Janelle Saffin (Page, Australian Labor Party) Share this | Hansard source

In response to the comment by the honourable member for Lyne that people should be filthy about cartel behaviour, I can assure him that people are filthy about it—and he knows this—particularly those of us who are consumers, and that includes small business and the over 10,000 small businesses that I have registered in the seat of Page. It is about the protection of them, as well as the protection of them as individual consumers. I also want to respond to the member’s comment about, in effect, putting in place effective architecture to allow investigation and prosecution to proceed. I concur with some of the comments that he made about the intention of this bill and the intention as stated by the responsible minister for competition behaviour, the Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, Chris Bowen. I want to respond at the outset to his contribution. It was a very interesting and informed contribution and I thank him.

I rise in support of the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008. In so doing, I wish to thank the minister for two very specific things. The first is honouring the Australian Labor Party’s election commitment to introduce offences that criminalise cartel conduct. The second is, importantly, giving added protection to consumers by criminalising serious cartel conduct. I would like to make some general comments about consumers and consumerism in this debate.

The Rudd government has a commitment to ensuring that consumers are empowered in the market place; hence the advent of schemes such as Fuelwatch and GroceryWatch as well as other measures and this bill amending the Trade Practices Act. Empowering consumers requires government action and it requires it in key ways. Empowering consumers gives consumers the tools to both monitor and respond to businesses’ behaviour that is not in our individual, collective or commercial interest. Such behaviour may give us inflated prices, which is not good for the market, or rapidly rising prices and may include not passing on market fluctuations. Hence the need for monitoring schemes. Monitoring schemes are imperfect tools in an imperfect market, but they are tools that are necessary and they are one key part of what I call the armoury in the price and price-fixing wars. These schemes ensure that market distortions do not exist and give protection to consumers.

As a society, we do not fully see ourselves as consumers; hence there is sometimes a discord between what we are advocating, what is being advanced and how we see ourselves. Talking about ourselves as consumers is rather utilitarian, but we are consumers. The consumer is not a modern phenomenon but a rather ancient one. What is new—and when I say ‘new’ I do not mean new as of this week but new in a general and modern sense—are consumer protection and empowerment policies. The Rudd government has a strong commitment to those policies. This bill also brings consumer protection into contract commercial business law, which for centuries was largely left unfettered and untrammelled to operate in the market, and that does result in market distortions and anticompetitive behaviour. This bill is also about anticompetitive behaviour, some of which is already prohibited in the Trade Practices Act. That is what this bill addresses.

Some months ago I bought some wine from a local bottle shop owner—yes, I confess!—in a small town in my electorate. I shop as I move around my electorate; it is my little way of spreading a few dollars across the electorate and it is also my way of finding another way of engaging with the local small business owners—I sort of get to yarn with them. While buying the wine, the bottle shop owner told me that the franchisee of a larger bottle shop operation—and I am not going to name names here—had a discussion with him about agreeing on certain prices for certain items. That sort of behaviour could clearly fall into the anticompetitive behaviour that we are talking about. He said that he told them—and I will not repeat the exact words—to ‘shove off’ and that he was not into that sort of behaviour. He told them that he would run his business as a good local businessman. He did not want to engage in that. When we move around our electorates we could all exchange various stories like that. Such behaviour can sound rather innocuous but is actually stealing—and it is stealing in a way that also rips us off. Its intent and design is purely to cheat us, the consumers. It is wrong ethically and now, if it fits the element of the new offence that this bill incorporates into the Trade Practices Act, it is going to be wrong legally. That is the important aspect of this bill.

I will now turn to the offences, the elements, the investigatory and prosecutorial process, the defences and the consultation process of the bill. I know that the consultation process has been extensively covered, but I would like to say that it was a very effective consultation process. The consultation process went on over the last 12 months. All the relevant stakeholders were consulted and had an opportunity to comment and there was a draft exposure bill. The offence itself is as follows: ‘If a corporation makes or gives effect to a contract arrangement or understanding between competitors that contains a provision to fix prices, restricts outputs, divide or share markets or rig bids and includes the sum fault elements that apply under the criminal code of intention and knowledge or belief.’ The latter is important, and from what I have read a change from the draft exposure bill was the intent of dishonestly obtaining a benefit. This is the current burden of proof, and it puts it beyond reasonable doubt, which is really important when we are talking about criminal behaviour. That means that serious and in some cases serial offenders will be caught. I will make a general comment here about law-makers, and that is that we sometimes have a propensity to stray into wanting to import civil burdens of proof into criminal offences. That has happened before and is something that we should never do lightly. In fact, it is a practice that I eschew. It weakens a fundamental plank of our justice system that is at the root of our government system—that is, the rule of law. We as law-makers should be ever mindful of and vigilant in this.

An individual will now receive a maximum jail term of 10 years, in step with other criminal sanctions in the Trade Practices Act, and a maximum monetary sanction of $220,000. For a corporation there will be a maximum monetary sanction of $10 million or three times the value of the benefit from the cartel or, where value cannot be so determined, 10 per cent of annual turnover. This brings our jurisdiction in line with other OECD countries, our trading partners and our ally, the US.

The amending bill also introduces corresponding civil prohibitions. Importantly, though, it makes sure that double jeopardy is covered in that civil proceedings will be postponed if criminal proceedings are afoot. If the prosecution is effected, the civil proceedings will be terminated. That is a very important provision in the act. It further introduces telephone interception powers so that the cloak of secrecy—or the wink and nod approach, as I call it—over cartel criminal behaviour can be penetrated.

The Telecommunications (Interception and Access) Act 1979 will be accordingly amended. I approve of this, but want to put on record my reservation about telephone interception. This is a general reservation that cuts across all areas: commerce matters, personal matters; in effect, just all areas. I also have a general reservation about privacy across all areas. Our modern society is rather devoid of privacy in practice, with the propensity to grant telephone interception access in all matters. Sometimes we can be too quick to impugn without closer scrutiny—not here—and again, this is my general comment. I heard a contribution from one of the opposition speakers who was talking about this very issue. I know that when we look at areas like anti-terrorism they were not as quick to make sure that those protections were in place. A scrutiny of bills committee that scrutinised liberties and rights—and these are rights of a civilised society—could do a lot to ensure the rule of law and just have a general second look in these areas.

I note that the ACCC will have the power and authority to investigate and that the Commonwealth Director of Public Prosecutions will, correctly, have the power to prosecute. I also note—and I forget the terminology in the legislation—there will be something like a standard operating procedure, which I call an SOP; a document made public that will articulate the way those two sets of powers and authorities will operate. That investigative power is a big power to have and I have no doubt that the ACCC has the competence to carry that out.

I say to my honourable colleagues, the opposition, that they did sit on their hands on this bill. They failed to act to give the necessary protections to consumers. The Dawson review that was commissioned by their government in 2003, and which was chaired by the eminent Hon. Sir Daryl Dawson, recommended such changes to the criminal offence of cartels but it was left to linger. It is no use leaving situations like this to linger because they are too hard, or too complex or this and that have to be weighed up. That is what we do all the time in this chamber. This was just left there but we have picked it up and run with it. We have made sure that these protections will be put in place for consumers. It will give better effect to commercial operations, particularly to small business, and it is legislation that is long overdue. I commend this bill to the House.

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