DAVID EATON. Small Business Commissioner Small Business Development Corporation

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August French
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1 DAVID EATON Small Business Commissioner Small Business Development Corporation

and advice; dispute resolution services; policy and advocacy Recent areas of focus

2 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

3 Business by size Contribution to the economy Share of private sector employment Share of private sector value added 29.9% Large 45.7% Small 42.9% Large 33.7% Small 24.3% Medium 23.4% Medium Source 2014: Department of Industry

4 Global insights European Commission Enterprise and Industry Europe s 21m SMEs lifeblood of Europe s economy 98% 67% 80% of all businesses of total private sector employment of new jobs created Source:

European Small Business Act The Small Business Act for Europe (SBA) puts Think Small First at the heart of policies across Europe Role of the Small Business

5 European Small Business Act The Small Business Act for Europe (SBA) puts Think Small First 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

6 A broad range of responsibilities 1. Information and advice 2. Business workshops 3. Commercial tenancy? 4. Business migration 5. Advice to Government & agencies 4. Dispute resolution Digital, telephone, face-to-face

7 SBDC: at a glance Dispute Resolution

8 Alternative dispute resolution service (ADR) For business to business A N D business to government disputes 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) How we deal with disputes SAT All dispute enquiries General advisory team Intensive Case Management (and mediation) Court Approx 60% 85% $25m finalised finalised in value

9 ADR Common areas of dispute? Contractual disputes Retail tenancy matters Alleged misrepresentation Business partnership disputes Non performance of services or goods Consumer guarantees 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

10 Who handles small business disputes? Employers Employees WA Industrial Relations Commission Businesses Consumers Commerce Protection Businesses Businesses/ Government SBDC Policy and advocacy

11 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

12 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 clauses Unfair contract terms Payment terms and times

13 Small business loans Dec 2016 ASBFEO Kate Carnell Corporate response

ACCC Unfair contract terms Fair contracting

14 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

15 Payment terms and times 9 April 2016

16 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

17 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

18 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)

19 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

20 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

21 Your role Everyone has a role to play? Big business Government Public sector agencies Small business operators Chambers and Industry Groups Media

22 Questions, comments Small Business Development Corporation Contact us smallbusiness.wa.gov.au

23 Small Business Development Corporation

Western Australian Industry Participation Strategy (WAIPS)

Western Australian Industry Participation Strategy (WAIPS) Table of Contents Message from the Premier... 2 1. Overview... 3 2. Coverage... 3 3. Key Components of the WAIPS... 4 3.1 Procurement Related