SA Economics and Finance Committee report encourages the adoption of state-based legislation

The SA Economics and Finance Committee (EFC) released its report investigating franchising in South Australia on 7 July, following on from the 2008 Franchise Inquiry and at a time when state-based franchising regulation is a hot topic in Australia.

The report examines which measures from the 2008 Inquiry have been implemented and found that 18 of EFC’s 26 recommendations had not been acted on while the remaining eight had been acted on in part.

Despite this, changes to the regulatory scheme were seen in generally positive light and the report concluded that until the SA government released the proposed SA Franchise Bill, the EFC could not confirm whether state based legislation would be advantageous.

The report encouraged the Minister Koutsantonis to introduce the SA Bill despite the amendments to the code in 2010, increased power to the ACCC, the new naming of the OFMA and proposed SA Small Business Commissioner.

Despite recommendations from the EFC to shelve WA’s state-based franchising legislation due to fears of procedural abuse and confusion, double jeopardy and increased costs to the franchise industry, the report recommends state-based legislation be implemented in good faith, with refinement through parliamentary debate.

There remains great uncertainty as to whether Minister Koutsantonis will see the EFC report and the significant changes to the Code, increased ACCC powers and his own proposed Small Business Commissioner as sufficient reasons not to introduce state based franchise laws.

It seems the ball is now in Minister Koutsantonis’ court to either introduce a SA Franchising Bill, or to preserve the status quo.

For further information, please contact Donaldson Walsh Lawyers .