Liberals to establish small business ombudsman

Opposition Leader Tony Abbott has promised to establish a Small Business and Family Enterprise Ombudsman if elected in the upcoming Federal Election.

It would support a cabinet-level small business minister and talk to small businesses about Coalition policies that affect them.

It would also have a role in mediation and dispute resolution in accordance with community consultation, Abbott said yesterday.

He said it "will put small business concerns at the heart of Government consideration".

"It's a very important initiative," Mr Abbott said. "Too often small business is forgotten by government and the Coalition is determined that this will never again be the case."

With Shadow Small Business Minister Bruce Billson, Abbott announced plans to extend the newly introduced unfair contracts protections - which remove unfair terms in standard form consumer contracts - to small businesses.

The Labor Government had intended to include business-to-business contracts in its protections but backpedalled when it introduced the Trade Practices Amendment (Australian Consumer Law) Bill 2009.

Last August Small Business Minister Craig Emerson said: "In the context of business-to-business contracts, a general notion of unfairness that is subject to interpretation by the courts may have the effect of increasing risk and costs faced by small businesses in particular."

Abbott argued yesterday that small businesses were as vulnerable as consumers when dealing with standard form contracts with the top end of town.

But the Australian Bankers' Association said the plan would backfire against those it aimed to help as lenders charged more to cover their risks.

"A fundamental principle of contract law is certainty of contract," the association's chief executive officer Steven Münchenberg said.

"This principle is an essential element of all commercial transactions because it allows the parties to adequately allocate and price risk.

"This proposal for further regulation, which creates uncertainty, would need to be taken into account when banks consider lending to small businesses and could end up impacting on credit availability to the sector."