Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Hansard source

Firstly, I thank Senator Murray. Labor is supporting Democrat amendments (2) and (3) but not supporting amendments (4) and (5) for the reasons I will outline. Senator Murray—and I thank him—has taken up a suggestion to move amendments (2) and (3) together and amendments (4) and (5) together but separately.

Labor agrees to amendments (2) and (3) moved by Senator Murray on behalf of the Australian Democrats. The amendments lower the barrier to prove substantial market power in a sensible way and also partly overcome the government’s amendments which provide little guidance on what substantial market power really is. The amendments make it easier to prove that a corporation has a substantial degree of market power due to informal contracts, arrangements or understandings. The amendments provide more clarity to what constitutes substantial market power by stating that it is sufficient that a corporation is not constrained to a significant extent by competitors or suppliers. The amendments clearly state a corporation will still have substantial market power if it does not have the ability to raise prices without losing business to rivals. This is aimed at directly overcoming the problems of the Boral case. The amendments also look at a corporation’s pattern of behaviour to determine whether a corporation has a substantial degree of market power.

Labor support Democrat amendment (3). Labor’s amendment to explicitly state that recoupment is not required to prove predatory pricing also covers this issue. This amendment is similar to Labor’s, so Labor is pleased to support it.

I turn to amendments (4) and (5) that Senator Murray has moved. Firstly, on amendment (4)—similar to amendment (3)—Labor believe that our amendment to clarify what ‘take advantage’ means, which we will reach soon, will be more effective and adequately cover the issues of connection between substantial market power and the use of that power for an anticompetitive purpose. Again, if Labor’s amendments were found to be ineffective, Labor would consider this change to the ‘take advantage’ concept in section 46.

Labor does not agree with amendment (5). The amendment has the potential to increase prices for consumers because suppliers would not be able to offer discounts to some retailers who in turn pass on savings to consumers. Labor wants lower and cheaper prices for consumers and believes that these price discrimination amendments are counter to that aim.

So, in summary and conclusion, Labor will be supporting Democrat amendments (2) and (3) but we will not be supporting Democrat amendments (4) and (5).