Federal mediator too far away from ACT action
The Canberra Centre. Photo: Jeffrey Chan
Given the games that shopping centre landlords, franchisors and larger businesses can play, it's time small businesses had access to an independent commissioner in the ACT.
Victoria, South Australia, Western Australia, and NSW all have a state-based small business commissioner, but Canberra small businesses are missing out on the considerable benefits a small business commissioner could bring at very little cost.
And no one should get too excited about the new federal small business commissioner. We have had lots of talk of a federal small business commissioner this year, but the position has only just been created. The only problem is that the federal government had previously given us an ACCC deputy chairman for small business. Now we have two federal 'small business commissioners', at double the cost to the taxpayer.
No doubt the latest federal small business commissioner will work hard in the role. After all, there is a great deal that can be done to help small businesses in their inevitable disputes with federal government agencies. Who do small businesses turn to when they have a business-related dispute with a federal government agency? The Ombudsman is there for administrative or process issues, but doesn't readily get involved in business-related disputes.
A state or territory-based small business commissioner can't help small businesses with federal government agencies so it's up to the federal government to ensure that the latest federal small business commissioner can do something meaningful about the very real problems small businesses have with such agencies.
What does the federal government's failure to give the new federal small business commissioner any legislative powers mean for small businesses? Well, it means we have missed an opportunity to help small businesses in a real and practical way.
More dangerously, the federal government's failure means the new federal small business commissioner will be too busy trying to give the role some substance at a federal level even to think about helping ACT small businesses with any problems they may have with shopping centre landlords or franchisors.
The point is very simple. Canberra small businesses need an ACT-based small business commissioner to help them with any disputes they may have with larger businesses. All those small retailers who have had a problem with a landlord know how it is when there's a dispute. Taking legal action can be prohibitive and the lease tends to be stacked in favour of the landlord. Changes to leases and rent increases can be offered on a take-it-or-leave-it basis.
Who does the small retailer turn to? The ACCC will generally not get involved in individual business disputes. Members of Parliament often help, and the ACT small business minister and industry associations can certainly be passionate advocates for small businesses generally, but the problem is that these are often ad-hoc responses and may be of little help where the small retailer is facing a nasty landlord.
The same goes if a franchisee in Canberra is the victim of a nasty franchisor, or the small business is up against a difficult ACT government department.
A small business commissioner in the ACT may not guarantee a result for the small business, but a small business commissioner in Canberra would at least be immediately available to implement the alternative dispute-resolution processes which in South Australia have led to disputes being resolved in up to 86 per cent of cases.
That's up to 86 per cent of cases that can stay out of the courts and where the commercial relationship between the small and large business can be preserved.
Having a small business commissioner in the ACT would give Canberra small businesses an independent person to help resolve business disputes through processes such as meditation. Such a commissioner also could identify emerging issues that could be resolved through mandatory industry codes of conduct.
The use of mediation to resolve business disputes is a well recognised process that helps keep matters out of the courts. Mandatory industry codes of conduct could usefully provide for a formal alternative dispute-resolution framework that small businesses in the ACT could use in the event of a dispute with a larger business.
That's the model adopted in South Australia and it could easily be adopted in Canberra. As for cost, initially, the commissioner could be a part-time appointment with just a small number of full-time staff. Formal mediations could be done by an external panel of mediators, with individual mediators being appointed as required.
Given the obvious benefits all we need now is bipartisan political support for an ACT small business commissioner. And we just need the federal government to give its latest federal small business commissioner some legislative teeth otherwise the new federal commissioner may end up being all bark and no bite.
Frank Zumbo is an Associate Professor at the School of Business Law and Taxation at the University of NSW.