ACCC’s SME challenge

It is telling that when asked about the recommendation of Rod Sims as new ACCC chief, Council of Small Business of Australia chief executive Peter Strong said he hoped the new chair could put a “more public face” on the organisation, much like the Australian Taxation Office has done in its dealings with the SME community in the last few years.

Become like the ATO? Surely no regulator wants to be unfavourably compared with an organisation that strikes fear into the hearts of many SME owners.

And yet it’s not as crazy as it sounds. During the GFC, the ATO became the most visible source of assistance for most small businesses, with generous tax payment arrangements allowing many struggling companies to trudge through the downturn.

The ACCC, on the other hand, didn’t come through that downturn with the greatest image in the eyes of Strong and others in the SME sector.

Graeme Samuel was seen to have allowed the lessening of banking competition with the mergers of Commonwealth Bank and BankWest and Westpac and St George Banks – decisions he later said he would not have made were it not for the financial crisis.

Some also saw Samuel as being a toothless tiger in the area of protection of franchisees during the GFC and the protection of small operators from the might of Australia’s market powers, such as Coles and Woolworths.

Of course, this criticism ignores some of the good things Samuel has done for protecting small business operators.

Under his watch, the ACCC won an important battle against Richard Pratt’s Visy over the cardboard cartel, was extremely vigilant in areas such as retail price maintenance (where big suppliers try to force smaller retailers to stop discounting) and won a landmark fight against franchisor Allphones. After a long-running case by the watchdog, the Federal Court ordered the franchisor to pay a group of franchisees $3 million for six years of unconscionable conduct.

The ACCC also worked hard to increase its education efforts in areas such as Australia’s new consumer law regime, a major area of reform during Sameul’s time in charge. The watchdog has also become much better at warning businesses of scams.

But judging from Strong’s comments, Sims needs to spend a bit of time connecting with the SME community in his first few months in the chair.

Small business wants to know that the watchdog is listening to its criticisms and ideas and will be prepared to stand up for the little guy when appropriate.

Under Samuel, the ACCC has done this most of the time. And there are some great small business people in there, including deputy commissioner Michael Schaper.

But Samuel’s stance on banking competition has clearly damaged the organisation’s standing in the eyes of some in the SME community and Sims needs to show he understands this.