The Franchise Council of Australia has welcomed proposed amendments to a Small Business Commission Bill in the South Australian Parliament that would prevent any commissioner from changing industry codes without legislative approval.
The move comes after the original bill passed the lower house several weeks ago, with small business minister Tom Koutsantonis its main supporter. However, franchise advocates say the bill is legislation by stealth, effectively awarding the power to amend industry codes.
FCA executive director Steve Wright told SmartCompany this morning he is “cautiously optimistic” that amendments put forward by the Liberal and Family First parties – along with two independents – will pass.
“This would certainly be a positive outcome. This is a key issue that we have noted is very contentious, and complex, and as a result, it’s been pushed very quickly through Parliament. In those circumstances it’s hard to be clear about goals.”
South Australia MP Tony Piccolo, who has advocated for both franchising and small business commissioner legislation for some time, was contacted this morning but unavailable before publication.
Small business minister Tom Koutsantonis was contacted, but he also was unavailable.
South Australian Parliament is sitting today.
Franchise expert Frank Zumbo, who has helped draft previous versions of franchising legislation, said it will be up to the members to decide whether the amendments are positive.
“Some are worthy and others would undermine the integrity of the bill, and obviously, the members would need to reflect on whether they want a bill that stands up for small business, or whether they take another position.”
The amendments would ensure that franchise owners aren’t disadvantaged compared to franchisors in other states, while another amendment requires a mandatory industry consultation in order to discuss any possible change to a code.
Wright also says the changes would make it much more difficult for any small business commissioner to change the Franchising Code of Conduct, which the industry believes is possible under the new bill.
“There is quite a lot of concern about what the Government is doing here, and we saw that in Parliament. A number of members expressed their concern over what the Government is going to do.”
The issue is that although business groups are broadly supportive of a move to create a small business commissioner – including the Franchise Council – the bill goes far beyond that and includes provisions to amend certain codes.
Although the legislation does not specifically mention the Franchising Code of Conduct, the industry has cried out over the bill, with some arguing it could discourage prospective franchisors from entering.
Some industry advocates, including Wright, say the bill is “legislation by stealth”.
Wright cited comments from independents, Family First and the Liberal parties, who stated in Parliament yesterday they had a number of concerns.
“There are plenty of concerns here, and that is great to see because it shows the non-Government parties have recognised there are issues. The main area is restricting changes to the code, and that is most important.”
“There are provisions here to make sure there is mandatory consultation before changes are made. We are cautiously optimistic about these changes.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
