The Hon. Rob Lucas MLC

The Hon

Rob Lucas MLC



Small Business Commissioner Bill

Tuesday, 18 October 2011

The Hon. R.I. LUCAS (17:52): I rise to speak to the second reading of the bill. As I listen to the contributions this afternoon, I am reminded that politics, indeed, makes for strange bedfellows. We have an ex-Labor minister in this council quoting a former Liberal Party chief of staff to a minister in support of the government's position on the bill. We have Liberal spokespersons quoting federal Labor minister Sherry ripping apart minister Turbo Tom Koutsantonis with words, such as, 'It's an unhealthy development. It's bizarre and strange. It flies in the face of significant progress. He strongly expresses his disapproval,' etc. As I said, politics certainly makes for strange bedfellows.

I note that the Hon. Ms Zollo quoted a number of business groups who supported the legislation as a reason why the Liberal Party should support the bill. When we debate the Work Health and Safety Bill, I will be comforted by the position that has been adopted by the Hon. Ms Zollo, because every one of those groups is urging a very significant amendment to the Work Health and Safety Bill. So, I look forward to the Hon. Ms Zollo and government ministers standing up and quoting all of those business organisations and associations.

An honourable member interjecting:

The Hon. R.I. LUCAS: Indeed, as my colleague says, the Hon. Ms Zollo was challenging whether she, too, would have the courage, the guts and the integrity to cross the floor and vote in the best interests of Australian business and injured workers in South Australia. Politics makes strange bedfellows. Choose your supporting arguments as a matter of convenience—that is the way of politics. I want to address some specific issues. My colleagues have raised most of the general ones and I do not intend to repeat all of those. I start from the position that anything the honourable minister Turbo Tom Koutsantonis is involved with—

The Hon. J.M. GAZZOLA: On a point of order, sir, the Hon. Mr Lucas should refer to the minister by his proper title.

The PRESIDENT: That would be very helpful. The Hon. Mr Lucas should refer to the minister with some respect, the same respect that was given to him when he was a minister.

The Hon. R.I. LUCAS: Well, if that is the case I will refer to him as the honourable minister Koutsantonis, also known as Turbo Tom and the welsher from the west, because I was never shown any respect by the honourable minister Koutsantonis, minister Foley, Premier Rann or, indeed, anybody, Mr President. Anything that comes from this minister I would start off with a healthy degree of scepticism and cynicism. As I have listened to some of the debate this afternoon, it has only added to some of the concerns I have.

This bill seeks to establish a small business commissioner. When I look at the small business commissioner's functions and the terms and conditions of the appointment of the commissioner, one of the arguments for it—and I respect the arguments for the bill from those inside and outside the chamber (whilst our party does not agree with them, I respect their arguments, nevertheless)—is that somebody needs to be given the power or authority to make decisions and to, in essence, enforce resolution of disputes between disputing parties. That is what I thought we actually had courts for, legally trained people—and there is an argument about costs of accessing justice in our legal system, and one of the responses for that is to have a low-cost jurisdiction. We had a small claims tribunal and various other low-cost options, and that is one of the responses that governments of all persuasion may well address.

But that is one of the reasons being proffered for this particular piece of legislation. So, we are going to appoint a person, and when I look at the requirements of that person there is nothing that would prevent this minister and this government from appointing the Hon. Mr Foley, the Hon. Mr Finnigan, the soon to be retired President (the Hon. Mr Sneath) to the position of small business commissioner—there is nothing that would prevent this Labor government doing that. We have seen today former Labor ministers being shoehorned through dubious processes into six-figure-sum positions within the public sector. In question time the details of the appointment of former health minister Stevens to a significant position was outlined and there have been many others.

There is nothing in this that requires anyone with any legal training. With a number of other positions short of a court, you outline in the legislation that the person you appoint has five or seven years legal training or some knowledge of it. We are going to allow this government to appoint either an ex-pollie, an ex-union hack or both—

The Hon. J.M. Gazzola: Or Liberal Party—

The Hon. R.I. LUCAS: The Hon. Mr Gazzola sparks up because his eyes lit up at the sound of ex-union hack and politician as he qualifies there, so his eyes sparkled at the prospect of becoming the small business commissioner. There is nothing in here that prevents the appointment of somebody. Let me be fair in relation to this, because maybe an ex-union hack, an ex-pollie, or both, might be appointed, but what you might appoint is a well-meaning, incompetent fool. With the greatest of respect to this and other governments, there are many of those who have been appointed to these semi or quasi-judicial positions, these statutory officer positions. They are not ex-politicians or ex-union hacks—they are just well-meaning incompetents or fools.

They are not well suited to positions which are going to have significant influence and significant power in relation, supposedly, to resolving a whole range of difficult issues. They do not have to have any legal training at all—and I will turn later on to some of the powers of this in relation to the power to require information.

You are going to have somebody shoehorned into one of these positions, with significant power in relation to resolving potentially multimillion dollar disputes between franchisors and franchisees, or between landlords and tenants, etc. Potentially, we will have a well-meaning and incompetent fool being appointed to a position—someone well intentioned, as I said, but just incapable, really, of being able to make the sorts of sensible decisions that are generally being made by a court of law by someone trained in relation to making some of these sorts of decisions.

Then you go to the powers to require information; under clause 12 of the bill, this well-meaning fool, or ex-union hack politician who is appointed has the power, by written notice, to require a person to give him or her any information in the person's possession that the commissioner requires for the performance of the commissioner's functions under the act. If you go to the functions under the act, under clause 5, they are considerable—and I will not read them all into the debate. This commissioner has the power to require any information at all. If there is a landlord and tenant dispute, does this mean that this small business commissioner will be able to say to the landlords, 'I want from you every document, email and contact you have had with other potential tenants within this particular development'?

Let's say that there is a landlord who wants, at the conclusion of tenancies, to undertake a redevelopment of that particular site and the tenant is complaining about that (and there are many of those, as we are well aware). The small business commissioner, under clause 12, is going to be given the power to require the provision of any or all of those documents the commissioner believes is required for the performance of the commissioner's functions. The only restriction I can see there is that you cannot be compelled to give information which is protected on the grounds of legal professional privilege or which might tend to incriminate you—relatively limited exemptions there.

So, there is information that might be commercially confidential or might be information that a landlord does not believe should be shared with the small business commissioner or, indeed, with the other party to the dispute. I ask the government—and we will pursue this in the committee stage, but the minister can respond at the end of the second reading—what are the restrictions on the commissioner, in particular, in terms of sharing that information with the other party to the dispute, the tenant?

Clause 13—Confidentiality places some restrictions in relation to sharing that information with others not engaged in the dispute, etc., but I ask the government to indicate what will be the restrictions? I also ask the government: what does it believe the restrictions are in relation to the commissioner's power to require information? Will the commissioner, in the example I have given, be able to require that sort of information from a landlord?

In relation to any other dispute between a franchisor and a franchisee, will the commissioner, under whatever is the relevant industry code or the provisions of this legislation, be able to require information from a franchisor in relation to other potential franchisees they have been negotiating with in terms of the conditions or the potential conditions? Will the commissioner be able to require from the franchisor any discussions they might have been having at the national level in relation to potential changes in their business?

Will the commissioner be able to require from the franchisor any details in relation to potential marketing budgets and the details those marketing or advertising budgets the franchisor is going to undertake on behalf of the franchised within that particular state? Will all of that sort of detail be accessible to the small business commissioner when the small business commissioner (he or she) is endeavouring to resolve a dispute between a franchisor and a franchisee?

Equally, of course, will the commissioner be able to demand all sorts of financial information from either tenants or franchisees that they may be uncomfortable providing, not realising that this is the power we are providing the commissioner in this particular legislation? For example, can the commissioner require tax records, tax information, profit levels, all that sort of information from a tenant in a residential tenancy dispute?

The tenant goes to the commissioner and says 'Hey, I'm having this argy-bargy with the landlord. I don't want to pay the increased rent,' or 'I want an option of three plus three plus three and they are only offering me an option of three years. This is outrageous. What are you going to do about it?' In those circumstances can the commissioner not only require a range of information from the landlord in relation to that but also say to that particular tenant, 'Okay; you are part of this process and I now require from you all your tax records, all your detailed financial records, your profitability margins and that sort of thing in terms of what you are telling me about profitability and what you can afford to pay as a rental'?

Can the commissioner require information from the tenant regarding potential offers they have had for the sale of their business, depending on the various leases that they have been offered by the landlord? If you have an option of a lease for three plus three plus three, the sale of your business will be at a higher level than if you had an option of only three years' tenancy from a landlord at a particular location.

Will the small business commissioner have the power under this act, if he or she so determines, to demand that sort of information from both the tenant and landlord? I can see nothing in clause 12 or clause 13 that will prevent the commissioner from demanding that sort of information. If the commissioner says that is required for the performance of his or her functions under clause 5, then the commissioner is entitled to demand that information from the landlord or the tenant, and similarly from the franchisor and the franchisee.

As one of my colleagues said earlier, I think, these things sound just wonderful, and we get all these emails from well-intentioned people saying 'Hey, a small business commissioner is what we want because that would help resolve disputes.' The numbers appear to be here for the legislation to pass in one form or another, so I guess time will tell in relation to the operation of the small business commissioner. One dispute that I am familiar with at the moment involves a government department that manages a tenancy, and government officers are already saying to the tenant involved in the dispute, 'Look, if this small business commissioner bill goes through it will help resolve the issue for you. You should get the Libs to support this legislation.'

My question to the minister, specifically with regard to commercial tenancies, is: with the passage of this legislation in the form there, what specific powers—in addition to those that already exist—will the small business commissioner have in relation to a retail and commercial tenancy dispute between a landlord and tenant? There are certain powers that already exist in relation to retail and commercial tenancies; some people are frustrated with those and some are comfortable, but there are some existing powers. We understand that the small business commissioner will take over the operations of the legislation as part of this proposal, but I want to know what specific additional powers there will be.

For example, if you have a government department negotiating with a private sector tenant in terms of a commercial tenancy and the government department is saying, 'I'm only prepared to offer you a three-year lease on that tenancy,' and the tenant wants three plus three plus three (they want nine years), what powers exist in this legislation for the small business commissioner? Is the small business commissioner in a position to say to the tenant, 'I am going to deliver for you a nine‑year (three plus three plus three) leasing arrangement from the government department'? Does the small business commissioner have the power to direct the landlord—in this case, a government department—to do that?

Similarly, if the position was in relation to a private sector arrangement, does the small business commissioner under this proposed package have any additional powers in relation to resolving that level of dispute? On my reading, I cannot see, in relation to those specific acts, that there are additional powers. However, if there is going to be something additional added, I am seeking that response at the end of the second reading to those specific questions; if they do not come at the end of the second reading, during the committee stage we will pursue them and pursue them at length until we get some answers. People out there are being told by government officers that if this bill goes through they are going to be assisted, that this is going to help them resolve the dispute in their favour. That is the inference and the impression that is being given to people out there in relation to this particular issue. If that is the case, what are the specific powers in the bill that will in fact allow that to occur?

The second area on which I raise those general questions is in relation to my very good friends from the South Australian Farmers Federation. The Hon. Ms Zollo has quoted the Farmers Federation's support for the bill. Indeed, we have received copies of letters from Ms Vincent, the chief executive, dated 20 September, including a copy of a letter to the honourable minister on 10 March of this year. I note that in the first letter the Farmers Federation, amongst other things, says:

SAFF has worked closely to ensure that the Bill provides the legislative framework for prescribing mandatory codes of conduct under the South Australian Fair Trading Act, thus empowering industry to self-regulate, especially helpful in mediating and settling disputes between farmers and big business (e.g. farm machinery manufacturers and grain handling companies).

Then, in the letter that went to the minister on 10 March, the Farmers Federation said:

In regards to the agriculture industry, a code of practice for farm machinery (to be negotiated later with the industry) would enable SAFF to play a bigger role in resolving disputes and act as a clearing house before unresolved disputes are escalated to the Small Business Commissioner.

I seek a specific response from the minister at the end of the second reading. Again, if that is not provided, this is an issue that a number of us will pursue in detail during the committee stage of the debate. Has the government indicated to SAFF or are they indicating to this parliament that they will be—as the SAFF are lobbying—implementing a code of practice for farm machinery? If that is the case, exactly what does that mean? I have a general question which will flow from this in relation to what these codes of practice will look like or relate to. I think the minister should give to the house and to the committee an example of the types of codes of practice that are envisaged by the government.

For example, as the SAFF are saying they have had these discussions, is the government going to introduce a code of practice for farm machinery? If it is, what does that actually mean? Will it be a code of practice arrived at between whom—which parties? Between farm machinery manufacturers? My colleagues the Hon. Mr Dawkins and others will advise me, but most of the farm machinery manufacturers are overseas.

The Hon. J.S.L. Dawkins: Absolutely.

The Hon. R.I. LUCAS: There are some perhaps interstate or whatever it is, but—

The Hon. J.S.L. Dawkins: Just about all overseas.

The Hon. R.I. LUCAS: Just about all overseas, my colleague advises me. If we are going to have this code of practice for the farm machinery sector to be negotiated with the industry, is it the government's intention and SAFF's intention that this is going to be negotiated with these overseas farm machinery manufacturers, or is it going to be negotiated with the local distributors on behalf of the farm machinery manufacturers? That is hardly satisfying if you were the SAFF, I would have thought, and you are going to resolve warranty issues with farm machinery.

Everyone is saying, 'Hey, this small business commissioner is going to resolve all these disputes.' Let's get into the detail of exactly what is meant, because it all sounds terrific. We are going to have a small business commissioner, and he or she is going to resolve tenancy disputes, farm machinery warranty disputes, disputes with Viterra and grain handling—this is fantastic!

The Hon. R.L. Brokenshire: Who fixes them now? Who fixes them at the moment?

The Hon. R.I. LUCAS: Well, a lot of them are a problem; I can see that, but what I am saying is, before we rush willy-nilly down the path of saying, 'Thank goodness. The Hon. Mr Koutsantonis has delivered the solution—the small business commissioner—and he or she is going to resolve these disputes. Viterra's problems are going to disappear, the farm machinery warranty problems will disappear, the disputes with government department agencies over tenancies will disappear and the disputes with tenancies at Burnside Village because of rapacious landlords will disappear, because the Hon. Mr Koutsantonis's small business commissioner has materialised from nowhere and he or she, with magical powers, is going to resolve all of these disputes.'

So, the Farmers Federation, the motor traders and Business SA rush to support it. The whole world rushes to support it. You are right in that the easy solution for the Liberal Party would be to roll over and say, 'Everyone wants it; you can have it.'

The Hon. R.P. Wortley: No, that's a harder decision—

The Hon. R.I. LUCAS: No, that's the easy solution, because the numbers are here to support it. We could just roll over, lie down, have our tummies tickled, roll over again, do nothing and let the bill go through. That is the easy solution for the Liberal Party. What we are saying is, 'Let the buyer beware.' Those of you who are supporting this legislation at least convince yourselves that all these wonderful things are going to happen, and then let's ask the question: how are they going to happen?

The Farmers Federation, with their code of conduct for farm machinery, how is that going to happen? How are the changes in relation to commercial tenancies going to happen? Given the time tonight, I will not go through all of them at this stage, but I do intend to go through them in the committee stage because it is so easy to make the claims in relation to this legislation.

It is so easy to criticise the Liberal Party, but at least the Liberal Party has had the courage to stand up and say, 'Hold on, pause, reflect, think about this, and then you explain exactly how it is going to provide a solution.' I want to hear from the government how the grain handling problems are going to be solved by the bill. I want to hear from the government how the issues in relation to farm machinery warranties are going to be resolved by the bill. I want to hear from the government about how retail and commercial tenancy disputes are going to be resolved by the bill.

I think we owe it to small business in South Australia. We owe it to the newsagents who believe that, in some way, this is going to resolve problems they might have negotiating deals with News Corp (as the Hon. Mr Darley was talking about) and maybe also resolving disputes with the Lotteries Commission. Is this small business commissioner going to say to the Lotteries Commission, 'Whoops, you're not able to do that. When you sell the Lotteries Commission, you're not going to be able to put a provision in the contract to have an online sale of tickets, because that is going to impact on the newsagents'?

That is what the newsagents want; they want this dispute resolved. They are a small business, so they will go to the small business commissioner and say, 'We want this particular position resolved,' in terms of the unconscionable conduct of either big business or, in this case, big government (the Lotteries Commission) and the impact on the newsagents, because it is a huge part of their revenue flows that exist at the moment.

As I said, there is a lot more at this stage that I could and would like to say but, given the time, I will not. However, because I know everyone else other than the Liberal Party is supporting this bill, I implore members to at least satisfy themselves that some of the claims that this minister and this government and those who support it are making are at least justified. That is all I am asking—at least explore those issues.

The Hon. Ms Bressington has suggested one way but, if you are not going to do it that way, at least through the committee stage satisfy yourselves or, if you have access to the minister and the government departments, ask some of those questions of the minister and his advisers over the next few days and see if you can satisfy yourselves that all these things are going to be resolved in the way that some of these lobby groups believe they are going to be. What are these specific additional powers that the business commissioner is going to have in relation to these issues?

In particular, there are earlier questions that I asked as to whether or not there ought to be some check, at least, in terms of the power to require information by the small business commissioner. I did not put on the record the question: is there any appeal right from somebody required to provide information to the commissioner? If you are so aggrieved that you believe that this is an abuse of power by the small business commissioner, what access do you have to object to a request for information from the small business commissioner that you do not believe is consistent with its functions under the act? They are the sorts of issues that certainly I and my colleagues will be pursuing in the committee stage of the debate.


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