Opinion Pollies have reason to remember small business

Leaving aside leadership questions, there is no doubt the cost of living will be the key issue in the federal election, writes Frank Zumbo.

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Frank Zumbo

OPINION: Leaving aside leadership questions, there is no doubt the cost of living will be the key issue in the federal election.

There will be the usual debate about border security, the national broadband network, regional Australia and petrol prices, but at the heart of all these issues is cost of living. The point is simple: the cost of living for ordinary Australians is going through the roof. Ordinary Australians, whether they are in western Sydney or in the ACT, are feeling growing pressure on household budgets. Electricity, petrol, water, insurance and health services are all going up.

How are ordinary families in the ACT and around Australia to survive? This will be the recurring theme during the election campaign. Western Sydney is at the heart of the political debate because it is a microcosm of the financial stresses suffered by families all over Australia. And let's not forget there are plenty of federal seats in western Sydney, and polling for them is likely to determine the outcome of the election.

Winning the hearts and minds of struggling families means sensible policies to tackle escalating costs of living. Here strong and effective competition laws are essential. For far too long Australia has had some of the weakest competition laws in the world and that now means that Australian consumers are easily ripped off.

Whether it is electricity, petrol, insurance or health services, a lack of transparency and genuine competition typically lies at the heart of the rip-off and the escalating cost of living. Consumers need more transparency and genuine competition across the board or they will end up with monopolies, duopolies and oligopolies.

Find a rip-off and you will tend to find a monopoly, duopoly or oligopoly. Doctors and lawyers have a statutory monopoly and you see legal and health costs going up. Look at petrol and you see prices going up because the major retailers have driven independent operators out of the market - especially in the ACT - and the majors now simply copy one another.

So, all we get is ''copycat'', not vigorous, competition. That's where there is a semblance of competition rather than a genuine attempt to deliver lower prices and wider choice for consumers. A lack of vigorous competition means higher prices and less choice for struggling ACT families.

And don't forget the poor old ACT small business operators, who may be seeing higher rents, higher electricity prices and escalating labour costs. All these increases mean higher prices to consumers. That adds further pressure to the cost of living as retail prices rise across the board.

No doubt federal Small Business Minister Chris Bowen will know how important small businesses are to the economy. Small businesses are the heart and soul of Bowen's Sydney electorate of McMahon. And the owners of these small businesses will determine whether Bowen gets re-elected.

Bowen needs to move quickly to demonstrate that the federal government is truly committed to delivering real solutions for small businesses. It needs to do much more to reduce the red tape burden. All we've really seen is the establishment of a deputy chairman with the Australian Competition and Consumer Commission having responsibility for small businesses, and a new Australian Small Business Commissioner. Do we really need two federal advocates for small business? You decide.

And remember the ACCC commissioner with responsibility for petrol, better known as the petrol commissioner. He says there is nothing wrong with petrol prices. Well, if you believe that, then you would be right to ask why we still need an ACCC petrol commissioner. With Bowen having appointed the ACCC petrol commissioner, the better question is to ask, what has the commissioner done for consumers and small businesses in the petrol industry.

Small business is an area where the Labor government and the opposition are actually having a policy debate. Take, for example, the Australian Small Business Commissioner. Here Labor has steadfastly refused to give the new commissioner legislative backing. In the absence of legislation, the commissioner lacks the powers that state-based small business commissioners have under legislation in their states.

In contrast, the federal opposition promises to give legislative backing to a federal small business ombudsman.

Significantly, the opposition promises to go even further and deal with unfair terms in commercial contracts. These are those contract terms where the larger business is given almost limitless power to change the contract to the potential detriment of the small business involved without the approval of that small business.

That will be an important first test for Bowen. Last time he had a policy role in the area of small business, he proposed laws to deal with unfair contract terms in commercial contracts.

Will he now deliver on that much-needed law reform? Or will he play politics and oppose the opposition's policy to stamp out unfair contract terms being used against small businesses?

This opinion piece first appeared in the Canberra Times.

Frank Zumbo is an associate professor in the School of Business Law and Taxation at the University of New South Wales.