DAVID EATONSmall Business Commissioner

Small Business Development Corporation

Overview

• Background – is small business important to our economy?

• Overseas experience

• Role of the Small Business Development Corporation

• Information and advice; dispute resolution services; policy and advocacy

• Recent areas of focus

• Corporate behaviour

• Western Australian

• Your role

• Key advisors to small business

• Open session

• Discussion and Q&A

Business by size

Contribution to the economy

Share of private sector

employment

45.7%

Small

29.9%

Large

24.3%

Medium

42.9%

Large

Share of private sector

value added

33.7%

Small

23.4%

Medium

Source 2014: Department of Industry

Global insights

European Commission – Enterprise and Industry

Source: http://ec.europa.eu/small-business

Europe’s 21m SMEs – lifeblood of Europe’s economy

of all

businesses

98% 67%

of total

private sectoremployment

80%

of new

jobs created

European Small Business Act

Think Small

First“

”

The Small Business Act for Europe (SBA) puts

at the heart of policies across Europe

Role of the Small Business Development Corporation

• Information and advice

• Crisis intervention – dispute resolution

• Policy and advocacy

Small Business Commissioner: Investigate and Influence

A broad range of responsibilities

1. Information

and advice

4. Business migration

2. Business workshops

5. Advice to

Government &

agencies

3. Commercial

tenancy

4. Dispute resolution

?

Digital, telephone, face-to-face

SBDC: 2016-17 at a glance

Dispute Resolution

A N D

business togovernment

disputes

For businessto business

A significant number of ‘potentially serious’ business disputes in Western

Australia are not pursued due to the potential cost of court action.

(DIISR Small Business Dispute Resolution Research 2010 Orima Research)

Alternative dispute resolution service (ADR)

How we deal with disputes

All dispute enquiries General advisory

team

Intensive Case

Management

(and mediation)

SAT

60%finalised

85%finalised

$25min value

Approx

Court

ADR – Common areas of dispute

Contractual

disputes

Retail tenancy

matters

Business

partnership

disputes

Consumer

guarantees

Alleged

misrepresentation

?

Non performance of

services or goods

Observation of small business in crisis

• Often lack business acumen

• Financial and contract literacy

• In a highly emotional state

• In crisis mode and/or seeking revenge for perceived injustice

• May ‘forget’ key elements of the case

• They may accept little responsibility for the situation

Who handles small business disputes?

WA Industrial

Relations

Commission

Commerce

Protection

SBDC

Employers Employees

Businesses Consumers

BusinessesBusinesses/

Government

Policy and advocacy

Policy and advocacy

• Conduct inquiries

• Deliver recommendations to all tiers of government

• Provide advice and submissions to:

• State Government Minister for Small Business

• State Government departments and agencies

• Commonwealth Government

• Local Government: ‘Small Business Friendly Local Govt.’

Policy and advocacy

Covering a wide range of topics, including:

• Red tape reduction

• What specifically and why?

• Liquor control

• Growth of hospitality and tourism

• Unfair contracts

• Extend protection beyond consumer to small business

• Competition policy

• Effects test

• On-demand transport reform

• The sharing economy

• Franchising

• Wien Review

• Access to justice

• Productivity Commission Review

Peer Group

• Commonwealth Agencies

• ACCC: accc.gov.au

• ASIC: asic.gov.au

• ATO: ato.gov.au

• Australian Small Business and Family Enterprise Ombudsmen:

asbefeo.gov.au

• Small Business Commissioners

• Western Australia: smallbusiness.wa.gov.au

• NSW: smallbusiness.nsw.gov.au

• Victoria: vsbc.vic.gov.au

• South Australia: sasbc.sa.gov.au

Recent focus - national

Bank loans and default clausesUnfair contract terms

Payment terms and times

Small business loans – Dec 2016

ASBFEO

Kate Carnell

Corporate response

ACCC – Unfair contract terms

Fair contracting – Nov 2016

• Since November 2016 – ‘unfair contract’ protections

applies to small businesses

• Contracts maybe considered ‘unfair’ when only one party

• Hold all/majority of power

• Can terminate contract

• Is penalised for breaches or termination

• Can vary terms unilaterally

• Only the term is void – not the whole contact

Payment terms and times

9 April 2016

16 April 2016

April 2017

ASBFEO

Kate Carnell

Australia - a challenging payment environment

Average pay

day in 2015

Recent focus – Western Australia

Government payment terms and times

Government procurement – local content

Construction industry – security of payment

Taxi industry reform

Small Business Friendly Local Government

Small Business Friendly (Public) Works

Focus areas - WA

Government procurement• Increase access / reduce barriers for local businesses

• WA Jobs Bill – currently before the Upper House

• Increased specification for local employment & materials

• Tenders will assess

- Quality

- Price

- Broader economic impact

• Cascade commitments through the supply chain

Government payment terms and times• Treasurer’s Instruction and Premier’s Directive – 30 days

Focus areas - WA

Construction industry – security of payment

• Government construction - Code of Conduct

• Contractors can be barred from future tenders

• Improve access to rapid adjudication - Building Commission

• Phoenix activity - ASIC investigative team

Taxi Industry Reform

• Atypical – legislation created a barrier to competition

• Sharing economy and challenges for regulators (AirBnB)

Small Business Friendly Local Governments

An SBDC initiative to help build stronger relationships between small

business and local governments.

Small Business Friendly (Public) Works –a concept

A concept to include impact mitigation during planning stage of major

construction or public works.

Focus areas - WA

Access to Justice

• SBDC Dispute Resolution

• Building Commission – Rapid Adjudication

John Curtin Law Clinic

• offers services to eligible Western Australian small

businesses in a clinical legal education environment

• enhance the education of Curtin Law students and

• improve access to justice through supervised

professional experience.

Business challenges

• Tough economy:

• Lower growth – e.g. Population growth rate of 1.5% (down from 2.0%)

• Lower govt expenditure

• Disruption continues:

• Technology and digital channel

• Global commerce and customer expectations continue to evolve

• Transformation:

• Industries are changing

• business models within industries are changing

• Business skills

• Literacy and capability

• Access to justice

Your role

Everyone has a role to play

Big business

Chambers and

Industry Groups

Public sector

agencies

Government

?

Small business

operatorsMedia

Questions, comments…

Contact us

13 12 49

smallbusiness.wa.gov.au

info@smallbusiness.wa.gov.au

Small Business Development Corporation

Small Business

Development Corporation