Mr REID(12.59 p.m.) —On behalf of the Standing Committee on Industry, Science and Technology, I present the committee's report incorporating a dissenting report entitled Finding a balance: towards fair trading in Australia , together with the minutes of proceedings and evidence received by the committee.

Ordered that the report be printed.

Mr REID —This report on the fair trading inquiry, Finding a balance: towards fair trading in Australia , is an important report for the future of small business in this country. The committee anticipates that the report may come as a shock to many people who have not been following the inquiry closely. The committee has felt compelled to make strong recommendations to set some ground rules for what constitutes acceptable commercial conduct in Australia.

One witness suggested to us that it is war out there between small business and big business. On the balance of the evidence to the fair trading inquiry, the committee has concluded that small businesses are regularly being confronted with combative and unfair commercial conduct in their dealings with powerful companies.

I will give one example of the type of business conduct that alarmed the committee. In major shopping centres around Australia, small businesses can be compulsorily relocated away from the shop for which they have negotiated a lease with no rights of appeal and no compensation for loss of goodwill.

Small business did not ask the fair trading inquiry for protection; they just want a fair deal. Over the last 20 years there have been numerous inquiries and reports canvassing business conduct issues affecting small business but little action on the part of governments. The committee outlines this long and sad history of procrastination in its report. The committee concluded that it is high time for action and is recommending that a uniform retail tenancy code, underpinned in the Trade Practices Act, be developed for use around Australia; that the Commonwealth enact franchising legislation covering all franchise operations, including motor vehicle dealerships and the petroleum industry; that the Trade Practices Act be amended to proscribe unfair conduct in trade and commerce; and that the Australian Competition and Consumer Commission have enhanced enforcement powers to take action on behalf of small businesses.

It was argued before the committee that amending the Trade Practices Act to prohibit unfair conduct would lead to uncertainty in commercial transactions. To address this concern the committee has framed a draft amendment to the act which gives a list of factors to which the courts may have regard in determining whether or not business conduct is unfair and thus unlawful. This list of factors clearly indicates what this committee considers to be fair conduct in the commercial environment.

The committee also makes recommendations designed to improve small business access to justice, especially in relation to disputes between small businesses and their banks, in the context of evidence that business dealings are biased in favour of powerful companies with access to the best lawyers. The heavy social costs of the unfair business conduct brought to light in the fair trading inquiry are highlighted throughout the report with numerous examples and several case studies. In my view, members of this House will be surprised and saddened by these stories, as were members of the committee.

It is perhaps inevitable that in a competitive economic environment many will fail and the personal consequences of failure can be severe. To forestall such devastation the committee is also recommending that there be improved small business education targeted through chambers of commerce, trade associations, local government development units, enterprises shedding staff and paying redundancy packages, and financial institutions.

However, education will not address the many cases where business failures result from opportunistic conduct by powerful companies which a just society will not tolerate. Action against such practices should need no justification other than the principles of fairness and decency which the vast majority of Australians would endorse. For this reason, the committee is urging the government to set a legislative framework for fair trading in Australia.

I wish to thank the many business groups, small business operators and interested individuals who recognised that there are problems and who provided written submissions and oral evidence. For some small business witnesses, providing such evidence revived many painful memories.

On behalf of the committee members, I extend thanks to the secretary of the committee, Mr Paul McMahon; the inquiry secretary, Susan Johnston; and Mr Lee Boldeman, a senior officer of the Department of Industry, Science and Tourism.

I would urge all members of the parliament to read this report and to discuss it with their constituents, many of whom are small business people with a vital interest in the committee's recommendations. I commend the report to the House.