Mrs Bronwyn Bishop (Mackellar, Liberal Party) Share this | Hansard source

In rising to speak to the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 I place on the record that I have always opposed converting civil offences into criminal offences. This bill is not allowing us to argue whether cartels are good or bad. Clearly, cartels are bad. They are also illegal. The question is: what do you do about the illegality? Do you think that civil penalties are sufficient or should it be turned into a criminal offence, thereby placing people in jail for up to 10 years as the bill proposes? From my point of view I can see no good argument to convert a civil offence into a criminal offence, particularly in the way this bill proposes.

When the bill was first proposed in 2005, it at least had a dishonesty clause in it that made it necessary to prove that there was a dishonest intent. That has been removed from this bill and there is really no good reason given for it except, I think, that this government does not really trust juries. You could say that the main criticism of the dishonesty provision is shown by this quote from the Scrutiny of Bills Committee Alert Digest:

The main criticism of the ‘dishonesty’ test is that it requires a jury to make a moral assessment by putting themselves in the position of a hypothetical ordinary person and assessing whether, according to the standards of ordinary people, the relevant conduct was dishonest. In addition, the test requires the jury to assess whether the defendant knew that his or her acts were dishonest according to the standards of ordinary people. This moral assessment has the potential to result in inconsistent outcomes.

Dare I say it: in the criminal jurisdiction we get so-called inconsistent outcomes every day of the week. Anybody who listens to talkback radio will hear precisely that, when they will hear what they think are similar circumstances, be it for murder, be it for robbery, be it for any criminal offence that is seemingly inconsistent in its outcome. So to dismiss the dishonesty test on that basis to me is fallacious.

I would also like to say that I am not interested in hearing these quotes from Mr Samuel, which I am hearing frequently, as to why this criminal change should occur. Since he has taken on the job of head of the ACCC, Mr Samuel, I think, has shown that he has no interest at all in the needs of small business and has been obsessed with criminally prosecuting those whom he personally wishes to punish. This has been amply demonstrated by the way criminal proceedings have been engineered against Mr Richard Pratt and by the way he defended the current government’s pathetic Fuelwatch scheme. He has no concern for small business issues. I will go on to those, particularly third line forcing and how decisions impact on individuals—in fact, there is a crusade to see this become a criminal offence.

The bill decides that we have to have a distinction between types of cartels. We are going to have hardcore cartel conduct and we are still going to have civil offences. The bill does not define what hardcore cartel conduct is, but the explanatory memorandum refers to the OECD definition, which says:

… an anticompetitive agreement, anticompetitive concerted practice, or anticompetitive arrangement by competitors to fix prices, make rigged bids (collusive tenders), establish output restrictions or quotas, or share or divide markets by allocating customers, suppliers, territories, or lines of commerce.

Pretty broad, really. It could capture quite a lot of arrangements that people might enter into. What about a group of doctors who are operating, say, four separate practices? They decide that they want to assist one another by having someone on duty all the time so that somebody in need of medical attention can actually get medical attention and the other doctors can have a rest. But they might agree that they will all charge the same price whether they are on or off. That is cartel-like behaviour. They too could be subject to being in jail for up to 10 years, if it is decided that that meets the definition of hardcore cartel-like behaviour. Guess who makes the decision? The ACCC. There is a memorandum of understanding between the ACCC and the DPP, and it is the ACCC who will decide and cull out which cases it thinks might be the right ones to prosecute and will then go to the DPP. That is not my idea of the way criminal cases should be decided upon for prosecution.

A lot of comparisons have been made between cartel-like behaviour and theft. But there is no ACCC to decide if someone commits an act of theft. There is no third party over here that is going to make the decision whether or not it is criminal behaviour. It is something that is investigated by police and if there is a case made out it goes to the DPP, and the DPP decides whether the prosecution will take place or not. So we are not really comparing apples with apples; we are comparing apples with oranges.

Looking at the Bills Digest, it has a nice summary of ‘A quick guide to the criminal cartel provisions’. It says:

1. The criminal cartel provisions only relate to conduct which is described as price fixing; restricting outputs in the production or supply chain; allocating customers, suppliers or territories or bid-rigging.

2. Any other anti-competitive conduct which is already regulated by the TPA is not intended to be caught by the new provisions.

3. Even if a provision of a CAU—

contract arrangement or understanding—

relates to the above conduct it will not be a ‘cartel provision’ unless it also satisfies the ‘purpose/effect condition’ or the ‘purpose condition’ and the ‘competition condition’.

For a civil penalty, it says:

1. The civil penalty provisions only relate to conduct which is described as price fixing; restricting outputs in the production or supply chain; allocating customers, suppliers or territories or bid-rigging.

2. Any other anti-competitive conduct which is already regulated by the TPA is not intended to be caught by the new provisions.

And on it goes:

4. There are two civil offences—the making of a CAU which contains a cartel provision and the giving effect to a cartel provision contained in a CAU.

Under the existing law, you can actually involve yourself in some price-fixing arrangements if you are in a joint venture, and that is a legitimate defence. But under these new provisions there will not be any such defence, but there will be the provision of the ACCC to authorise joint venturers to enter into collusive type arrangements. More power to the ACCC. The ACCC is becoming a very powerful body and we are investing these powers allegedly in one person—unelected, appointed by a government of the day. There is not much recourse to judge his decisions to see whether they are good or bad.

Another anticompetitive practice that is illegal is third line forcing. The Trade Practices Act says so. But you can engage in third line forcing if you get permission from the ACCC, under an exemption in the Trade Practices Act, to do so. Coles and Woolworths both have exemptions from the third line forcing provisions of the Trade Practices Act to have shopper dockets, and we heard from a contributor to this debate this morning that they now account for 44 per cent of all petrol sales in this country. They are technically in breach of the Trade Practices Act but they are given an exemption so that they can engage in that behaviour. My guess is that when the original exemption was granted nobody really saw the monster that it could grow into, with the independents being forced out of business.

As you and I and everybody else know, Madam Deputy Speaker Moylan, a subject of constant discussion is petrol prices and whether there is any collusive behaviour going on between the oil companies. We get report after report that says no, that could not be the case. People continually ask questions about Coles and Woolworths and their impact on the price of foodstuffs. We always get a report that says, ‘No, this is just fine,’ but when you do comparisons between the way food prices have risen in this country and the way they have risen in other countries of like nature you find that ours are way out of kilter and far higher.

So it is a very grey area; yet we have this determination to make it a criminal offence—to put somebody in jail, which will somehow mean that we will have a more competitive market. I, quite frankly, do not believe that. I think that financial penalties for this behaviour can be a quite adequate remedy. If we consider that they are not high enough, make them higher; make them such an imposition that they cannot be considered—in the words of some who want to see this become a criminal act rather than remain a civil offence with only a financial penalty paid—just ‘a cost of doing business’. How cynical is that? If the penalty is not adequate and can be judged a cost of doing business then increase it so that it becomes a cost that cannot be borne.

I have heard many members in this debate say, ‘They’ve got it in other countries, so we ought to have it here.’ I have never been impressed by that argument. We should always consider what is good for Australia, what will make our markets better. Every day we have people going out and buying engagement rings for their fiancees and thinking that the value of that diamond ring will be something they can count on. Why is that so? It is because there is a cartel in diamonds operating. Do we kick up a fuss about that on a regular basis? No. OPEC is a cartel but it is far too big for us to take on, so we just have to live with it. Within our own jurisdiction, dealing with our own companies, we are going to turn business people today into criminals tomorrow—when the big players in cartels simply are too big for us to touch.

I oppose this legislation because I would always oppose such legislation, whether it were to be introduced by us or whether it were to be introduced by this government. But I will say this: at least the legislation that was to be introduced back in 2005, when we were in government, had a dishonesty test. This government has chosen to remove it. There is only one reason that somebody would choose to remove it, and that is that they think it will be easier to get a conviction—that you will not have to trust in the good sense of a jury to make a decision as to whether there was a dishonest intent: ‘No, we cannot trust the jury; we might not get a conviction. So we had better remove it.’

I think that today, when this bill passes the House, will be a sad day. I do not think the bill will enhance competition in the market. I do not think it will send to people who would engage in cartel-like behaviour any more serious a message than they have now. But I do think that we are placing an enormous amount of trust in the ability of the ACCC and one man to make decisions, because although you might say the ACCC is broader than the person who heads it it is quite clear, if you look at it empirically, he is the one who has much sway. I think that to place all this on someone without any proper scrutiny as to whether the decisions he is making are good or bad makes for bad law.

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