Wednesday, 23 November 2011
Business Names Registration (Application of Consequential Amendments) Bill 2011; Second Reading
I present the explanatory memorandum to this bill and I move:
That this bill be now read a second time.
The Business Names Registration (Application of Consequential Amendments) Bill 2011 supports a package of related bills already passed by the Parliament. The package comprises the Business Names Registration Bill 2011, the Business Names Registration (Transitional and Consequential Provisions) Bill 2011 and the Business Names Registration (Fees) Bill 2011. This package of legislation which was passed by the Parliament on 13 October 2011, along with subordinate legislation, will create a National Business Names Registration System.
The Business Names Registration (Application of Consequential Amendments) Bill 2011 will clarify the application of the consequential amendments to other Commonwealth Acts that were included in the Business Names Registration (Transitional and Consequential Provisions) Bill 2011. The Business Names Registration (Transitional and Consequential Provisions) Bill 2011 has been drafted such that currently both the transitional and most of the consequential amendments commence on the same day prior to the commencement the National Business Names Registration System. However the policy intention is for most of the consequential amendments to commence on the day that the national system commences. This bill clarifies that the consequential amendments to most other Commonwealth Acts will not apply until the national Business Names Registration System commences.
Currently businesses need to register their names in each state and territory in which they trade. The proposed national registration system to be administered by the Australian Securities and Investments Commission will mean businesses will pay one fee to register nationally, using an online application process. An entity carrying on a business in Australia using a name other than its own will be required to register with ASIC. This will enable the identification of the entity behind the business name. The Commonwealth has no power to regulate all business names registrations in Australia therefore the establishment of a national Business Names Registration System and the legislation which underpins it relies on a referral of constitutional powers from the states to the Commonwealth. The states therefore must enact referral legislation to give effect to the national registration system. The Commonwealth legislation is drafted in such a way that the national system cannot commence if any state does not refer or adopt the legislation. Two states, Tasmania and New South Wales, have already enacted their referral legislation. Queensland has also passed its referral legislation. The new national registration system will commence after all states refer business names powers to the Commonwealth or adopt the Commonwealth legislation. It is envisaged that states will have completed this process by March 2012 and the national registration system will commence by the end of May 2012. It is important that the Business Names Registration (Application of Consequential Amendments) Bill is enacted before the end of March 2012 to ensure a smooth transition to the new system can be achieved. Full details are contained in the explanatory memoranda.
Thank you to my colleague the Parliamentary Secretary for an absolutely compelling case as to why the parliament should support this bill. There is nothing worse than consequential provisions that kick in before the consequence to which they relate has actually been achieved. The bill has identified a changeover date when a number of Commonwealth laws dealing with the tax system, the ANL Act, the Bank Integration Act, the Corporations Aboriginal and Torres Strait Islander Act, Financial Transaction Reports Corporations Act, the Defence Service Home Act, Olympic Insignia Protection Act, Wine Australia Corporation Act and the Qantas Sale Act. There is no point in having all of those provisions activated prior to the national registration system actually commencing. We were alerted to this issue and had some good discussions with the responsible minister to not impede the passage of the legislation through both houses of parliament with the understanding that this amending provision would be coming through. The coalition is very supportive of this bill. It tidies up a technicality that needs to be tidied up so there is synchronicity with the changeover—that the changeover date sees the national business name system activated and then all of these other changes are brought into effect to coincide with that date. This whole idea about national business names registration is something the coalition supports. When we were talking about the substantive bill I pointed to the work that was instigated back in 2006-07 by the then coalition government and it is good to see that things are being moved along by the current government.
I will briefly touch on a couple of other points I raised in my contribution. I would put this under the watching brief that the coalition has on the implementation of the national business names system. There were a couple of issues that we know—
Mr Husic interjecting—
Thank you. Government Whip?
I want to get the title right; I do not want to be discourteous. Thank you, Government Whip, for that encouragement. There are a couple of things that I think all stakeholders in this process were interested in, including the merging of state based business names registration into a national system. I am sure the parliamentary secretary would be aware of the potential for overlap there and the bill provides for geographical identifiers to be attached to names after that transition so that no one is disadvantaged. There is also some work to be done on a determination about certain names that would not be permissible and how potential conflicts or near-identical names would be handled. That work is ongoing but it certainly is an area that all stakeholders are interested in and will keep a watching brief on.
The other things I touched on briefly were the interplay between this system, domain names and trademarks, and how having some synchronisation with those various intellectual property and commercial identifier systems with the business names was a smart move. We hope that goes well. I know a number of us would like the domain name system to go back the other way and check with business names, to reduce the risk of ambush marketing but we have not quite got to that point yet because there are a whole lot of interjurisdictional issues there that I am sure the parliament will need to turn its mind to down the track, when it becomes more of a commercial concern.
I also touched on the issue of the ABN. You would be aware from your extensive parliamentary career, Deputy Speaker Slipper, that the ABN is not required by all persons involved in carrying out commerce in Australia. Certain thresholds for turnover and the nature of the business were factors that decided whether or not you needed an ABN. That was thought to be appropriate at the time but under the business names national framework an ABN is essential, otherwise you cannot get a business name. So whereas once microbusinesses might not have needed an ABN now they will need to, as not having an ABN will inhibit someone getting a registered business name and, under this law, to trade without a registered name is a strict liability offence. So now, all of a sudden, the ABN becomes a fundamental issue.
I am alerted to ongoing concerns about the government's hostile disposition towards independent contractors. We have seen a number of examples where the government is making it quite difficult for independent contractors to carry out their legitimate contribution to our economy. In fact, there was another episode earlier this morning with the abolition of the entrepreneur tax offset. One of the spurious rationales given for that was that it would help delineate between independent contractors and traditional employees. They question implied is: why should an independent contractor, a self-employed person, get that very modest tax incentive whereas an employee may not? The answer is: the employee can go to the employer and talk about how things are going and not be completely consumed by the success, fate or otherwise of the enterprise within which they carry out their work. For an independent contractor, a self-employed person, that is their worry, directly. They are the ones who sit up at night wondering when the revenue is going to come in.
There was a modest incentive of a 25 per cent tax offset for small businesses—whatever their structure—for income levels up to $50,000 and then that 25 per cent tapered down to nothing at $75,000. Again, the rationale, as spurious as it is, was that this somehow clouded the issue. This is part of a coordinated and calculated campaign to make independent contractors feel as if they are some blight on our economy, that self-employment is somehow an illegitimate way of pursuing a livelihood. I stand steadfastly opposed to that assertion that keeps rearing its head through the Gillard Labor government. A hope at some point the Labor Party takes account of the Prime Minister's Chifley address where she talked about the ambitions of working men and women and how being your own boss and starting your own business was a legitimate ambition for working men and women—a motive, an inspiration I can well relate to and my community can well relate to. It would be nice to see some policy consequence to those fine words, because to this point we have not seen that.
In closing, I did touch on the interplay between some intellectual property issues—the trademark registration process and business names—and I alluded to a local business person caught in a David and Goliath sort of arm wrestle with a global company who has decided that the business name they have been operating under for some years—Global Gas, which deals with issues of measurement and verification of energy and gas, is somehow infringing against Global GAP. The irony is that 'GAP' as near as it is—yes, it is three letters and two of them happen to be 'G' and 'A', and there is a difference at the end—but the 'GAP' is actually an acronym for an agricultural certification known as 'good agricultural practice'.
This operation is born out of Europe. It was previously known as Europe GAP. It started in 1997 and was designed to give retailers confidence that food that was being purchased was being farmed and processed in a way that minimised detrimental environmental impact. Good stuff—no problem with that. But to then say that Global GAP, being a private sector body that sets voluntary standards for the certification of production processes of agriculture, including aquaculture, for products around the world to help consumers and retailers somehow is being infringed upon by a Mornington Peninsula-based company dealing with the measurement of gas is, I find, quite offensive.
What has been brought to this task and what is yet another example of the David and Goliath battle that so many small businesses face is that they have been slapped with a good, weighty volume as to why they are offending the intellectual property rights of an agricultural certification outfit in Europe which has no crossover in terms of markets, no risk of confusion. In fact, 'Gas' is a proper noun and GAP in this context is an acronym. It is really quite spurious. A multinational is slapping down a small business and using their commercial weight and the legal tools to the disadvantage of that small business that has a legitimate right to access the name that they have been trading under for many years.
Here is an example of where intellectual property intersects with business names, and I touched earlier on the domain name area. I am pleased that this national business registration process has an eye to those issues—although, if you feel you are being infringed upon, it is still up to you to fight the good fight and find all the lawyers and the cash. And you are still potentially vulnerable to this kind of quite predatory behaviour of frightening a small business out of a legitimate name that they have every right to use for some spurious argument that was presented in a nice, meaty folder by a very, very reputable law firm. But the money you spend does not equate with the strength of your argument. I hope Mr Sokol gets a fair go, as IP Australia considers this issue. I urge them to consider this application on its merits. The two business names at question present some superficial similarities, but that does not amount to a risk of confusion, commercial detriment or an infringement on intellectual property, as the enterprises, industries, markets, customers and services provided are distinctly different. Gee, I hope Global Gas gets a fair go. The coalition supports these amendments and hopes the national business name registration system rolls out quite well.
If will start with a startling claim: I often enjoy listening to the speeches from the member for Dunkley. I would enjoy them more if they had some connection to reality. We did have a number of spurious claims that were being made in that contribution, which started well and then just diverted into a direct lift out of 'Conspiracy News dotcom', making all sorts of suggestions about whether or not we had taken a position that was opposed to the role of independent contractors in the small-business sector. For a lot of these small businesses it has been liberating to be able to have the opportunity to set their own businesses up and control the way they operate in our modern economy. We have been strong supporters of providing the means and the wherewithal for independent contractors to exist. These contractors had a hard enough time—given that those opposite, when in government, refused to provide the proper and adequate support to the Trade Practices Act in dealing with a range of different issues, from creeping acquisitions through to predatory pricing. Predatory pricing in particular is of deep concern to small business but was not acted upon by the other side.
They talk about support for small business but they introduced the GST. This is something that even today causes small businesses to scratch their heads in frustration—MYOB, putting in the BAS statements and the red tape that comes with it. That was brought upon them by that side of politics, which claims it has the interests of small business at heart. They talk about IP issues, for example. I actually agree with the member for Dunkley. I think IP issues are a big way multinationals try to stifle the creativity of small Australian firms. It is a serious issue, but it is not something that has cropped up overnight.
In fact, I recall that a small business in New South Wales, my home state, was being pursued by a US firm over, of all things, a claim to patent the name 'Ugg Boot', which we are all familiar with; we know it is an Australian icon, and it has taken off, particularly in the US. This firm had attempted to muscle out a New South Wales business by using the patent system or the trading system to force them out of using the name. This occurred during the period of the Howard government in which representations had been made to IP Australia to move quickly on this and deal with it. They had the power to fix this, but they did not. Again, they failed to stand up for small business, which they claim is their bread-and-butter constituency. They failed to stand up for them on trade practices, they failed to stand up for them on red tape and they failed to stand up for them on trademarks and patents.
This week we have seen, as a result of late consideration by the parliament—into about three o'clock this morning—11 bills passed to give effect to the minerals resource rent tax. This will provide 2.7 million businesses with a huge shot in the arm—a $6,500 instant tax write-off. A few weeks ago I conducted 10 mobile offices in my electorate of Chifley. I went out and took the opportunity to speak to small businesses, to ask them how they were going and what they were facing. And they were interested to know what was being done for them. It is with huge pride that I can say that, as a result of a significant reform in the form of the minerals resource rent tax, the wealth under the ground that is owned by Australians is going to be shared above ground. These arrangements not only will mean a great deal to the other side of the country but will also benefit businesses across the eastern seaboard and across all parts of this country. It is a big deal.
For example, a cafe owner told me that when his refrigerated sandwich bar broke down he was faced with a choice: either find $5,000 out of his own funds or try to claim it from insurance. The prospect of increased premiums was something he did not cherish, and he had to pay out of his own funds to deal with that repair. These are the types of things small businesses will be able to get assistance with from 1 July next year as a result of the deliberations of the parliament last night and the moves made by this government to ensure that the benefits of the mining boom spread.
Perhaps I could draw to the attention of the Government Whip that we are not debating the bills that were voted on earlier this morning. We are in fact debating the Business Names Registration (Application of Consequential Amendments) Bill 2011.
At any rate, I certainly accept what has been said. I am proud of the things we have done for small business, and this reform, Mr Deputy Speaker, is another element of that reform process. We have a multiplicity of registration systems within this country and we are trying to ensure that there is a uniform system in place. I am particularly pleased about the involvement of ASIC and having registration and oversight through ASIC. That is an important measure that gives a great degree of confidence to small business.
I referred earlier to independent contractors and small businesses that set up, particularly in this day and age where there is a lot more freedom for people to do that. Importantly, as a result of what we are doing in another reform, the National Broadband Network, people will be able to trade in other parts of the country and the world more easily, but they will not want to wade through the red tape of business registration. We have made that uniform.
I certainly commend the states that have worked with the federal government. As the parliamentary secretary indicated earlier, there needs to be a referral process. These powers do not exist themselves in the hands of the federal government so it did require cooperative federalism to ensure that, as the parliamentary secretary said in his second reading speech, by May next year this system will take effect.
The amendments before the House will ensure that, as a result of the broader legislation which gives effect to these reforms and which was passed in October this year, when the system does kick in things will be harmonised and start at the same time. It is a common-sense proposition that, if you trade in this country, particularly with the ability to trade across borders and being able to reach out and collaborate with people in different parts of the country, you should not have to wade through paperwork in order to set up your business elsewhere. I am sure that small businesses will welcome the fact that they will be able to set up small business concerns and know that in one part of the country the process will be the same as exists in the other parts.
Tasmania and New South Wales have already signed up and other states will be ready to sign up by March. By May this system will kick in and will provide tangible benefits to small business. It is a demonstration of how cooperative federalism can deliver in a significant way for the economy. I commend this very sensible set of amendments and the overall reform. If you will excuse my enthusiasm, Mr Deputy Speaker, I think a lot of good things are being done for small business in this country by this government. This is another step along that path and I certainly commend the legislation to the House.
It is a great pleasure to speak again on this bill, with the amendments included. As a former small business owner of 10 years I know the benefits and joys of being in business, but I also know that it can be onerous at times, particularly with red tape and regulation. Prior to this bill being introduced, each state and territory had a different requirement for businesses to register. In this era of federalism, under a national system in Australia, it is completely ludicrous that any business, particularly small and micro businesses, should have to incur the cost of registering their business name in each state and territory, particularly given that the costs vary in each state and territory. The cost in Canberra was, I think, $130 to get my business registered for five years or something, and in Victoria it was $70 for three years. It is not just the difference in the cost between the states and territories; it is also the difference in the time span in terms of how long you have the business registration name. The difficulty with that too is that you have to be constantly aware of when these things expire as well as try to find this extra money—another imposition on business. As my colleague has mentioned, this government has done a great deal for small business and this is another way of harmonising and reducing the burden of red tape for small business. I do commend the government for introducing a range of measures to harmonise the management of businesses in Australia, and this is one of them.
The purpose of this bill is to clarify that the consequential amendments to other Commonwealth acts made under the Business Names Registration Bill will not apply until the National Business Names Registration System commences. The legislation was drafted so that most of the consequential amendments will commence on the same day prior to the commencement of the National Business Names Registration System. The policy intention is for most of the consequential amendments to commence on the day that the national system commences, with the transitional provisions commencing earlier. The consequential amendments are to a number of other Commonwealth acts that commence around two months before the commencement of the National Business Names Registration System. Given that these amendments give effect to activities under the national system, it would be impractical for them to commence before the system actually begins.
The application bill has been drafted as a separate bill dealing with the application of provisions rather than attempting to amend the commencement table in the transitional bill. The new application provisions are set out in a separate piece of legislation rather than in the transitional bill itself. They do not directly amend the text of the transitional bill but just clarify when and how certain provisions in that bill will apply.
We as a government are very keen to ensure that businesses—small businesses, micro businesses—can succeed. We have introduced a range of measures that will reduce company tax and provide small businesses with instant asset write-offs and improve the amount that they can actually write off over a tax year. This is just another measure that will reduce regulation and red tape for businesses. It will make it easier for Australians to succeed in business, to manage their business, to administer their business and, hopefully, to increase their productivity and the success of their business. I commend this bill. It is in the tradition of Labor reform in the small business sector and the micro business sector. As I said, having had my own small business, it can become pretty tiresome filling out endless forms, and having to do it in each state and territory in order to run a business across the nation—to trade in different parts of the nation—is completely ludicrous. I welcome this bill and the amendments to it.
I would like to take this opportunity to thank all of those members who have contributed to the debate, particularly those who are still in the chamber—the member for Chifley and also the member for Canberra. I note that the House always welcomes the opportunity to hear from the member for Canberra because she is someone who not only has a strong commitment to small business but also brings to this debate the insights that one would expect from someone who has run and owned her own small business. This comes through in the quality of the insights that she is always able to provide.
This bill supports a package of three bills, already passed by the parliament, which establish a National Business Names Registration System. The bill makes some small technical changes concerning the application of consequential amendments to 10 Commonwealth acts; however, it is part of a much larger initiative being implemented under the Council of Australian Governments seamless national economy reform agenda.
Fragmented and inconsistent regulation across Australia makes it harder to do business and adds to the compliance burden for business. The existing approach to registering business names reflects this. A National Business Names Registration System will make a practical difference for businesses right around Australia.
Businesses using a trading name and operating across state and territory boundaries will no longer have to register a business name in every state and territory in which they operate. Businesses operating in only one state or territory will also benefit, with a three-year registration fee of around $70, compared to fees of $160 for a new registration in New South Wales and $255.60 in Queensland. All businesses using a trading name will also benefit from the streamlined online business name application process, which will make applying for a business name a faster and easier process.
Combined with related initiatives such as the Australian Business Licence Information Service and the Australian business account, the national business names registration system is estimated to provide benefits of $1.5 billion over eight years to business, government and consumers. The Australian Business Licence Information Service, a new whole-of-government online service, will deliver information about licences, registrations, permits and assistance to business from all levels of government. Such customised information about regulatory requirements will simplify the process of starting a business and save existing businesses valuable time. The Australian business account will be an online account for managing ongoing business interactions with all levels of government. The account will help businesses take control of their regulatory activities online 24 hours a day, seven days a week, and save time through prefilling and submitting forms online where available. Businesses will be able to access key registrations, monitor their compliance requirements and subscribe to regulatory change notifications, business development opportunities and other important information.
The states must enact referral legislation to give effect to the national business names registration system, and so far referral legislation has been passed by the parliaments of Tasmania, New South Wales and Queensland. Legislation is also currently before the Victorian parliament, with South Australia and Western Australia set to introduce legislation shortly.
All jurisdictions have worked hard to deliver a national business names registration system, and the Australian government would like to take this opportunity to thank state and territory governments and their officials for their commitment to this important reform. Depending on the passage of referral legislation through remaining state parliaments, the national system will start at the end of May 2012. Once it is operational, I know businesses across Australia will appreciate the time and money saved by this important reform.
I thank members of the contributions they have made to this debate on the Business Names Registration (Application of Consequential Amendments) Bill 2011 and I commend the bill to the House.
Question agreed to.
Bill read a second time.
Ordered that this bill be reported to the House without amendment.