Read all the latest news from Brendan O'Connor MP
Read all the latest news from Brendan O'Connor MP
The Morrison Government’s so-called ‘Regulation Impact Statement’ (RIS)released this week by Minister Cash, completely lacks detail and is a RIS in name only.
The document is just a repackaged discussion paper that re-prosecutes the case that small business franchisees face power imbalances with bigger franchisors. Labor has been calling for action for years now.
Franchisees are rightly dismayed at the government’s inaction because the longer the Morrison government kicks the can down the road, the longer small business franchisees will suffer.
The bipartisan Parliamentary Committee on Corporations and Financial Services – Fairness in Franchising report outlined in much more detail that than the so-called RIS, that the status quo for franchisees is unacceptable, and made 71 recommendations to improve the operation and effectiveness of the franchising sector.
The report was handed down in March. Aside from establishing a taskforce, not one recommendation has been implemented.
Stakeholders have reported that a particular concern is that the Government appears to be crab-walking away from robust dispute resolution and binding arbitration proposals.
As SmartCompany reports, University of Sydney lecturer and former Office of the Franchising Mediation Advisor official Derek Minus said some of the proposals in the RIS are akin to “moving deck chairs on the Titanic… [It creates] the appearance of useful activity that has little chance of addressing the real problems identified in the committee report, which are preventing the delivery of fair, timely and cost-effective dispute resolution”.
The RIS also lacks any detail on the benefits and costs of important reform options - let alone any indication of the Government’s preferred approach in relation to a validated public register of franchise agreements, or fair termination terms and processes.
Franchisees will get no love from the Government elsewhere either. The Government has provided no indication that it will strengthen the unfair contract term provisions of the Australian Consumer Law.
This is despite overwhelming support from ACCC Chair Rod Sims, small businesses and the Small Business and Family Enterprise Ombudsman Kate Carnell, to protect more small businesses from unfair contract terms, and make such terms illegal and eligible for penalties.
Whether it is franchising, phoenixing, or payment times, it is increasingly clear that the Liberals take small business for granted.