Business Advisory Forum, COSBOA Calls For System To Measure Impact Of Regulation: Legal Matters

COSBOA calls for system to measure impact of regulation

By Michelle Hammond
Thursday, 12 April 2012

Small business lobbyists have used an inaugural business forum to call for regulatory reform, including measuring the impact of regulation on small business.


Earlier today, Prime Minister Julia Gillard opened the first Council of Australian Governments Business Advisory Forum in Canberra, attended by state leaders and key business chiefs.


The forum was held a day ahead of the COAG meeting between Gillard and the state premiers and chief ministers.


Gillard used the forum to call for a new partnership between industry and the three levels of government.


“This is a partnership where we want to discuss some of the issues that are at the forefront of the minds of business, and therefore should be at the forefront of the nation’s leaders as we meet tomorrow,” Gillard told the forum.


Gillard said she welcomed new unemployment figures for March, which show the unemployment rate is steady at 5.2%.


“But we know from our business representatives around the nation, and our state premiers and chief ministers, that the way in which our economy is responding to these days of change is different for different industry sectors and different parts of the country,” she said.


“While there is spectacular growth in some parts of our economy, our high Australian dollar, and competition for labour and capital, means that other parts of our economy are under pressure.”


Arguably, one part of the economy doing it particularly tough is small business. Amanda Lynch, deputy chair of the Council of Small Business of Australia, used the forum to outline concerns.


Lynch also provided recommendations, including harmonisation of the tax system, removing red tape, and introducing a system to measure the impact of regulation on the small business sector.


Lynch said although COSBOA may be prepared to work with Federal, state and local governments to identify redundant regulation, there is a growing perception the reform process may have stalled.


“There has been a 30% increase in business failures over the past three years so it is not enough to merely recognise the issues without taking steps to deliver solutions,” Lynch said.


“Small business is growing impatient and need to see outcomes being delivered in the next six to 12 months.”


“[We need to] develop a mechanism that will measure the impact of regulation on small business and set a benchmark, which will hopefully form the high-tide point.”


Meanwhile, the Australian Food and Grocery Council used the forum as an opportunity to call on the Federal Government to consider regulatory reforms in the food and grocery sector.


According to AFGC acting chief executive Dr Geoffrey Annison, the sector is under pressure due to the rising cost of labour, energy, water, transport and high global commodity prices.


“The Government must implement accelerated depreciation tax measures to enable manufacturers to take advantage of the high Australian dollar,” Annison said in a statement.


“Compliance with regulation and standards has also been identified as a major and ongoing issue for companies – the Government must reinvigorate its reform agenda in this area.”

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Ray Borradale
Cosboa needs to be more proactive in bring together the endless number of Small Business associations and if we are to see a reduction in Small Business regulation we should, as pointed out, be identifying redundant regulation, but also looking at ways to introduce better regulation that produces even more redundant regulation.

COSBOA should further be lobbying to follow the example of South Australia's Small Business Commissioner Act which is similar to some of the legislation in US states, in that there is an explicit obligation of 'good faith' dealings on all parties in B2B contractual relationships. In fact, in federal US Law there are 918 references to 'good faith'.

As it stands now Small Business in Australia gets a rough time in disputes with bigger businesses using financial weight to overwhelm or drag out cases for many years. In these situations Small Business has learnt to capitulate and suffer the financial consequences rather than add to the cost by pursuing even the most legitimate of complaints.

Bigger business use the financial threat of the exorbitant costs in pursuing complaints to further take advantage of financially weaker business parties claiming default wins.

COSBOA knows all this but now is the time to call for 'good faith', pecuniary penalties for breaches of Law in relation to B2B contractual relationships, a forum similar to the VCAT model to handle disputes and take away financial advantage and default wins to bigger business and as an added deterrent, a publicly accessible online register of complaints and outcomes similar to that of the ACCC now.

What we are talking about here is the type of legislation that allows for the streamlining of regulation but also builds investor confidence, reduces bankruptcies in small business, increases employment and its sheer existance as a deterrent reduces disputes and the need to for dispute resolution resources.
Ray Borradale , April 13, 2012
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