Barnaby Joyce (New England, National Party) Share this | Hansard source

On behalf of the Standing Committee on Industries, Innovation, Science and Resources, I present the committee's report entitled Internet competition inquiry: inquiry into impacts on local businesses in Australia from global internet-based competitiontogether with the minutes of the proceedings.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—The arrival in Australia of Amazon, the world's largest online retailer, has focussed attention on the effect of internet based competition on Australian business. I'd like to note to the House that the market capitalisation of Amazon is $600 billion. The total retail expenditure of our major supermarkets, including Coles and Woolworths, is $90 billion, so we're talking about an absolute giant here.

Online shopping has grown rapidly in recent years, and this has enabled overseas firms to compete directly with Australian retailers in the domestic market. For some Australian businesses, competing with overseas firms based in lower-cost markets is proving challenging. This is also noted in such things as when people in shopping malls have to pay rent while people online only have to pay for stamps to send the products.

Nevertheless, while online retail is increasing competition, it is also creating opportunities for Australian businesses to export their goods and services globally. For example, almost 90 per cent of Australian small businesses using eBay are exporting products overseas.

The size of the customer base available online enables small manufacturers and retailers to establish highly specialised business models that can succeed and grow. In addition, it allows businesses based in regional Australia to access the same market opportunities as those in urban areas.

A key role for government is to ensure that the digital economy operates with a level playing field and that Australian businesses are equipped with the skills and technologies needed to succeed.

Therefore, the committee has recommended the establishment of a grants program to assist Australian small businesses to take advantage of digital economy opportunities. The grants program should provide matched funding for businesses that are looking to improve their capacity to engage in online retail.

The committee has also recommended that the government develop education materials to assist small businesses to understand the risks and benefits of using online platforms and emerging digital technologies. These materials should also assist businesses to improve their cybersecurity processes.

The committee believes it is important to share the stories of Australian companies that have benefited from engaging in the digital economy. Promoting these stories, especially from companies outside the technology sector, will encourage other small businesses to explore the opportunities that new technologies are creating in their industry.

The speed with which new internet based firms have been able to become significant market actors is unparalleled. For example, in a number of Australian cities it took Uber only a few months to disrupt the taxi market.

The committee heard from representatives of the hotels industry about their concerns relating to the growing market power of online accommodation booking sites. I note that, even in my own local area, basically you have to follow the conditions of the online booking agencies, even though at times they get 25 per cent of the price of the accommodation. If you don't want to be part of them, you don't get any clients.

The hotels are upset by what they perceive as unfair contract provisions and commission rates charged by the booking sites. Due to the popularity of the sites, however, the hotels have little choice but to accept the contract conditions.

There is a concern that digital platforms are able to gain possibly damaging levels of market power before regulators can adequately respond. The committee has, therefore, recommended that the government consider future reforms of competition law in light of the potential for digital platforms to act in anticompetitive ways. I note that I've had a distinct interest in this for a long period of time, since section 46(1AA), otherwise known as the Birdsville amendment.

New digital technologies are changing the world of work and the potential employment impacts of automation and artificial intelligence are a concern for many people.

As with every preceding wave of rapid development there will be some jobs that are replaced by new technologies. The effect on the retail industry may be a movement of staff from customer service roles to warehousing and logistics roles.

Overall, however, the digital economy should result in more jobs being created than lost.

Nevertheless, there are many Australians who have developed skills and expertise in jobs that are at risk from technologies such as automation. For this reason the committee has recommended the creation of a digital retraining fund.

The fund would assist Australian workers develop their digital skills helping them to maintain their employment or, if necessary, transition to new jobs.

It is easier to find a job if you already have one, so it is important to assist Australian workers improve their skills now before digital disruption places them at risk of unemployment.

The committee has also recommended that the government invest in the development of the nation's capacity to forecast future skill needs. This would assist education and training providers prepare courses as well as help local businesses with their workforce planning.

I would like to thank the organisations and individuals who appeared at public meetings or provided submissions to the inquiry. I would also like to thank my committee colleagues and note that this is the first report since I became chair, so I acknowledge those who preceded me for their contribution to the inquiry.

I commend the report to the House.

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