Thursday 22 June 2017

The Victoria Small Business Commissioner

The 'Australian Model' for Helping Small Business Collect Payment from Customers

With its announcement of a 'Small Business Commissioner' in 2015, a post that has yet to be filled (the job is still open for applications if you're interested), the UK government is following a model that was pioneered in Australia.  How does the system work in Australia, and how successful has it been?

The first Small Business Commissioner in Australia was created in Victoria with the passing of the Small Business Commissioner Bill in 2003.  The Commissioner was to be dedicated to
promoting a fair and competitive market environment for small business.

The Victorian Small Business Commissioner (SBC)  lists its goals as:

  • promoting informed decision-making;
  • mediating business-business, business-government, retail tenancy, owner driver and forestry contractor, and farm debt disputes
  • investigating complaints about unfair market practices;
  • minimising disputes between small and large businesses.

Small businesses with an unpaid or disputed invoice can contact the SBC and request that it mediates between the two parties.   Mediation costs $195 per party per half day and is performed by qualified subcontract mediators.

The SBC has the power to issue a certificate to a party where the process has not been successful or where a party has refused to engage in the process.    Where a party has in the view of the Commissioner unreasonably refused to take part, details of the certificate may be published in the commissioner's annual report.  Hence there is a repetitional reason for businesses to positively engage with the process

In 2015-16 the Victorian SBC reports that it received nearly 2,000 cases of disputes.  Around 500 of these went to mediation, and 82% of these cases were resolved at mediation, without the need to progress to arbitration or litigation.

The success of the Victorian SBC has led to the establishment of Small Business Commissioners in New South Wales, Western Australia, South Australia and also nationally for Australia.

It remains to be seen how significant an impact on late payment, payment disputes and supply chain 'bullying' the UK Small Business Commissioner will have, but if the experience in Australia is anything to judge by, the sooner the government appoints the Commissioner and they can get on with the job, the better!