Victorian government rejects VSBC abolition proposal

The review was produced by Helen Silver, former secretary of the Victorian government's Department of Premier and Cabinet, and provided various recommendations focused on “returning the non-frontline public sector towards its pre-pandemic share of employment”.

Within the recommendations, Silver proposed that the VSBC should be abolished as a standalone entity and its functions absorbed into VCAT.

This proposal came under the ‘Absorbing functions into departments or other bodies’ section of the report, to which Silver said: “The review has found there are some entities whose functions are not, or no longer, required to operate all or some of their functions at arm’s length from government, or functions overlap with the existing work of departments and other relevant bodies”.

“In addition to achieving savings for direct and indirect costs to the government, these reforms will enable clearer structures and oversight, and stronger accountability. It will also make the government less complex to navigate for citizens, business and the VPS.”

If the government were to adopt this recommendation, along with other body mergers, the review outlined the estimated net savings for the government through these reforms at over $119 million.

Silver said VSBC should be absorbed by VCAT, as although the VSBC provided important dispute resolution services for small businesses, they did not need to be delivered by a separate body.

It was also outlined that the merger of the two bodies would reduce administrative duplication and simplify the experience for small businesses seeking to resolve disputes.

Despite the recommendation, the Victorian government revealed it had chosen to reject it and that the VSBC would continue as a standalone entity, instead choosing to abolish its startup support agency, LaunchVic.  

The Council of Small Business Organisations Australia (COSBOA) welcomed the Victorian government’s decision to reject the VSBC and VCAT merger as it ensured the state’s small businesses continued to have access to a dedicated, specialised body focused on practical support.

Matthew Addison, COSBOA chair, said the VSBC provided fast, accessible and affordable dispute resolution tailored to the needs of small businesses.

“Keeping the Commission in place preserves a support system that helps prevent issues from escalating and allows businesses to stay focused on their operations,” he said.

“COSBOA has long supported the role of specialist small business commissioners across Australia, and reiterated the importance of maintaining independent, small business specific expertise.”

Addison added it was important bodies such as VSBC remained intact, as small businesses often required early, practical assistance when disputes arose.

“A general tribunal cannot always provide the same level of sector-specific guidance or responsiveness to resolve issues quickly and fairly,” Addison said.

“This decision provides Victorian small businesses certainty and maintains an important mechanism designed to keep commercial relationships on track.”