Franchising reforms proceed to next stage

Contentious reforms to Western Australia’s franchising laws, aimed at creating a level playing field between franchisees and franchisors, have progressed to a second stage of parliamentary review, despite strong opposition from commerce minister Troy Buswell.

The Franchising Bill 2010 was debated in the Legislative Assembly yesterday afternoon and was subsequently passed on voices.

Mr Buswell and senior Liberal MP Mike Nahan spoke out against the Bill, while Liberal MP Graham Jacobs voiced his support.

Earlier this year, the Economics and Industry Standing Committee chaired by Mr Nahan tabled a report opposing the Bill.

Recent amendments to federal franchising legislation and the cost of enforcing the bill at around $1 million a year for the next four years were cited as some of the main reasons the committee opposed the Bill.

Despite this, some Liberal and National MPs sided last night with Labor and independents MPs to support the bill.

Labor’s Bill Johnson, who dissented from the majority report, voiced his support for the Bill yesterday stating it should be supported with amendments.

The Bill, which would impose a ‘good faith’ obligation and penalties for breach of the Franchise Code of Conduct, was introduced to parliament by Liberal backbencher Peter Abetz in October last year.

Mr Abetz said the reforms were aimed at addressing the perceived imbalance in the relationship between franchisors and franchisees, which sometimes resulted in small franchisees being exploited by ‘rogue’ franchisors.

He said today that the progression of the Bill to the ‘consideration in detail’ stage was a positive outcome.

“The fact that it has got through the second reading is a huge milestone for franchisees, because it’s the first parliament in Australia where this kind of legislation has gotten to this point,” Mr Abetz said.

In addition, he said he was optimistic that the Bill would eventually be passed, but realised the process may take some time.

“The tricky part now is where to next, I’m depending on the Labor Party to allocate some more private members time…and put it back on the agenda again.”