Senator MURRAY —My question is addressed to the Minister representing the Minister for Small Business and Consumer Affairs. Is it good news for small business that the Franchising Code Council has collapsed due to funding problems, the threat of litigation, a lack of protection for its directors and no underpinning legislation? Can the minister confirm that the budget decision of this government to withdraw funding from the franchising council which administers the franchising code of conduct has contributed to the collapse of the council? What impact will the collapse of the council and loss of its education, auditing and mediation processes have on the ability of the tens of thousands of small businesses who operate franchises in seeking to defend their rights against the market power of predatory franchisors? Does the collapse of the franchising council, combine with the decided reluctance of this government to pursue amendments to the Trade Practices Act to outlaw harsh and unconscionable conduct against small business operators, confirm that this government is just not interested in defending the rights of small business where that involves treading on the toes of big business?

Senator PARER —I would like to thank Senator Murray for that question. It is very refreshing to get questions like this on the interests of small business from someone in the Democrats. It has been a long time coming. I think the last time we had questions like this was when Senator Siddons was here. So it is years and years.

At least Senator Murray understands the fact that the rest of the Democrats do not understand—that is, you cannot talk about redistributing wealth unless you create it first. It is a lesson, I might say, the Labor Party should also take on board.

Honourable senators interjecting—

The PRESIDENT —Order! The level of noise in the chamber is far too high.

Senator PARER —In fact I was rather intrigued to see with a flourish the other day Senator Kernot saying she was taking over the job of employment from Senator Stott Despoja. I would have thought that it would be more appropriate to give it to Senator Murray. At least Senator Murray understands that, if you are really going to create employment in this country, you are going to have to do it through the small business sector.

Honourable senators interjecting—

The PRESIDENT —Order! The level of noise is still far too high.

Senator PARER —He regrets the franchising council has chosen to appoint an administrator. He is discussing with industry interests to see whether alternative self-regulatory mechanisms can be put in place. It is important to realise that the former council failed not because of any problem with the concept of self-regulation but because of a division within the council between those who were prepared to modify corporate plans to meet tight budgetary circumstances and those who refused to adapt to the different circumstances. The strategy of the former government towards franchising went through a number of lurches or changes in direction.

The previous funding allocations had to be set against the need to take firm budgetary action to redress the massive budget deficit left to us by the other side. In this context, funding for the council was reviewed. Funding for the council was discontinued in 1997-98. However, there was no change at all to the $648,000 allocated to the council for 1996-97 because the government recognised the desirability of allowing it time to adapt to those budget changes.

The minister met with the council in October and discussed the need to modify the strategic plan, which they had developed under the former government, and to prioritise their activities to achieve self-funding status from 1997-98. This is what the minister would expect any company facing reductions in revenue to do. At subsequent meetings of the council, it was clear that many members were willing to do this. The minister understands that a draft strategic plan along these lines was in fact prepared.

Based on discussions the company had with the minister and his officials, he agreed to seek funds to increase the subsidy by another $150,000, to be paid in 1997-98. This brought the subsidy to $800,000 over two years, which should have been more than enough to achieve the transition to self-sufficiency. In spite of this, there were some council members who were unprepared to modify their position to meet the new financial circumstances.

In November and December, the council twice considered a resolution to wind up on the basis that it did not have enough funds to implement the old plan. Both those resolutions were defeated. The minister was advised at the end of December that the then chairman, Mr Gardini, had resigned. Mr Delaney, a representative of the franchisee interests on the council, wrote to the minister in December to indicate, notwithstanding council decisions, he had convened another meeting to consider the— (Time expired)

Senator MURRAY —Madam President, I ask a supplementary question. Senator Parer, I think you should understand that I am in the Democrats because of their leadership and their policies—

Honourable senators interjecting—

The PRESIDENT —Order!

Senator Alston —Madam President, I rise on a point of order. If it is good enough for Senator Murray to take the opportunity to indicate where his support lies, I would have thought an equal opportunity ought to be made available to his colleagues. We might be able to clear up any problems in one hit.

The PRESIDENT —There is no point of order.

Senator Faulkner —Madam President, I also rise on a point of order. I do question your ruling, Madam President. Really, if the same opportunity is to be given, perhaps Senator Alston could express his loyalty to Senator Hill.

The PRESIDENT —There is no point of order.

Senator MURRAY —Minister, can you confirm whether the government has received an expression of interest from the national franchisors association to take over the admin istration of the code? Will the government rule out allowing the code to be taken over by the very people who were set up to regulate it in the first place? In view of the lessons learnt from this collapse, will the government now urgently consider making the code mandatory and capable of enforcement?

Senator Schacht —And will you amend the legislation to put `unconscionable conduct' into the Trade Practices Act?

Senator PARER —Who is asking the questions, Senator? You can ask a question on that. Again, I would like to congratulate Senator Murray because it is a very unique experience, and I hope you, Senator Murray, will continue because you may eventually get the Democrats to really focus on small business and the job creation that comes.

Senator Bob Collins —Have you had a look at Senator Murray's CV? Have you had a look at his business background?

Senator PARER —That is why I am congratulating him. He is the only bloke in the Democrats, the only person in the Democrats—

Honourable senators interjecting—

The PRESIDENT —Order! Senator Parer is answering this question and I will ask him to continue when the Senate is silent.

Senator Murray —Madam President, I rise on a point of order. Senator Woodley objects to the inference that he is not a bloke.

The PRESIDENT —There was so much noise in the chamber that I did not hear anything of that nature.

Senator PARER —It was a generic term, I might say, Senator.

The PRESIDENT —Senator Parer, you will address your remarks through the chair, not across the chamber.

Senator PARER —Thank you, Madam President. It is a term that is commonly used to cover both sexes, by my kids anyway. The minister has pointed out that the council was destroyed by dissension within the industry and that self-regulation can only be effective if all members of the self-regulatory body agree to a general direction. A fresh start will enable this to happen. The issue of trading practices in relation to franchising is one that is before the fair trading inquiry of the House of Representatives Standing Committee on Industry, Science and Technology. (Time expired)