximum penalty of $20,000 and an expiation fee of $1,200 may be applied for noncompliance.

Another significant element of the bill is a streamlining of court processes. Settlement agreements reached through mediation facilitated by the Small Business Commissioner will be treated as minor statutory proceedings, simplifying enforcement in the Magistrates Court. This change will save small businesses time and costs associated with reprosecuting legal arguments in court.

Importantly, the bill acknowledges the difficult business environment that many small businesses are currently operating in. Rising costs, including wages and rent, are increasing the financial pressures on businesses, making it more important than ever to provide a robust support network. By strengthening the role of the Small Business Commissioner, and improving the legal framework around dispute resolution, this bill will provide small businesses with support that will assist them to overcome challenges and to thrive.

Recognising the significance to our economy of small businesses, the Malinauskas government is committed to implementing policies to support their growth and resilience. Our $14 million Small Business Strategy is being rolled out through the Office for Small and Family Business, based on a number of themes that were identified through consultation with small businesses. These themes include strengthening business capability, building skills and workforce, navigating the digital environment, boosting sustainability, embracing diversity and improving access to government services.

The government is also prioritising digital readiness and resilience through the Small Business Digital Capability Program which includes the Cyber Uplift Step Program. This initiative helps businesses safeguard themselves against the growing threat of cyber attacks, equipping them with the necessary skills to protect their digital assets and respond effectively if breaches occur. I am pleased to commend to the council a bill which not only recognises the crucial importance of small business to our economy but reflects the strong desire of the Malinauskas government to see South Australian small businesses grow, prosper and thrive.

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (15:35): I thank all honourable members for their contribution on this legislation and I look forward to the committee stage.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. N.J. CENTOFANTI: Can the Attorney please indicate what consultation has been made directly with small businesses on this amendment bill?

The Hon. K.J. MAHER: I am advised that there was significant consultation, including consultation through the YourSAy portal. I am informed that the consultation page received 498 visits from 300 unique visits, with 11 formal written submissions being received, including from stakeholders such as the Australian Hotels Association, the Housing Industry Association, Motor Trade Association and the Law Society amongst others.

The Hon. N.J. CENTOFANTI: Can the Attorney indicate whether there is any budget to expand the commission?

The Hon. K.J. MAHER: There is no additional budget at this stage. The extra functions are from within the existing budget.

The Hon. N.J. CENTOFANTI: Therefore, can the Attorney confirm that there is no budget to increase FTEs within the commission?

The Hon. K.J. MAHER: My advice is, no. With no extra budget, there are no plans as a direct result of this for extra FTEs. I am advised that this does not propose to expand functions greatly but provide consistency across the board.

The Hon. N.J. CENTOFANTI: Can the Attorney then just indicate what are the current FTEs of the commission?

The Hon. K.J. MAHER: I am advised it is about 15 FTEs.

The Hon. N.J. CENTOFANTI: In relation to clause 11(2) functions:

(1) The functions of the Commission are to—

(a) facilitate the resolution of disputes involving small businesses through alternative dispute resolution…

Can the Attorney give an indication as to what alternative resolution dispute processes will be explored?

The Hon. K.J. MAHER: My advice is that this is not proposed to differ from what is already done but to provide clarity. In terms of an alternative dispute resolution, I am advised that there are in-house advisers who can help with the negotiation, as well as a panel of mediators who can provide those services too.

The Hon. N.J. CENTOFANTI: Clause 9—Amendment of section 4—Small Business Commissioner, what are the benefits of the commission—

The CHAIR: Do you want to talk to that at clause 9?

The Hon. N.J. CENTOFANTI: Sorry? No, it is a question.

The CHAIR: Yes, do you want to ask that question at clause 9?

The Hon. K.J. Maher: If there is only a couple, sir, I am happy to deal with it at clause 1.

The Hon. N.J. CENTOFANTI: Yes, there are only a couple more. I thank the Attorney for his hospitality. What are the benefits of the commission being included under the Crown?

The Hon. K.J. MAHER: My advice is, this does not change practically the way the commission operates or the way the commission is structured, but this was on advice about drafting to make it clear how the commission sits within government.

The Hon. N.J. CENTOFANTI: One final question in relation to I believe clause 18—Power to require information. I note that there is a fee increase from $1,300 up to $20,000. Can the Attorney explain the requirement for that somewhat large increase in expiation fee?

The Hon. K.J. MAHER: My advice is that relates to possible penalties. My advice is that there has been a maximum penalty previously of $20,000. What this proposes to do is to add in an expiation fee of $1,200, so you could expiate it rather than have a penalty. So it introduces the expiation fee. My further advice is that we are not aware of a time when a penalty has actually needed to be imposed. There is not a memory of that actually having happened but, should it happen, rather than there having to be a full prosecution, there is a way to expiate it.

Clause passed.

Remaining clauses (2 to 98), schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (15:44): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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