Roger Price (Chifley, Australian Labor Party) Share this | Hansard source

I will also make a short contribution on the Trade Practices Legislation Amendment Bill (No. 1) 2007. I am very pleased to see the Minister for Small Business and Tourism in the chamber, even though she has decided not to make a formal contribution to this debate. I completely agree with the honourable member for Lowe and I will reinforce some of the points he made in his contribution. This government constantly claims to be the champion of small business. However, when push comes to shove it never stands up for small business, and this legislation is a classic example of that. Mr Deputy Speaker Hatton, if honourable members were to visit a shopping mall in Bankstown in your electorate or a shopping mall in the electorate of Lowe or a shopping centre in my electorate of Chifley, they could ask the small traders who pay high rents how they would benefit as a result of the amendments in this bill. I think it is fair to say that their response would be that they will not benefit very much at all. This legislation will not stop Woolworths or Coles, which receive very favourable rental rates for their premises, from continuing to do what they constantly do—that is, to lower their prices if they face competition. They are not required to lower them across the state or the city, and this amendment to the Trade Practices Act makes that abundantly clear.

As the shadow minister pointed out, if members were to look at the Senate report dealing with these amendments they would note that the Woolworths submission clearly states that these amendments break no new ground and that they merely codify legislative decisions made by the courts. What an indictment of the Minister for Small Business and Tourism that she cannot stand up for small business. She regularly comes to the dispatch box and claims to be a champion for small business, but Woolworths has said that the effect of these amendments on its operations will be exactly zero. That is abundantly clear.

This legislation amends the Trade Practices Act to state that a substantial degree of power in a market is a lower threshold than a substantial degree of control. The legislation clarifies the threshold to state that a corporation can have a substantial degree of power in a market even though it does not have freedom of constraint. The legislation also makes it clear that more than one corporation can have a substantial degree of power in a market. Section 46 will also be amended to clarify that a court may take into account a substantial period of below-cost pricing when considering whether a firm has abused its market power and that it may consider the company’s reasons for engaging in below-cost pricing. The legislation also proposes to appoint a second deputy chair of the ACCC.

In the lead-up to the 2001 election, the government—this alleged champion of small business—responded to small business concerns by promising a review of the Trade Practices Act. That was the Dawson review, which was tabled in 2003. It found that the Trade Practices Act was in need of only minor reform. The main recommendation was the imposition of prison penalties for individuals involved in serious cartel operations. The government accepted that recommendation and announced its intention to legislate accordingly in 2005. To date, that legislation has not been introduced and this bill makes no provision for said jail terms. It is worth noting that Australia is one of the few countries in the OECD without jail terms for serious cartel operations. The relevant prison term in the United States was recently increased from three years to 10 years.

I say to the minister for small business: your government promised jail terms for cartel operations. Why won’t you stand up for small business and insist that this legislation has jail terms when there are cartel operations? If not, why won’t you state that to the House? You did not participate in the second reading, but in the summing up why didn’t you state to the House what has changed your view? Why were you so hot to trot in insisting that you would bring down jail terms and you fail to do so in this legislation?

After the Dawson review was completed the High Court handed down its decision in the Boral case. This was only the third time that the High Court had considered a matter pursuant to Section 46 of the act, abuse of market power, and the first time the court had considered a predatory pricing matter. Predatory pricing is the practice of reducing prices below cost to drive competitors with fewer resources out of business. Other members have made contributions about section 46 and the misuse of market power. I want to place on record that, as far as small business is concerned, I believe that they do need protection from misuse of market power. I regret to say that I think shopping centres are replete in Australia with examples of misuse of market power. There are small businesses that are tenants in those shopping centres that put their financial lives on the line day in and day out and they have no recourse to justice. This legislation is not going to provide it. In fact, the minister for small business thought this was so inconsequential that she could not even make a contribution in the second reading debate.

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