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Staggeringly HUGE move by Morrison Government for small business

Thursday, March 28, 2019

We were staggered late yesterday when we received the Morrison government’s media release announcing reform options to the Unfair Contract laws for small business people. If they proceed, the government is to implement our dream ‘wish list’ for these laws.

We first started campaigning for these laws back in 2009 and 2010. After a big battle in 2015 the laws were passed by parliament and came into operation. We didn’t get everything we wanted but it was a start. It turned out, however, that the ‘big end of town’ thumbed its nose at the laws because the laws had no teeth.

The Morrison government initiated a review into the laws in late 2018. Here’s the Treasury discussion paper. We made a detailed submission setting out our wish list. Now the government is flagging its intent to move in a direction we never would have expected.

The reform options are as follows:
  • Unfair contracts will be illegal – to date, an unfair clause would just be ‘null and void’.
  • There will be civil penalties for breaches – to date, no penalties.
  • ‘Small business’ with protections will be any business with up to 100 employees. This greatly expands the number of businesses protected.
  • No contract value threshold – to date, only applied to contracts up to $300,000 in value
  • Will apply to government contracts – to date, government was not covered by the laws.
Legislation is to be prepared subject to further input.

SEA comments

Big businesses can’t complain. It only has itself to blame for ignoring these laws over the last three years.

The Morrison government is setting a new precedent for the operations of governments. That is, the standards which the law expects and demands of private business operations must be the same as those to which government itself should be held. Government departments far too often are not legally held accountable in the same way businesses are held accountable. This makes for bad and (sometimes) even corrupt government in terms of commercial standards. This step by the Morrison government is a bigger issue than fairness for small business. It cuts to the core of the relationship between how government operates and the people.

Robert Gottliebsen (The Australian) says that this Morrison government reform “ranks high in the list of major peacetime political achievements in our history”. We agree. The Morrison government is embarking on a reform program fundamental to the way our economy operates. At the heart of the reform is ‘the people’.

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