Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Hansard source

I rise to speak on the Competition and Consumer Legislation Amendment (Small Business Access to Justice) Bill 2017. In doing so, I stand here as a small business owner and operator. This private senator's bill seeks to amend two particular acts—that is, the Competition and Consumer Act 2010 and the Australian Small Business and Family Enterprise Ombudsman Act 2015. It allows judges in the Federal Court to waive liability for adverse costs to small business private litigants in cases related to the misuse of market power. It also allows the Small Business and Family Enterprise Ombudsman to provide assistance to small businesses in preparing these cases.

In listening to the contributions made by some of those opposite, they have consistently said this is about access to justice. I suggest it is not necessarily about access to justice; it is about whose model for access to justice gets selected. It appears to me that, instead of accepting that there are a number of different options and models through which small businesses, particularly small businesses without access to much resource, are able to get a fair and equitable opportunity to settle disputes in the Australian legal system, we are now seeing this as an opportunity to try to once again wedge government. As everybody in this place would know, following a very extensive review by Professor Harper, the government made an election commitment that we would review the provisions within the Competition and Consumer Act 2010 to make sure we put additional protections in place for small businesses.

What we have got here today is a bill that, if enacted, would see private litigants given the power to request a no adverse cost order at any stage of a competition case. If the court grants such an order, the legal fees of the defendant would be prevented from being transferred to the litigant. In order for this particular no adverse cost order to occur, a judge would have to be satisfied that the action has a reasonable prospect of success. It raises an issue that may be significant for persons or groups other than the applicant, and when the disparity between the respective financial positions of the applicant and the respondent is such that the respondent could use the possibility of a costs order against the applicant as a means to deter the applicant from pursuing action. It is much the same way as model litigation occurs, where any government instrumentality cannot use its power and resources in order to deter a smaller organisation from seeking its legal rights.

Probably one of the more important aspects of the bill before us is that it is proposing that the Australian Small Business and Family Enterprise Ombudsman may provide assistance in advising a private litigant on the arguments that might be made and the evidence that is needed to satisfy a court to grant a no adverse costs order. In doing so, they would be charged with the capacity to prepare those arguments, which is outlined in proposed sections 15(c) and 74B of the Australian Small Business and Family Enterprise Ombudsman Act 2015.

Whilst I think everybody in this place would like to see that there is a level playing field and there is access to adequate opportunity for any small business to be able to seek legal recourse in a situation where they believe that they have been wronged, what we've got here is a bill that is largely seeking to overpromise but largely likely to underdeliver. The fact is that there's no point in promising a litigant access to justice for a small business when the current law is actually broken. The reality is that, if you break the law, the consequences will follow. If Labor is really genuine about supporting small business, why aren't they actually working with us to effect changes to section 46 of the Competition and Consumer Act? The changes to that section have been universally supported within business as providing a balance to the small business market and small-to-big business market relationship and will do far more to assist small business than any other proposals that are currently on the table.

By levelling the playing field for small business, we want to ensure that they compete on their merits against businesses with substantial market power and prosper. But we equally have to make sure that the tools that we give them to do so are fit for purpose and the best possible tools that we can give. So we absolutely fundamentally believe that changes to section 46 of the Competition and Consumer Act are absolutely essential to delivering the level playing field that everybody in this place universally agrees needs to happen. The bill that we have put before this place seeks to repeal the existing section 46, which prohibits a corporation with substantial market power from taking advantage of that power for one of three prohibited purposes that are largely directed towards harming or deterring particular competitors. We seek to replace that particular section 46 with a new section 46 which prohibits a corporation that has a substantial degree of power from engaging in contact that has the purpose, effect or likely effect of substantially lessening competition in a relevant market.

What we think that we have achieved by the amendments that we are proposing to the Competition and Consumer Act, through the repeal and replacement of section 46, is exactly what those opposite are proposing and purporting to be trying to achieve by this private members' bill which is before us today. What we've got to remember is that the bill that was put forward as a government bill that sought to change section 46 has gone through a very rigorous process. It came off the back of a very substantial review, as I mentioned earlier, by Harper. It's also gone through all the usual rigorous processes of Senate committees. In fact, the majority view of the Senate committee, when it undertook its investigation inquiry into this particular bill, was that the bill provided adequate protection for non-dominant firms from the destructive actions of firms with substantial market power. It also not only considered that the new provisions would provide a more equitable market but also made clear that the amendments do not represent an argument for small versus big—rather, they represent support for open and fair markets that allow all businesses to participate and compete on their merits.

What we've got here—the situation at the moment—are, essentially, two bills in this place that are seeking to effect the same sorts of protections and provisions for small business. We seem to be having a debate about whose bill is better—the one that's gone through a very rigorous process or the one that's just been popped in by the Labor Party. And, by their very own admission, in listening to a contribution of a couple of the Labor members before standing to give my contribution, there seems to be a level of 'gotcha politics' in all this. We can go out and find these people who say, 'We think we've got a better idea,' when talking about the provisions that will be enacted if the effects test changes that are proposed by the government come into place. In a democracy, as you well know, not everybody always agrees with everybody else. What I think we need to do is agree that we have an outcome that we're seeking to achieve. Then, we need to go through a proper and thorough process.

I believe, and the coalition believes, that a proper and thorough process has been gone through in relation to making changes to section 46. The statements made before with some level of pettiness—'This is your idea, so, therefore, we're not going to accept it; we want to achieve exactly the same thing, so we're going to bring in something that's our idea so we have every opportunity to say why your idea's wrong'—are not constructive debate in this place. This is not what the people of Australia asked us and elected us to come to this place to do. The people of Australia elected us so we could come here, work together, put different ideas on the table, and hopefully come up with satisfactory legislative and regulatory outcomes that deliver what they actually seek from those that they elected to this place. They do not want 'I don't like it just because it's your idea' type politics. That, unfortunately, seems to be what we're descending into in so many instances in this particular parliament.

We need to be very careful about creating a very clear balance between making sure that we put protections in place for everybody so there is a level playing field in the legal environment to get legal recourse against any damage or wrongs and making sure that when we do these things we don't overly burden the legal system and don't overly burden the litigant by creating a system that is unnecessarily expensive or particularly time-consuming. It often becomes expensive when it is time-consuming. We need to make sure any legislation that we pass in order to put these protections in place is not seen in any way, shape or form as an encouragement for small business to engage in litigation as an example. It absolutely never assists in the resolution of a dispute, particularly at the earliest opportunity or at the least cost, if we end up with our parties going to court. In the first instance, we should always try every single possible opportunity to come up with a dispute resolution mechanism that does not encourage access and entry into court.

Unfortunately, the bill that is before us today moves immediately to the inference that litigation is the first point at which we need to start engaging, and that is a very bad signal to be sending to the marketplace. In essence, it is encouraging small business to commence litigation. The reality is that as soon as you commence litigation you will immediately start to incur extraordinary costs. It then becomes an ever-increasing problem, because the higher the costs, the more need for the litigant to try and establish that they will not have to pay any costs against them. We have seen so many small businesses go to the wall because they have been encouraged to litigate when there are many other remedies available to them to try and deal with their disputes. The seeking of a court order in itself carries with it the legal cost in satisfying the court that the order satisfies the hurdle test, which would be borne, once again, by the small business applicant. Even if the court grants the no adverse costs order, the applicant must still fund their own case—and the case is likely to be complicated by the legal argument about the facts—and address the expert evidence brought by the respondent. The cost to the applicant for their own legal representation is in itself likely to be high under the conditions that have been put forward by the bill before us today.

Of particular concern is the role that has been purported to be required of the Australian Small Business and Family Enterprise Ombudsman by this particular bill. The functions that would be given to the ombudsman would require them to provide legal advice on the prospects of obtaining an order, which I don't believe, and the government doesn't believe, is an appropriate role for a public statutory office of this nature. It also doesn't seem to be clear how a party who took up litigation on the basis of an assessment and subsequently did not obtain an order in their favour could then withdraw from the litigation without penalty costs. It is also unclear what liability the ombudsman would have should the party not be successful in obtaining an order in their favour. A party in receipt of a no adverse costs order is incentivised to take up belligerent litigation tactics, which are absolutely unhelpful for any judge and for the other party if they are acting in good faith.

Additionally, the ability to request a no-adverse-costs order at any stage of the proceedings raises two key issues. Firstly, it's not clear how a judge would be expected to consider a no-adverse-costs order at the outset of a matter, where the evidence has not been tested by the parties. This in itself could be the subject of an appeal and further add to the risk and potential cost of any proceedings that may subsequently commence. Secondly, allowing such an order to be requested at a later stage would appear to undermine the rationale of the policy. If parties are not taking private action because of the risk of significant adverse costs orders, only at the outset of the matter would a no-adverse-costs order be able to address this. It's unclear why a party who considers a no-adverse-costs order is available to them would then wait until later in the proceedings to request such an order. In a sense, it's somewhat contradictory. As it stands, the bill would allow a party to request a no-adverse-costs order when it becomes aware that it does not have a reasonable prospect of success, rather than withdrawing from the case, as it possibly should.

This also significantly and fundamentally changes the role of the Australian Small Business and Family Enterprise Ombudsman from advocacy to assistance. In particular, the addition of this function would severely limit the ombudsman's ability to advocate on issues. In addition, we have received advice that Labor's estimated cost of $1 million over the forward estimates does not reflect the true cost of this policy. It does not appear to account for the increased workload of the Federal Court that would result if judges were called upon to make cost waiver assessments, and the forecast costs do not appear to account for the significant increase and change in the role and functions of the ombudsman and the increased resourcing of that agency that would be required.

As I said earlier, the government believes that before this place at the moment, through our amendments to section 46 of the Competition and Consumer Act, we have a fit-for-purpose instrument that the Labor Party could support to facilitate the changes and the outcomes that they are seeking for small business. Why are we sitting here debating this when we could be getting on with the job by just proceeding, even with amendment, with the changes to section 46 and the bill before the place, instead of sitting here having a debate over whether a no-adverse-costs order legislative instrument is a better instrument than the section 46 effects test amendments being proposed by the government?

What I would say to those opposite and those who have put this bill into this place is, let's get back to doing what the people of Australia expect us to do: have respectful, positive, proactive and outcome-driven debate about how we are going to deliver for the Australian public a better landscape in which they can do business. I can assure you that it is pretty hard out there, whether you are a big, small or medium business. Do not be fooled—it is a really tough environment out there. In my home state of South Australia we have the added indignity of power costs. We are in a situation where in any energy-exposed business it is the only bill that anybody cares about getting at the end of the month or quarter because it is so large. Added to that insult is the fact that not only is your bill enormous, but sometimes when you go to turn on your power it's not there at all.

It's a pretty sad state of affairs that we should be sitting in here and arguing the semantics of whether your bill is better than my bill, when we are both trying to seek the very same outcome. I think it's a pretty sad reflection on where we have got to in this place. Unless I missed something completely in this whole exercise, I believe that the intent of both of our bills is exactly the same. I believe that everybody in this place genuinely wants to help and support small business. We want to try and create the most opportunity for a level playing field for access to everything. We don't like to see the big guy beating up on the little guy, but equally we don't like to see vexatious little guys biting at the heels of the big guys unnecessarily. We need to create an environment in Australia where all business can prosper. We need to lower taxes as much as we possibly can so businesses are in a position to employ people, because at the end of the day the best outcome for Australia is to make sure that everybody has a job, and wouldn't it be great to think that we had an economy that was prospering so well that people could not only have a job but also have a job that they loved, just like I know that you and I, Mr Acting Deputy President, love the jobs that we've got.

Obviously the intent of this bill is supported by the government but, with the completely unnecessary cost and burden that is going to be put on the public by it, I would much rather see our bill passed. (Time expired)