Unfair Contract Term review to strengthen small business protections

1 April 2019

The Victorian Automobile Chamber of Commerce (VACC) has welcomed an announcement by the Assistant Treasurer, the Hon Stuart Robert, and Small Business Minister, Senator Michaelia Cash that, after a review into Unfair Contract Terms (UCTs), the Federal Government will further strengthen protections to all small businesses.

The review supports most of the recommendations provided by VACC’s national body, the Motor Trades Association of Australia (MTAA), on behalf of thousands of automotive businesses nationally, including support for MTAA’s call to make UCTs illegal and attaching civil penalties to breaches.

“The review has recognised that the current UCT regime doesn’t provide strong deterrence and does not afford appropriate protections to many small businesses, including some automotive businesses that are currently not covered by UCT provisions,” VACC CEO, Geoff Gwilym, said.

VACC supports the Federal Government’s commitment to redefining small business – for the purposes of the protections – as a business that employs fewer than 100 persons at the time a contract was entered into or had an annual turnover less than $10 million. 

“Some automotive businesses, such as new-car dealers, were disadvantaged by not being able to access the protections afforded by the UCT regime. The proposed changes will go some way to addressing this concern,” Mr Gwilym said.

VACC also welcomes the Federal Government’s commitment to:

• Broadening the coverage of small business contracts by removing the value threshold
• Further clarifying the definition for a standard form contract
• Extending the UCT protections to government contracts
• Considering exempting ‘minimum standards’ prescribed by state and territory laws.

VACC and MTAA will make submissions and actively participate in planned consultation on the Regulatory Impact Statement, particularly to ensure any enhanced protections for small business apply to insurance contracts.