SA passes Small Business Commissioner Bill - with amendment

Written on the 24 October 2011 by Franchise Council of Australia

Despite the determined efforts of the FCA and the Liberal Party Opposition in South Australia, the Labor Government has pushed through its Small Business Commissioner (SBC) Bill, including the provisions which will allow it to adopt the Franchising Code of Conduct into SA law.

The good news is that after intense debate, the Government agreed to an amendment which means it can not change the rules of franchising in SA without carrying out a 60-day mandatory consultation period with relevant stakeholders (which would include the FCA). Failure to do so can trigger a 'disallowance motion' on the proposed changes.

This important amendment means the franchising community can continue to operate on the same rules in SA as it currently does nationwide.

If the Government, in future, moves to change the rules, the FCA, and other relevant stakeholders, must be properly consulted. On failure to do so, the proposed changes can be stopped.

The SA SBC Act goes way beyond the reach of SBC offices in place in Victoria and recently initiated in WA, NSW and Queensland. It introduces fines for Fair Trading breaches and gives adjudication authority to the SBC.

Fines of up to $20,000 can be imposed for failure to provide information and fines of up to $50,000 can be imposed for breaches.

The FCA strongly opposed the SA approach which sets the scene for state-based franchising law. The Federal Minister, Senator Sherry, also emphatically opposed it.

The new chairman of the ACCC, Rod Sims, told the FCA national convention that the ACCC had new powers of investigation and it planned to use them. However he told Federal Parliament this week that he did NOT agree with the concept of state-based franchising regulation and that the SA Government had misused his comments to imply he did support their approach.

With the benefit of information provided by FCA, the Queensland and SA Law Societies and the Law Council of Australia, non-Labor Parties and Independents raised four amendments to the SA SBC Bill. After a long debate over several days, the Government successfully split the vote of minor parties and Independents to defeat three of the amendments. The amendment which was passed was the 'disallowance' amendment.

If the SA Government takes any action to change franchising rules in SA, the FCA will be seeking to activate the disallowance amendment passed by the Parliament yesterday evening.