David Bradbury (Lindsay, Australian Labor Party) Share this | Hansard source

I rise to support the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 and to echo the comments of those speakers who have come before me in relation to the matters that are contained within the bill. Clearly, the point has been made consistently, and I wish to reinforce the point, that cartels are, in many respects, one of the great evils when it comes to anticompetitive activity within the marketplace. Cartels, of their nature, undermine the integrity of the marketplace and run counter to efficient outcomes within the marketplace.

It is essential that we have a robust regulatory regime in place to ensure the proper operation of the market, and that is why it has been well recognised throughout market economies over many years—and the member for Wakefield certainly emphasised this point—that there is a very significant and important role for government to play in intervening in the marketplace to set the parameters and to create the rules of the game, the rules of operation and the rules under which trade will occur so as to ensure that the market and its participants, or their interests, are not being compromised throughout its operation in the ordinary course of events.

I saw a quote from Warren Pengilley, who wrote an article titled ‘The law of collusion: aftermath of the Geelong petrol price-fixing case’, which appeared in the Law Society Journal. Mr Pengilley—and I think that this really encapsulates the essence of laws designed to combat the activities of cartels—stated:

The law regards each marketplace competitor as being responsible for its own pricing decisions. The result of each competitor making its own decision will deliver, so economic competition theory runs, the best market outcome. This is because each competitor will seek to maximise its profit and make such decisions as are necessary to achieve this end. Conduct which complies with this concept is not illegal. It is when competitors seek to subvert this concept by making arrangements between themselves on agreed outcomes that the law steps in.

The comments that were made earlier by the member for Mayo are, I think, to some extent rebutted by the extract that I have just quoted. The member for Mayo was indicating that he holds a concern that entrepreneurial effort and entrepreneurial zeal will be discouraged by the introduction of criminal sanctions for those participants convicted of their involvement in cartel related activities. But it is an important process to follow through that there has to be a conviction, and of course the burden of proof in criminal matters, which continues to be the case in these matters, will be one of ‘beyond reasonable doubt’. Clearly, the offence needs to be made out, and it is only after it has been made out that those who have been engaged in the sort of activity that Mr Pengilley has so aptly described will then be dealt with according to the criminal law and the sanctions that are proposed within this bill.

The question that needs to be asked in relation to this debate is: why should matters such as these—that is, cartel related activities—be treated differently to other offences and other activities that effectively have the same substantive economic outcome? To clarify the comparison I am drawing: there are many instances in which individuals will seek to profit from others by doing things that effectively amount to stealing. We need to understand that collusion and the various activities that might be involved in cartel related activities amount to theft. It may not appear that there are victims, but there are victims of the crimes that we are contemplating in the course of discussing this bill. The victims are consumers. The victims are small businesses. Victims are right throughout the economy. Whilst to some extent they may be faceless and to some extent they may not even be aware that they are victims at the time when they are deprived of the money that these cartel related activities essentially rob them of—notwithstanding that—they are victims. It is in that context that we need to reflect upon the fact that these proposed criminal sanctions are essentially about recognising the gravity of these offences and the gravity of these activities. To participate in cartel related activities is essentially to participate in theft. The proceeds of the crime come from the larger amounts of money that consumers, small businesses and other individuals and participants throughout the marketplace are required to contribute in meeting the increased prices that flow through from these cartel related activities.

I think it is worth reflecting upon some of the acts and some of the offences that are currently on the statute books, not necessarily in relation to the Commonwealth parliament. In my home state of New South Wales, there is an offence, for example, under the Crimes Act, of ‘directors et cetera cheating or defrauding’. That is section 176A of the Crimes Act. That section reads:

Whosoever, being a director, officer, or member, of any body corporate or public company, cheats or defrauds, or does or omits to do any act with intent to cheat or defraud, the body corporate or company or any person in his or her dealings with the body corporate or company shall be liable to imprisonment for 10 years.

It strikes me that this offence, which is on the statute books in New South Wales and has been there for many years, is not seen to be a particularly exceptional offence. I have certainly never been approached by anyone petitioning me to either effect any change to this offence or to lobby others to do so. Essentially, I think that is because there is, right across the community, a consensus that activities of this sort are reprehensible, and it is because they are reprehensible that the law, through the imposition of criminal sanctions, seeks to deter those activities. It strikes me as rather strange to hear particularly those from the other side suggesting that sanctions of this sort should not be imposed in relation to those matters that might emerge from cartel related activities.

It is worth noting that these particular proposals have a long history. We can go back to the many discussions at the international level through the OECD. We can look closer to home at the Dawson review, and the many valuable submissions that I have seen that were made as part of that review. The Dawson review concluded—and I think this is of particular significance to the comments that I have just made—at page 19:

There was general agreement in the submissions made to the Committee that, notwithstanding the difficulty in arriving at an appropriate definition of serious or hard-core cartel conduct, it is sufficiently reprehensible to be punishable by the imposition of a gaol sentence.

It is that very element of there being a community consensus, a broad consensus—

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