The Abbott government has committed $1.4 million to provide small businesses with the same protections as consumers when it comes to unfair contracts imposed by big business. Currently, consumers are protected from unfair terms in standard form contracts whilst businesses are not.
Minister for small business Bruce Billson said this policy has been driven by calls from business owners themselves.
“Small businesses have told us they have also been subjected to unfair terms in standard form contracts, which are presented by big business on a 'take it or leave it' basis, with little or no ability to vary the terms,” he said.
“The legislative reforms will make unfair terms in standard form contracts with small businesses void. This will help to provide a level playing field for small businesses and enhance the welfare of Australians by increasing small business certainty, confidence and productivity.”
A new Department of Finance unit will also be set up to provide specialist advice on contracts to ensure small businesses are not disadvantaged as part of Commonwealth departments' tendering and procurement processes.
The government has allocated $2.8 million over the next four years to setting up the unit to work with small business to develop procurement guidance material tailored specifically for the sector.
“Small businesses have said contracting documents and accompanying obligations, including requirements to have very expensive insurance, can be overly complex and impose barriers in tendering for contracts,” said Mr Billson.
In addition, the federal government has allocated $8 million to establish the Small Business and Family Enterprise Ombudsman to replace the Australian Small Business Commissioner.
“Small businesses can find it difficult to navigate the Commonwealth and its numerous departments, which is why we are moving to this single entry point model,” said Mr Billson.
“The Ombudsman will act as an advocate and will cut compliance burdens and reduce red tape, meaning small businesses can get on with the job of attending to their customers.”
In the Budget papers, the government has said the Ombudsman will be a “Commonwealth-wide advocate for smaller enterprises; a single entry point agency for small business to access Australian government small business programs and support; a contributor to making Australian government laws and regulations more small business-friendly; and a concierge for dispute resolution”.