Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Hansard source

I am speaking in support of the second reading amendment moved by the member for Fenner in relation to the Competition and Consumer Amendment (Competition Policy Review) Bill 2017. Labor support the majority of the schedules contained in this important legislation; however, we do oppose schedule 6, which seeks to increase the maximum penalty for breach of secondary boycott provisions by a substantial, and we would say unreasonable, amount.

Labor, of course, is the party of competition. It was the Whitlam government that introduced the first Trade Practices Act into Australian law in 1974. That reform was brought in with the aim of promoting competition and producing productivity and efficiency outcomes in our economy. The aim was to prevent monopolistic and cartel behaviour that was stifling competition in numerous Australian markets. It was also to prohibit practices and policies which reduce competition in a market.

So it was a Labor government that established the foundations for competition policy in this country and it has been successive Labor governments, after the Whitlam government, that have built on that competition legacy. Probably the most important reforms in modernising our economy and promoting productivity, efficiency and competition were introduced by the Keating government, when Prime Minister Paul Keating commissioned Fred Hilmer to review Australia's competition policies. This led to massive sweeping reforms in a number of industries, but particularly in aviation, banking and financial services, and utilities, most notably in electricity by the establishment of the east coast electricity market. These have laid the foundations for decades of successive and uninterrupted economic growth in Australia.

This was again built upon by the Rudd and Gillard governments in 2011, when they instituted a wholesale reform—an overview of Australia's consumer law through a COAG process. The aim of that was to harmonise Australia's consumer and competition laws, to produce a consistent national approach when it came to consumer issues associated with unfair contracts, consumer rights, product safety and of course competition reform. Those laws and those changes criminalised cartel conduct, which up until that particular point in time in 2009 had been a civil penalty. They also brought Australia into line with international best practice that mandated jail time for people and organisations that were caught fixing prices through unfair and uncompetitive behaviour and also through cartel conduct.

When it comes to competition policy and ensuring that we're promoting competition and efficiency in markets, those opposite tend to have a different approach and a different philosophy to the Labor Party. They seek to use this platform of competition review and reform as a means of reducing wages, working conditions and safety in particular industries in Australia. They've used competition laws as a smokescreen for reforms to what essentially are workplace laws and worker health and safety laws. They have used this to reduce collective bargaining rights and collective action in support of fair incomes and safe workplaces. The way they do it—and it's not just this government; there have been successive Liberal coalition governments in the past—is by seeking to have secondary boycott provisions within Australia's competition and consumer laws when they probably rightfully should be within workplace relations legislation. When they have it in this particular piece of legislation, they massively increase the penalties. That is what schedule 6 of this bill does today, by introducing, quite simply, unreasonable and unrealistic penalties for breaches of secondary boycott provisions.

It's all to do with their core philosophy of making life harder for workers and their families. We've seen this over recent years with the policies that have been introduced by this government and their recent support for cuts to penalty rates for weekend workers in Australia. This is the Turnbull government that's stood by and done absolutely nothing when it comes to ensuring that workers' penalty rates for working on Sundays in retail and hospitality industries are protected. Malcolm Turnbull, the member for Wentworth, as Prime Minister, could have stepped in and supported Labor's bills to stop cuts to penalty rates but chose not to. They've sought to restrict collective bargaining in workplaces. They seek to restrict union rights to enter workplaces and they seek to introduce unreasonable and unrealistic penalties that are not internationally consistent for breaches of workplace laws. This bill contains one of those in the increases in penalties for secondary boycotts.

In respect of that particular piece of legislation, what this bill is seeking to do in relation to schedule 6, which Labor is opposing, is introduce and increase massively the penalties for secondary boycotts. A secondary boycott involves one person in concert with another person engaging in conduct that hinders or prevents a third person supplying or acquiring goods and services from a fourth person. Schedule 6 of this bill will increase the penalty for breaching those provisions from $750,000 to the greater of $10 million or three times the total value of the benefits obtained from the secondary boycott or, if the court cannot determine the total value of these benefits, 10 per cent of the annual turnover of the corporate for the 12 months leading up to when the secondary boycott occurred.

This is an unreasonable approach from this government and puts us out of step with what's occurring internationally in respect of competition and consumer provisions and secondary boycotts. The International Labour Organization's convention No. 87 does permit sympathy action. This change is inconsistent with that approach. It will introduce higher penalties for anticompetitive and anticonsumer conduct in terms of international best practice. Penalties for unlawful conduct under the Fair Work Act attract a maximum penalty of $12,600. That's for a breach of industrial and workplace laws, where these provisions should be. But under this reform of schedule 6 the penalty will be 800 times that, at $10 million, for a secondary boycott penalty. In our view, that is unfair. It's inconsistent with Australia's obligations that we've signed up to through the International Labour Organization. It's not something that Labor will be committing to.

I have some brief comments in respect of the effects test. That's been another hotly contested issue in respect of changes to competition and consumer laws. The original draft bill that we're debating here today included the effects test amendments to the misuse of market power provisions in the act. It was removed by the coalition government and introduced separately, because they know that the effects test is the very definition of dangerous economic policy. As the member for Fenner pointed out, the Prime Minister has argued against an effects test in cabinet. We know, through leaks from cabinet, that the Prime Minister argued against this policy when he was the Minister for Communications. Senator Brandis argued against this policy. But, because the member for Warringah wanted to keep the National Party onside, they agreed to this effects test.

God help us when the National Party is determining economic policy in Australia! God help Australia! But that is exactly what is occurring with this introduction of an effects test into the parliament in separate legislation to this. It's dangerous because the major effect of an effects test will be to create a climate of fear for businesses looking to compete through reductions to prices. Every time a business reduces its prices, it will be creating a legal risk for itself if there is an effects test. We know that, since 1974, at least 10 inquiries into Australia's competition laws have considered a proposal for an effects test, and all of them have rejected it, apart from Professor Harper's review, which is the only one that's recommended the effects test. In the words of the former Treasurer, Peter Costello:

The so-called effects test is designed to protect competitors, particularly less efficient ones, from a competitive challenge.

That's the antithesis of what we're trying to do with an effective competition policy in this country. We all know that the government's own former Minister for Trade and Investment, Andrew Robb, was also opposed to an effects test. An effects test is bad economic policy. It will end up being a lawyer's picnic when it's up to them to argue before the Competition and Consumer Commission or before the Federal Court whether or not there has been an effect, or a likely effect, on competition by an organisation reducing its prices.

This bill also seeks to introduce a reasonable search defence. We've consulted widely to ensure that this measure wouldn't allow companies and individuals under investigation to use this defence in refusing or failing to comply with compulsory information requests by the ACCC under section 155. Section 155 is the foundation of the ACCC's ability to investigate alleged breaches of the act, and Labor went to the last election with a suite of policies to strengthen it. We're committed to increasing penalties for anticompetitive and anticonsumer conduct to ensure revenue to increase the ACCC's litigation budget from $24½ million to a maximum of twice that level. We welcome the government's announcement to align Australian consumer law penalties with the rest of the act but urge them to adopt Labor's other policies that are in line with international best practice.

In conclusion, Labor has long recognised that an effective competition policy is at the heart of a well functioning economy, but it's also at the heart of a fair society that protects the interests of consumers over rent-seeking monopolists. Our record on this could not be stronger.

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