By Chalpat Sonti
A State Labor MP has come out swinging against his federal colleagues, blasting their handling of the problems besetting one of the nation's largest business sectors.
In an extraordinary attack, South Australian MLA Tony Piccolo has labelled the Federal Government's handling of an inquiry into the $128 billion-a-year franchising sector as no comfort to the "hundreds of mum and dad franchisees who have or are being screwed over by franchisors" and akin to the script of a popular satirical TV series.
After months of silence, Federal small business minister Craig Emerson recently finally announced what the Government proposed to do with the results of a parliamentary inquiry into the franchising code of conduct.
That inquiry, which had rare widespread bipartisan political support, recommended 11 changes to the code, including the requirement for good faith bargaining between franchisors and franchisees, monetary penalties for breaches of the code and a greater role for the Australian Competition and Consumer Commission to investigate breaches.
It also drew on earlier state-level inquiries in WA and South Australia.
The inquiry was held in response to many complaints from disgruntled franchisees, but has gained further momentum from the events of recent months, including several high-profile franchise failures leaving many hundreds of thousands of dollars out of pocket and the economic downturn, which has seen laid-off workers looking to invest their redundancy cheques.
WAtoday.com.au recently revealed Mr Piccolo - a long-time advocate for the rights of franchisees - was considering introducing laws in his home state in frustration at the Federal Government's handling of the issue.
After months of silence on what he proposed to do, Dr Emerson finally released an "options paper" on Sunday, on which he is seeking public input. the paper restates the recommendations and asks for answers to a series of questions.
However, Mr Piccolo blasted the "very disappointing" paper.
"There is no comfort in this document to the hundreds of mum and dad franchisees who have or are being screwed over by franchisors," he said yesterday.
"While I welcome the Federal Government's ongoing consultation it is very misleading to call the document an options paper. There are no options discussed in the paper."
The Federal Government's handling of the franchising issue was ideal material for Logie-award winning satirical TV show Mr Piccolo said.
That show focuses on the activities of Government spin doctors whose brief was simply to get the Prime Minister re-elected, no matter what the consequences were.
"While I appreciate that the Government wants to act cautiously with any reforms so not to damage the industry, this latest announcement does nothing to reassure the small business industry that it is serious about creating a comeptitive and level playing field," Mr Piccolo said.
Most observers, including Mr Piccolo, acknowledge that state-based legislation is not ideal for a national industry, but he said a motion he willintroduce to his own parliament next month "will send a clear message to the franchise industry that the state will not cop any reforms that are not consistent with the recommendations of the parliamentary enquiries".
Momentum to do something is growing in other states. WAtoday.com.au yesterday revealed how a Queensland MLA wanted that state's new administrative disputes tribunal to deal with franchising issues.
The state-level inquiries in WA and South Australia have also proposed solutions, but have deferred to federal action.
Franchising expert Frank Zumbo, an associate professor of business law at the University of NSW, said Dr Emerson was "playing with fire" if he ignored Mr Piccolo's warning.
"The policy vacuum created by (Dr) Emerson is dangerous as it opens the way for state-based legislation," he said.
"Mr Piccolo's suggestions should not be ignored as key recommendations of the Ripoll inquiry, such as a statutory duty of good faith, could easily be implemented at a state level."
The options paper posed more questions instead of options, Mr Zumbo said.
"The franchising sector would be forgiven for thinking that (Dr Emerson) was establishing yet another inquiry to seek answers to the questions being posed."