Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Hansard source

by leave—I move further opposition amendments (1) to (6) together, as circulated in my name:

(1)    Schedule 1 page 4 after item 8 insert the following item

8A  Subsection 46(1)

After “taking advantage”, insert “in that or any other market,”

(2)    Schedule 1, page 4 after item 8 insert the following item

8B After subsection 46(1A)

Insert:

      (1B)    In determining whether a corporation has a substantial degree of market power the court will take into account the following principles;

             (a)    the threshold of ‘a substantial degree of power in a market’ is             lower than the former threshold of substantial control; and

             (b)    the substantial market power threshold does not require a corporation to have an absolute freedom from constraint – it is sufficient if the corporation is not constrained to a significant extent by competitors or suppliers; and

             (c)    more than one corporation can have a substantial degree of

power in a market; and

(d) evidence of a corporation’s behaviour in the market relevant

to a determination of substantial market power.

(3)    Schedule 1, page 4 after item 8 insert the following item

8C  After subsection 46(2)

Insert

          (2A)    In determining for the purpose of this section whether a corporation has a substantial degree of power in a market, the Court may consider the corporation’s degree of power in a market to include any market power arising from any contracts, arrangements, understandings or covenants, whether formal or informal, which the corporation has entered into with other entities.

(4)    Schedule 1, page 4 after item 8 insert the following item

8D  After subsection 46(3)

Insert

          (3A)    In determining for the purposes of this section whether a corporation (a) has a substantial degree of power in a market; or (b) has taken advantage of that power for a purpose described in paragraph (1)(a),(b) or (c); the court may have regard to the capacity of the corporation, relative to other corporations in that or any other market, to sell in that or any other market a good or service at a price below the cost to the corporation of producing or acquiring the good or supplying the service.

(5)    Schedule 1, page 4 after item 8 insert the following item

8E  Before paragraph 51AC(3)(a)

Insert

           (aa)    whether the supplier imposed or utilised contract terms allowing the unilateral variation of any contracts between the supplier and business consumer; and

(6)    Schedule 1, page 4 after item 8 insert the following item

8F  Before paragraph 51AC(4)(a)

Insert:

           (aa)    whether the acquirer imposed or utilised contract terms allowing the unilateral variation or any contract between the acquirer and small business supplier; and

These are the amendments that should have been contained in the Trade Practices Legislation Amendment Bill (No. 1) 2005 currently before the House and indeed in the other place. They consist of the recommendations of the Senate Economics Committee inquiry into the effectiveness of the Trade Practices Act to adequately protect small business—or, to put it another way, to enhance opportunities for small business. What that Senate report found, as we all already knew, is that the Trade Practices Act is not effectively providing small business with appropriation protection, is not giving small business in this country the best opportunity to strive and become profitable, and is not enabling those small business owners to put food on the table for their families.

These amendments are quite straightforward. I want to just go to the key points again. They would clarify for the benefit of the courts what the parliament means when it talks about market power, what the court means when it talks about taking advantage of that market power and many other issues that go to the heart of section 46 of the Trade Practices Act and its effectiveness in protecting small business.

Again, why isn’t the government proposing changes to section 46? As I pointed out earlier, it is because the government has decided that it will use these very important small business issues as leverage to get through the Senate what the opposition still believe are inappropriate changes to Australia’s mergers laws, in particular carving the ACCC out of the process. In addition, we are concerned that, under the proposed formal arrangements, 40 business days is insufficient time for the ACCC to consider matters under the clearance provisions, although I should point out that we are not voting against that particular proposal. We are trying to be very reasonable, or as reasonable as we can be, on Dawson bill matters. But it is not unreasonable for the opposition to say to the government: don’t hold a gun to the head of small business. If you really believe that the opposition is correct, and that the Senate committee is correct and section 46 of the Trade Practices Act has effectively been gutted by the courts, fix it. Fix it concurrently with the Dawson bill. Don’t say to the small business community, ‘You will only get improvements to section 46 if you back what you don’t want to back,’ and that is changes to merger provisions.

Apparently, we are doing a bit of the Dawson bill again today because the Treasurer has made some commitments not only on amendments to the Dawson bill which we considered earlier but also, as I understand it, on section 46. Apparently, the Treasurer has told Senator Fielding and Senator Joyce that, if they let the Dawson bill through the Senate, he will in the not-too-distant future do something about section 46. Indeed, I read in the paper that the Prime Minister has made a personal commitment to the small business sector that the government will deal with section 46 in the not-too-distant future. We will just have to wait and see, after the Dawson bill has passed the other place—if it passes the other place; that is, if the two senators accept the government’s commitments—how long that will take.

There are also some questions about the nature of those section 46 amendments. We want effective changes, not just window-dressing; we want all of the Senate committee recommendations, not just some of them; and we want proper consultation with the states, which is not always done by this government.

I want to make a point very quickly about recoupment. Obviously, the ACCC trying to prove that a bigger player has abused its power by holding prices down just for the purposes of driving a smaller competitor out of business goes to the heart of section 46. I am very concerned that it is the government’s intention to almost insist that the court needs to find that recoupment was likely and indeed possible on the part of the bigger player abusing its market power. My great fear is that, if recoupment is written into the act, the courts will have an obligation to find recoupment was possible. The courts have always taken recoupment into account when trying to assess whether a bigger player has abused its power. We do not need it written into the act. (Time expired)

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