Mr Pallas (Tarneit) — I rise to indicate  in support of the contribution made by the member for Northcote  that Labor does not oppose the bill.  In so doing I recognise the very  substantial contribution that  small business plays  in  the economic wellbeing of the state of Victoria. The government tells us  —  indeed in material associated with the discussion paper  attaching to this document  — that there are something  like half a million small businesses currently trading and that they constitute  something  like 30 per cent of the state’s production. In addition to that  we know  small business provides almost half of the state’s total employment in the private sector.

That  is a pretty compelling figure  in the  context of  a recognition  that the administrative settings that government puts in place must assist small business in the  way that it goes about  engaging with government and  how  it deals with disputes  between itself and  its  customers and commercial  partners; and in  a broader  sense  to take a lot of the  red  tape weight off small business. To do that  I  think  this  Parliament  was  unanimous in its  support  of  the  Labor government’s initiative of the establishment of the small business commissioner. That office has demonstrated its worth to the community. While  these amendments go  some  way to increasing and improving the  utility  of  the  small  business commissioner, I argue that there are probably some additional changes that could be made. I would say that in substance this bill creates  a substantial good for the community at large.

The Liberal Party supported Labor’s bill in  2003,  and  it raised some concerns about the nature of that bill  and how it operated, while flagging concerns that it wanted to  see picked up. The bill  follows a discussion paper that  what was released in  2012. The department has advised that the  response of stakeholders in that process was relatively muted in  terms of the level of submissions. They were relatively small in number, but broadly they were supportive of the changes that have been incorporated into  this bill. Therefore Labor will not oppose the bill. Having grown up in a  small  business  family I understand the trepidation that running a small business generates in the small  business  owner  about the amount of effort and  time they have to  put in delivering a quality  service to their customers. I should say that by the word ‘customers’, in  my father’s case I mean patients. My  father  was  a  small-town  general  practitioner who ran a business that was on some occasions was a single business; on other occasions he had a number of partners.

But whatever the business is, it is about  making sure  that when small business has to attend to  something more than just the  delivery of service and to  make sure it provides a quality service or good to the community, to the  extent that government can intervene it does so in a way that enables small business to have not only a clear appreciation of the legislative and commercial responsibilities that attach to it but also a feeling that there is somebody within government to advocate on its behalf. The establishment of the small business commissioner was a great initiative.

I support the content  of  the  changes  that  the government is proposing here. Anything  that lifts the burden from business is  a good  thing, and  from small businesses  in  particular  given the  limited  administrative capacities  small businesses have by definition.

The  small  business  commissioner  has a statutory  obligation  to  investigate complaints relating to unfair  market practices under the arrangements that have been in place.  The  clarification  made in the amendments to section 5(2)(c) of the  act  provides that the commissioner’s alternative dispute resolution  (ADR) powers are not limited to matters that relate to  unfair  market practices. That removes any doubt that might exist as to whether the jurisdiction  is  expressly intended to include  commercial dealings. In effect this is both a clarification and a necessary broadening — at least so  far as small business would see it — of the facilitative role the small business commissioner can play.

The  amendment is  also  partly  designed  to  ensure  that  the  new  power  to investigate complaints  relating  to government entities  is not limited  by the definition  that  is incorporated  in  the  existing  bill  relating  to  market practices.

Whilst I do not think there was an intention to limit the power in that respect, the clarification  is  critical because ultimately  if  a government  is  in the business of saying, ‘We want to facilitate how your business interacts with  its commercial  operators  by  providing  you  with  alternative  dispute resolution mechanisms’, that should similarly be the case in  terms of its interaction with government.

In many cases small businesses do have difficulties with government. Governments put in place principles that attach to the way  they deal  with small  business, and those practices, procedures and codes that apply at a bureaucratic level can be not only confusing to small business but also suggestive that the  government does  not  have  the  level  of  flexibility that small business needs. The most obvious example  is in  regard to  cash flow and the bill payment practices that some departments apply.

If  you  run a small business and you sometimes  live hand to mouth based on the cash flows that you  have, the fact that a  government entity has a  formula  by which it  will  not pay bills before  a  particular period of time  can be quite critically damaging and dangerous. That obligation will mean that small business operators  will  feel  more  confidence  that there is someone they can  go  to, someone they can talk to, and that ultimately there will be a process — and  if need be an ADR process — that they can work through.

The emphasis with a small business commissioner  is  and must remain on ensuring that small businesses receive the appropriate education and information and also that the  small business  commissioner is  on their side and will act and become involved accordingly. The bill clarifies and assist with that.

There are  restrictions  in terms  of  the  obligations on  the  small  business commissioner to investigate complaints, and that is reasonable.

The  small  business  commissioner  should  not  be  obliged  to  pursue  serial complaints  or  to  act  in  circumstances  where  alternative  mechanisms   are available. The act provides that if the  small business commissioner chooses not to pursue a  complaint that  has been  brought before them, they must provide to the complainant written advice of the alternative avenues available to them, and that is a good thing.

The  commissioner has available to them a valuable process to publish in the end of year report the names of businesses that failed  to  undertake  mediation  in good faith.  This naming  and shaming process is not entirely the  same as  that which  is applied in  other  jurisdictions. The practice  of  fining is becoming increasingly prevalent.  It is  a mild  form of  coercive power,  but it  is one nonetheless.

If we are looking  at applying a light touch and if we want to ensure,  at least as  a  first  avenue,  that  participants  in  the  ADR  processes  have a clear understanding that there  is a consequence  for non-compliance without  going as far as fining, this is a good first step.

While the provisions of the  bill do not deal with a number of the concerns that the government, when in opposition, raised in respect of transparency, the means by which consultants are employed or  the powers of delegation — whilst they do not go as far as the government previously indicated an intention to do —  they do substantively improve the operation  of the small business commissioner. I am happy to indicate that the opposition does not oppose the bill.