The Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, has welcomed the Albanese government’s move to introduce legislation into Parliament to crackdown on unfair contract terms and increase penalties for anti-competitive behaviour.
“These are real problems for small and family businesses and rebalancing the relationship imbalances between small business and large enterprises will promote economic growth,” Mr Billson said.
“It is very pleasing to see election commitments being progressed quickly by Small Business Minister Julie Collins, Assistant Treasurer Stephen Jones and the Assistant Minister for Competition, Charities and Treasury Andrew Leigh.”
Mr Billson said he has met with many small and family businesses who have highlighted these issues as an impediment as they don’t have the power or resources to stop unfair terms being imposed on them.
“We see in many contracts we review, examples of unfair terms,” Mr Billson said. “Too often a large business with relative superior bargaining power acts unfairly against a small business or multiple smaller businesses.
“We have seen contracts where a big company is allowed to cancel or vary the contract with two days verbal notice, but the small business is required to provide 90 days’ notice in writing.
“We have seen contracts where the big company is able to keep deposits for at least 12 months after the agreement with a small business ends with no fixed end date.
“I encourage large enterprises doing business with smaller firms to be a kindly customer – patient and understanding, with good and generous intent, especially around contract terms.” The Bill being introduced into Parliament in relation to unfair contract terms will introduce civil penalty provisions prohibiting the use of, and reliance on, unfair terms in standard form contracts. This will enable a regulator to seek a civil penalty from a court.
“What is also crucial, however, is that these new laws be enforced by regulators to defend the economic interests of small business owners,” Mr Billson said.
The Bill to increase penalties for corporations engaging in anti-competitive behaviour will see the penalty leap from $10 million to $50 million.
“Fines need to be more meaningful and not just an easily absorbable ‘cost of doing business’ that a big business can easily afford to pay that doesn’t cause powerful firms to think more carefully about their behaviour and change their approach,” Mr Billson said.
