Small Business Watchdog on the Prowl

The new small business watchdog will have unprecedented powers to name and shame entities who snub complaints from small businesses.

Apparently the Small Business and Family Enterprise Ombudsman will be given new powers to force big businesses, suppliers or state-owned entities to attend mediation to resolve disputes.

If they refuse to comply, they will face penalties including the option to be named publicly. The Small Business Ombudsman, which was announced in the May budget is due to replace the Small Business Commissioner on July 1 2015. It is hoping to implement the procedure wherein if a small business has an issue or complaint, they are able to have their issue considered by the right agency and not fall through the cracks.

The new role is meant to reflect the extra powers and responsibilities of the expanded office. This will be a position that can help smaller businesses understand how to deal with disputes, and help get those businesses into the most appropriate dispute resolution process that will save the businesses time, staff and money.

In all honesty there are probably only a handful of entities that will end up actually being named and shamed if this power is given to the regulator. It is highly doubtful that the ombudsman will name and shame anyone unless there’s absolute proof. It’s basically a measure that can be taken if the current system doesn’t work and gives the ombudsman an extra trick up his sleeve.

However, in the event a big player is named, it should be noted that some big businesses will content with swallowing some some bad publicity for a little while and then return to their bad behaviour. Overall, most big business are fine, it’s just ones who misuse their power that affect it for every other business. If big businesses are found to have done the wrong thing by a small business, they should be compelled to compensate a small business as they attempt to enter a new industry.

The draft legislation for the role of the regulator, which is due to be released later this year, is also expected to include the power to demand Commonwealth agencies, overseas businesses and interstate companies to attend mediation. However, the time and money that goes into mediation can eat into a small business just as badly as the offense that occurred. Research shows that it costs businesses $7500 and 63 hours to resolve a dispute on average; and the average time it takes to resolve a single dispute is six months.

Aside from its role in dispute resolution, the Ombudsman will function as an advocacy arm for small business, to “listen to small businesses and family enterprises and present those views to the government".

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