Small business to benefit from unfair contract protections

Legislation providing small businesses with the same sorts of protections from unfair contracts as consumers enjoy, has passed through parliament.

As AAP reports, the legislation was originally promised by the Coalition at the last Federal election. The argument for its introduction was that small businesses are not in a strong position to handle losses resulting from unfair contracts.

The Greens then introduced amendments which increased the thresholds for coverage from $100,000 to $300,000 for contracts up to 12 months long and $300,000 to $1 million for contracts greater than 12 months. The lower house signed off on these amendments yesterday.

SMH reports that Peter Strong, chief executive of the Council of Small Business of Australia, welcomed the legislation.

"The big end of town will still be fighting this tooth and nail but I'm not sure how they can win given all the political parties have agreed,” he said.

Though first put forward by the Coalition, the unfair contract legislation was among recommendations made by the financial system inquiry chaired by David Murray.

The Government agreed with two other recommendations of the Murray inquiry which affect small businesses.

The first is in the area of credit card fees. According to the Government’s response it “will phase in a legislated ban on surcharges that exceed the reasonable costs faced by merchants in accepting cards."

And secondly, the government wants to facilitate crowdfunding for start-ups. As such, it will “consult the community on crowdsourced debt funding in parallel with legislation to implement crowdsourced equity funding.”

Image: ABC