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Do Not Call Register Act extension to negatively impact small business in Australia

In new research out today, an extension of the Do Not Call Register to include all Australian businesses phone and fax numbers will place a significant financial strain on the majority of Australia’s small businesses.

The study commissioned by business search directory, TrueLocal.com.au in partnership with the Council of Small Business of Australia revealed 78% of small businesses do not have the resources to manage the proposed Government changes to the Do Not Call Register. The findings come as the Federal Government has introduced legislation to extend the Do Not Call Register Act to allow all phone and fax numbers to be included on the Do Not Call Register, including those used by small businesses.  Political parties are exempt from compliance with the Act.

If the proposed legislation is passed, small businesses will not be able to call a business to promote, advertise or propose to supply goods, services, land, business opportunities or investment opportunities if the number is on the Do Not Call Register and where there is no prior consent or an ongoing relationship.

Any business that fails to comply with the legislation and calls a business listed on the Do Not Call Register could face a fine of up to $1.1 million for each breach of the legislation.  It is estimated that 30% of organisations could list on the Do Not Call Register. In November 2009, TrueLocal.com.au partnered with COSBOA and engaged research company CoreData to seek a snapshot of the views of small business towards the legislation and its impacts.

The survey of 781 small businesses revealed:

  • Many small businesses were unaware of the legislation with over half of respondents (58%) saying they were unaware of Government’s proposed extension to the Do Not Call Register
  • 45% of small businesses believe the overall cost of operating their business will increase if this legislation is passed
  • 22% of small businesses said they gained new business through phone calls – meaning an estimated 440,000 small businesses, over 1 in 5, would be adversely affected by the legislation (estimated to be nearly 2 million active small businesses in Australia)
  • The property, business services, communication, marketing and media industries will be heavily impacted by this proposed legislative change as using the telephone to source new business is their preferred marketing method.
  • Opinion is heavily divided amongst Australian small businesses about registering with the Do Not Call Register.

TrueLocal.com.au chief executive, John Allan said as an organisation with many small to medium sized business clients, he was concerned about the implications of the extension on this sector.

“We oppose it as we believe it is anti-competitive for Australia’s new and emerging businesses, as they will be unable to contact an estimated 30% of prospective customers to establish a new relationship.”

“It will therefore favour big businesses and larger incumbents who have existing relationships and disadvantage smaller companies working hard to attract new business.”

“Additionally, the majority of small businesses have said they simply do not have the resources to easily check their contact information against the Government’s Do Not Call list and the legislation would increase the operating cost for nearly 50% of small businesses.”

“As a result, small businesses are faced with a substantial increase in operational and compliance costs at a time when many are still feeling the effects of the economic downturn.”

“We hope the Government will listen to this message from small business and mitigate the negative implications of this policy amendment on a crucial part of the economy,” Mr Allan said.

COSBOA chief executive, Jaye Radisich said, “We need to reduce red tape for small businesses, not increase new compliance costs by the proposed extension to the Do Not Call Register.

“Phone calls are the most popular source of new business for many industries, especially in the services industries – so we’re concerned that these small businesses will be hampered by the new legislation.”

“Small businesses need to be given a fair go to be able to generate new, local leads to build their businesses,” Ms Radisich said.

Both TrueLocal and the Council of Small Business of Australia have made submissions to the Senate Standing Committee’s inquiry into the Do Not Call Register Legislation Amendment Bill 2009.  The committee is due to release its findings on February 24.

David Olsen

David Olsen

An undercover economist and a not so undercover geek. Politics, business and psychology nerd and anti-bandwagon jumper. Can be found on Twitter: <a href="http://www.twitter.com/DDsD">David Olsen - DDsD</a>

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