A big victory is dawning for small business

Legislation on competition policy and contracts is often tailored to big business interests. Under the new government ministry, small businessses will make their voices heard.

Now the election is done and dusted, we in the small business community are intent on assisting the government achieve its election promises, particularly on competition policy and contracts.  We know the government wants to honour these promises, but we also know that there will be many well-funded, well-resourced organisations fighting to have the promises withdrawn or watered down to a point where there is no impact.

In many ways, it seems nothing has changed since 1977, when the Council of Small Business of Australia was established. Back in those days, our founders realised that there was not an unambiguous voice in Canberra for small business. The other industry groups in the nation’s capital had mixed membership, including those from the big end of town. Even then, the big landlords, large franchisors and Coles and Woolworths compromised the ability of the industry groups to lobby professionally about small business issues. 

A review of the minutes from that very first COSBOA meeting shows associations with big and small members are still compromised now just as they were then, and end up lobbying for big businesses (the millionaires) rather than small.  This is why COSBOA has changed its approach to advocacy in more recent years, with more aggression and a willingness to publicly challenge those who are compromised and are not completely for small business. After all, any foe of small business is also an enemy of a healthy economy.

Here we are in 2013, and organisations such as the Australian Chamber of Commerce and Industry and the NSW Business Chamber are claiming to be the voice of small business. The trouble is these groups are still compromised by their membership, which includes Wesfarmers, Woolworths, large landlords and big developers as well as large franchisors. As a result, their campaign 'Too big to ignore' — which was supposed to be a call to arms for small business leading to the election — ignored the sector’s two biggest issues: competition policy and contract law.

The likes of the Shopping Centre Council and the Franchise Council of Australia can walk into the offices of the Prime Minister, the Treasurer and other ministers and claim there are no problems with contracts or competition because ACCI, ‘the voice of small business’ (rather than 'a voice of small business') did not mention these issues.

This is what happened the last time we tried to address the problems associated with contract negotiations.  Not long after the 2007 election, the Rudd Government seemed keen to address the legal shortcomings on these two issues, which have caused many small business people great stress and physical and mental health problems.  But big business representatives from ACCI, NSWBC and others lobbied hard to retain the unfairness and the lack of transparency in contract negotiations and processes and the government backed down. For the past five years, small business owners have felt bullied and stressed by the big landlords, the largest of the franchisors and the duopoly.  

COSBOA is on the front foot when it comes to supporting the government and the new Small Business Minister, Bruce Billson. Billson is tough and knows his facts, but many at the big end of town know no favour when it comes to maintaining their business model. We have formed our own taskforce of small business people and small business experts to help counter what will inevitably be a very aggressive and relentless campaign from ACCI, the NSWBC, the Shopping Centre Council, the Franchise Council and their moneyed supporters.

COSBOA has established a good dialogue with the Business Council of Australia, which will feed into our support to the government. Although BCA members include the grocery duopoly, big landlords and the like, they do not claim to represent small business and we do not claim to represent big business. We know what we will disagree on and we also know the many issues we have in common. There are many good relationships between big and small that should not be ignored. This relationship is well placed to discuss the issues, to determine the facts and perhaps to take action to resolve issues without government intervention.

 We’ve also developed a professional working relationship with the banking sector, often seen as lacking understanding of small business. We have worked with the Australian Banking Association and NAB, and together are gathering more and more information on issues around financing for small business. We will soon publish information that will better inform comment and policies.  This has occurred through a focus on small business, our bailiwick, without any compromise from big businesses who may feel threatened by fairness and transparency, or by the discovery of any damning facts that may be found. The banking sector has been open and focused on improving service and determining the facts. Other sectors should learn from this unless they have something to hide. 

We will, however, take a different approach with Wesfarmers and Woolworths and competition policy. We will be hosting a national forum on issues to do with the duopoly and will call together industry groups and businesses, including Coles and Woolworths, to work out some way of determining facts, confirming what impact their obvious domination has on other businesses, whether the current competition environment is truly fair, and if there are issues and problems what can be done.  

The domination and demands for ever-increasing profits by the two giants is at the expense of their suppliers and to the detriment of many honest professional retailers. We will also discuss whether urban planning has an impact on competition. This may go nowhere and end up being an anger fest, or it may help inform policy, company behaviour and the Australian economy, depending on the behaviour of those involved. In the meantime, we are ready to fight for the health of the people who run Australia’s small businesses.

Peter Strong is the executive director of The Council of Small Business Australia

Related Articles