Chris Hayes (Werriwa, Australian Labor Party) Share this | Hansard source

I rise today, as I think every member so far has, to support the Competition and Consumer Legislation Amendment Bill 2010. The bill before the house today does two very significant things in bringing clarity and certainty to the applications of key provisions in competition and consumer laws. Firstly, it implements the government’s election commitment to deal with creeping acquisitions by clarifying the Trade Practices Act to ensure that the Australian Consumer and Competition Commission has power to reject acquisitions that would subsequently lessen the competition in any local, regional or national market. Secondly, and equally importantly, it also provides greater clarity in relation to unconscionable conduct provisions, implementing the recommendations of the expert panel appointed by the minister in 2008, which made recommendations in November 2009.

These are two significant pieces of kit, if I can use the member for Dunkley’s analogy, to improve the consumer competition law in this country. This has by no means been put forward as a total panacea to all business conjecture or all business difficulties. Like you, Madam Deputy Speaker, being a person who came from a business background I know that the challenges out there are often great, but this is moving to deliver a greater degree of certainty in an area where it is clearly required. People have asked for this and we are trying to deliver that certainty so they have a degree of understanding of how to propose their businesses and run them into the future.

There has been a long-standing concern in most communities about creeping acquisitions, whether they be the discussions a few years ago about banks or petrol stations. Certainly in my own backyard in Werriwa every time one of the mainstream supermarkets wants to set up we are inundated with concerns about what that does to local competition, the local fruit grower and the local community. The local community, apart from everything else, has a fair degree of association or perceived ownership of who supplies the goods and services to them. There is an element of parochialism. Essentially, when it comes down to dealing with mums and dads locally, we need to ask: is this good for us? Can people come in and undercut now and force us to suffer a higher price regime in the future through their monopolistic powers? This very much applies to local supermarkets.

Following the release of the ACCC’s grocery inquiry in 2008, the government committed to undertake a consultation process to evaluate the various models to address creeping acquisitions. It is important to bear in mind that what we are talking about here is creeping acquisitions. Essentially, a series of small-scale acquisitions individually do not substantially lessen competition in the market but a series of acquisitions may over time substantially impact on the market. This is very significant. These small retailers are being bought out systematically with a view to eventually having a dominant pricing position in a market.

In 2008 and 2009 two discussion papers were released by the government. Four broad models of reform were put up for discussion. Regrettably, like a lot of things we deal with in business, there was not substantial agreement or consensus in terms of the outcome. There were certainly varying views about how to address these problems and, regrettably, there was no consensus for any one model.

As a result of the public consultation, the government identified two areas of existing law where clarification would assist in addressing growing creeping acquisition concerns. These were set out in the 2008 publication entitled Merger Guidelines. In taking this approach the government responded to the specific problems with specific remedies rather than with general remedies that could have unintended consequences elsewhere and impact on economic activity—and, when we talk about local communities, it could very much impact on employment.

In January 2010 the government announced that it would amend the Trade Practices Act to ensure that the Australian Competition and Consumer Commission had the power to reject acquisitions that would substantially lessen competition in any local, regional or national market. That is significantly different to saying that an acquisition can have a substantial impact on a market. This is going to address that on a multi-level plane, if you like.

Importantly, in its announcement the government also confirmed the view that site acquisitions, including entry into a lease for land or acquisition of freehold land, are acquisitions of an asset under section 50 of the Trade Practices Act. This policy announcement reduced the uncertainty surrounding the application of section 50 in the Trade Practices Act to leases and acquisitions of greenfields market sites.

South-western Sydney, where I come from, is Sydney’s growth area at the moment. It is predicted that Camden alone is going to double in size within the next 15 years and Liverpool is likely to grow by one-third of its current size. All this land is being developed out there, and it is certainly being looked at in terms of developing various business components of that as well. When we look at not only the markets of today but also the markets that will develop in those regional committees, the development of greenfield sites becomes very important. I think it is quite significant that the ACCC will have powers in that respect. The amendments to section 50 of the act will clarify for the courts and for the ACCC the ability to consider more geographically confined markets where there might be regional markets. Small acquisitions can be assessed in relation to section 50. It also clarifies for the courts and for the ACCC that they can consider the impact of a proposed acquisition on the competition in any market, ensuring consideration can be given to the competition impacts of acquisitions in a multi-market regime.

These amendments go a long way to respond to community concerns and matters that have been raised with me by the chambers of commerce in Campbelltown, Ingleburn and Liverpool. These matters are significant to small players who want to remain in a market, and they are equally important for assessing not only the effect on business but also the effect on the market itself. That is why it is quite crucial to clarify these provisions, particularly as they apply to the small and regional markets within my electorate.

Another thing the Senate Economics Committee recommended in 2008 was that the government engage in an inquiry process to consider the merits of introducing a listing of examples or a statement of principles into the law, particularly with regard to retail tenancy leasing and trend sizing, which you, Madam Deputy Speaker, have spoken about at great length. I acknowledge your commitment in this regard, and it is not the first time you have dealt with these matters in this place.

As I stated at the outset, the Minister for Competition Policy and Consumer Affairs, Dr Emerson, appointed an expert panel near the end of 2009 to consider whether a listing of examples or a statement of principles would assist in defining the application of unconscionable conduct and should be incorporated into the Trade Practices Act. It comes as no surprise that the panel, all of whom have considerable knowledge and experience—and I do not think anyone would challenge that—came up with a recommendation that the principles should be incorporated into the Trade Practices Act. The proposed changes will do two things. Firstly, they will identify that the consumer and business related provisions of the Trade Practices Act and the ASIC Act are fundamentally the same. This unification will ensure that the provisions will be interpreted in the same way by the courts and that any legal precedents will apply equally and consistently to proceedings brought by either consumers or businesses. Secondly, they will introduce interpretive provisions to the Trade Practices Act and the ASIC Act.

This principle is not intended to change the law. Unlike what my colleague the member for Dunkley said, it is not designed to do something other than deliver consistency. But in terms of unconscionable conduct it will draw upon existing cases applying statements of principles which will assist the courts or the ACCC in assessing these matters. It will actually give greater codification, if you like, to the courts as to what the intention of the parliament is in making these laws and aiding their ability in statutory interpretation of these provisions. It will be a good thing to have this in relation both to actions taken by consumers as well as businesses. The changes reflect the view of the Senate Standing Committee on Economics, and the recommendations are clearly now reflected in this bill.

In conclusion, all the amendments contained in this bill will bring greater clarity and certainty to the application of key provisions in competition and consumer laws. I commend the efforts of the minister for introducing the bill and his continued contribution to improving laws that will protect Australian small businesses and consumers. It is true that all Australians prosper when there is competition in our markets. These amendments will ensure that competition can be more effectively promoted and that conduct designed to undermine that competition can be addressed more effectively. I commend the bill to the House.

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