Submission to the Department of Treasury Consultation Paper on Extending Unfair Contract Term Protections to Small Businesses

This Business Council of Australia submission calls on the government to reconsider its preference to extend the legislation.

The ‘unfair contract terms’ problem for business-to-business transactions is not well defined, the benefits of legislating are unproven and unquantified, and the costs and risks understated.

Instead, we recommend prioritising non-legislative measures, if needed, such as providing information and guidance on unfair terms, greater use of industry codes of conduct, industry Ombudsmen and existing legal protections.

If the government decides to proceed with the legislation, it should only apply to certain types of small business, provide exemptions for sectors where measures are already in place and be offset by other regulatory reductions, in keeping with the government’s red tape reduction commitments.