Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

I will pick up where I left off on 23 June, where broadly my contribution at that time sought to highlight the deficiencies and flaws in the government's Competition and Consumer Amendment Bill (No. 1), ostensibly designed to deal with the anticompetitive conduct known as price signalling. I detailed the appalling inactivity and indifference of the government to repeated calls from the Australian Competition and Consumer Com­mission, the ACCC, for action and to address the price-signalling gap in Australian competition laws. I also talked about and drew attention to the absence of price-signalling laws in Australia impacting on the actions and decisions of the commission and cited some examples involving petrol retailing and also some observations by the former commission chair, Graeme Samuel, as it related to the banks.

I also talked about the coalition leadership on this matter, which is hard to contest. It took the coalition to introduce a private member's bill, last November, to tackle anticompetitive price signalling. Notwith­standing the absence of the awesome res­ources of the Commonwealth, the coalition managed to do what the government seemed either unable or unwilling to do. What we then saw was the government react, seemingly motivated by political positioning. It seemed to be struck by the simple fact that there was an acknowledged gap in the competition law over which the government had done nothing. It seemed to then go from this phase of obfuscation to complete overreaction, from inaction to reaction, from the coalition's policy precision and measured intervention to develop an amending law to the government sensing the need to be seen to be doing something. The government seemed to act with its motive being one of political opportunism. There was this ham-fisted panic where, out of the blue, the government decided it should do something, not inspired by sound policy considerations but by the need to be seen to be doing something and to have some media sound bites to offer concerned consumers and a concerned regulator. That is where we got to.

I was capturing how the government's bill is fundamentally flawed. It has a serious number of substantial deficiencies that are catalogued in the dissenting report of the House of Representatives Standing Com­mittee on Economics, where we examine this bill. Quite remarkably, though, it has been characterised by a leading academic and competition law expert as 'international worst practice on information exchanges between competitors'—hardly a ringing endorsement, hardly a sense that the government has got this right. It does not come as much of a surprise to this side of the House that the government has got this so wrong, largely due to the way it has gone about doing its work.

The government, as I touched on earlier, reacted to the coalition leadership; it did not work up its own careful policy solution. It then sought to have the coalition's bill examined at great length by the House economics committee and then did a dis­honour and the disservice to the House economics committee, treating it almost as an ornamental stopover on the way from the drafting room and the Treasurer's speech into this parliament. In fact it was quite offensive when you look at the way government members and the government generally have dealt with this process or lack of process as it involved consultation. There were a number of very considered, quite substantial and weighty submissions provided to the House economics committee, outlining with a great degree of care and precision all of the decisions, all of the choices and all of the legislative design options the government has gone with, and why so many of them failed the test of sound economic policy and competent competition law. It is quite telling if you look at the House economics com­mittee report—and some loosely call it the majority report in that it was the casting vote of the Labor chairman that gave it majority report status—to see that it simply says, 'Go on, pass the government's bill.' None of the independent evidence presented to the House economics committee supports such an unequivocal recommendation to simply pass the government's bill. What is quite remark­able, notwithstanding that the position of government members was to simply pass the government's bill, is that the government itself has identified that the bill has some flaws and has brought forward its own amendments to the bill that the majority of members on the House economics committee thought was just right—'She'll be right, mate. Tick it through; send it through.' The government has come up with its own recommendations dealing with financial workouts for companies in difficulty where there is a need to discuss those financial arrangements between a number of credit providers.

This leads me to exactly what the bill is about. The government's bill has two key parts. The first seeks to prohibit private disclosures—known as a 'private disclosure prohibition'—of pricing information to competitors. That is the government state­ment. In the explanatory memorandum, and even in some of the commentary, the government has put forward this per se prohibition on private disclosure. It is there because there is apparently no redeeming quality to any private communication between competitors. That is the argument. Even in the explanatory memorandum, the government seeks to argue that things are so completely and clearly anticompetitive that they surely must be unlawful. That is a pretty bold statement. But what undermines that bold statement is that there are then pages and pages of exceptions. Things are so clear, so categorical and so obviously offensive that this provision seeks to make any kind of private communication between competitors unlawful. But apparently it is not so bad in a number of the circumstances that the government seeks to pick out. In seeking to pick out those exemptions and circum­stances, it belies the very assertion that the government makes that these per se prohibitions are so categorically and comprehensively wrong that they must amount to a per se prohibition in the law. It then goes on to have a second category of prohibition relating to general disclosures. This is about information relating to the price of goods and services, the capacity of a business to acquire or supply goods and services and any aspects of the commercial strategy.

We want to focus on what is actually in the bill. What those out there would like to focus on is what is not in the bill and, more particularly, why the coalition's bill is not being discussed. In its 20 April bulletin, Mallesons assessed the coalition's bill as superior to the government's bill, yet the government has not seen fit to even bring on the coalition's bill—the very bill that gave rise to the government's getting off its backside in the first place. Quite remarkable! Mallesons said:

While the Coalition's draft Bill would need some revision and modification, it would appear to be the preferable alternative on the basis that it would require demonstration of an anti-competitive purpose and a substantial anti-competitive effect, rather than simply imposing a blanket prohibition on disclosure.

That is what the experts are saying. They did not have a chance to canvass any of those views with the House economics committee because the committee heard absolutely nobody in response to the submissions that were received. The per se prohibitions are the ones that are of particular concern because they seek to make something unlawful simply because it is. That is the argument the government is asserting, even though it undermines that argument, and I will come back to that point.

On the second area of the more general disclosure prohibition, a concern about the reach of that provision goes well beyond price disclosure and into what is known in a familiar sense by competition lawyers as 'concerted and facilitating practices' in which coordination can be enhanced between competitors to the detriment of the economy and to the detriment of consumers. Rather than go into that model that exists in European law and that has evolved through case law in the United States, the govern­ment thinks it can simply get this right, even though submission after submission draws attention to the concerns about this bill. It is for these reasons that I will be moving an amendment in this place which seeks to put on the record all of the concerns that the coalition has about this bill and to put forward some suggestions about how they might be remedied. In addition to our general amendment, we will be proposing some specific amendments to make the most offensive aspects of this bill a little less offensive and I am hopeful that the government might seriously take on board that constructive effort.

Bearing in mind that a number of provisions of this bill are a direct lift out of the coalition's bill, I am hopeful that the government might see fit to directly lift some of our remedies to the bill's greatest failings. We will be moving that the House declines to give this bill a second reading and that the House condemns the government for its belated action to address the anti-competitive pricing signalling gap in Australia's competition law. We will note that the bill only arose following the coalition's leader­ship to introduce the Competition and Consumer (Price Signalling) Amendment Bill 2010 as a private member's bill into this House, recognising the assessment of academics and leading competition law practitioners that the coalition's bill is superior to the government's bill and should be brought on for debate in the House.

We are looking for the parliament to record its concern about the government's failure to undertake proper and meaningful consultation in the preparation of this bill, and to allow the House economics com­mittee to carry out its work to examine the bill and consider public submissions. We then hope the parliament will be honest enough to note the very clear flaws that are in the bill. Our second reading amendment talks about recklessly creating a per se liability for private communications without adequately justifying this approach in terms of economic policy or competition law principle and how the bill ignores that sound competition law should, wherever possible, have an economy-wide application unless clear justification is provided to deviate from this settled approach.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! If the member for Dunkley is going to talk about his amendment, he should move the second reading amendment.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

I was building up to moving it. I notice I have got a little while to go, but I would like to move the second reading amendment and hope it will be seconded and supported by at least half a dozen other people. In the few minutes that are left, I will conclude some of the aspects of that amendment. The amendment is also about the sector specific application and the per se prohibition that gives rise to a need for the complex task of identifying all concei­vable business transactions and conduct that may have a legitimate business justification and the exhaustive list that flies from there. It also talks about the risks to the consumer and the economic detriment from failing to adequately differentiate between information sharing that can be pro consumer and pro competitor.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour, when the honourable member will have the opportunity of continuing his contribution, and then a seconder to his amendment will be called for.