Henry Pike (Bowman, Liberal National Party) Share this | Hansard source

It is a pleasure to follow that very thoughtful contribution by the member for Banks. He's touched on many important aspects of last night's budget and the journey that our nation will take over the next few months as we head into the next federal budget. I will touch on some of those same themes as well a bit later in my remarks.

Firstly, I want to discuss the specifics of the Treasury Laws Amendment (More Competition, Better Prices) Bill 2022. This bill seeks to help improve competition across the private sector, and it does this through two schedules.

Schedule 1 amends the Competition and Consumer Act, the CCA, and the Australian Consumer Law, the ACL. It increases penalties on businesses for breaching anticompetition laws. Specifically, if the ACL is breached, the business will be fined whichever is the higher amount of either $50 million, three times the value of the benefit obtained, or 30 per cent of the body corporate's adjusted turnover during the breach turnover period. If the CCA is breached, the business will again be fined whichever is the greater of four options. For breaches under 21 days in length, it will be $50 million plus $1 million for each day that the contravention continued. For breaches over 21 days in length, it will be $71 million plus $3 million for each day that the contravention continued after the first 21. The other two options are matching the ACL breach punishment: three times the value of the benefit obtained, or 30 per cent of the body corporate's adjusted turnover during the breach turnover period. The maximum punishment for a person in breach that is not a body corporate is $2.5 million, a 400 per cent increase. That's all very technical and very complex but, to put it simply, it increases penalties for businesses acting in an illegal, anticompetitive way.

Schedule 2 amends the CCA and the ACL as well as the Australian Securities and Investments Commission Act. It increases penalties on businesses that impose unfair contract terms. The maximum penalty for an ASIC breach is the greatest value of 5,000 penalty units or three times the value of the benefit obtained or the detriment avoided. The maximum penalty for an ACL breach is $2.5 million.

The bill will better align Australia's penalty regime with equivalent jurisdictions, as determined by the OECD, on competition law worldwide. It is a crackdown on the exploitation of consumers and small businesses, and the coalition stands resolutely for these groups and will be supporting this important bill.

Healthy market competition is fundamental to a well-functioning economy. I think everyone in this chamber and, indeed, across this country would agree with that statement. Competition keeps prices low and the quality and choice of goods and services high. Competition is the not-so-secret ingredient that has ensured that our nation and similar nations with similar economies have prospered, while other world economies, without the same level of competition, have stagnated.

Australians are currently suffering under a rapidly worsening cost-of-living crisis. We're all aware of that, and there's been much talk of that in the course of this new parliament and, certainly, in the media's discussion of last night's federal budget. It is absolutely critical and it should be the No. 1 priority of this government and of all of us here in this chamber to ensure that we respond to that cost-of-living crisis as effectively as possible. It was disappointing that last night's federal budget didn't go anywhere near addressing the crisis. We had, essentially, just an adoption of the Labor Party's election promises and some bad news—laying the groundwork for tax increases that I'm sure will come in due course.

It was an abandonment of a number of critical elements of cost-of-living relief that we were promised ahead of the last election. Of course, the $275 energy price reduction guarantee from the Labor Party was essentially put to bed. Their commitment in relation to real wages has been abandoned in this budget, and, disappointingly, from my perspective as the member for Bowman, none of the projects that were promised for my electorate in the Redlands were explicitly outlined in the budget, and many of them were buried within an element of the budget that extends beyond the forward estimates, which I find quite remarkable.

As I make my way around the businesses and households of the Redlands, that cost-of-living and inflation pressure is absolutely biting, and people are raising it with me all the time. We've got local businesses who are struggling with the pressures of inflation and with supply chain concerns, and certainly I've had many stories raised with me by local businesses who have been doing terrific work—absolutely the right thing, in good faith, every step of the way—but have been hung out to dry by bad operators in the market who act without regard for others or concern for legal consequences.

According to the 2018 OECD report Pecuniary penalties for competition law, Australia lags behind other developed countries in the competition policy space, due to its relaxed laws. In fact, the base penalty for anticompetitive breaches in Australia has not changed in almost 30 years. I looked this up, and, as it turns out, I had just started primary school when some of the penalties were last updated. With rising inflation and a deepening cost-of-living crisis, a realignment of Australia's anticompetitive penalty regime is certainly necessary. This bill provides that realignment in the face of new pressures that are being felt across the economy. Last night's budget warned us, correctly, I think, that we've got more of that to come. That is going to be the challenge before this new government—to make sure that they do take the concrete action needed, not summits or national conversations, to address the economic challenges facing our country.

There is one aspect of the government's planning on this bill that leaves a lot to be desired. Prior to the election, Labor claimed that this policy to increase fines under the Competition and Consumer Act would raise, in its first four years, $557.7 million for the budget. But Treasury's costing of this legislation has found that it will actually raise a mere $63 million. So we've got a $500 million black hole here, and the question is: how did the government get that so wrong? Of course, I can understand that, being in opposition, you do not have the resources of the government to get these costings exactly right, but that is a significant black hole—a significant discrepancy between what was promised, in terms of revenue from this measure, and what we're actually going to see come through from these changes. You've got to imagine the sort of opportunity cost that $500 million would have—certainly, in all of the electorates represented in this place. You can think about how much difference $500 million would make to local infrastructure projects or local initiatives.

It goes to, I think, a fundamental problem with the projection of revenue from measures such as these. Too often I've seen rhetoric—this government is particularly guilty of it, unfortunately—about hitting the big end of town, hitting multinationals and achieving greater compliance, and big numbers are attributed to the additional revenue that these will actually bring in. But the simple fact is that that isn't a silver bullet for Australia's fiscal situation. It is not a silver bullet for our economic woes. That is not the revenue solution that's going to end up solving our fundamental structural deficit problems. So we've got a really serious concern there, and we need to make sure that, when measures like this are floated, we are very realistic about how much they're actually going to raise. We are supporting this bill and we support this measure, but certainly a $500 million black hole should be of deep concern to all in this chamber.

As a further concern, many contract negotiations are inherently unequal in nature. Large corporations quite regularly leverage their immense resources to tell consumers and small businesses to either take it or leave it, and this can lead to poor market outcomes and, in extreme cases, downright exploitation of those least able to defend their interests. Certainly, I've heard many stories in my electorate of businesses who've had to go through very difficult negotiations where the power imbalance between the parties was very significant. In today's commercial environment, and with dark clouds gathering across Australia, it becomes critically important that improved safeguards are provided both for consumers and for small businesses. This bill, by adding strong civil deterrent measures for unfair terms and in standard-form contracts, aims to do that.

This bill further protects the interests of Australian consumers and small businesses with no consequent increase in their compliance burden. This 'more competition, better prices' bill is both necessary and timely, in that it is one positive step, at least, to help mitigate the potentially devastating cost-of-living impacts that we've been warned about in last night's budget—impacts which will, of course, only be made worse by Labor Party policy elsewhere, including the abolition of the ABCC and Labor's reckless energy and climate policy, for a start.

It was the coalition that first commissioned a review of unfair contract terms protection for small business back in 2018. It was this discussion paper that found that our current penalties are not a sufficient deterrent for bad behaviour from big business. When the provisions of the bill were first considered by the former coalition government last year, aspects were discussed with key stakeholders across consumer groups, businesses, legal organisations and the telecommunications industry. From those stakeholders the coalition government received some 80 submissions. I hope that this Labor government is likewise committed to effective stakeholder engagement when it comes to applying the provisions and monitoring the consequences of this bill. The coalition commissioned and funded the findings which inform this bill, and now it is essential that this parliament puts these findings to good use by supporting this bill and the improved deterrence regime that this bill will provide for.

I note that the bill includes a requirement to review the reforms two years after commencement. I believe that's very good practice and a very good provision for such matters, and it's certainly something that I'd like to see in a lot more bills that we have in this place—that we have a locked-in, legislated review to determine how it's gone in practice, to determine how we can improve it, to re-engage stakeholders on how things have been implemented and how things could be improved, and to proceed on that basis. Unfortunately, too much legislation in this place is just 'set and forget'. We need to be a lot more flexible and nimble in the way that we pass bills in this place and how we review these and strive to get a better regulatory environment across the country. It's not just about more regulation; it's about better regulation. It's about reducing red tape and getting better results.

When it comes to good public policy, I understand the importance of bipartisanship, subject to the needs and views of my electorate, and, as such, I stand with my coalition colleagues in support of this bill. The coalition's support, of course, does not extend to a blank cheque. The coalition will not allow the government to take control of competition law reform and lead it in a strange direction. It is to this end that this bill includes a clear requirement to review all provisions two years after their commencement. I want to ensure that this review is thorough and timely and includes adequate consultation. I'll certainly be keeping an eye on how all that progresses and the feedback from relevant stakeholders, wherever possible.

The coalition stands where it has always stood: as a true champion of small business. I hope that this bill will go some way to making their life easier in this very difficult environment. It is open competition between businesses within the context of the free market that makes Australia great, and, at such a challenging time, it is entirely appropriate that the safeguards outlined in this bill are introduced promptly to protect them.

Almost every day I talk to good people at home in the Redlands. These are decent hardworking Queenslanders who are struggling to pay their rent or mortgage and put food on the table during this cost-of-living crisis. During this time, it is very difficult to run a small business in Australia. This bill—born, as it is, from the coalition—is at least one sound step in addressing this crisis. I commend the bill to the House.

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