26 July 2022

Labor delivering on promise to ban unfair contract terms


Joint media release with
The Hon Dr Andrew Leigh
Assistant Minister for Competition, Charities and Treasury

The Government is delivering its election commitment to make unfair contract terms illegal, protecting small businesses and the hard-working Australians they employ.

Small businesses and consumers often lack the resources and bargaining power to effectively review and negotiate terms in standard form contracts. Existing laws haven’t stopped the use of unfair terms, which remain prevalent in standard form contracts.

The Government will introduce legislation in the upcoming sitting period to strengthen unfair contract terms protections for small businesses and consumers.

The amendments will introduce civil penalty provisions outlawing the use of, and reliance on, unfair terms in standard form contracts. This will enable a regulator to seek a civil penalty from a court.

Additionally, a larger number of small business contracts will be afforded protection. This will occur by increasing the small business eligibility threshold for the protections from less than 20 employees to less than 100 employees, and introducing an annual turnover threshold of less than $10 million as an alternative threshold for determining eligibility.

These reforms will help to improve consumer and small business confidence, allowing the small business sector to grow with confidence.

Minister for Small Business, Julie Collins, said the Albanese Government is serious about delivering on our better deal for small business.

“These reforms are a critical part of this agenda,” she said.

“These changes will improve the long-term resilience of Australia’s small businesses and help them bounce back following significant challenges in recent years.”

Assistant Minister for Competition, Charities and Treasury, Andrew Leigh said Labor will give small business the protection that “the Liberals couldn’t be bothered getting around to”.

“Too many hard-working Australians are struggling with late payments, staff shortages and complex regulation, all while worrying about being pushed around by big clients,” he said.

“We will deliver on our promises, and safeguard small business and contractors from exploitation.”