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Committee considers options for unconscionable conduct

THE WA Government has started its push on unconscionable conduct protection for small businesses by reconstituting the Small Business Safeguards Committee.

The committee, chaired by Vincent Mayor Nick Catania, is considering whether simply mirroring federal unconscionable conduct legislation in the Fair Trading Act will be enough to protect small businesses.

Mr Catania said discussions before the committee included whether more regulation would help small businesses or if it would be better to adopt voluntary codes.

“Do we have enough protection in commercial leasing legislation? How can we adapt the Fair Trading Act?” he asked.

The committee has already met once and Mr Catania said only three or four meetings should be necessary before it can present its findings to the Government.

The committee includes representatives from the Property Council of Australia, the Chamber of Commerce and Industry, the Department of Justice, the Small Business Development Corpor-ation and other small business bodies.

Small Business Minister Clive Brown told Business News earlier this year that protecting small businesses from unconscionable conduct was one of his primary concerns.

However, this electoral promise has been taken out of Mr Brown’s hands.

Because the necessary legislation is likely to affect the Ministry of Fair Trading, it has come under the purview of Fair Trading Minister John Kobelke.

Small businesses have redress against unconscionable conduct through protections added to the Trade Practices Act in 1997.

But history has shown the cost of taking actions through the Trade Practices Act has proved too difficult for most small businesses.

WA Retailers Association CEO Martin Dempsey, who is also a member of the safeguards committee, said it was talking about making a fairly erudite federal law into a practical state law.

“Small businesses can’t afford to initiate actions in the Federal Court,” Mr Dempsey said.

He is keen on a proposal to give WA’s commercial tribunal system some judicial muscle.

Mr Dempsey said one of the big concerns for small business was in the area of commercial tenancy, when a shop’s lease was close to expiry.

“Landlords say there is no automatic right of refusal. Because they can track the turnover of the business they try to get a higher percentage of the turnover in rent. Anything above 20 per cent of turnover is too much,” he said.

“The landlords usually wait until the business is coming to the end of the lease and then talk about hiking up the rent 20, 30 or 40 per cent and say take it or leave it.

“The take it or leave it is the unconscionable part.”

Property Council of Australia WA branch chief executive Joe Lenzo said he was happy to be given a chance to have some input into Labor legislation.

“There are a number of legislative changes that are going to take place,” he said.

“As long as there is proper consultation, we’re happy.

“But whether that consultation has any effect on fixing problems the business community faces remains to be seen.”

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