Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Assistant Treasurer. Will the minister update the House on the government’s actions to crack down on anticompetitive behaviour by powerful business? Why has this reform been delayed?

Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Prior to the last election, the Labor Party made a commitment to strengthen the Trade Practices Act to crack down on anticompetitive conduct by powerful businesses. I am pleased to inform the House that the government is acting on that commitment. Australian consumers need small and medium sized enterprises to provide rigorous competition. The Australian economy depends on rigorous competition so that Australian consumers can benefit. Predatory behaviour by large and powerful businesses means that they abuse their power in the market with a view to damaging a small business to increase their market dominance.

Through a series of cases, the courts have watered down the Trade Practices Act over several years. For example, in 2003 the High Court, in the Boral case, said that if a big firm cuts its prices to drive a small business out of operation to dominate the market the ACCC must be able to prove that that big firm can make up the losses into the future. That evidentiary burden proved so high that the ACCC immediately discontinued all its predatory pricing cases and has not commenced any others. Unfortunately, the member for Higgins completely ignored calls from across the board to fix that situation, and it has taken the election of a new government, five years after the Boral case, to fix the Trade Practices Act. On 28 April we announced the government’s package of reforms to fix this problem. This amounts to the biggest reform of the Trade Practices Act in 22 years. The new rules will make it easier for the ACCC to prosecute businesses who are engaging in anticompetitive behaviour. The government’s amendments will ensure that victims of predatory pricing, or the ACCC, will no longer have to prove that the predator has the ability to recoup losses after participating in anticompetitive, below-cost pricing.

We will also clarify the meaning of the term ‘take advantage’ in section 46 in response to concerns raised that the present meaning of the term has prevented section 46 from capturing anticompetitive behaviour. And we will remove the uncertainty that arose in the dying days of the previous government under the cobbled-together amendment which resulted in a two-track process. It is very important for business certainty that that situation is fixed, and we are looking for bipartisan support for that very important reform. We will also give small business cheaper and easier access to the courts to prosecute situations in which they are being disadvantaged by anticompetitive conduct by big and dominant players by giving them access to the Federal Magistrates Court. We will also enshrine in legislation—make it the law—that one of the deputy chairs of the ACCC will have a small business background.

I am pleased that these reforms have been welcomed as striking the right balance from businesses across the board and are seen as a sensible approach. They have been welcomed by the Council of Small Business Organisations, by the Australian Industry Group, by the Motor Traders Association, by the Fair Trading Coalition and by that well-known friend of the government the Australian Chamber of Commerce and Industry. These reforms have been welcomed because they are sensible, they have been welcomed because they are long overdue and they have been welcomed because the previous government wilfully neglected to act.