Office of the Small Business Commissioner
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OverviewNSW has a relative advantage as the most populous
Australian state and home to the largest concentration
of economic infrastructure. NSW must use this
comparative advantage to ensure it is the preferred
place in which to do business.
Over recent years, NSW’s share of the nation’s GDP has
declined. It’s time to reverse that decline and build a
sustainable future. NSW must continue to reduce its
taxes, and appropriately invest those it collects. NSW
should be an efficient and productive state that provides
opportunities for business to grow. Government has a
role to play in supporting economic conditions and the
critical infrastructure to ensure NSW remains the
business capital of Australia.
To ensure future growth, NSW cannot rely solely upon
Sydney as a ‘brand’ with its diverse population, and
stable political and social environment – as valuable and
as important as these fundamentals are. The NSW
Government has a critical role to play in attracting and
retaining business in NSW by maintaining a competitive
tax system, minimising compliance burdens, and running
efficient and effective services.
IntroductionOn 10 March 2010, the NSW Business Chamber
released its policy blueprint, 10 Big Ideas to Grow NSW.
The 10 Big Ideas to Grow NSW emerged from
policy symposiums hosted by NSW Business Chamber
during 2009 which involved over 500 business
leaders, academics, community leaders and
government representatives.
The 10 Big Ideas cover the performance of Government,
taxation, red tape, transport, infrastructure,
Commonwealth-State relations, health funding,
regional development, local government, the business
environment, education and skills. They represent a
combination of savings, new spending initiatives and tax
cuts, and in aggregate, they improve the Budget position
of NSW by at least $670 million over four years.
Big Idea 5 of the 10 Big Ideas to Grow NSW calls for the
establishment of a Department of Business Growth.
Within that Department, NSW Business Chamber calls
for the establishment of an Office of the Small Business
Commissioner.
Further information about the 10 Big Ideas can be found
at 10bigideas.com.au
Office of the Small Business Commissioner
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PurposeThe purpose of the Office is operational and strategic
but will undertake the following important functions:
1. Dispute Resolution
The Office will provide a dispute resolution
mechanism for
> business to business disputes;
> disputes between business and government
departments;
> disputes between businesses and local councils;
> disputes between landlord/leasee; and
> mediation of franchise disagreements.
2. Independent advice and recommendations to Government
The Office of the Small Business Commissioner will
provide independent advice and recommendations to
Government. The Office will investigate business
complaints, review and provide comment on systemic
issues; make submissions to relevant inquiries; and
make representations to the Minister and Parliament
through independently established reporting
mechanisms.
3. Referral to appropriate jurisdiction
In instances where the Small Business Commissioner
does not consider a complaint can be managed in the
Office of the Small Business Commissioner, the
Commissioner will refer the complaint to a more
appropriate jurisdiction. For example, serious breaches
of the Trade Practices Act may be referred to the ACCC.
The Ombudsman may also be referred matters under
certain circumstances.
It is noted that a number of industry Codes of Practice
require disputing parties to use mediation services but
are not explicit in the type of service/system parties
must use. The Office of the Small Business
Commissioner may provide such services or may refer
parties to a more appropriate service.
The Office of the Small Business Commissioner The position of the Small Business Commissioner shall
be a statutory position. The Office of the Small Business
Commissioner shall be a statutory office.
The roles and functions of the Office of the Small
Business Commissioner and the Small Business
Commissioner will also be prescribed by legislation.
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Operations of the Office of the Small Business CommissionerAn independent office to be established by the NSW
Government, the Office of the Small Business
Commissioner will have a number of functions and
powers to promote a fair, competitive operating
environment for business within NSW. Such functions
will include:
> Dispute resolution including the investigation of unfair
market and business practices
> Review of government regulation
> Education and support services
The Office of the Small Business Commissioner will act
impartially in all matters (as an Ombudsman does).
Independent commentary
As an independent statutory office, the Office of the
Small Business Commissioner will be able to provide
public commentary on issues affecting small and
medium sized businesses and in working with the Small
Business Advisory Council (see below) propose
legislative and regulatory reform in favour of small
business.
While small businesses operate in the same commercial,
economic and legal environment as larger businesses,
policies must allow for the different needs and capacities
of smaller enterprises. In contributing to the policy
development process, the Commissioner should take a
broad approach in considering whether policy issues are
relevant to the small business sector.
Areas of policy development where the Commissioner
could play a role include, but are not limited to:
> Small business access to finance
> Timeliness of government payments
> Fair trading
> Red tape reduction and regulatory reform
Red tape reduction and regulatory reform
As an independent statutory office, the Office of the
Small Business Commissioner will be able to make
recommendations to the Minister for red tape reductions
and for amendments to regulation in favour of small
business. Evidence and other data collected by the Small
Business Advisory Council, and the Small Business
Commissioner through the mediation, dispute
resolutions and other functions, can be provided to the
Minister in support of such change.
In 10 Big Ideas to Grow NSW, NSW Business Chamber
recommends that the Better Regulation Office be
relocated from the Department of Premier and Cabinet
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to the proposed Department of Business Growth
reporting to the Treasurer. This is to ensure that all
resources currently directed towards enhancing small
business growth are consolidated and administrative
processes streamlined.
Mediation and Dispute Resolution Services
To support the provision of a competitive and fair
operating environment for small and medium services,
the Office of the Small Business Commissioner will
provide an alternative dispute resolution service.
The service will be designed to bring together parties
who have contractual and other disputes regarding unfair
business behaviour. The aim is for such disputes to be
effectively and efficiently resolved without the parties
having to report to costly and time-wasting court
proceedings. Further, decisions made to resolve the
dispute are immediate because a decision of the court is
not required. The decision agreed between parties will
be for that dispute only, and will not dictate future
business relationships.
With government subsidised mediation services, parties
will be brought together in a non-confrontational setting
and have their disputes mediated by expert mediators.
Mediators will be professionally recognised and the
Office of the Small Business Commissioner will retain a
panel of mediators who will be drawn upon to provide
such services.
Mediation services will be government subsidised and
inexpensive to ensure the majority of disputes are
mediated and finalised without the need for parties to
resort to expensive and drawn out court processes. In
Victoria, for example, the major component of the
operational budget allocated to the Office of the Small
Business Commissioner is for the provision of mediation
and dispute resolution services.
The additional benefit of this system is that it alleviates
the stresses on the Administrative Appeals Tribunal by
keeping out those matters, which with the assistance of
mediators, are able to be efficiently and effectively
managed between parties. For example, in the last six
years, the Victorian Small Business Commissioner has
mediated 5,500 disputes, and resolved 80% of all
matters, in disputes worth approximately $200 million.
Education and Support Services
The Office of the Small Business Commissioner will be
responsible for informing and educating government
agencies on the operations of small business. This is
particularly relevant in the development of Service
Charters (see below).
The Office of the Small Business Commissioner will
also provide education services to small businesses,
which will include
> information about the operations of the Office of the
Small Business Commissioner,
> the work of the Department of Business Growth, and
> other services including regulation and compliance,
fraud and related matters, privacy and customer
data collections.
ScopeIt is envisaged that
> ‘small business’ will be interpreted by the
Commissioner on a case-by-case basis, to ensure that
the services of the Office of the Small Business
Commissioner are as relevant to as many business as
possible. Sole traders would fall within the scope of
any definition.
> the Commissioner will determine the extent to which
a small business has been the victim of ‘unfair’
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practices or ‘unconscionable’ behavior to enable
complainants to use the services of the Office of the
Small Business Commissioner when dealing with
business regulation, contractual matters (for example
in franchise arrangements) and in tenancy
arrangements. Where necessary and appropriate, (for
example where there are serious breaches of the
Trade Practices Act, or where there are clear examples
of misleading and deceptive conduct), matters will be
referred to an appropriate jurisdiction, notably the
ACCC. The Commissioner may refer other matters to
the Ombudsman.
> mediation services will be inexpensive and government
subsidised to ensure the majority of disputes are
mediated and finalised outside court processes.
> Office of the Small Business Commissioner will retain
a panel of appropriately trained mediators and
investigators.
> Office of the Small Business Commissioner will be
impartial in all matters (as an Ombudsman is)
> Office of the Small Business Commissioner will be
hosted by the Department of Business Growth (itself
a newly established Department created through the
combination of the Department of State and Regional
Development; Office of Fair Trading; and the Better
Regulation Office).
> Department of Business Growth will provide the
administrative and operational support required of the
Office of the Small Business Commissioner.
Funding the Office of the Small Business CommissionerAs a statutory position, the Office of the Small Business
Commissioner would receive funding as a line item
within the budget of the host agency.
The Department of Business Growth, as host of the
Office of the Small Business Commissioner, would
provide the Office with its corporate services
requirements, including IT, human resources, payroll and
other ‘shared services’ requirements. The Department
would be responsible for all administration requirements
attached to the provision of these services.
The operational budget for the Office would be a
separate line item over which the host department would
have no jurisdiction. Indicatively, it is thought the Office
would require initial funding of approximately $3 million,
increasing as the operations of the Office increase.
Office of the Small Business Commissioner
Cost to Establish a Department of Business Growth 2011-12 2012-13 2013-14 2014-15
Establish a new Department of Business Growth $5.0m
Expand Department of Business Growth $7.5m $10.0m $10.4m $10.8m
Establish the Office of the Small Business Commissioner $3.0m $3.0m $3.1m $3.3m
Total $15.5m 13.0m $13.5m $14.1m
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Relationship with the MinisterAs a statutory position, the Small Business
Commissioner will have an independent relationship
with the Minister for the Department of Business
Growth. This is recommended to be the Treasurer, and
as a central agency will contribute to the Department
being able to drive change and achieve results.
Relationship with the Director General of the Department of Business GrowthAs a statutory position, the Small Business
Commissioner will have an independent relationship
with the Director General for the Department of
Business Growth. On matters of administrative,
operational or strategic interest, the two officers would
need to work collaboratively.
Case study – Paying bills on time in Government
One area where the Small Business Commissioner could actively advocate on behalf of small businesses would be to encourage the Government to pay its bills on time. This is an issue of significant concern for small businesses in NSW, and has been raised by a number of NSW Business Chamber members.
Current Government practice generally requires payment within 30 days, but payments are often late, creating cash flow pressures.
Cash flow is critical for small businesses, and with banks tightening lending criteria following the global financial crisis, receiving payments in a timely fashion has become even more vital to the ongoing viability of these businesses.
For example, a small business providing goods to the Government Health Sector has been consistently paid late, and is often owed several million dollars in late payments. This is placing increasing pressures on the business.
Small businesses dealing with Government Departments are wary about complaining too loudly about their mistreatment for fear of losing future business.
The NSW Government should be moving to improve the timeliness of payments to small businesses, and match the Victorian Government’s ‘fair payments clause’, which has been in effect since 1 July 2007. This clause requires government departments to pay small business suppliers under contracts up to the value of $3 million within 30 days, and to pay penalty interest rates on late payments. The Federal Government has recently matched this commitment for contracts up to the value of $1 million.
Unfortunately, conditions in NSW appear to be getting worse rather than better, with recent tenders from the Department of Health increasing the payment period from 30 days to 45 days.
Such decisions continue to reinforce the perception that NSW is a costly place in which to do business.
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Small Business Advisory Council As means of providing the Minister with broad-based
input and advice on the range of regulation, policy and
operational matters impacting on business, the Minister
will appoint a Small Business Advisory Council in effect
replacing the current Small Business Development
Corporation Board.
Replicating the Federal Small Business Advisory
Committee, the NSW Council will be independent of
government and provide advice on the impact of
proposed policy changes and regulatory reforms.
Chaired by the Small Business Commissioner,
members will be chosen by the Minister and include
representation from a range of industry groups
representing business. It is recommended that the
NSW Business Chamber participate on the
Small Business Advisory Council.
Issues considered by the Small Business Advisory
Council will be relevant to the COAG agenda and provide
the Minister with advice and information that contributes
to effective representation at relevant government
councils and at industry forums.
The secretariat support for the Small Business Advisory
Council will be provided by the Department for
Business Growth.
Small Business ChartersGovernment agencies whose work involves engagement
and interaction with small businesses, whether by
contract, tender for services, preferred client or service
provider, partner, or other means, will be required to
enter into a Service Level Agreement with the relevant
small business.
This is to ensure relevant departments recognise the
importance of supporting small businesses and are
committed to excellence in dealing with small businesses.
As a useful management tool, a Small Business Charter
can assist in the setting of service level standards,
performance standards, benchmarks for service delivery,
and act as an accountability mechanism.
Such standards are envisaged to be included in the
Small Business Charters:
> Government tendering practices
> Late payments
> Government response times to inquiries
> Preferential treatment
> Licensing and approvals
> Grants and approvals
> Information and support services
> Communication with small business practices
Appointment of the Small Business CommissionerIt is recommended that the Small Business
Commissioner be a person with relevant industry
experience and be considered by industry and
government alike to be a person of independence
and integrity.
The Commissioner must demonstrate a commitment to
promoting a competitive and fair operating environment
for all NSW small businesses.
The selection of the Small Business Commissioner
should be through an advertised, competitive, merit
based selection process.
Office of the Small Business Commissioner
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Notes
1110bigideas.com.au
10bigideas.com.au
Call > 13 26 96 nswbusinesschamber.com.au
NSW Business Chamber140 Arthur Street North Sydney NSW 2060
Locked Bag 938 North Sydney NSW 2059
t > 13 26 96 f > 1300 655 277 e > [email protected] w > 10bigideas.com.au
1 Ensure taxpayers get better value for money by auditing government services and performance.
2 Create jobs by cutting employment taxes and red tape.
3 Protect the NSW Budget by fighting for a fairer share of the GST.
4 End the blame game in hospitals by handing funding to the Federal Government.
5 Move economic growth to the centre of State Government decision making by establishing the Department of Business Growth.
6 Encourage growth in regional NSW through funding government and business relocations to regional areas.
7 Get the politics out of infrastructure by establishing Infrastructure NSW.
8 Take charge of Sydney traffic by appointing a Transport Tsar.
9 Help Sydney prepare for the future by creating 10 super councils.
10 Better prepare young people for the workforce by improving the HSC for students not attending university.
Visit 10bigideas.com.au to find out more
REP
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