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12 March 1991 - Current

Small Business Commission Bill 2016
Page 4293
09 November 2016

Ms HUTCHINS (Minister for Local Government) — I move:

That this bill be now read a second time.

Speech as follows incorporated into Hansard under standing orders:

The purpose of this bill is to establish the Victorian Small Business Commission, and to improve the functions, powers and duties of the small business commissioner, as head of the commission.

In 2003, the Victorian government was the first jurisdiction to establish the role of the small business commissioner, in order to create a more competitive and fair operating environment for small businesses to grow and prosper. Since its establishment the office of the commissioner has done an outstanding job in representing the needs of Victoria's small businesses, primarily through the provision of low cost alternative dispute resolution services. This is illustrated in the commissioner's office reporting client satisfaction with its mediation service at 95 per cent for the previous financial year.

In addition to providing valuable mediation services for small businesses the commissioner is also responsible for resolving disputes under the Farm Debt Mediation Act 2011, Owner Drivers and Forestry Contractors Act 2005, Retail Leases Act 2003, and the Transport (Compliance and Miscellaneous) Act 1983.

This is highlighted in the manner the office of the commissioner has lead the way administering the Farm Debt Mediation Scheme, a critical function of the office that provides mediation services to farmers and creditors prior to commencing debt recovery proceedings on farm mortgages. The office of the commissioner has been very successful in helping farmers and creditors to reach agreement about current and future debt, demonstrated by the commissioner's settlement rate of 96.4 per cent reported for the previous financial year.

Based on Victoria's successful model, other jurisdictions including the federal government have since established their own small business commissioners. For example, there are now small business commissioners in New South Wales, South Australia, Western Australia and the small business champion in Queensland based on the Victorian model, as is the commonwealth government's newly established Australian small business and family enterprise ombudsman. Victoria is again leading the way with the establishment of the Small Business Commission.

The government recognises the significant contribution that over 540 000 small businesses make to Victoria, particularly in providing jobs, growing the economy and building social cohesion. Small businesses are the backbone of Victoria's rapidly evolving economy, representing over 97 per cent of the state's businesses. The government also recognises the challenges and pressures that small business owners face in an evolving economy. Often small business owners lack the resources that larger businesses have to manage the challenges of operating and growing a business. This is why it is critical that Victoria continues to lead the way in providing small businesses with a strong, effective and relevant voice that is representative of their needs and understands the challenges and difficulties small businesses face.

Small business is not only at the heart of Victoria's economy but also at the heart of the government's economic agenda. In the 2015–16 financial year the government took significant steps to provide additional confidence and support to the small business sector. We've taken a leadership position with the Australian small business and family enterprise ombudsman to help improve payment times from larger businesses to small businesses. Recent data from Dun & Bradstreet found the average time large businesses took to pay invoices was 52 days, well ahead of the small and medium businesses, who's average payment times were around 41 days. We are also hearing anecdotally from small businesses that some larger businesses are stretching payment times to 60, 90 or even 120 days — which makes it very hard to manage your cash flow.

The government also believes regulation is vital to keeping Victoria's workplaces and services safe and secure, but it is equally important when we can remove it, to do so. To this point. the government recently launched the Small Business Regulation Review — a first-of-its-kind government-wide review that helps cut burdensome red tape that is negatively impacting our small businesses and their day-to-day operations.

The review will look into three sectors across the state's economy over the next two years, the first, the retail sector, which reflects the regulatory experience of the vast majority of small businesses, with up to 30 per cent of all small businesses in Victoria involved in some form of retail. The government's conversation with the small business community will be guided by an Issues paper that will give small business retailers the opportunity to submit their regulatory concerns and frustrations directly to us.

In 2016, the government also established two new councils — the Small Business Ministerial Council and Multicultural Business Ministerial Council — to advise the government on issues concerning small enterprise.

Victorian businesses also received significant tax relief, with targeted measures in the Victorian budget 2016–17. As a result 36 000 individual businesses across Victoria will benefit from a $286 million payroll tax cut, with the incremental raising of the tax-free payroll threshold from $550 000 to $650 000. Once fully implemented, around 2800 businesses will no longer pay any payroll tax at all.

There is also a raft of additional day-to-day support that is offered through Small Business Victoria. In 2015–16 Small Business Victoria assisted more than 60 000 business owners to 'plan, start and grow' their business.

Small Business Victoria provides assistance through things like training workshops, intensive business mentoring, small business bus visits and financial support and the small business festival. With over 390 training workshops delivered in the last year, it means that there are significant opportunities for all business owners to get involved and learn new skills.

The festival which ran through August hosted its largest program yet with more than 450 free or low-cost events in metropolitan Melbourne, Geelong, Ballarat, Bendigo, Great South Coast, Gippsland, north-eastern Victoria, Mildura and Shepparton.

So it's fair to say this government has a clear cut agenda for small business designed to give it a voice, the support and the confidence to thrive. The establishment of a strengthened Small Business Commission with improved functions and powers only further serves to achieve this agenda.

The commission will be led and constituted by the small business commissioner, with a broader mission to assist small businesses. The commissioner will continue to be independently appointed for a term of five years by the Governor in Council and the commission will continue to submit an annual report to Parliament.

The bill repeals and re-enacts, with amendments, provisions previously contained in the Small Business Commissioner Act 2003, which continue to be relevant to small business and the functions of the small business commissioner. The bill also provides new functions and powers for the commission, including more inclusive and accessible dispute resolution mechanisms. For example, disputes between small businesses and educational institutions will now be subject to the commission's jurisdiction.

One of the new functions of the commission will be to discreetly assess and provide commentary on proposed legislation that has the potential to adversely affect small businesses, where directed by the Minister for Small Business, Innovation and Trade and in consultation with the Department of Economic Development, Jobs, Transport and Resources. The bill provides for the commission to advise and comment on the development of legislation and regulatory policy relating to small business and related matters. This function will build on the commission's knowledge and expertise from more than a decade of working with small businesses. Although the commission will not have a role in creating policy, it will be able to leverage its significant expertise to provide relevant insights to the development of new laws and policy within and across the government.

The commission will also have a broader remit to consider the implications of government action for small business across different departments and agencies, and to provide expert commentary to the minister of the day.

The bill defines the types of disputes that the commission will oversee and help to resolve, and expands the range of organisations to which the dispute resolution services apply. Small businesses involved in contractual or commercial disputes with professional associations, as well as industry, non-profit, or educational entities, such as schools or universities, for example, will now have the benefit of the dispute resolution services offered by the commission. A broader range of government agencies will also be able to access commercial dispute resolution, providing a more effective interface with government and public organisations. For example, disputes that may arise between small businesses and certain statutory offices classified as special bodies under the Public Administration Act. This is consistent with the government's commitment to improving accountability across a range of government functions.

The newly constituted commission will also have powers and functions to work with small business commissioners in other states and territories, including the commonwealth. The bill provides for the commission to work collaboratively with small business commissioners, or their equivalent offices, in other jurisdictions to enhance conditions for small businesses.

For example, this will enhance the commissioner's ability to report on important issues for small business, such as payment times, and support Victoria's leadership position working with the Australian small business and family enterprise ombudsman in advocating for improved conditions for small businesses in this critical area.

This change also demonstrates the government's commitment to other projects such as improving data collection and analysis across jurisdictions, and through the harmonisation of definitions relating to small business. Working with the Council of Australian Governments, Victoria will continue to advocate measures that facilitate and enable more effective international comparisons to better understand the small business economy.

The government's priority is to build a strong economy, improve economic growth, create jobs that support diversity in employment and improve liveability. As part of this, the government recognises the importance of building a strong and confident small business community that contributes to the creation of future jobs and industries in the Victorian economy. The government is committed to supporting small businesses to help them thrive. The new Small Business Commission will play an important role in this endeavour.

I commend the bill to the house.

Debate adjourned on motion of Mr BURGESS (Hastings).

Debate adjourned until Wednesday, 23 November.