Chris Bowen (Prospect, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

by leave—I move amendments (4), (5) and (6) circulated in my name:

(4)    Schedule 3, item 7, page 11 (line 4), omit

                 ‘Omit “$3,000,000”, substitute “$10,000,000”.’,

                 substitute

                 ‘Repeal the subsection.’

(5)    Schedule 3, item 8, page 11 (line 6), omit

                               ‘Omit “$30,000,000”, substitute “$10,000,000”.’,

                               substitute

                               ‘Repeal the subsection.’

(6)    Schedule 3, after item 8, page 11 (after line 6), insert:

8A Subsection 51AC (11)

Repeal the subsection.

These amendments deal with the threshold for actions under section 51AC of the Trade Practices Act. Section 51AC prohibits unconscionable conduct in business transactions between companies, particularly between a large company and a small business. The section only applies to transactions that are less than $3 million; the figure was originally $1 million and it was increased to $3 million in 2001 on the recommendation of a Senate committee. This bill increases the threshold to $10 million.

After some consideration, the opposition has come to the view that the threshold is not appropriate. The evidentiary hurdle to jump when it comes to unconscionable conduct is high, and appropriately so. An act must be particularly egregious to satisfy the court that it was unconscionable. An act can be unfair, it can be harsh, without being unconscionable. An unconscionable act is one which offends the conscience, one which would make any decent person not be able to sleep at night. The Trade Practices Act, at subsection (4) of 51AC, outlines the factors that a court may have regard to when considering section 51AC cases. First amongst these is ‘the relative strengths of the bargaining positions of the acquirer and the small business supplier’. This makes it clear that this section deals with the relationship between big business and small business, so if the threshold is removed we are not going to see actions between, for example, BHP and Rio Tinto—two large companies of equal or similar bargaining power. The act will still apply to big business doing business with small business exclusively.

The ACCC, the government’s watchdog, believes that the threshold should be removed, as we do. Small business can engage in large transactions. The government seem to think that small business only has small transactions, but a small business can engage in a large, one-off transaction. Small businesses should have this section available to them. The government thought that $10 million was an appropriate figure back in 2004. Three years later, they still think that $10 million is the appropriate figure, when inflation would indicate that $11 million or $12 million would be the appropriate figure now. In other, similar arrangements—in other policy areas but related to the Trade Practices Act—the government have said $20 million is the appropriate threshold. Well, let us be done with it. Let us not have Senate committees recommending increases every three or four years; let us abolish the threshold. It makes no good policy sense, it serves no purpose and it should go.

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