Greg Hunt

Federal Member for Flinders | Minister for Health

Local Media

Government enhances protections for Phillip Island small businesses

Tuesday, 15 November 2016

Phillip Island small businesses will have increased protections under Australian consumer law, thanks to new laws passed by the Turnbull Government.

Changes to Australian unfair contract terms under consumer law will provide close to 900 small businesses on Phillip Island the same protections as available to consumers, following an extensive consultation and implementation period. This represents yet another injection of confidence into small businesses in the region.

Having met with a number of local small businesses in recent months, a common concern of business owners has been legal protections with respect to their negotiations with big business and the changes implemented this week will strengthen their position.

The extension of the unfair contract term protections provides a ‘fair go’ for small businesses, giving them extra protection when contending with ‘take it or leave it’ contracts. The changes ensure small businesses have access to a level playing field to compete, invest and grow.

Under the new law, a small business will be able to have an unfair term in a standard form contract declared void by a Court if, at the time of agreeing to the contract, it had fewer than 20 employees and the contract did not exceed $300,000 (or $1 million for contracts longer than 12 months).

A standard form contract is one which has been prepared by one party to the contract and where the other party has little or no opportunity to negotiate the terms. It is estimated that Australian businesses enter into an average of eight standard contracts each year.

The new protections will ensure small businesses get a fair deal when entering into standard form contracts with larger businesses. For a long time small businesses entering into contracts with larger businesses have had no choice but to accept all the terms of a standard form contract that they are given – that changes today.

The changes are a key part of the Federal Government’s strategy to ensure Australia is the best place to run a small business and come on the back of the Government’s corporate tax plan which will reduce the tax burden for businesses across the Island.

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