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Wednesday, 3 June 2015
Page: 5630


Mr BILLSON (DunkleyMinister for Small Business) (09:26): I move:

That this bill be now read a second time.

The Australian Small Business and Family Enterprise Ombudsman Bill 2015, and its accompanying Australian Small Business and Family Enterprise Ombudsman (Consequential and Transitional Provisions) Bill 2015, fulfil a key coalition election commitment to establish an Australian Small Business and Family Enterprise Ombudsman. They are yet another demonstration of the commitment of the Abbott government to the small businesses and family enterprises of Australia. I would like to take a moment briefly to outline the contribution of small business to our economy, and the challenges this crucial sector faces.

There are more than two million actively trading small businesses in Australia. Ninety-six per cent of all Australian businesses are small businesses. Combined, small businesses produce more than $330 billion of total economic national output, and employ over 4.5 million people. Many small businesses are also family enterprises, which represent 70 per cent of all Australian businesses. These businesses and their enterprising women and men are the foundation on which Australia's economy is built and our future prosperity will be realised.

Small business people face many challenges. Family enterprises share these challenges, and face others as well—such as succession planning. Small business people and those who run family enterprises put a lot of time and effort into their business. They deserve our respect and support.

Small businesses are often treated as if they were big businesses with all the resources of a big business. Important compliance demands faced by small businesses include:

the workplace relations framework;

competition policy;

contract law;

business and tax law; and

business processes and communications.

Big businesses, with their accountants and their legal departments, are better equipped to deal with such matters. For small business people, time spent on compliance demands is time away from investing in the success of their enterprise.

Australian governments have not always understood these challenges and the needs of small businesses and family enterprises. Under the former Labor government, small business was not a priority. There was a revolving door of small business ministers, including five in the final 15 months of Labor's term in office. More importantly, over the six years of the former Labor government, 519,000 jobs were lost in small business. At the end of Labor's term, fewer small businesses were actually employing people than when Labor started, with the small business share of the private sector workforce falling from 52 per cent to 43 per cent of all employees.

This coalition government, this Abbott government, is committed to turning this situation around. We know the hardworking women and men of Australian small businesses are the engine room of our economy, and a key impediment to their growth is unnecessary red tape and excessive regulation. We are implementing a general deregulation agenda, which will ensure that Commonwealth legislation and regulations are small business friendly, and this especially focuses on the particular demands of small business and family enterprises. A good regulatory regime can make all the difference to the productivity of small businesses and family enterprises, and decisions about when, or whether, a business should proceed with an investment or a decision to expand or recruit additional employees. Because small businesses feel the burden of regulation more keenly than large businesses, the government's deregulation efforts will especially benefit small businesses.

I often speak with admiration of the courage that small business people display when taking risks to start their businesses. These people now have a cabinet-level champion, with the Abbott government the first to give small business its own dedicated cabinet-level position. But small business also deserve an advocate embedded within the federal bureaucracy who understands their concerns and can assist them. As of March, the government had announced reforms to generate more than $2.45 billion in annual red tape compliance cost savings. These are reductions that make a real difference for businesses on the ground. However, in addition to an evangelical minister, an advocate within the Commonwealth machinery can help the government do more.

The Australian Small Business and Family Enterprise Ombudsman Bill will establish the position of the ombudsman who will assist the small business and family enterprise sectors. The ombudsman will have two key functions, an advocacy function and an assistance function. Through these functions, the ombudsman will meet our commitment to establish a role that is:

a Commonwealth-wide advocate for small businesses and family enterprises;

a concierge for dispute resolution, who will also offer an outsourced alternative dispute resolution service; and

a contributor to making Commonwealth laws and regulations more small business friendly.

The advocacy function of the ombudsman will build on the role and work of the Australian Small Business Commissioner, which was created without 'commission' or legislative backing by the former government after the widespread support for the coalition's policy initiative and 2010 election commitment. The former government asked Mr Mark Brennan to be an advocate for the small business sector, but the role was not underpinned by any specific legislation. The ombudsman will be much more, and will have strong, legislated powers. Despite the limitations of the current commissioner's role, Mr Brennan has and continues to function well in his role and is contributing positively to the preparations and groundwork for the ombudsman.

Mr Brennan has my ongoing thanks, and doubtless also the thanks of the small business sector.

The advocacy function will allow the ombudsman to advocate for small businesses and family enterprises in relation to relevant legislation, policies and practices. The ombudsman, with an expanded advocacy role, will listen to small businesses and family enterprises and work with the Treasury portfolio to ensure small business perspectives and views are front of mind and embedded in bureaucratic, consultative and policy and program development, analysis and review processes across the Commonwealth. To assist this expanded advocacy role, the ombudsman will have the information-gathering powers to be able to investigate and make recommendations to government on the wide range of issues affecting small businesses and family enterprises. The ombudsman will also promote best practice, to address the key concerns of small businesses and family enterprises, as they interact with the public sector and corporations.

The ombudsman will not duplicate the functions of other officials. The ombudsman will therefore work collaboratively with Commonwealth officials, such as the Commonwealth Ombudsman, and the state small business commissioners, as well as other relevant officials across all jurisdictions. As part of this collaboration, the ombudsman will identify systemic issues that warrant a national approach, and advise the government about such matters.

To assist with the deregulation agenda, the ombudsman will provide advice on proposed and existing legislation, regulations and practices. The ombudsman will therefore help ensure that the interests of small businesses and family enterprises are at the centre of policy and program design at the bureaucratic level, just as I am doing as minister at the cabinet level. The ombudsman will also help ensure that, wherever possible, red tape burdens are minimised, removed or prevented from being imposed.

The bill also allows for the minister to refer matters to the ombudsman for inquiry. This part of the advocacy function is similar to that available under the Productivity Commission Act 1998, and it is intended to provide a formal framework and supporting powers under which the ombudsman can be asked to undertake a public inquiry into matters of significant interest to small businesses or family enterprises. In these circumstances, the minister will be required to table the report of the ombudsman's inquiry in each house of parliament.

Under the assistance function, the ombudsman will fulfil an important alternative dispute resolution role, providing improved access to justice for small businesses at the Commonwealth level. The ombudsman assistance function requires the ombudsman to give assistance in relation to relevant actions if requested to do so, and will comprise two parts—a concierge role and an outsourced alternative dispute resolution service.

A key requirement of the ombudsman is to not duplicate the functions of Commonwealth, state or territory officials. Instead under the ombudsman concierge role, small businesses and family enterprises will be referred, where appropriate, to existing agencies that can deal with their issues. The concierge role acknowledges that a number of services already exist for small business issues, complaints and disputes, but that small businesses often do not know where to turn for support. Under the assistance function, small businesses may approach the ombudsman for assistance for any dispute or complaint. However, the ombudsman must transfer a request for assistance to another Commonwealth, state or territory agency, if that agency could deal with the request and it would be more effective and convenient for that agency to do so.

The ombudsman will also provide an outsourced alternative dispute resolution service, dealing with matters involving, for example, interstate and international commerce. As part of this facilitated dispute resolution function, the ombudsman may recommend that an alternative dispute resolution process be undertaken. The ombudsman may further advise parties to a dispute of relevant providers that may be able to independently perform the alternative dispute resolution process. To support the facilitation of early and cost-effective dispute resolution, the ombudsman may publicise the failure of a party to participate in a recommended alternative dispute resolution process. This approach is intended to incentivise parties to genuinely participate in an alternative dispute resolution process.

The ombudsman's alternative dispute resolution service will complement the concierge role and has been designed to work with, and not replace, existing systems across the Commonwealth, states and territories. The government does not want to complicate matters, nor create 'forum shopping' opportunities for the multiple handling of single concerns or grievances. This facilitated dispute resolution service will be underpinned by the Commonwealth's reach under the Constitution, and will be bound by the requirement that the ombudsman not duplicate the functions of existing agencies.

When used effectively, alternative dispute resolution services help improve business productivity, preserve business relationships, and avoid expensive litigation. It is important that the ombudsman facilitate, and not hinder, the timely resolution of disputes. The outsourced alternative dispute resolution service has been designed so that the ombudsman can help parties understand their options, but that any alternative dispute resolution process is conducted by an independent practitioner chosen by the parties. This separation will give everyone confidence in the independence and integrity of the ombudsman alternative dispute resolution service, and allow the ombudsman to advocate on broader matters relevant to small businesses and family enterprises.

Further to these functions, the ombudsman will also seamlessly link with the government's single access point for business information, services and assistance, which will form part of the government's Digital Transformation Agenda. It can be extremely frustrating for businesses to make sense of the often complex information and broad array of services on offer. Consequently, the ombudsman will direct people to information about accessing Commonwealth small business programs and assistance.

One area where the ombudsman will not undertake a formal role at this time is in relation to dispute resolution under the mandatory industry codes for franchising, horticulture and oil. Unfortunately the specific requirements under each code do not align with the operation of an ombudsman who is an advocate. However, the ombudsman will be able to receive such enquires regarding industry codes matters, and, through its concierge role, refer businesses to the mediation or dispute resolution adviser under each code. The success of this arrangement, as well as potential solutions to formally align the mandatory codes and any voluntary codes with the ombudsman, will be considered in the future. I anticipate that it will be considered before or as part of a review of the ombudsman assistance function. Under the bill, the first review must be completed not later than 30 June 2017.

This government listens to small businesses and family enterprises, and the bill is the result of extensive consultations. I take this opportunity to thank the wide range of stakeholders who participated and demonstrated great good will and interest in the various stages of the consultation process.

In particular, I would like to thank my ministerial counterparts in the states and territories, the state-based commissioners, Commonwealth agencies such as the Commonwealth Ombudsman and ACCC, as well as industry ombudsmen and others that currently provide dispute resolution or policy advocacy support to small business. The success of the ombudsman will depend on its relationships with these and other organisations. Their feedback has helped ensure that the bill will help these relationships grow and prosper, to the service and benefit of small businesses and family enterprises across Australia.

An Australian Small Business and Family Enterprise Ombudsman was first proposed by the coalition before the 2010 election. This bill is the latest step in a long standing coalition commitment to support and be the best advocate and ally of the small business community. Small businesses have waited a long time for this new role. That is why I am delighted to bring this bill to the House and commend it to my colleagues.

Debate adjourned.