Andrew Murray (WA, Australian Democrats) Share this | Hansard source

I move Democrat amendment on sheet 5038 revised:

(1)    Page 3 (after line 9), after Schedule 1, insert:

Schedule 1A—Amendments to deal with abuse of market power, unconscionable conduct and price monitoring in relation to petroleum marketing and to amend the Oilcode to provide for review

Trade Practices Act 1974

The contents of this amendment should have been moved as separate items, but the chamber will note that I have moved them as a batch. I have done so because I think the amendments to section 46 and 51 of the Trade Practices Act hang together on three grounds: firstly, they have been put before in this chamber in two other bills; secondly, they emerge from the Senate Economics References Committee report of March 2004 entitled The effectiveness of the Trade Practices Act 1974 in protecting small business; and, thirdly, they represent those amendments either which the government have accepted in full or in part in their government response or which reflect the unanimous views of members, including coalition members, of the committee.

Before I go briefly through these items, I note that they reflect a view that Labor have supported. It is also a view that other non-government members as well as government members of this chamber have supported. The items in the amendment that I have moved in a block refer to those elements of section 46 that require improvement as a result of the various court cases which have diminished and weakened the effectiveness of section 46 and the ability of the ACCC to carry out its regulatory duties. To some extent, these are clarifying amendments, and, in other matters, they in fact enhance the law. For instance, the first item, ‘Subsection 46(1)’, states:

After “power” (second occurring), insert “, in that or any other market,”.

In the Rural Press case, the exercise of financial power in one market was not regarded as simultaneously being a matter that should be disadvantaged from having power in a market in which the action did not take place. The effect of that is that, where a corporation used market power in one market to engage in prescribed conduct in a second market, the court stated that misuse of market power in the second market was not a breach of the act. So the committee recommended that section 46 be amended to state that a corporation which has a substantial degree of power in a market shall not take advantage of that power in that or any other market for any prescribed purpose in relation to that or any other market.

This proposal was accepted by the government back in 2004. It is a proposal that has been discussed with the states, so the consultation routine has been undertaken. It is a proposal which is the development of a shifting view of how a market should be assessed. Members of the chamber who are familiar with the Trade Practices Act will recall that at one time a market was considered national. As a result of an inquiry by a joint select committee, a recommendation was made that markets can be other than national.

I am spending some time in this first instance to indicate that we are all in blazing agreement—except that the government, for some extraordinary reason, will not amend the law in a way which would assist competition in Australia in a way which has been unanimously agreed to by everyone. So I think it is my job to keep prodding the government in this area. What I have found extraordinary is that, for some human reason that I cannot fathom—because it does not seem to have any logic attached to it; it seems to be to do with personality, character or some trait that I cannot identify with when you are dealing with matters like this in a professional manner—the government minister responsible for these matters will not bring them forward. Why are we concerned about it? We are concerned about it because we do not think you can loosen regulation in one sector without strengthening the Trade Practices Act. I have heard that same message delivered by numerous Labor speakers. I have heard that same message delivered by Senator Fielding. I have heard that same message delivered by coalition senators—for example, Senator Joyce. I have heard that same message delivered by the Greens senators. So it strikes me as extraordinary.

The second item in that block that I have moved—item 1 on the two pages of 5038 revised—again comes back directly to two recommendations which were put in the Senate Economic References Committee report The effectiveness of the Trade Practices Act 1974 in protecting small business. In that report they recommended that section 46 should be enhanced:

The Committee considers that the amendments suggested by the ACCC are consistent with the intention of Parliament in 1986, and that their inclusion in the Act would clarify the intentions of Parliament.

Recommendation 1 says:

The Committee recommends that the Act be amended to state that the threshold of ‘a substantial degree of power in a market’ is lower than the former threshold of substantial control; and to include a declaratory provision outlining matters to be considered by the courts for the purposes of determining whether a company has a substantial degree of power in a market. Those matters should be based upon the suggestions outlined by the ACCC in paragraph 2.16 of this report.

Again I find everyone in blazing agreement that this should occur; however, we are shoving it at the government again because they wilfully will not assist small business by strengthening the Trade Practices Act, which is the other side of the coin to loosening up market regulation with respect to the sites act and the franchise act. Section 46(3) follows on in that same theme.

The different approach outlined in my block of amendments is with respect to paragraphs 51AC(3) and 51AC(4). That section attempts to deal with the issues of the unilateral variation of contracts. Section 51AC(3) and 51AC(4) are in the ‘unconscionable conduct’ section. The Senate committee recommended that subsections 51AC(3) and 51AC(4) of the act be amended to include whether the supplier or acquirer imposed or utilised contract terms allowing the unilateral variation of any contract between the supplier and business consumer or the small business supplier and acquirer. Again it was unanimous. It was agreed to by the government and repeated unanimously in another committee’s recommendation—in the Rural and Regional Affairs References Committee’s report Operation of the wine-making industry—because the unilateral variation of contracts is an issue which, if adversely expressed, detrimentally affects anyone in a contractual relationship. These two amendments seek to carry out the effective rendition of something which was universally agreed to be desirable by the people who consider policy in the Senate and which was accepted by the government.

Once again, it is not an issue that the government is prepared to bring forward cognately, simultaneously or near the time that this legislation, which gives greater power to large businesses, is being considered. We keep saying to you, Minister: we Democrats—and in this respect I think I can speak for all the non-government parties as well as many government senators—support the continuing evolution of a free, fair and flexible marketplace in Australia, but you have to accompany it with the appropriate mechanisms to ensure that people who are being hurt, or who could be hurt, by deficiencies in the law are properly protected and that a proper safety net applies.

In this brief discussion I have not sought to outline that block of changes in detail or in great technical or legal motivation, because that is available to you from the various reports. I put them in this block because I expect, yet again, the government to turn these down contrary to the views of its own backbenchers, contrary to the expressed views of the official government response to the reports of the Senate, contrary to the needs, desires and wishes of small business and contrary to good policy.