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Australian Small Business and Family Enterprise Ombudsman Bill 2015 [and] Australian Small Business and Family Enterprise Ombudsman (Consequential and Transitional Provisions) Bill 2015



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ISSN 1328-8091

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BILLS DIGEST NO. 2, 2015-16 10 AUGUST 2015

Australian Small Business and Family Enterprise Ombudsman Bill 2015 [and] Australian Small Business and Family Enterprise Ombudsman (Consequential and Transitional Provisions) Bill 2015 Paula Pyburne Law and Bills Digest Section

Contents

Purpose of the Bill ............................................................... 3

Structure of the Bill ............................................................. 3

Background ......................................................................... 3

First consultation ..................................................................... 3

Second consultation ................................................................ 4

Committee consideration .................................................... 4

Selection of Bills Committee.................................................... 4

Senate Standing Committee for the Scrutiny of Bills .............. 4

Parliamentary Joint Committee on Human Rights .................. 4

Statement of Compatibility with Human Rights .................... 4

Policy position of non-government parties ........................... 4

Australian Labor Party ............................................................. 4

Australian Greens .................................................................... 5

Position of major interest groups ......................................... 5

Financial implications .......................................................... 6

Key issues and provisions..................................................... 6

Part 1—preliminary ............................................................. 6

Key issue—definition of small business ................................... 6

Variations in existing definition ............................................. 6

Stakeholder comments ......................................................... 7

Part 2—Australian Small Business and Family Enterprise Ombudsman ............................................................................ 8

Date introduced: 3 June 2015

House: House of Representatives

Portfolio: Treasury

Commencement: For the Australian Small Business and Family Enterprise Ombudsman Bill 2015 sections 1 and 2 on Royal Assent; all other provisions on the earlier of a single day to be fixed by Proclamation or six months after Royal Assent.

Links: The links to the Bills, their Explanatory Memoranda and second reading speeches can be found on the Bills’ home pages for the Australian Small

Business and Family Enterprise Ombudsman Bill 2015 and the Australian Small Business and Family Enterprise Ombudsman (Consequential and Transitional Provisions) Bill 2015, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website.

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Terms and conditions of appointment .................................. 8

Functions ............................................................................... 8

Relationship with the Minister .............................................. 9

Part 3—advocating for small business and family enterprises ............................................................................... 9

Ombudsman-initiated research and inquiries ....................... 9

Reporting and publishing .................................................. 10

Merits review .................................................................... 10

Inquiries referred by the Minister ....................................... 11

Reporting and publishing .................................................. 11

Providing advice to the Minister ......................................... 12

Reporting and publishing .................................................. 12

Other advocacy functions.................................................... 12

Reporting and publishing .................................................. 12

Ministerial discretion not to publish ................................. 12

Constitutional connection ................................................... 12

Part 4—assisting a small business or family enterprise ........ 13

Responding to requests for assistance ................................ 14

Decision not to provide assistance .................................... 14

Arrangements with other agencies ................................... 15

Assisting in a dispute ........................................................... 15

Stakeholder comments ..................................................... 16

Warning to parties to the dispute ..................................... 16

Gathering information about requests for assistance ........ 16

Part 5—General requirements .............................................. 17

Secrecy ................................................................................ 17

Consequential and Transitional Bill .................................... 17

Schedule 1 ............................................................................. 17

Functions of the Commonwealth Ombudsman .................. 17

Consequential and Transitional Bill ..................................... 17

Concluding comments ....................................................... 18

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Purpose of the Bill The purpose of the Australian Small Business and Family Enterprise Ombudsman Bill 2015 (the principal Bill) is to establish the Australian Small Business and Family Enterprise Ombudsman (the ASBFE Ombudsman) and to specify its powers and functions.

The Australian Small Business and Family Enterprise Ombudsman (Consequential and Transitional Provisions) Bill 2015 (Consequential and Transitional Bill) amends the Ombudsman Act 1976 to facilitate the transfer of complaints to the ASBFE Ombudsman from the Office of the Commonwealth Ombudsman in certain circumstances.1

Structure of the Bill The principal Bill contains five parts:

• Part 1 contains preliminary matters including the meanings of key terms

• Part 2 establishes the ASBFE Ombudsman, including the functions of the Ombudsman, provides for the appointment of the ASBFE Ombudsman and sets out the conditions on which persons will assist him or her

• Part 3 details the ASBFE Ombudsman’s advocacy function

• Part 4 sets out the manner in which the ASBFE Ombudsman is to respond to requests for assistance and

• Part 5 contains general requirements in relation to the concurrent operation of the Australian Small Business and Family Enterprise Ombudsman Act 2015 (when enacted) and state laws, secrecy, the review of decisions and other matters.

The Consequential and Transitional Bill contains two schedules:

• Schedule 1 contains consequential amendments to the Ombudsman Act for the transfer of complaints to the ASBFE Ombudsman and

• Schedule 2 contains relevant transitional provisions.

Background In the lead up to the September 2013 Federal election, Bruce Billson articulated the Coalition’s commitment to establish a Small Business Ombudsman if it was elected.2

Following that election, as Minister for Small Business, Mr Billson outlined his plans to:

… create a single entry point for small business to access Federal small business programmes and support, to contribute to making Commonwealth laws and regulations more small business friendly and as a “concierge” for dispute resolution. 3

First consultation Consistent with this stated commitment, on 30 April 2014 the Government published a discussion paper about the key responsibilities of the Ombudsman and invited public comment.4 Announcing the release of the discussion paper Mr Billson stated that the Ombudsman will be a:

• concierge for dispute resolution

• Commonwealth wide advocate for small businesses and family enterprises

• contributor to the development of small business friendly Commonwealth laws and regulations and

• single entry point agency through which Commonwealth assistance and information regarding small business can be accessed.5

1. Ombudsman Act 1976 (Cth), accessed 17 July 2015. 2. B Billson, The nation can’t afford Rudd’s cash splash on borrowed money, media release, 1 September 2013, accessed 30 July 2015. 3. B Billson (Minister for Small Business), Government outlines plans for small business and family enterprise ombudsman, media release, 18 October 2013, accessed 17 July 2015.

4. Treasury, Small business and family enterprise ombudsman, Discussion paper, Treasury website, 30 April 2014, accessed 30 July 2015.

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Second consultation Having settled on a model, the Government issued an Exposure Draft of its proposed legislation and, once again, invited comment from relevant stakeholders.6 The Bill reflects the outcome of those consultations.

Committee consideration Selection of Bills Committee On 18 June 2015 the Bills were referred to the Legal and Constitutional Affairs Legislation Committee (the Senate Committee) for inquiry and report by 11 August 2015.7

Senate Standing Committee for the Scrutiny of Bills On 17 June 2015, the Standing Committee for the Scrutiny of Bills drew attention to a number of matters in its report.8 The comments will be canvassed under the heading ‘Key issues and provisions’ below.

Parliamentary Joint Committee on Human Rights On 18 June 2015, the Parliamentary Joint Committee on Human Rights stated that the Bills ‘do not require additional comment as they promote human rights or contain justifiable limitations on human rights’.9

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill does not engage any of the applicable rights or freedoms and is therefore compatible.10

Policy position of non-government parties Australian Labor Party In October 2012, the then Gillard Government appointed Mark Brennan (formerly the Victorian Small Business Commissioner) as Australian Small Business Commissioner.11 It was considered that an important part of the role would be ‘working collaboratively across all levels of government to ensure services for small businesses are simple and easy to access’.12

Consistent with that action, the Australian Labor Party (Labor) has stated that it will support the Bills—with some reservation about the drafting of the sections of the principal Bill that go to the oversight and advocacy roles of the Ombudsman.13 These concerns are canvassed under the heading ‘Key issues and provisions’ below.

5. B Billson (Minister for Small Business), Government looks to make life easier for small business, media release, 30 April 2014, accessed 17 July 2015. 6. Treasury, Australian Small Business and Family Enterprise Ombudsman Bill 2015: Exposure Draft, Treasury website, 11 March 2015, accessed 30 July 2015. 7. Details of the terms of reference, submissions to the Committee and the final report (when published) are on the inquiry homepage, accessed

30 July 2015. 8. Standing Committee for the Scrutiny of Bills, Alert Digest No. 6 of 2015, The Senate, Canberra, 17 June 2015, pp. 12-15, accessed 30 July 2015. 9. Parliamentary Joint Committee on Human Rights, Twenty-third report of the 44th Parliament, The Senate, Canberra, 18 June 2015, p. 2,

accessed 31 July 2015. 10. The Statement of Compatibility with Human Rights can be found at page 113 of the Explanatory Memorandum to the Bill. 11. B O’Connor (Minister for Small Business), Mark Brennan appointed Australian Small Business Commissioner, media release, 17 October 2012,

accessed 17 July 2015. 12. B O’Connor (Minister for Small Business), First national Small Business Commissioner begins, media release, 2 January 2013, accessed 31 July 2015. 13. B Ripoll, ‘Second reading speech: Australian Small Business and Family Enterprise Ombudsman Bill 2015’, House of Representatives, Debates,

16 June 2015, p. 6420, accessed 31 July 2015.

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Australian Greens When the Australian Small Business Commissioner was appointed, the Australian Greens (the Greens) voiced their support for the position by introducing a Private Senator’s Bill into the Parliament14 which would ‘formalise the role of the Federal Small Business Commissioner in legislation’.15

Speaking on the introduction of the Small Business Commissioner Bill 2013, Senator Whish-Wilson expressed the view that:

The Small Business Commissioner must be more than a symbolic position, the Commissioner and their office must be empowered to be effective advocates for small business.

… the Australian Greens welcomed the decision of the Government in 2012 to appoint a Small Business Commissioner. However this does not go far enough—currently the Commissioner has no legislated role. It has no power to ensure it can be an effective broker between small and big business. At the moment the Commissioner and their office don’t have defined roles and responsibilities, the Commissioner can channel their office’s resources and energy in whatever direction they choose.

Therefore legislation for the office of the small business commissioner is crucial to ensuring roles are defined and the Commissioner has the power to be effective. 16

Given this stated position, it is likely that the Greens will support the Bills.

Position of major interest groups Submitters to the second consultation and to the Senate Committee were generally supportive of the intent of the Bill.17

Of major concern to some stakeholders, though, is the use of the term ‘Ombudsman’. The Australian and New Zealand Ombudsman Association (ANZOA) is the peak body for Ombudsmen in Australia and New Zealand.18 In 2010 ANZOA released a policy statement outlining the essential criteria for describing a body as an Ombudsman.19 In summary, ANZOA’s policy is that a body must:

• be independent—an ombudsman must not be subject to direction, and must not be, or be able to be perceived to be, an advocate for any group

• have a clearly defined jurisdiction

• have sufficient powers to investigate matters within its jurisdiction, both in relation to individual complaints and systemic issues

• be accessible

• afford procedural fairness—the actions of the ombudsman must not give rise to a reasonable apprehension of partiality, bias, or prejudgment and

• be accountable.20

According to the Energy and Water Ombudsman NSW:

14. Parliament of Australia, ‘Small Business Commissioner Bill 2013 homepage’, Australian Parliament website, accessed 31 July 2015. 15. P Whish-Wilson, Australian Greens introduce Bill to give Federal Small Business Commissioner some teeth, media release, 25 February 2013, accessed 31 July 2015. 16. P Whish-Wilson, ‘Second reading speech: Small Business Commissioner Bill 2013’, Senate, Debates, 25 February 2013, p. 750, accessed

31 July 2015. 17. Treasury, Submissions, Australian Small Business and Family Enterprise Ombudsman Bill 2015: Exposure Draft, Treasury website, 11 March 2015, accessed 17 July 2015. 18. Australian and New Zealand Ombudsman Association (ANZOA), ‘About ANZOA’, ANZOA website, accessed 20 July 2015. 19. Australian and New Zealand Ombudsman Association, Peak body seeks a halt to misuse of the term Ombudsman, media release, 18 May

2010, accessed 20 July 2015. 20. Commonwealth Ombudsman, Submission to the Legal and Constitutional Affairs Committee, Inquiry into the Australian Small Business and Family Enterprise Bill 2015, July 2015, accessed 31 July 2015.

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… the primary function of an Ombudsman is dispute resolution and an Ombudsman is required to be impartial to, and independent of, parties to a dispute. Therefore I do not believe that the ASBFEO performs an Ombudsman role within its secondary dispute resolution function or fulfils the essential requirements of impartiality and independence.

21

The Commonwealth Ombudsman and ANZOA agree with that assessment. 22 The Small Business Development Corporation added its strong opposition to the inclusion of the term ‘Ombudsman’ to identify the role.

Traditionally an Ombudsman acts to investigate maladministration by a public authority. It does not provide business advice and assistance in resolving business problems that are not “dispute related”. I am concerned that the use of the term Ombudsman may be problematic for small business operators, particularly those with a preconceived notion of what a “traditional” Ombudsman does.

23

There are two consequences of the perceived misuse of the Ombudsman title. The first is that it ‘could lead to confusion for the particular groups for which it is being established to serve and for the wider community’.24 The second is that ‘the suggested stretching of the concept of Ombudsman has the potential to diminish the Australian public’s confidence in the role and independence of the Ombudsman institution as a whole’.25

Financial implications According to the Explanatory Memorandum, funding of $8 million over four years was allocated in the 2014-15 Budget for the creation and ongoing expenses of the Ombudsman.26 The expenditure profile is:

2014-15 2015-16 2016-17 2017-18

$2.0m $2.0m $2.0m $2.0m

Key issues and provisions Part 1—preliminary Part 1 of the principal Bill contains the relevant definitions.

In particular, for the purposes of the principal Bill, a business is a small business at a particular time in a financial year (the current year) if it has fewer than 100 employees at that time; or either its revenue for the previous financial year is $5,000,000 or less, or if there was no time in the previous financial year when the business was carried on—its revenue for the current year is $5,000,000 or less.27

Key issue—definition of small business

Variations in existing definition There are a number of definitions used in current Commonwealth legislation to describe a ‘small business’. The key definition of small business used by the Australian Bureau of Statistics (ABS) is largely based on the number of employees, with a small business defined as an ‘actively trading business with 0-19 employees’.28

21. Energy and Water Ombudsman NSW, Submission to the Legal and Constitutional Affairs Committee, Inquiry into the Australian Small Business and Family Enterprise Bill 2015, 17 July 2015, accessed 31 July 2015. 22. Commonwealth Ombudsman, Submission to the Legal and Constitutional Affairs Committee, Inquiry into the Australian Small Business and Family Enterprise Bill 2015, op. cit; Australian and New Zealand Ombudsman Association, Submission to the Legal and Constitutional Affairs

Committee, Inquiry into the Australian Small Business and Family Enterprise Bill 2015, 15 July 2015, accessed 31 July 2015. 23. Small Business Development Corporation, Submission to the Legal and Constitutional Affairs Committee, Inquiry into the Australian Small Business and Family Enterprise Bill 2015, 14 July 2015, accessed 31 July 2015. 24. LEADR and IAMA, Submission to Treasury, Australian Small Business and Family Enterprise Ombudsman Bill: Exposure Draft, April 2015,

accessed 31 July 2015. 25. Commonwealth Ombudsman, Submission to the Legal and Constitutional Affairs Committee, Inquiry into the Australian Small Business and Family Enterprise Bill 2015, op. cit. 26. Explanatory Memorandum, Australian Small Business and Family Enterprise Ombudsman Bill 2015 [and] Australian Small Business and Family

Enterprise Ombudsman (Consequential and Transitional Provisions) Bill 2015, p. 4, accessed 5 August 2015 27. Clause 5 of the Australian Small Business and Family Enterprise Ombudsman Bill 2015. 28. Australian Bureau of Statistics (ABS), Small business in Australia, 2001, cat. no. 1321.0, ABS, Canberra, 23 October 2002, accessed 31 July

2015.

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Other Commonwealth statutes contain differing interpretations of the term such as:

• Privacy Act 1988—defines a small business as one whose annual turnover for the previous financial year is $3 million or less29

• Australian Securities and Investments Commission Act 2001—defines a small business as a business employing fewer than 100 people if the business is, or includes, the manufacture of goods, or a business employing fewer than 20 people otherwise,30 and

• Fair Work Act 2009—defines a small business employer as an employer with fewer than 15 employees.31

The definition in the Bill of family enterprise encompasses any small business that is operated as a family enterprise.32

The table below indicates the number of small business in Australia based on Australian Bureau of Statistics data.

Counts of business by employment size as at 30 June—2010 to 2014

2010 2011 2012 2013 2014 % change % change

2013 to

2014

Annual average 2010 to 2014

Non-employing

1,303,040 1,306,023 1,306,093 1,264,298 1,273,769 0.7 -0.6

1-4 employees

580,177 581,741 582,719 563,412 571,176 1.4 -0.4

5-19 employees

189,023 191,812 198,340 197,412 199,915 1.3 1.4

Total employing small businesses

769,200 773,553 781,059 760,824 771,091 1.3 0.1

Total Small business

2,072,240 2,079,576 2,087,152 2,025,122 2,044,860 1.0 -0.3

Total Businesses

2,124,650 2,132,412 2,141,280 2,079,666 2,100,162 1.0 -0.3

Small business % of all businesses

97.5 97.5 97.5 97.4 97.4

Source: Australian Bureau of Statistics (ABS), Counts of Australian businesses, including entries and exits, June 2010 to June 2014, cat. no. 8165.0, ABS, Canberra, Table 13—Businesses by employment size ranges: June 2010 to June 2014, p. 21, accessed 20 July 2015.

Stakeholder comments Some stakeholders believe that ‘this definition [in the Bill] is appropriate’—particularly because it includes ‘those small businesses with high numbers of casual employees, such as hotels and clubs, which would be excluded by a lower employee threshold’.33

29. Privacy Act 1988, section 6D, accessed 20 July 2015. 30. Australian Securities and Investments Commission Act 2001, subsection 12BC(2), accessed 31 July 2015. 31. Fair Work Act 2009, subsection 23(1), accessed 31 July 2015. 32. Clause 6 of the Australian Small Business and Family Enterprise Ombudsman Bill 2015.

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However, the Department of Finance noted that ‘there are already many definitions of small business used within the Australian Government and the one proposed in the legislation is not consistent with any of the current ones’ and that ‘yet another definition of small business will only add to the confusion and require constant explanation of which definition is being used’.34

According to the Australian Bankers’ Association:

… the current definition is broader and inconsistent with existing accepted definitions for example those used by the Treasury, the Australian Taxation Office (ATO) and other government agencies within Australia and included in financial services legislation. The broader definition has the potential to create significant confusion and uncertainty across administrative, operational and regulatory boundaries.

35

Part 2—Australian Small Business and Family Enterprise Ombudsman

Terms and conditions of appointment The principal Bill establishes the Australian Small Business and Family Enterprise Ombudsman (ASBFE Ombudsman).36

The ASBFE Ombudsman is appointed by the Governor-General by written instrument for a term of not more than five years. However, there is no legal impediment to a reappointment. The Minister must be satisfied that the person who is appointed as ASBFE Ombudsman has suitable qualifications or experience and is of good character.37

Other elements of the appointment are:

• the remuneration of the ASBFE Ombudsman is determined by the Remuneration Tribunal38

• the ASBFE Ombudsman may resign his, or her, appointment by giving the Minister a written resignation39

• the Minister may terminate the appointment of the Ombudsman for a number of reasons40 including, but not limited to misbehaviour or for failing, without reasonable excuse, to comply with the duty to disclose interests within the Public Governance, Performance and Accountability Act 201341

• the ASBFE Ombudsman’s staff are persons engaged under the Public Service Act 199942 and are made available by the Secretary of the Treasury43 and

• the Treasury Secretary may engage consultants to assist in carrying out the Ombudsman’s functions.44

Functions Broadly speaking, the functions of the ASBFE Ombudsman are to advocate for small businesses and family enterprises in relation to relevant legislation, policies and practices and to give assistance in relation to relevant actions if requested to do so.45

33. Law Council of Australia (Business Law Section), Submission to Treasury, Australian Small Business and Family Enterprise Ombudsman Bill: Exposure Draft, 10 April 2015, p. 2. The Motor Trades Association of Queensland also supported the definition. Motor Trades Association of Queensland, Submission to Treasury, Australian Small Business and Family Enterprise Ombudsman Bill: Exposure Draft, 7 April 2015, p. 2, accessed 31 July 2015.

34. Department of Finance (Procurement Policy Branch, Technology and Procurement Division), Submission to Treasury, Australian Small Business and Family Enterprise Ombudsman Bill: Exposure Draft, 10 April 2015, accessed 31 July 2015. 35. Australian Bankers’ Association, Submission to Treasury, Australian Small Business and Family Enterprise Ombudsman Bill: Exposure Draft, 7 April 2015, paragraph 2.1, accessed 31 July 2015. 36. Clause 12 of the Australian Small Business and Family Enterprise Ombudsman Bill. 37. Clause 24 of the Australian Small Business and Family Enterprise Ombudsman Bill. 38. Subclause 25(1) of the Australian Small Business and Family Enterprise Ombudsman Bill. 39. Subclause 28(1) of the Australian Small Business and Family Enterprise Ombudsman Bill. 40. Clause 30 of the Australian Small Business and Family Enterprise Ombudsman Bill. 41. Public Governance, Performance and Accountability Act 2013, accessed 17 July 2015. 42. Public Service Act 1999, accessed 17 July 2015. 43. Clause 33 of the Australian Small Business and Family Enterprise Ombudsman Bill. 44. Clause 34 of the Australian Small Business and Family Enterprise Ombudsman Bill.

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The ASBFE Ombudsman is to perform these functions in the most convenient and effective way possible— although the principal Bill is silent as to the matters to which the ASBFE Ombudsman may have regard in determining what is ‘convenient and effective’.46 In addition he, or she, must avoid duplicating the operations of any other agency of the Commonwealth, a state or a territory that performs an overlapping function and work co-operatively with other agencies of the Commonwealth, the states and the territories.47

Relationship with the Minister The Minister may, by legislative instrument, give directions to the ASBFE Ombudsman about the performance of his, or her, functions and the ASBFE Ombudsman must comply with those directions.48 Such a legislative instrument is not disallowable. In addition, the Minister may give the ASBFE Ombudsman a direction (which must be complied with) to provide him, or her, with specified reports about the ASBFE Ombudsman’s functions. 49

Part 3—advocating for small business and family enterprises The ASBFE Ombudsman’s advocacy function is detailed in Part 3 of the principal Bill and comprises a number of aspects including:

• research and inquiry undertaken on the ASBFE Ombudsman’s own initiative

• inquiry by the ASBFE Ombudsman on a matter which is referred by the Minister

• advice by the ASBFE Ombudsman to the Minister about the effect of legislation, policies and practices and the way in which they might be improved at the request of the Minister and

• review by the ASBFE Ombudsman of proposed legislation, policies and practices to determine its effect on small businesses and family enterprises if the proposal is carried out; and ways in which it might be improved.

Ombudsman-initiated research and inquiries It is open to the ASBFE Ombudsman to conduct research or make inquiries into the effect of certain legislation, policies and practices on small businesses or family enterprises (or a class of small businesses or family enterprises) and the ways in which they might be improved.50

In undertaking such research or inquiry, the ASBFE Ombudsman is empowered to serve a person with a written notice requiring the person to provide specified information or documents within a period of not less than 10 business days, if the ASBFE Ombudsman reasonably believes that the person has, or could take reasonable steps to obtain, the specified information or documents.51

A person who is served a notice under this section must comply with it. A failure to do so gives rise to a maximum penalty of 30 penalty units. 52 It is a defence that the person does not have the information or document required and he, or she, has taken all reasonable steps available to obtain it but has not be able to do so. 53 Where documents are produced in relation to Ombudsman-initiated research or inquiry the ASBFE Ombudsman may copy the documents, take extracts from them, or keep possession of them for as long as is necessary for the purposes of the research or inquiry to which they relate.54

45. Clause 13 of the Australian Small Business and Family Enterprise Ombudsman Bill. 46. Paragraph 16(a) of the Australian Small Business and Family Enterprise Ombudsman Bill. 47. Clause 8 of the Australian Small Business and Family Enterprise Ombudsman Bill provides a formal definition of the term agency of the Commonwealth, a state or a territory. 48. Clause 20 of the Australian Small Business and Family Enterprise Ombudsman Bill. 49. Clause 21 of the Australian Small Business and Family Enterprise Ombudsman Bill. 50. Clause 36 of the Australian Small Business and Family Enterprise Ombudsman Bill. 51. Under section 28A of the Acts Interpretation Act 1901, the terms ‘serve’, ‘give’ and ‘send’ have the same meaning.

52. Under section 4AA of the Crimes Act 1914 a penalty unit is equivalent to $180 with effect from 31 July 2015. This means that the maximum penalty is $5,400. 53. Subclause 37(5) of the Australian Small Business and Family Enterprise Ombudsman Bill. 54. Clause 38 of the Australian Small Business and Family Enterprise Ombudsman Bill.

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Reporting and publishing The Bill sets out the reporting requirements for the ASBFE Ombudsman in relation to an Ombudsman-initiated inquiry.55 The Minister is authorised to publish the ASBFE Ombudsman’s report—or any part of that report—in any way he, or she, thinks fit.56 Before doing so, however, the Minister must consider whether the publication of any of the information in the report, or a recommendation of the report would be likely to adversely affect the interests of any person. In that case, the Minister must direct the Ombudsman to notify the person about the relevant information or recommendation and to give the person a reasonable period (not exceeding 30 days) to make representations, either orally or in writing, about the publication of that material.57

The Minister must take those representations into account before publishing all or part of the report. To that end the Minister may delete any information or recommendation from the report if he, or she, is satisfied that its publication would be likely to adversely affect the interests of any person and the Minister reasonably believes that it is in the public interest to do so.58

In addition, the Minister must delete from the report any confidential information. For the purposes of the Bill, information is confidential if the decision-maker is satisfied that the disclosure of the information in the way proposed would cause undue distress or embarrassment to a person, that the information is commercial-in-confidence or that disclosure of the information in the way proposed would be contrary to the public interest.59 The decision about whether information is commercial-in-confidence requires a decision-maker to be satisfied about all of the following:

• the disclosure of the information could unreasonably affect the person, or a business or action related to the person, in an adverse manner

• the information is not in the public domain

• the information is not required to be disclosed under another law of the Commonwealth, a state or a territory and

• the information is not readily discoverable.60

Merits review A decision by the Minister that it is not in the public interest to delete information or a recommendation from a report before the report is published is subject to review by the Administrative Appeals Tribunal (AAT).61

The Scrutiny of Bills Committee noted that the relevant provision encompasses a decision which is comprised of two elements. The first is that the information or recommendation would be ‘likely to adversely affect the interests of any persons’. The second is that the Minister reasonably believes that it is in the public interest to delete the information or recommendation’. The Scrutiny of Bills Committee has sought the Minister’s clarification as to whether both elements of this decision may be challenged in an appeal to the AAT.62 At the time of writing this Bills Digest a reply from the Minister had not been published.

Importantly, the decision by the Minister that information is not to be treated as confidential information is also reviewable by the AAT.63

55. Clause 40 of the Australian Small Business and Family Enterprise Ombudsman Bill. 56. Subclause 41(1) of the Australian Small Business and Family Enterprise Ombudsman Bill. 57. Subclause 41(2) of the Australian Small Business and Family Enterprise Ombudsman Bill. 58. Subclause 41(3) of the Australian Small Business and Family Enterprise Ombudsman Bill. Note that under clause 92 of the Australian Small

Business and Family Enterprise Ombudsman Bill a decision that it is not in the public interest to delete information or a recommendation from a report before the report is published is subject to review by the Administrative Appeals Tribunal. 59. Subclause 9(1) of the Australian Small Business and Family Enterprise Ombudsman Bill. Note that clause 92 of the Australian Small Business and Family Enterprise Ombudsman Bill provides that a decision that information is not to be treated as confidential information is subject to

review by the Administrative Appeals Tribunal. 60. Subclause 9(2) of the Australian Small Business and Family Enterprise Ombudsman Bill. 61. Paragraph 92(b) of the Australian Small Business and Family Enterprise Ombudsman Bill. 62. Standing Committee for the Scrutiny of Bills, Alert Digest No. 6 of 2015, op. cit., p. 12. 63. Paragraph 92(a) of the Australian Small Business and Family Enterprise Ombudsman Bill.

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Inquiries referred by the Minister The Minister may refer matters to the ASBFE Ombudsman for inquiry.64 These matters relate to the effect of certain legislation, policies and practices on small businesses or family enterprises (or a class of small businesses or family enterprises) and the ways in which they might be improved. In that case, the Minister may require the ASBFE Ombudsman to do any, or all, of the following:

• to hold hearings for the purposes of the inquiry

• to submit, his or her, report to the Minister within a specified time

• to make a draft report available to the public during an inquiry and

• to make recommendations in relation to the matter.65

The ASBFE Ombudsman must comply with such a requirement imposed by the Minister.66

The Bill contains the rules to be followed by the ASBFE Ombudsman in relation to the conduct of a formal inquiry into a matter following a referral by the Minister.67 In particular, the Bill sets out the requirement for persons to provide information and documents when given a notice to do so by the ASBFE Ombudsman,68 the power of the ASBFE Ombudsman to summon a person to appear at a hearing and to give evidence and/or produce documents69 and the requirement on a person who is a witness at a hearing to answer a question as required by the ASBFE Ombudsman and to produce a document as required by a summons.70 In each of those instances, a failure to comply with the relevant requirement gives rise to a maximum penalty of 30 penalty units.71

Where the ASBFE Ombudsman is undertaking an inquiry which has been referred by the Minister he, or she, may direct that all or part of a hearing take place in private.72 However, the ASBFE Ombudsman must make available to the public the contents of written evidence or documents which have been produced in connection with the inquiry—provided that any confidential information has been deleted.73

Given the breadth of the power to conduct inquiries, including to summon witnesses and to pay them allowances and expenses, the annual $2 million budget which has been allocated to the ASBFE Ombudsman may not be sufficient.

Reporting and publishing Where the Minister has referred a matter to the ASBFE Ombudsman for inquiry, the ASBFE Ombudsman must provide a written report to the Minister on the matter74 and in most cases the Minister must table the report in each House of Parliament within 25 sitting days after the Minister receives it. (The Ombudsman may recommend that the tabling of the report be delayed for a specified period—in which case the Minister must table the report within 25 days from the end of that period.)75 The Bill provides for information or opinions to be deleted from the report before it is tabled if the information or opinion would be likely to adversely affect the interests of any person and the Minister reasonably believes that it is in the public interest to delete the information or opinion. In addition, the Minister must delete any confidential information from the report.76

64. Subclause 42(1) of the Australian Small Business and Family Enterprise Ombudsman Bill. 65. Subclause 42(2) of the Australian Small Business and Family Enterprise Ombudsman Bill. 66. Subclause 42(3) of the Australian Small Business and Family Enterprise Ombudsman Bill. 67. Clauses 43-54 of the Australian Small Business and Family Enterprise Ombudsman Bill. 68. Clause 47 of the Australian Small Business and Family Enterprise Ombudsman Bill. 69. Clause 48 of the Australian Small Business and Family Enterprise Ombudsman Bill. 70. Clause 49 of the Australian Small Business and Family Enterprise Ombudsman Bill. 71. Subclauses 47(4), 48(2) and 49(1) of the Australian Small Business and Family Enterprise Ombudsman Bill. 72. Subclause 46(2) and clause 52 of the Australian Small Business and Family Enterprise Ombudsman Bill. 73. Clause 53 of the Australian Small Business and Family Enterprise Ombudsman Bill. 74. Clause 55 of the Australian Small Business and Family Enterprise Ombudsman Bill. 75. Subclause 56(1) of the Australian Small Business and Family Enterprise Ombudsman Bill. 76. Clause 56 of the Australian Small Business and Family Enterprise Ombudsman Bill. Note that clause 92 of the Australian Small Business and

Family Enterprise Ombudsman Bill provides that a decision that it is not in the public interest to delete information or a recommendation from a report before the report is tabled is subject to review by the Administrative Appeals Tribunal.

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Providing advice to the Minister The third aspect of the advocacy function is that the Minister may refer matters to the ASBFE Ombudsman for advice. Those matters relate to the effect of certain legislation, policies and practices on small businesses or family enterprises (or a class of small businesses or family enterprises) and the way in which it might be improved.77 Any referral by the Minister may set out the period within which the advice is to be given by the ASBFE Ombudsman78 and may specify any matter to which the ASBFE Ombudsman must have regard in giving the advice.79

Reporting and publishing Once the ASBFE Ombudsman has given the requested advice to the Minister, it may be published in any way the Minister thinks fit. As with the right to publish other material which is produced in relation to the ASBFE Ombudsman’s advocacy function, the Bill provides that the Minister may delete any information or opinion from the advice if it would be likely to adversely affect the interests of any person and the Minister reasonably believes that it is in the public interest to delete the information or opinion. In addition, the Minister must delete any confidential information from the advice.80

Other advocacy functions Another aspect of the ASBFE Ombudsman’s advocacy function relates to the review of a proposal for relevant legislation, policies and practices, or to change relevant legislation, policies and practices, to determine its effect on small businesses and family enterprises if the proposal is carried out; and ways in which it might be improved. This may occur either on the ASBFE Ombudsman’s own initiative or on referral by the Minister.81

Reporting and publishing Once the ASBFE Ombudsman has given the relevant advice to the Minister, it may be published in any way the Minister thinks fit—subject to the same rights of the Minister to delete information or opinion which would be likely to adversely affect the interests of any person where the Minister reasonably believes that it is in the public interest to do so and to delete any confidential information from the advice.

Ministerial discretion not to publish The Law Council is critical of the provisions of the Bill which give the Minister the discretion not to publish a report prepared by the ASBFE Ombudsman as set out in the paragraphs above, stating that ‘it would be more appropriate for the legislation to place an obligation on the Minister to publish all Ombudsman reports within a reasonable period of time’.82

Constitutional connection The Constitution divides legislative authority in Australia between the federal and state governments. The Commonwealth is responsible for making laws about the matters allocated to it in the Constitution—primarily in sections 51 and 52—although there are other relevant sections. 83 If the matter is not one which has been allocated to the Commonwealth under the Constitution, then it is for the states to legislate. Currently some, but not all, of the states have passed legislation to establish Small Business Commissioners to assist small businesses operating within that state.84

77. Subclause 57(1) of the Australian Small Business and Family Enterprise Ombudsman Bill. 78. Paragraph 57(2)(b) of the Australian Small Business and Family Enterprise Ombudsman Bill. 79. Paragraph 57(2)(c) of the Australian Small Business and Family Enterprise Ombudsman Bill. 80. Subclause 58(3) of the Australian Small Business and Family Enterprise Ombudsman Bill. 81. Subclauses 62(1) and (2) of the Australian Small Business and Family Enterprise Ombudsman Bill. 82. Law Council of Australia, Submission to Treasury, Australian Small Business and Family Enterprise Ombudsman Bill: Exposure Draft, 10 April

2015, p. 3, accessed 29 July 2015. 83. Commonwealth of Australia Constitution Act, accessed 17 July 2015. 84. For example: Small Business Commissioner Act 2013 (NSW); Small Business Commissioner Act 2003 (Vic); Small Business Commissioner Act

2011 (SA).

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The advocacy function of the ASBFE Ombudsman under the principal Bill is linked to certain types of past, present or proposed legislation, policies and practices which are prescribed in the principal Bill.85 The relevant of legislation, policies and practices are based on the following:

• the exclusive power of the Parliament to make laws about the Commonwealth public service: subsection 52(ii)

• the power to make laws in respect of the territories: section 122

• the corporations power: section 51(xx)

• the trade or commerce power: section 51(i)

• the insurance power: section 51(xiv)

• the banking power: section 51(xiii)

• the telecommunications power: section 51(v) and

• the power to make laws about copyright, patents, designs or trade marks: section 51(xviii).86

Importantly, the research and inquiry powers provided to the Ombudsman in Part 3 (as well as Part 4) of the Bill are limited so as not to ‘impair the capacity of a state to exercise its constitutional powers’.87

Part 4—assisting a small business or family enterprise The other function of the ASBFE Ombudsman is the assistance function. Part 4 of the principal Bill sets out the manner in which the ASBFE Ombudsman is to respond to a request for assistance in relation to a relevant action. The constitutional connection to relevant action is defined in Part 4. It is based on the same constitutional powers that underpin Part 3.

Restaurant and Catering Australia has expressed its concern that:

… the legislated powers of the ASBFE Ombudsman will severely restrict its ability to assist a majority of small business operators in the hospitality industry, given that [the ASBFE Ombudsman] cannot intervene in cases where no one party is an incorporated body. 88

This is not quite correct. The principal Bill is framed so that the ASBFE Ombudsman would have jurisdiction where both parties were unincorporated, if for instance, the relevant action related to trade and commerce and the parties were located in different states, or if one was located in a state and the other was located in a territory. However, given the limitations in the power of the Commonwealth to legislate under the Constitution, it is inevitable that there may be some gaps in coverage.

The Law Council of Australia argues that as small businesses in jurisdictions without a Small Business Commissioner may have access to fewer protections, an option may be to amend the principal Bill to extend the definition of relevant actions to include ‘any entity engaged in trade or commerce within the meaning of the Competition and Consumer Act 2010’.89

85. Clause 35 of the Australian Small Business and Family Enterprise Ombudsman Bill. 86. The combination of powers listed ‘plus the Constitution’s nationhood power provide the necessary connection between the Ombudsman’s functions and the Constitution. Explanatory Memorandum, Australian Small Business and Family Enterprise Ombudsman Bill 2015 [and] Australian Small Business and Family Enterprise Ombudsman (Consequential and Transitional Provisions) Bill 2015, p. 13. A ‘nationhood’

power is not explicitly referred to in the text of the Constitution, nor is it obviously apparent in its structure. Rather in Attorney-General (Vic); Ex rel Dale v Commonwealth (1945) 71 CLR 237 (the Pharmaceutical Benefits case) both Dixon and Starke JJ referred to the ‘nationhood power’ as a determinant of the extent of Commonwealth appropriation and spending power by articulating the powers under sections 81, 83, 61 and 51(xxxix) of the Constitution. Source: J Steffanoni, Constitutional interpretation: the nationhood power of the Executive, accessed 23 July 2015. 87. Clauses 39, 54 and 78 of the Australian Small Business and Family Enterprise Ombudsman Bill. 88. Restaurant and Catering Australia, Submission to Treasury, Australian Small Business and Family Enterprise Ombudsman Bill: Exposure Draft,

7 April 2015, p. 2, accessed 31 July 2015. 89. Law Council of Australia (Business Law Section), Submission to Treasury, Australian Small Business and Family Enterprise Ombudsman Bill: Exposure Draft, op. cit., p. 4.

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Responding to requests for assistance The Bill provides that any person may request assistance from the ASBFE Ombudsman in relation to a relevant action. That request may be made either orally or in writing.90 Where the request is made in writing it is a formal request.

Decision not to provide assistance There are three circumstances in which the ASBFE Ombudsman does not provide assistance to a person who requests it. First, the ASBFE Ombudsman is not authorised to deal with a request for assistance in any of the following circumstances:

• the request for assistance does not relate to a relevant action

• the action is taken by a Minister of the Commonwealth, or of a state or a territory

• the action is taken by an agency of a state or a territory

• the action is an order, direction or decision by a judge, justice or magistrate of a federal, state or territory court or a member of a tribunal

• the action is taken by an officer of such a court or a tribunal exercising powers of the court or tribunal

• the action is taken as part of proceedings of a Parliament, parliamentary committee, or commission or inquiry under a law of the Commonwealth, or of a state or a territory

• the action consists of enforcement of a judgment or order of a court or tribunal.91

Second, the ASBFE Ombudsman may decide not to give assistance in response to a request where, for instance, he, or she, reasonably believes that the request is frivolous or vexatious or is not made in good faith.92 In any event, where the request for assistance was a formal request, the ASBFE Ombudsman must give the person making the request a notice in writing setting out the reasons for not providing the requested assistance.93

Third, the ASBFE Ombudsman must not give assistance in response to a request, or in relation to an aspect of a request if he, or she, reasonably believes that the request for assistance could have been made to another agency of the Commonwealth, a state or a territory which could have more conveniently or effectively dealt with it—and that agency has the legal power to deal with the request.94

In order to make that decision, the ASBFE Ombudsman must consult with the other agency. Having decided that the other agency could have more conveniently or effectively dealt with the request for assistance, the ASBFE Ombudsman must transfer the request (along with any information and documents relating to the request) to that agency as soon as is reasonably practicable.95 The ASBFE Ombudsman must also notify the person who made the request that it has been transferred.

The effect of the transfer is that the request is taken to have been made to the other agency under the law of the Commonwealth, state or territory under which the other agency operates and to have complied with any manner and form requirements for lodging a request for assistance with that agency.96

This, then, is the basis for the ‘concierge role’ to which the Minister for Small Business has referred.97 It may be a source of frustration or confusion for some persons whose request for assistance is passed on to another body. Speaking about the Bills, Labor MP Bernie Ripoll drew attention to this potential problem stating:

The last thing a small business would want when it has sought assistance from the Ombudsman on a matter between the small business and another Commonwealth agency is for the matter to be simply referred on to

90. Clause 66 of the Australian Small Business and Family Enterprise Ombudsman Bill. 91. Subclause 67(2) of the Australian Small Business and Family Enterprise Ombudsman Bill. 92. Paragraph 68(1)(b) of the Australian Small Business and Family Enterprise Ombudsman Bill. 93. Subclauses 67(3) and 68(2) of the Australian Small Business and Family Enterprise Ombudsman Bill. 94. Subclauses 69(1) and (2) of the Australian Small Business and Family Enterprise Ombudsman Bill. 95. Subclauses 69(4) and (5) of the Australian Small Business and Family Enterprise Ombudsman Bill. 96. Subclause 69(7) of the Australian Small Business and Family Enterprise Ombudsman Bill. 97. B Billson (Minister for Small Business), ‘Second reading speech: Australian Small Business and Family Enterprise Ombudsman Bill 2015’, House

of Representatives, Debates, 3 June 2015, p. 5630, accessed 31 July 2015.

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another government agency and not dealt with effectively or resolved. There is a view that this could compromise the independence and impartiality of the office of the Small Business and Family Enterprise Ombudsman as a true advocate for small business. Labor would seek clarification on this from the Minister. 98

The Law Council of Australia acknowledges that the ASBFE Ombudsman should have a broad discretion to decide which complaints it will attempt to resolve. However, it argues that complaints from trade associations and other small business associations should be handled by the Ombudsman in all but exceptional circumstances. The rationale for this view is that small business complaints which have been referred by a trade association and small business association are likely to raise more serious and wide-ranging issues.

To that end the Law Council of Australia:

… believes that the Bill should be amended to state that the Ombudsman has an obligation to deal with all complaints made to it by trade associations and small business associations … unless the trade association or small business association agrees that a referral is appropriate. 99

Arrangements with other agencies In order to facilitate the process of transferring a request for assistance to another agency, the ASBFE Ombudsman may enter into an arrangement with the other agency.100 The Law Council of Australia considers that this ‘should be by way of Memoranda of Understanding with relevant regulators to formalise the referral process [and they] should include a timeframe for the regulator to assess and respond to the referral’.101

Small Business Commissioners from some states have expressed their concern about the ‘potential for overlap and confusion between the function of the Ombudsman and the State-based Small Business Commissioners’.102 In particular the Small Business Commissioner for South Australia (SASBC) recommends that:

… the Bill be amended to prevent such overlap and clearly distinguish between the functions of these bodies. Alternatively, at the least a Memorandum of Understanding should be developed between the Ombudsman and SASBC at a very early stage to ensure clarity for small business and this should be referenced in the Bill. 103

Similarly the Small Business Commissioner for Western Australia considers that there is a ‘need for further clarification in relation to areas of clear State responsibility, especially regarding retail lease enquiries and disputes’ and that the Bill should explicitly name those classes of disputes which are the jurisdiction of the Small Business Commissioners.104

Assisting in a dispute Where a person requests assistance in a dispute in relation to a relevant action, the ASBFE Ombudsman may make recommendations about how the dispute may be managed, including that the parties to the dispute should take part in an alternative dispute resolution process.105 To that end, the ASBFE Ombudsman may recommend that the alternative dispute resolution process be conducted by one or more of a group of persons who are drawn from the list of providers which he, or she, has published.106 There is no power in the Bill for the ASBFE Ombudsman, a delegate or person assisting him, or her, to conduct the alternative dispute resolution process.107

98. B Ripoll, ‘Second reading speech: Australian Small Business and Family Enterprise Ombudsman Bill 2015’, op. cit. 99. Law Council of Australia (Business Law Section), Submission to Treasury, Australian Small Business and Family Enterprise Ombudsman Bill: Exposure Draft, op. cit., p. 4. 100. Clause 70 of the Australian Small Business and Family Enterprise Ombudsman Bill. 101. Law Council of Australia (Business Law Section), Submission to Treasury, Australian Small Business and Family Enterprise Ombudsman Bill:

Exposure Draft, op. cit., p. 5. 102. Small Business Commissioner South Australia, Submission to the Legal and Constitutional Affairs Committee, Inquiry into the Australian Small Business and Family Enterprise Ombudsman Bill 2015, 7 July 2015, accessed 20 July 2015. 103. Ibid. 104. Small Business Development Corporation, Submission to the Legal and Constitutional Affairs Committee, Inquiry into the Australian Small

Business and Family Enterprise Ombudsman Bill 2015, 10 April 2015, p. 2, accessed 29 July 2015. 105. Subclause 71(1) and paragraph 71(2)(a) of the Australian Small Business and Family Enterprise Ombudsman Bill. 106. Paragraph 71(2)(b) and clause 72 of the Australian Small Business and Family Enterprise Ombudsman Bill. 107. Subclause 73(2) of the Australian Small Business and Family Enterprise Ombudsman Bill.

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The ASBFE Ombudsman must not recommend a group of alternative dispute resolution providers unless he, or she, has a reasonable belief that those providers are best suited to assist the parties in the dispute having regard to:

• the qualifications and experience of the providers

• the convenience of the parties in accessing assistance by the providers and

• the cost to the parties in accessing assistance by the providers.108

Stakeholder comments The submission by Independent Contractors Australia to the Senate Committee sums up the position of small business as follows:

In contractual undertakings between small business people and large businesses or government entities there is an imbalance of power. This occurs for a simple reason—namely, that in a dispute the small businessperson generally cannot afford the legal expense of asserting his or her commercial contractual rights. That is, no matter what the rights or wrongs of a situation may be, the larger party can win because it can afford to apply legal muscle where the small businessperson cannot.

109

In this context, Independent Contractors Australia has noted that the Bill does not guarantee low-cost mediation and that this compares poorly with the mediation services offered by Small Business Commissioners in the states. 110 The Australian Motor Industry Federation echoed the need for ‘time and cost efficient’ mediation that recognises the ‘potential disparity between parties’, citing the example of a small business that recently ‘had to endure 1.5 years and $80,000 in legal costs before arriving at an outcome’.111

Warning to parties to the dispute Where the ASBFE Ombudsman recommends an alternative dispute resolution process he, or she, must give a written notice to the parties to the dispute to that effect. That notice must include a warning that should the parties fail to undertake an alternative dispute resolution process, or withdraw from the process, the ASBFE Ombudsman may publicise that fact.112 According to the Explanatory Memorandum ‘the “name and shame” powers were considered to provide the right balance to encourage parties to participate in the process, but not so punitive that small businesses would be discouraged approach the Ombudsman’.113

Gathering information about requests for assistance The Bill empowers the ASBFE Ombudsman to make inquiries for the purpose of carrying out the assistance function under Part 4.114 To that end, the ASBFE Ombudsman has powers, equivalent to those in Part 3 of the principal Bill to serve a person with a written notice requiring the person to provide specified information or documents within a period of not less than ten business days, if the ASBFE Ombudsman reasonably believes that the person has, or could take reasonable steps to obtain, the specified information or documents.115

A person who is served with a notice under this section must comply with it. A failure to do gives rise to a maximum penalty of 30 penalty units. 116 However, a person is not liable for the penalty if the person does not have the information or document required and he, or she, has taken all reasonable steps available to obtain it

108. Subclause 71(3) of the Australian Small Business and Family Enterprise Ombudsman Bill. 109. Independent Contractors Australia, Submission to the Legal and Constitutional Affairs Committee, Inquiry into the Australian Small Business and Family Enterprise Ombudsman Bill 2015, 16 July 2015, p. 1, accessed 29 July 2015.

110. Ibid., pp. 3, 5. 111. Australian Motor Industry Federation, Submission to Treasury, Australian Small Business and Family Enterprise Ombudsman Bill: Exposure Draft, 10 April 2015, p. 2, accessed 31 July 2015.

112. Subclause 71(5) and clause 74 of the Australian Small Business and Family Enterprise Ombudsman Bill. Note that clause 92 of the Australian Small Business and Family Enterprise Ombudsman Bill provides that a decision to publicise that a party to a dispute has refused to engage in, or has withdrawn from, an alternative dispute resolution process is subject to review by the Administrative Appeals Tribunal. 113. Explanatory Memorandum, Australian Small Business and Family Enterprise Ombudsman Bill 2015 [and] Australian Small Business and Family

Enterprise Ombudsman (Consequential and Transitional Provisions) Bill 2015, p. 73. 114. Clause 75 of the Australian Small Business and Family Enterprise Ombudsman Bill. 115. Clause 76 of the Australian Small Business and Family Enterprise Ombudsman Bill. 116. Under section 4AA of the Crimes Act 1914 a penalty unit is equivalent to $180 with effect from 31 July 2015. This means that the maximum

penalty is $5,400.

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but has not be able to do so.117 Where documents are produced or given to the ASBFE Ombudsman in response to the written notice he, or she, may copy the documents, take extracts from them, or keep possession of them for as long as is necessary for the purposes of the inquiry to which they relate.118

Part 5—General requirements

Secrecy Part 5 of the Bill contains provisions which relate to secrecy and the disclosure of protected information in certain circumstances.119 For the purposes of the Bill, protected information is information that is disclosed to, or obtained by, a person in his or her capacity as a person assisting small business/family enterprise and relates to the affairs of a person (other than a person assisting small business/family enterprise).120

A person commits an offence if protected information has been disclosed to, or obtained by, the person in his or her capacity as a person assisting small business/family enterprise and the person discloses the information to another person or uses the information. The maximum penalty for the offence is imprisonment for two years or 120 penalty units, or both.121

The Bill sets out two exceptions to the prohibition. The first exception is where the disclosure or use is authorised by a provision of the Australian Small Business and Family Enterprise Ombudsman Act or a legislative instrument under it. The second exception is where the disclosure or use is in compliance with a requirement under a law of the Commonwealth, of a state or of a territory.122

Consequential and Transitional Bill Schedule 1 Schedule 1 to the Consequential and Transitional Bill will commence immediately after the commencement of sections 3-96 of the Australian Small Business and Family Enterprise Ombudsman Act 2015.

Functions of the Commonwealth Ombudsman The function of the Commonwealth Ombudsman is to:

… investigate complaints about the administrative actions of Australian Government departments and agencies. The Ombudsman has special responsibilities for complaints relating to the Australian Defence Force, Australian Federal Police, Freedom of Information, Immigration and Postal Industry...[In particular], the Ombudsman can investigate complaints about the actions and decisions of Australian Government agencies to see if they are wrong, unjust, unlawful, discriminatory or just plain unfair. He can also investigate complaints about goods and services delivered by contractors for and on behalf of the Australian Government.

123

Consequential and Transitional Bill The Consequential and Transitional Bill amends the Ombudsman Act by inserting proposed section 6E into the Ombudsman Act to deal with the transfer of complaints to the ASBFE Ombudsman.

The amendment operates so that:

• the Commonwealth Ombudsman may decide not to investigate a complaint and transfer it to the ASBFE Ombudsman if the complaint could have been made to the ASBFE Ombudsman who could more conveniently or effectively deal with the complaint and has the power to deal with it124

117. Subclause 76(5) of the Australian Small Business and Family Enterprise Ombudsman Bill. 118. Clause 77 of the Australian Small Business and Family Enterprise Ombudsman Bill. 119. Clauses 80-91 of the Australian Small Business and Family Enterprise Ombudsman Bill. 120. Clause 81 of the Australian Small Business and Family Enterprise Ombudsman Bill defines a person assisting small business/family enterprise

as each of the Ombudsman, a delegate of the Ombudsman, a person assisting the Ombudsman (clause 33), a person engaged as a consultant (clause 34), and a person providing an alternative dispute resolution process in connection with a dispute in relation to a relevant action. 121. This means that the maximum amount of the penalty is $21,600 with effect from 31 July 2015. 122. Subclause 82(2) of the Australian Small Business and Family Enterprise Ombudsman Bill. 123. Commonwealth Ombudsman (CO), ‘Complaints the Ombudsman can investigate’, CO website, accessed 30 July 2015. 124. Ombudsman Act 1976 , proposed subsection 6E(1).

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• before deciding to transfer the complaint the Commonwealth Ombudsman must consult with the ASBFE Ombudsman about whether it would be more convenient or effective for the ASBFE Ombudsman to deal with it (or deal with complaints within a particular class of complaints)125

• if the Commonwealth Ombudsman decides to transfer the complaint to the ASBFE Ombudsman, this must be done as soon as is reasonably practicable, and any relevant information or documents must also be transferred126

• a complaint that has been transferred is treated as if it were made under the Australian Small Business and Family Enterprise Ombudsman Act on the day of the transfer.127

According to the Commonwealth Ombudsman there will need to be ‘close co-operation between the two offices to ensure duplication is avoided and small businesses receive seamless services’.128

Concluding comments The Bill establishes the ASBFE Ombudsman who is authorised to carry out advocacy and assistance functions.

The advocacy function as set out in the principal Bill will position the ASBFE Ombudsman to undertake wide-ranging inquiries into the way in which legislation, policies and practices affect small business and family enterprises. That will position the ASBFE Ombudsman to provide the Minister with high quality, contemporaneous advice about those effects and ways in which to improve them. However, the principal Bill gives the Minister a discretion to decide whether to publish the ASBFE Ombudsman’s reports in whole or in part. That being the case, the benefit of the ASBFE Ombudsman’s inquiries may not be made public at all.

The ASBFE Ombudsman’s assistance function comprises two part—a concierge role and an outsourced alternative dispute resolution service.

Many of the submissions in relation to the Bill are critical of the use of the term Ombudsman to describe the role. It appears that the ASBFE Ombudsman as established by the principal Bill will not have the requisite independence that would generally be expected of such a position.

125. Ombudsman Act, proposed subsection 6E(2). 126. Ombudsman Act, proposed subsection 6E(3). 127. Ombudsman Act, proposed subsection 6E(4). 128. Commonwealth Ombudsman, Submission to the Legal and Constitutional Affairs Committee, Inquiry into the Australian Small Business and

Family Enterprise Bill 2015, op. cit.

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