27 July 2022

Federal Labor Government to introduce new legislation to strengthen protections for small business against unfair contract terms Changes complement WA Government small business safeguards including new Security of Payment Act for construction subcontractors and the Investigations and Inquiry authority of the Small Business Commissioner.

The McGowan Government welcomes the proposed introduction to the Federal Parliament of new legislation to outlaw the use of unfair terms in standard contracts.

The legislation, to be introduced to the spring sitting of parliament by Federal Minister for Small Business, Hon Julie Collins MP, will extend protection from unfair terms to small businesses with an annual turnover of less than $10 million dollars.

It will also allow access to fair contract provisions to medium-sized businesses with up to 100 employees.

Western Australia has been at the forefront of addressing power imbalances for small business through legislative change.

In 2020, the McGowan Government passed the Small Business Development Corporation Amendment Act 2020 allowing the WA Small Business Commissioner to compel parties to provide documents relating to investigations of unfair practice.

From August 1, 2022, the new Building and Construction Industry (Security of Payment) Act 2021 will apply to any new construction contracts entered into, to help ensure construction subcontractors are paid on time for their work.

Comments attributed to Small Business Minister Don Punch:

"The WA Government welcomes this decisive move by the Albanese Labor Government to increase protections for small businesses when entering into contracts.

"Small businesses are at risk of being subject to unfair terms, particularly when accepting standard form contracts from big business customers, which can have devastating effects as they often lack the capital reserves and resources to fight unfair provisions.

"In Western Australia, we have been enacting better protections for small business for many years, reflecting the importance of this sector to our economy and community.

"We welcome the introduction of new Federal legislation which will enhance State protections and further level the playing field for WA's 220,000 small businesses."

Minister's office - 6552 6900