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Thursday, 2 April 1998
Page: 1849


Senator SCHACHT (11:39 AM) —I appreciate the fact that I had a chance to talk to the minister's adviser, who happens to be the minister in the other place, privately and the information he provided, which included the fact that the $1 million figure is a disallowable instrument and can be adjusted as a disallowable instrument from time to time. That does give further flexibility. As I said to Minister Reith, whatever the cut-off figure is it will be under review and there will be plenty of people in the industry rapidly making their points of view known if this figure means that too many people are falling outside the definition and cannot get remedy. There will be political pressure for it to come back here and be adjusted. As it is by disallowable instrument it will be much easier to do than put an amendment through the parliament again. So that does assuage one of my partial fears; there is a greater flexibility about the $1 million.

Senator Murray has again pointed out to me a very important point that the opposition gives weight to. He wants the $1 million to be limited to a 12-month period, which means that under the definition more small businesses would fall into the category of $1 million than would under a definition that is not time limited. With the transaction period going over several years, a motorcar salesman would probably run into tens of millions of dollars of transactions and therefore clearly fall outside the $1 million definition. That Democrat amendment does seem to have considerable merit.

I agree with Senator Murray in that it is probably too late to move rapidly to the suggestion made by Mr Delaney a while ago that we have no limit at all and leave it open. We are too far gone to go down that track at the moment, and it can be changed by regulation. However, Senator Murray again makes the point in his amendment, which we are sympathetic to, that if you put the ABS definition in, whichever is the greater is an important point. Minister Reith did point out to me privately that they do not like the idea of having a range of definitions, but at least the court can decide. That is a reasonable process. I was a bit suspicious when we were advised that the Property Council of Australia was very keen on the ABS definition. I thought that this proves what a quagmire you are often in with small business—the interests of the Property Council are not necessarily the same as those of the small business community and retail tenancies in shopping centres, et cetera. So I accept that in some cases the ABS definition would, by itself, be more restrictive but by having the option of whichever is the greater overcomes that point.


Senator Margetts —The MTAA concerns are dealt with that way.


Senator SCHACHT —Yes. In particular, the 12-month limit on the transaction has some merit. The opposition does not want to delay the bill or play around, but one thing I do suggest to the minister is that maybe we could deal with other amendments and come back to this one at the end of the committee stage because there may be some position we can negotiate on as we get more information. I am not opening this up to have 100 small business organisations streaming down in here to lob pieces of paper on top of us; that would only make it more confusing.


Senator Ian Campbell —That is the next debate.


Senator SCHACHT —Yes. The opposition thinks that the Democrat amendment at the moment has considerable merit. I can certainly say that in the petroleum and motorcar industries, businesses that most of us would consider to be small businesses have transactions greater than $1 million, whichever way you try to add it up. Those industries have been bedevilled by franchising disputes. The minister can say, quite rightly, that the franchising code will cover a number of these and they have to get to an agreement. They have never been able to agree to a franchising code generally. In fact, the motor manufacturers have never even agreed to the view that their retailers are franchisees. That was my experience. Despite the extraordinary evidence that they were franchisees, they have always said that they were not. They went through a convoluted debate and discussion to prove, when I was minister, that their franchisees were not franchisees—because they did not want to sign onto a code.

Those issues make me a little nervous about saying, `Let us leave it until the code. They will sign on to the code, the code will be covered generally because of the fair trading provisions here and elsewhere it will give greater strength to that code to be used in the court.' I am also cognisant that there is such suspicion in this industry between the franchisees and the manufacturers, between the petrol retailers and the petrol companies, that it is extremely difficult to get them to agree on anything—even to meet. That is why I think giving the definition here some more latitude, so that more of those retailers and franchisees in the motor industry, in its various aspects, could fall inside the definition by using Senator Murray's amendment, has some merit. I raise that to get a response. It might be an idea if we do leave this particular amendment until later in the committee stage so that there can be a bit more discussion.

I have to say, Minister and your senior adviser, that we are not interested in having this hang around or in beating people to death over it. I accept that there are a range of arguments and that this is a grey area. We accept that there is going to have to be a cut-off point and a threshold test, but we want to make sure that it is a reasonable threshold test. So far, the Democrats's amendment seems to deal with most of our concerns.