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SA gives green light to SME commissioner and franchising code

Monday, 24 October 2011 | By Michelle Hammond
South Australia will receive its own Small Business Commissioner and a new code to protect franchisees, after a hotly contested bill passed through state Parliament.

 

The South Australian Small Business Commissioner’s bill, which passed through Parliament on the weekend, will see the creation of a Small Business Commissioner to advocate on behalf of small businesses in the state.

 

It will also see the introduction of a state-based franchising code of conduct, in conjunction with the national code.

 

The bill, opposed by the Franchise Council of Australia and the Liberal Party, was passed with a minor amendment moved by the Family First Party.

 

The amendment requires any changes to code of conduct be made after consultation with the industry.

 

Labor MP Tony Piccolo, a well-known advocate of state-based franchising laws, says the government is “quite happy” to include this amendment in the bill.

 

“It doesn’t in any way change the content of the act itself,” Piccolo says.

 

“It just means if you’re going to have a mandatory code of practice for an industry, like franchising, submissions and consultations need to be made.”

 

“The bill and subsequent codes will go some way towards correcting the current huge power imbalance between a franchisor and franchisee.”


While the FCA believes a state-based code is unnecessary, and could damage the state’s franchising sector, executive director Steve Wright says he is pleased the government agreed to the amendment.

 

“[This] means it cannot change the rules of franchising in South Australia without carrying out a 60-day mandatory consultation period with relevant stakeholders,” Wright says.

 

“Failure to do so can trigger a ‘disallowance motion’ on the proposed changes.”

 

“This important amendment means the franchising community can continue to operate on the same rules in South Australia as it currently does nationwide.”

 

Associate Professor Frank Zumbo, who drafted previous versions of franchising legislation, welcomed the reforms, namely the establishment of a Small Business Commissioner.

 

“The SA Small Business Commissioner will play a vital role in promoting better decision-making by the state’s small businesses,” Zumbo says.

 

“Assisting small businesses, franchisees, retail tenants and farmers to resolve business disputes with larger parties will be central to the work of the... commissioner.”

 

Piccolo says the government will now turn its attention to the appointment of the commissioner, with Zumbo believed to be a potential candidate, although Zumbo has played down expectations.

 

“Right now, it’s important that the role is established. I’m happy to assist with the government going forward, but right now we’re just looking at establishing the office,” he says.