Additional comments of the Australian Labor Party
The independence and impartiality of the role of an ombudsman is
important to all Australians. The office of Commonwealth Ombudsman exists to
safeguard the community in its dealings with government agencies, and to ensure
that administrative action by Australian Government agencies is fair and
The establishment of the office of Commonwealth Ombudsman was first
moved under the Whitlam Labor Government and enabled by legislation in 1976, commencing
operation on 1 July 1977. The Commonwealth Ombudsman can investigate complaints
about the actions and decisions of Australian Government agencies to see if
they are wrong, unjust, unlawful, discriminatory or just plain unfair.
The inaugural office of the Australian Small Business Commissioner
(ASBC) was established by the Gillard Labor Government in 2013. The principal
functions of the ASBC are to:
provide information and assistance to small businesses, including
referral to dispute resolution services;
represent small business interests and concerns to the Australian
work with industry and government to promote a consistent and
coordinated approach to small business matters.
This Australian Small Business and Family Enterprise Ombudsman Bill 2015
(the bill) seeks to abolish the office of the ASBC and replace the role with
the new Australian Small Business and Family Enterprise Ombudsman (ASBFE
Title of Ombudsman
This bill, with the establishment of the office of the ASBFE Ombudsman,
cannot fulfil the functions of an independent and impartial umpire and will
therefore compromise the safeguard role that a traditional ombudsman plays on
behalf of all Australians.
The advocacy and dispute resolution functions of the ASBFE Ombudsman at
the heart of this bill are inconsistent with an accepted set of criteria
considered necessary to be described as an ombudsman.
Labor Senators note the strong opposition expressed by numerous expert
groups and peak organisations in the six submissions that expressed a view
about the use of the term 'ombudsman' in the title.
The Commonwealth Ombudsman identified concerns with the suitability of the
title 'ombudsman' for this role, and the Australian and New Zealand Ombudsman
Association (ANZOA) noted that the office proposed 'is not an Ombudsman and
should not...be called one'.
The Commonwealth Ombudsman expressed strong concern that:
Use of the term Ombudsman in this context is...misleading and
has the potential to damage the 'Ombudsman' brand that has been developed by
Ombudsman offices throughout Australia over the last 40 years.
As noted in the main report, both Restaurant & Catering Australia
and the Small Business Commissioner of Western Australia expressed concern that
the title may actually prevent small businesses and family enterprises from
approaching the new office.
The Energy & Water Ombudsman NSW 'urge[d] the committee to reconsider the
name' and replace it with a more accurate one.
Independence and impartiality
Labor Senators are concerned that the new ASBFE Ombudsman is described
in the Explanatory Memorandum as a 'departmental official' who will receive
corporate and staffing support from the department.
One of the generally accepted core functions of an ombudsman is for the ombudsman
to be able to independently and impartially investigate the actions of
government agencies. This may prove difficult with the administrative
arrangements and organisation of the ASBFE Ombudsman described in the bill as
being structured within a departmental agency of government.
Under clause 20 of the bill the minister may give written directions to
the Ombudsman and the Ombudsman must comply with these directions. The
activities of the Commonwealth Ombudsman’s office are governed by a number of
Commonwealth laws, principally the Ombudsman Act 1976. The Commonwealth Ombudsman's
office delivers an annual report which provides details of the numbers and
types of complaints dealt with, and the ways in which they are resolved. The Commonwealth
Ombudsman must provide the minister an annual report under section 46 of the Public
Governance, Performance and Accountability Act 2013.
Labor Senators are concerned that this bill requires that the ASBFE
Ombudsman provide quarterly reports to the minister on the research and inquiries
undertaken. Our principal concern goes to the lack of an effective arms-length
separation of powers between the ASBFE Ombudsman and the minister’s office. The
bill describes arrangements that could reasonably be described as a close
working relationship with the minister’s office and one that is not far removed
from ongoing oversight by or influence of the minister.
This was rightly reflected in the views of some stakeholders expressed
to the inquiry. The Office of the NSW Small Business Commissioner (OSBC), for
example, submitted that:
The OSBC queries whether the level of direction able to be
given to the Ombudsman from the Minister aligns with the references in the
Explanatory Memorandum to the objective of impartiality. If the Ombudsman is
truly going to be able to make credible inquiries into the concerns of small
businesses and family enterprises arising out of legislation, policies and
practices, the Ombudsman needs to have the certainty that the Minister will not
alter any findings or recommendations made by the Ombudsman. In its current
form the provisions in the Bill diminish the Ombudsman's independence from the
Government of the day and risk limiting the Ombudsman's ability to be
Business Enterprise Centres Australia expressed the view that it would
be preferable for the Ombudsman to report directly to Parliament, rather than
to the minister.
Labor Senators consider the operation of the existing Commonwealth
Ombudsman, particularly its relationship to the government of the day, to be a
more appropriate association and one that should be considered as a model to be
applied to the role of ASBFE Ombudsman.
Failure to address this fundamental issue will result in a lowering of
expectations by the community and the potential for a diminution over time of
the respect and high regard Australians have for the role of an ombudsman.
Labor Senators note the views of those expressing concerns regarding the
advocacy function to be performed by the ASBFE Ombudsman. Those concerns go to
the combined role of advocacy on behalf of a group or individual and the role
of independent and impartial investigator as an ombudsman. Labor does not
consider the advocacy functions set out for the ASBFE Ombudsman as being the
primary role or function of an ombudsman. Rather, it is Labor's view that those
functions could be provided by the existing Australian Small Business
Commissioner. This would allow for a clear separation of the two roles and
maintain the independence and impartiality of the new ASBFE Ombudsman.
In The Treasury's consultations on the exposure draft legislation for
the ASBFE Ombudsman, the Australian and New Zealand Ombudsman Association, the
Financial Ombudsman Service of Australia and the Association of Dispute
Resolvers (LEADR-IAMA) all noted the advocacy function as being of considerable
concern and inconsistent with the role of an independent ombudsman.
The Shopping Centre Council of Australia submitted that the use of the term 'ombudsman'
in the title was misleading and should be changed to Commissioner.
A similar view was expressed by the Telecommunications Industry Ombudsman.
The Australia and New Zealand Ombudsman Association (ANZOA) submitted to
The Treasury and to this committee that:
It is clear...that the role for the Small Business and Family
Enterprise agency is an advocate—both in reality and perception. As such, it
does not meet the independence criterion...Again, this is no criticism of the
proposal. ANZOA supports the aims of the proposal to assist small business and
family enterprise, but strongly submits that it should be called something
other than an Ombudsman.
The minister has even acknowledged that 'an Ombudsman who advocates a
position regarding a particular issue would not be perceived as impartial in
dealing with disputes relating to that issue'.
However, the minister maintains that the ASBFE Ombudsman or the Ombudsman’s
staff will not conduct any dispute resolution processes but rather refer
matters to outsourced alternative dispute resolution providers, and that this
separation between dispute resolution and advocacy ensures the independence of
Labor Senators note the view expressed by the minister, but consider
nevertheless that the arrangements prescribed in the bill are inappropriate for
an office being established with the title of ombudsman, and fear that this
will lead to confusion among small business owners resulting in
underutilisation of the service.
Outsourced dispute resolution
Labor Senators consider that an ombudsman must be truly independent if
he or she is to have the confidence of the community. The ASBFE Ombudsman bill
includes a dispute resolution function, but the bill designates this role as a
secondary function with an emphasis on the Ombudsman primarily being a
'concierge for complaints'. Dispute resolution services are allocated to a
panel of dispute resolution providers and any role the Ombudsman plays in the
resolution of disputes is only minor.
Regarding those able to provide dispute resolution services, the
Mediator Standards Board noted in its submission to consultations on the
exposure draft of the legislation the need for those mediators that can perform
dispute resolution services to be accredited under the National Mediator
Clause 72(1) of the bill provides that:
the Ombudsman may publish a list of persons who:
- have the qualifications or experience to conduct
alternative dispute resolution processes to resolve disputes in relation to
Clause 72(2) of the bill provides that:
the Minister may, by legislative instrument, prescribe:
- the qualifications or experience required for persons to
be included on the list...
Labor Senators support the concerns of the Mediator Standards Board and
urge the government to prescribe that those able to conduct alternative dispute
resolution services are required to be accredited under the National Mediator
The Abbott Government has raised the expectations of the small business
sector in election commitments and statements since the Minister for Small
Business announced that the new ASBFE Ombudsman would be able to more
effectively deal with and resolve small business issues.
Labor Senators are not convinced that the new role of ASBFE Ombudsman
has the statutory independence of an ombudsman, and consider that the role
prescribed in the bill is not comparable to an ombudsman. The new role of ASBFE
Ombudsman is not consistent with the accepted definition of an ombudsman and
will lead to confusion and unmet expectations from those seeking an independent
and impartial umpire to investigate matters they seek to pursue in a fair and
Labor Senators support the views expressed by stakeholders in the report
that the title of 'ombudsman' should be re-considered by the government. The
dual roles of advocate and ombudsman are not consistent with the accepted
definition of an ombudsman; nor are the regularity of the reporting
requirements of the ASBFE Ombudsman and the powers of the minister to direct
Labor Senators are mindful that Australian small business operators may
underutilise the new office of ASBFE Ombudsman as a result of these issues as
prescribed in the bill.
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