Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the bill stand as printed.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

I missed putting my second reading amendment. Were there any other amendments put?

The Temporary Chairman:

There was an amendment to an amendment which was defeated and another amendment which was also defeated. As we are now in the committee stage, you will have an opportunity to move an appropriate amendment. We are looking at Democrat amendment (1).

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

This amendment was put forward by my colleague Senator Murray, and I invite him to speak to it.

Andrew Murray (WA, Australian Democrats) Share this | Link to 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.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

For the record may I state what I think most senators understand clearly to be the government’s position, and that is that the amendments that the Democrats have moved—and I think others have similar proposals on the table—really have nothing to do with the legislation before us. We are discussing the Petroleum Retail Legislation Repeal Bill 2006, not the Trade Practices Act per se. It is a bill to repeal two antiquated, out-of-date, specific pieces of legislation that were introduced many years ago to deal with petrol retailing in particular. They have been shown by industry practice to be totally out of date and not to deal with the realities of this particular industry. The amendments that are being proposed are quite inappropriate with regard to the bill before us. The government’s position is clear. The government’s proposed amendments to sections 46 and 51AC of the Trade Practices Act are well known. They have been clearly stated publicly by the Treasurer on many occasions, as has the Treasurer’s position with regard to their progress, and that is that once the Dawson package of amendments has been passed by this parliament then the government will move to amend sections 46 and 51AC in the fashion outlined publicly, which I think meets many of the desires of the Democrats and others in this place.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

The opposition finds itself in circumstances where the amendments moved by Senator Murray, except for part 7 of our amendments on sheet 5028, are identical—that is, we are proposing the same changes to subsections 46(1), 46(1A), 46(2) and 46(3) of the Trade Practices Act 1974 and to section 51AC, with the insertion of a new 51AC(3)(aa) and a new 51AC(4)(aa). An additional opposition amendment on sheet 5028 proposes to insert a new clause entitled ‘Directions by Parliament to monitor prices, costs and profits of an industry’. So we are obviously thinking in the same way.

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

You’ve got the same source document.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

Either that or telepathic communication or drafting by the same person with very similar instructions.

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

The Stephens committee.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

I am appreciative of the acknowledgement that Senator Stephens has done such good work, and I am sure she will appreciate it as well. The reason that we support the amendment by the Democrats to the extent that it goes is that previous approaches to control the power of major oil companies have involved specifying the number of retail sites oil companies can operate and Labor’s approach is to focus on reform to the Trade Practices Act instead.

In the context of the petrol market, the issue is to ensure that the ACCC has the power to ensure that oil companies are not abusing their market power. The petrol retail market is therefore an excellent candidate for these new pro small business reforms to the Trade Practices Act. These reforms have been stated since 2004 in the Senate report The effectiveness of the Trade Practices Act 1974 in protecting small business. Labor supports all of these recommendations.

We will be introducing our amendment on sheet 5028, with the additional item entitled ‘Directions by Parliament to monitor prices, costs and profits of an industry’, unless I am advised by the chair that we are unable to move it if the amendment before us is defeated. I am advised that that is not the case, so we will proceed to support this amendment and we will move our amendment, or those items that have not been carried—if the government changes its mind about these, of course. We will be pursuing this matter in the way that Senator Murray has pursued it.

The government have agreed to bring forward a bill that includes a small set of these recommendations. This has been held up in the Senate due to an apparent linkage with other major Trade Practices Act amendments—the Dawson bill, which contained merger changes that were deleted from the bill in the Senate. The major changes relate to section 46, which constrains abuse of market power. They seek to toughen section 46 to allow the ACCC to crack down on the abuse of market power.

The amendment to subsection 46(1) to insert the words ‘in that or any other market’ has regard to the Rural Press decision which limits section 46 to the primary market not secondary markets. However, market power, in our view, can be exerted in secondary markets, and this amendment is necessary to ensure that this aspect of the Rural Press case is overturned—in other words, that this chamber expresses a view that the findings in the Rural Press case not apply and that the court have regard to taking advantage in more than a particular market with regard to subsection 46(1).

In relation to adding, after subsection 46(1A), the provisions which I think are best described as the key recommendation of the Senate committee report—and, in fact, amendments which the ACCC has asked for—we have regard to the key outcome of the Boral case, which effectively imposed the old, pre-1986 threshold for anticompetitive conduct: substantial control. This amendment ensures that the lower threshold intended to apply in the current law is preserved. It overrides this aspect of the Boral decision. In other words, by the passage of this amendment we are seeking to give effect to what was understood to be the intent of the law in the first place before that decision. It clarifies the meaning of ‘take advantage’ to ensure that interpretations applied in case law, and especially this in the Boral case, are overridden. The effect of these would be to ensure that an abuse of market power can occur if there is no strong evidence of purposeful intention. So we say that that is an important change that is necessary to this legislation.

Inserting a new subclause (2A) to section 46, in our view, clarifies the uncertainty that may exist after the Boral case in relation to coordinated market actions—that is, cooperating in a price war. It would ensure that undertakings to coordinate market activity can be evidence of an abuse of market power. Again, we say that this is necessary because of the interpretations of the courts. In our view, those interpretations would undermine the original intent of the legislation, and this amendment would restore it.

We regard inserting the new subclause (3A) in section 46 as a recoupment issue. The issue is whether or not predatory pricing—that is, forcing a player out of the market by price wars, such as is believed to have occurred with Compass Airlines—requires that price cutters’ losses need to be recouped. Labor’s amendment ensures that this is just a factor that the courts may have regard to. It is not an obligation, but it empowers the court to use its discretion to decide whether these factors can be considered in the interpretation of an action under these provisions.

The insertion of a new subclause 51AC(3)(aa) would seek to stop unilateral variations of contracts by one party, the more dominant market player, which would have the effect of driving up costs and enhancing the profits of one party. We think that that is an important variation to the law that should take place. Similarly, the insertion of 51AC(4)(aa) would have the same effect.

To that point our amendments are identical, and I will deal with the proposed new section 95ZEA when dealing with the opposition’s amendment. We think it is important not that the Senate wait for as yet uncertain legislative prescriptions that might flow from whatever action the government is considering but that the Senate now has an opportunity, concurrent with dealing with the petroleum retail legislation, to remove barriers to the implementation of the competition intent, if I can put it that way, that the parliament had when the original trade practices legislation was passed and subsequently amended—but subsequently, of course, given a different effect or interpreted differently by the courts. In our view, that would have the effect of strengthening competition in the market and of ensuring that dominant players in the market have less opportunity to impose their presence in the market and to compete unfairly against smaller players.

This is a small business amendment. This is an amendment which, if the government really did support small business, it would easily assent to. From what the minister has said, it is not going to assent to this. We have to wonder what the motivation of this government is—the government which claims to be the protector of small business, at the same time resisting amendments in a way that can only benefit the biggest players in this industry and indeed in all industry.

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

And that they agree with.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

Clearly: if the government is not prepared to take these actions then the government agrees with the courts’ interpretation of the legislation and the limitations on enforcing the courts’ power on anticompetitive behaviour. That is the test that this government will have to pass in considering its position on this legislation. We will support this amendment on the basis that it is identical to the majority of our amendment on sheet 5028. We think it ought to be carried. If it is not carried, we will continue to press our own amendment with that additional amendment about parliamentary monitoring powers, if I can put it that way. But we think it is important that this matter be tested, and we will be keen to see the position of all parties in relation to this amendment.

Question put:

That the amendment (Senator Murray’s) be agreed to.

I formally move the amendment on sheet 5028 circulated in my name:

(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

Trade Practices Act 1974

95ZEA Directions by Parliament to monitor prices, costs and profits of an industry

Commercial confidentiality

Public inspection

As those who have been listening to the debate will have noted, our amendment is identical to the amendment which has just been debated in this chamber, moved by Senator Murray on behalf of the Democrats, with the exception that we would propose that a new section 95ZEA be inserted into the legislation so that a direction may be given to the commission. It says:

                 …         …         …

                 …         …           …

Frankly, we have heard all sorts of excuses from the current Treasurer about why he did not authorise the ACCC to conduct a proper investigation into the structure of petrol pricing in this country—all sorts of excuses but no action. This is a new amendment. It was not referred to in the Senate committee report that was referred to in relation to the previous amendment, which was indeed relevant to parts 1 to 6 of the amendment proposed by the opposition.

It is based on section 29(3) of the Trade Practices Act in that it allows either house or a committee of either house to give a direction to the ACCC to engage in formal price monitoring, something which the Treasurer could have done but has chosen not to in the entirety of his stint as Treasurer—so much for being the world’s greatest Treasurer! In an environment where we are seeing horrific petrol prices hurting the Australian public, the Treasurer has chosen to do nothing. Currently the ACCC engages only in informal price monitoring. It just looks at the published bowser—I should say ‘pump’ as bowser is actually a brand of an old pump—prices. It is a sort of computer based or Google price monitoring where the ACCC gets computerised services from price-monitoring organisations and relies upon those.

Without an authorisation, a direction from the Treasurer, the ACCC does not have powers to require the oil companies to open up their books and to allow the ACCC to look behind the petrol prices to look at the components of the petrol prices, to look at the relationship of terminal gate pricing to the other factors: the margins in the industry, the prices at which the petrol is being supplied to the service stations, for example, and the variety of prices in that context, as the petrol might be being supplied in different sections of the market. It does not have the power to require the oil companies to open up their books, but this amendment will give the ACCC that power, a power which the ACCC could have if the Treasurer had agreed to formally give that price-monitoring authority under the legislation—that is, under section 29(3) of the legislation—to the ACCC. Why are we asking that it be referred to either house of the parliament or a committee of the parliament? It is because we think this is important. We think that the issue of the way that petrol is priced in this country and the effect that has on various communities and various businesses is important and that there should be power which is not controlled by the executive government—power within this or the other chamber or within the committees of either of these chambers—to require the production of that material.

I have already debated our earlier amendments. I do not propose to touch upon them again other than to say that we have just seen the government take a decision which flies in the face of their claimed affinity with the interests of small business. We have seen the government vote down, albeit by the narrowest of margins—that is, a tied vote—amendments which would have given the ACCC the powers that it has been asking for to deal with anticompetitive behaviour in the market: a deliberate action by the government and they stand condemned for that action. They ought to be ashamed of the action that they have taken in denying the ACCC the powers to deal with anticompetitive behaviour in the petrol market or indeed in any market. They have chosen not to support those amendments.

But we are giving them a second chance here. What we are giving the government is a chance to reflect on that decision and also to reflect on the fact that their Treasurer, supposedly the world’s greatest Treasurer, has failed for a decade to give the ACCC the power to investigate properly the pricing of petrol, the performance of the oil companies and the relationship between the various markets from the terminal gate on in the petrol industry and to report to the public, as well as to the parliament, so that they can understand what is going on. Here is a Treasurer that has been lying down on the job, ignoring the interests of Australians while pretending to care. We are giving the government a chance to show that they care by supporting these amendments.

If they do not, frankly, the charge which can justifiably be levelled against the government is that they are all talk but that, when it comes to action—when it actually comes to giving effect to legislative change which can have an impact on a market that is punishing many Australians—they are found wanting and run away from the task. The only conclusion—which Senator Murray invited me to draw earlier and which I must say I totally agree with—is that, because the government really do not have any concern about ordinary Australians and the effect on them of the petrol market and really do not have any concern about the dominance in the market of the big players, and therefore are quite happy with that circumstance, they are happy with the status quo.

Here is a chance for government senators to stand up for what they claim they believe. Otherwise, if you stand up in a debate after this and claim to support small business, we will know and we will be able to say quite clearly: ‘But you voted down legislative amendments which had the best interests of small business at heart, indeed in many respects amendments which the ACCC has been asking for so that it can enforce the Trade Practices Act and give effect to the intention of the parliament.’ So I urge senators to support this block of amendments. We will be seeking to display to the Australian public how individual senators have voted on this.

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

I need to restate an essential position that I think needs to be repeated and clearly articulated. Before us is an amendment to which the government is opposed not in policy terms but in timing terms. What worries me is that the rejection of this amendment by the government at this time seems to be founded not on strategy or good policy considerations but on some kind of spite. I find that unacceptable. I know that the concerns of Senator Joyce and others in the areas of trade practices law and the deregulation of the petroleum market have upset many of his coalition colleagues, but those opinions are honestly held and honestly presented and I cannot condemn any senator for such an approach. But to say to small business that, because there has been that sort of disagreement within the coalition ranks, you cannot have the amendments to strengthen the Trade Practices Act—which the government actually agrees with—is, I think, rather spiteful. If the government is determined that what are known as the Dawson amendments—which, by the way, include an amendment which is absolutely not Dawson, which tries to get rid of the unions’ ability to bargain on behalf of business; but do not let me get started on that anti-choice thing—should be part of a package, why aren’t we debating Dawson, the petrol bill and the small business bill altogether? Then we could be done with it and it could pass.

It is unusual for me to use language like this, but it upsets me. The chamber is probably aware that I have been campaigning on this for a long time and I feel strongly about it. It upsets me because it does not seem to be the right way to handle parliamentary matters that affect the community at large. Because of the disagreement within the coalition ranks, because the Dawson bill was not passed in toto—by the way, it was passed: only schedule 1 was in limbo; the rest could have passed—we are not in a situation where the government is prepared to deal with small business, trade practices strengthening amendments now. Yet it is prepared to deregulate the market now. It is a very odd circumstance.

The minister at the table, the Minister for Finance and Administration, Senator Minchin, is not responsible for this strategy—he is not the portfolio minister—but, through him, I say to the minister that I am really disappointed that the cabinet did not see fit to bring forward the retail petroleum bills, the Dawson bill and the small business bills together so that we could review these as a package and resolve what we all regard as seriously interconnected issues. Having restated my aggravation on this matter, which I should not go on about any more, we Democrats think the opposition amendments are worthy of consideration and support.

Through the chair, I say to the shadow minister that we did not include your section 95ZEA amendments in our amendment batch, because they did not come from Senator Stephens’s majority report. We were focused on making sure those amendments came through. We are not sure that what you have proposed will fit the bill completely, but we are sure that you are going in the right direction. I have been criticised in the Senate for arguing that the ACCC is not being allowed, both by law and by direction, to get behind the corporate veil of those who control the petroleum supply in this country. Of course, if the ACCC got behind the corporate veil they might not find anything because there might not be anything to find. But they do not have equivalent powers to ASIC and ASX, and there are not circumstances that apply with ASIC and ASX such as continuous disclosure, the requirement to report in certain ways and the requirement to investigate in the area of prices, costs and profits.

This is a matter which concerns the Australian community, so the Democrats think the opposition is going in the right direction with this amendment. I am not certain that it is phrased perfectly; I would not know that. I would encourage the government, even though it is bound to be rejecting this as well, to think more about what it could do to ensure that the ACCC is able to do as good a regulatory job with respect to this area of concern as ASIC is allowed to do in other fields.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise to support the opposition’s amendment. I supported Senator Murray’s amendment and am aware of the change that the Labor Party have made to their amendments. I think that they are worthy of consideration. I too wish to express my frustration that the government has decided not to act on the trade practices amendments—whether that is because of internal dispute in the government or sheer bloody-mindedness, I do not know. But clearly there will be enormous disappointment in the small business community around Australia that the government has decided to move in this way and repeal these bills without having at the same time the complementary measures which would have meant that we could have done something in a holistic way in this parliament. We could have looked at a number of things as one package—that is done frequently. It has not been done on this occasion and as a result the small business community is missing out. It has been given a lick and a promise about what might come through and what the government may move in the future. I do not think that is good enough.

I think the small business community is already under enough pressure and there would not have been any difficulty for the government to bring through a package. The fact that it has chosen not to and has no good reason to cite to the Senate for not doing so is a matter of concern. The Australian community expects this parliament to act in the best interests of the nation, not to conduct their internal disputes in a legislative framework. That is the only assumption that I can draw from the government’s actions in this regard. It knows full well the changes that need to be made to the Trade Practices Act to make sure that we do get appropriate protection for small business. It has chosen not to do that and small business will draw its own conclusions as to which section of the business community the government actually supports. On this occasion it is advancing the cause of the major oil companies at the expense of small business. This is not accidental. It has made a deliberate decision to do so. I urge the government to get over its internal divisions and to support a holistic package. I support the opposition amendment.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I do not really have much to add to what I said before in relation to the Democrats’ amendments, which were very similar. I note and record my understanding of Senator Murray’s frustrations. I am sorry that I am not able to assist him but I do treat with respect his motivation and his concern. He does understand well that the government do not think it at all appropriate to be amending this bill in the way that is proposed by either the opposition or the Democrats. We have legislative proposals in relation to both the Dawson package and section 46 which will be proceeded with in due course, but they are not appropriate in relation to this particular bill.

I reject Senator Milne’s description of this legislation as some sort of proposal by the government to assist the major oil companies at the expense of the minor or independent retailers. That is absolutely and utterly incorrect. Its shows a complete misunderstanding of what is being proposed here. We are dealing with two quite redundant and irrelevant pieces of legislation, introduced I think in 1980, which no longer reflect the structure of the petrol retail industry. The advent of retailing by Coles and Woolworths has demonstrated the complete redundancy of the sites act and the franchise act. What we are doing in repealing those redundant acts is to bring in a specific Oilcode which is of considerable importance and benefit to the smaller retailers in this significant industry. So I reject out of hand that comment upon this legislation and place on record that the government oppose the opposition amendment.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I was listening to this debate and I just realised that there has not been a direct response to the opposition’s additional item 95ZEA ‘Directions by parliament to monitor prices, costs and profits of an industry’. We are talking about something here that is an essential resource that Australian families and small businesses cannot do without. We cannot do without petrol. If you ask people about this, you will find that a lot of them are concerned about the price, the cost and the profits of this essential resource. I would be interested to hear the minister’s explanation as to why he will not support such a thing knowing that most people out there are very concerned about this industry—the costs and the profits. I do not think we have really had an adequate response from the minister in regard to the proposal from the opposition. I will be interested to hear the response from him on this particular area.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

I am happy for the minister to respond to that. I was concerned that the debate would end without that response. I am afraid that the minister’s reasons for not supporting this amendment do not cut much ice with the opposition. We recall the Ralph committee report and all of the worthy recommendations on tax reform. The government passed legislation on some of it and then found the rest too hard. The opposition is concerned that this is yet another opportunity the government are taking to have the parts of the measures which they propose which are supported by the opposition and others passed but then to say: ‘Hang on. We’ll bring some legislation in here to deal with these other problem, but you’ll have to wait and see that some time down the track. We’ll let you know what it is. Trust us.’ That does not cut much ice with the opposition, and that is the reason we are moving these amendments.

Let me say to Senator Fielding that the reason we have moved the amendment that he referred to is that the Treasurer has had the power to require the ACCC to conduct the sorts of inquiries that our amendment talks about, but he has chosen not to use it in the face of a number of circumstances in the community over the last four or five years where there have been serious concerns about the way petrol is priced. I am a member of a Senate committee inquiring into petrol prices. It is very interesting to see how prices zigzag in the various markets. It is very interesting to hear evidence about the impact of the major players on those markets. It is very interesting to talk to some of the witnesses who will say things when they are not on the record that they know they cannot afford to say when they are on the record because they have to maintain a commercial relationship with an oil company.

The best way to get behind that is to empower some organisation, such as the ACCC, to go behind these commercial arrangements and find out exactly what is going on and to report that to the public. Clearly, the Treasurer has squibbed the opportunity to use section 29(3) of the Trade Practices Act on numerous occasions. So we are going to hold the government to the mark. The reason we have moved this amendment is that the Treasurer has chosen not to exercise the power that he has had all of the time he has been Treasurer. He has had every opportunity to use this power and he has declined. I am really interested to know how the government defends the inaction of the Treasurer and how the government justifies, in the face of that inaction, that the parliament ought not to have the power that the Treasurer is clearly too frightened to exercise.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

The government does not believe it appropriate that a house of the parliament or a committee of the parliament should have the authority to give the ACCC written directions. That is not at all appropriate. Apart from that, we do not think that anything will be gained by this particular exercise. This is all about petrol pricing. On the one hand, we supported having yet another inquiry by a Senate committee into the whole issue but, as I noted at the time, I think that makes 47 inquiries of one kind or another into petrol pricing in the last 20-odd years. It is probably the most inquired-into industry. I think Graeme Samuel himself, on behalf of the ACCC, has said that there have been any number of inquiries into this matter which have not revealed any proof of the wild accusations which are often made about this industry. We all look forward to seeing what the Senate economics committee comes up with, whether it finds anything different from the other 46 inquiries, but we doubt it very much. In any event, we cannot support a proposal that empowers committees of the parliament to direct the commission in the exercise of its authority.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

Of course, I can understand why the government would say that. They would not want to seek the executive power that is held over the ACCC. Let me say that the Senate committee is severely limited in the way that it can inquire into this matter. But, if the Treasurer had empowered the ACCC to use section 29(3) of the Trade Practices Act, then the inquiry would have been much more effective, I would have to concede, than a Senate inquiry. But, of course, no matter how many inquiries we have, the fact is that the Treasurer has refused to use the power that he has to empower the ACCC. The minister is saying: ‘But it’s only appropriate for the executive of government to have that power, not the parliament, because we can choose not to use it. The Treasurer has chosen not to use it and, for that reason, we are opposing the parliament having this power so that the Treasurer can refuse to use section 29(3) of the act to investigate matters that the Senate committee cannot get behind.’ But the Senate does not have the power to require the production of the detailed material that goes into the pricing of petrol that the ACCC would have.

I think the government were quite pleased to agree to a Senate inquiry, as cover for the fact that they were doing nothing. Their justification to the public was: ‘We’ve agreed to a Senate inquiry into petrol pricing.’ But the shame of the matter is that the government could have taken action—the Treasurer could have taken action—by writing and signing a letter to the ACCC, saying, ‘Under section 29(3) of the Trade Practices Act, I want you to conduct an inquiry into petrol pricing.’ Did the Treasurer do that? No, he did not. He sat in his office, hiding behind the door, pretending that it was not a problem that he could do anything about, when we all know it is. The government say that it is not appropriate for the parliament to have these powers. Let us hear from the government why it is appropriate for the Treasurer not to have exercised the powers that he had. If it is not appropriate for the parliament to have the powers that the Treasurer has, why hasn’t the Treasurer used them? What justification can the government give for the Treasurer not using the powers? That might be a cogent argument for why the parliament should not have the powers. If the Treasurer clearly is not prepared to use the powers, and the ACCC is there willing to take up the challenge, then what is the justification for the government opposing the parliament having the powers? That is what I would like to hear.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I do not want to prolong the debate any longer than it needs to go on but, as I said, as a matter of principle, firstly, we do not believe the parliament should be giving orders to an executive arm of government. Secondly, the government’s position on this is well known. As I said, petrol pricing is without doubt the area of commercial activity most subject to inquiry in all of Australia’s commercial activities. There have been some 46—now 47—inquiries. The commissioner himself has made it clear that he is not aware of any prima facie evidence to substantiate the wild allegations that are made about petrol pricing in this country. It is well on the record that, as a matter of fact, we have the fourth lowest petrol prices in the OECD. Margins in this industry are extremely thin. It is a highly competitive industry, as evidenced by the fluctuations in prices, so we see absolutely nothing to be gained by a make-work scheme of the kind suggested by Senator O’Brien.

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

Through you, Chairman, to the minister: I wish to raise two things. One is that I think we should not discount the great power and impact of Senate committees, because, as soon as it started meeting, the price started falling. Perhaps Senator Brandis has more influence than we think! But the other is that I did hear you say, Minister—and I was a bit taken aback by it, but maybe you would explain what you meant—that it is not appropriate for the parliament to give an instruction to the executive arm of the government. I always thought of the commission as an independent statutory authority. I find it difficult to see it in the same way as an agency or a department of the government. But perhaps that was not what you meant?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

Through you, Chairman: it is—in the general sense of having the legislature, the judiciary and the executive—part of the executive structure of the system of government and therefore, ultimately, it is part of the executive. Its framework for operation is set by the parliament but it is part of the executive and, at the end of the day, the executive is the one accountable for its actions every three years. But for a body which is part of the executive to be subject to written directions from a committee of the legislature I do not think is appropriate.

Question put:

That the amendment (Senator O’Brien’s) be agreed to.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

by leave—Family First moves together:

(1)    Schedule 2, page 4 (line 2), omit “amendment”, substitute “amendments”.

(2)   Schedule 2, page 4 (after line 13), at the end of the Schedule, add:

Trade Practices Act 1974

In themselves, items (1) and (2) form one package, which relates to collective bargaining for independent fuel retailers. It is important for independents to be able to get together and bargain collectively. They can apply to bargain collectively at the moment, but we are talking here about streamlining the process.

Just recently the Senate broadly debated the issue of bargaining collectively for all industries. For some reason, the Senate agreed that collective bargaining for individual small businesses was important but knocked back an issue tied to mergers and acquisitions. Recently, the Senate considered a trade practices bill that looked at collective bargaining and agreed that it was important for small business. This bill, the Petroleum Retail Legislation Repeal Bill 2006, if it goes through tonight, will make it even harder for independents, as the big players will take an increasingly greater market share. One of the ways that small businesses and independents can get better pricing is through collectively bargaining, and Family First is proposing what the Senate has already agreed to previously regarding changes to the Trade Practices Act. I ask here that the Senate agree that, if this bill goes ahead, it also, at the same time, strengthens and makes it easier for small business, the independents, to get together to collectively bargain.

The issue here is that it is very time consuming for independents to get together at the moment and there is no guarantee that they will receive permission to get together to collectively bargain. Realistically, this is an important issue, especially with this bill that will remove any restrictions on the big end of town. Chair, could I just ask a question here? The sort of behaviour that is occurring on the right-hand side of the chamber is appalling.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Don’t be a goose.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

No, I have to say that it is absolutely appalling.

The Temporary Chairman:

I might ask senators to have their discussion outside, if they wish to laugh and do other such things.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

This issue should be extremely important to National senators. This is about supporting small business, independent retailers. It is about allowing them to collectively bargain in an easier and faster way. The Senate agreed to this. I appeal to senators tonight to support once again this amendment—this time for the petroleum companies or independents to be able to bargain together.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I place on the record the government’s acknowledgement of Senator Fielding’s genuine concern for the role of independents and small business in this industry. We believe that these reforms will enhance the position of independents and small retailers in this industry and believe that the Oilcode, which has been worked up over many years and in full cooperation with the Motor Trades Association and others involved in this industry, is specifically aimed at ensuring they are able to continue to participate in this important industry. We have outlined our position with respect to the collective bargaining issue. That is part of our package of proposals, under the so-called Dawson reforms, which we have prepared and are looking forward to debating in this place.

However, as I have said before in relation to this matter, those amendments are more appropriately dealt with holistically in relation to the Trade Practices Act as a whole and not in relation to the repeal of these two antiquated and now redundant pieces of legislation. We believe that the parliament should be supporting the repeal of those two acts and the introduction of this Oilcode; it should be dealing with that matter and that matter alone. In due course, we will give the parliament the opportunity to have its say on the issue, generally speaking, of collective bargaining within the Trade Practices Act.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

Can the minister explain further—given that we all agree that small business needs to be able to collectively bargain together—other than saying there is a whole realm of changes with the Trade Practices Act and a lot of other bits and pieces? The Senate debated this issue recently, and for some reason the government seems to want to pass collective bargaining only on the basis that we make it easier for big business to merge. That is what was discussed here previously. I am trying to work out why the government would not want to support this amendment given that the last time this issue came up in the Senate it was only tying it to allow mergers to make it easier for big business to merge, and that was knocked back. Would it not seem rational or reasonable to expect that, if this bill goes ahead, it will basically take away any restrictions on the big end of town, and the small independents will need to be able to collectively bargain together?

This amendment makes it easier for small businesses to get together. It takes away the time and a lot of the effort and the burden that they have with that application process. Clearly, it would make it lot easier for small business. I do not understand how the minister could tie it to something else, because it stands on its own. We are talking about small businesses being able to collectively bargain, and you are tying it to a lot of other stuff. It does not make sense to me. I wonder if you can explain it so that it does.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I reject the proposition that this bill ‘takes away any restrictions on the big end of town’, as it was characterised. As I have said ad nauseam, and as we have been saying for many years, the sites act and the franchise act that were brought in in 1980 no longer have any relevance to this industry. It is a fact that the discount petroleum retailing initiatives of both Coles and Woolworths have now captured some 50 per cent of the market, because these acts are so redundant and irrelevant that they have been—to use a common parlance—‘got around’ by Coles and Woolworths. Of course, consumers have been very significant beneficiaries of the entry of Coles and Woolworths into petrol retailing. That is why they have captured such a large market share: because of their capacity to bring lower prices to consumers. If there is one thing we should all believe in it is ensuring that consumers get the lowest possible prices, so, to that extent, the entry of Coles and Woolworths has brought that about in a very significant way.

They have demonstrated in quite a dramatic fashion how utterly redundant these two pieces of legislation are: an old-fashioned act trying to restrict the number of sites which can be operated directly, which clearly does not work; and a franchise act which governs only one form of relationship between an oil major and a retailer. This proposition is to remove those two old acts, which do not affect Coles and Woolies one way or the other, and bring in an Oilcode which very properly and clearly sets out the appropriate relationships that should exist under the Trade Practices Act for retailers and wholesalers. These are very important and timely measures. But to use this vehicle for a piecemeal amendment of the Trade Practices Act generally is not appropriate.

We have said repeatedly that amendments to the Trade Practices Act should be holistic; they should be comprehensive; they should be made in the light of the very significant and considered report by the former Mr Justice Dawson; they should be balanced; and they should take account of the needs of medium to larger businesses in this country so that they can operate profitably to the benefit of all of us as well as the needs of small business. That is what the package does, and we look forward to the opportunity to pass it. But we are not going to debate it in a piecemeal fashion or tack it on to the end of a very specific initiative to improve petrol retailing in this country.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

It is probably worth going back and trying to look at what we are explaining here. I do not think anyone disagrees that the current restrictions are no longer serving their originally intended purpose. The issue here is that the government is proposing to have no restrictions moving forward.

Progress reported.