Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister representing the Minister for Small Business (Senator Abetz) to a question without notice asked by Senator O'Neill today relating to competition policy.

Again, we have another question time that reveals issues that are tearing this coalition government apart. Those who watched closely when this government was elected might remember that on arrival they actually did not do much. There was this long delay before they actually started to do things. But one of the first things they did do—in an effort to respond to supporters, I expect—was to ask for a review of competition policy. That was one of the first things they implemented, on 4 December 2013. They gave ample time to Mr Harper to undertake his review, and in fact it returned in March 2015. That is when this government got the review: March 2015. On 14 April 2015 Mr Harper himself gave a speech to CEDA. This has been out and under discussion in the public for that whole time—for six months. I also want to put on the record that Mr Harper, perhaps anticipating the incompetence of the government, decided to give them a bit of a hand and attached at the end of his report a draft piece of legislation for the implementation of what he suggested. But even with that big leg-up from the man they picked to do the job of the competition review they still have not settled on a position. In fact, there were reports in the paper, after the coalition party room meeting this week, in which the cabinet is supposed to have deferred a decision on the matter indefinitely.

It is an issue that is tearing this government apart—Liberal from Liberal, National from National. Indeed, there is a list of members of the coalition and the government who are at each other's throats. I will just go through it, as reported in the Australian Financial Review article of 8 September. The article reported that nine members and senators, including Bert van Manen, Matt Canavan, Matt Williams, Andrew Southcott and our own senator Ian Macdonald, argued for the cabinet to approve the proposed changes to section 46 but were met by an attack from the other side of their own party. This goes to the certainty that the Treasurer, Mr Hockey, is doing a terrible, terrible job. His own party does not trust him with anything to do with this competition policy, let alone other economic policy.

This Prime Minister, who has made an unbelievable set of terrible captain's calls, cannot seem to put his foot down on this effects test. Rather, he is just allowing this unrest and division and uncertainty to linger long over those opposite.

There is the sort of commentary that we are hearing from participants in this debate. Particularly the commentary of Minister Billson is worthy of comment. In recent times, he declared that section 46 was a dud. He said straight out that it does not work; it is like 'a hunting dog that won't not leave the porch.' He is out there drumming up business amongst his colleagues in opposition to the uncertain position, or seemingly uncertain position, of the leader at this time.

Let's contrast this with Labor's position. In opposition we made it clear that we do not support this effects test. We do not think it is good policy. We think it would hurt competition. We think it would stand in the way of enterprise. We think it would have a disastrous impact on business investment decisions. We do not agree with it. But the other side cannot even make up their mind about it. In Senator Abetz's answer what we heard was, 'We will consider the Harper review.' They have already been considering it for more than six months. This was a high-order issue. They commissioned this report immediately. It was one of the very first things they did, and they are not advancing at all. Cabinet is all over the place.

Senator Bushby interjecting—

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Senator Bushby, that is enough.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator Abetz, in his answer to the third question that I put to him—the second supplementary—said, 'Until such time as we determine a view in cabinet, anyone can say anything.' He said, 'Anyone can say anything.'

Senator Smith interjecting—

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Order! Senator Smith, you will get your opportunity.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

This disunity of ideas is exactly as Senator Joseph Ludwig aptly described. I want to put it on the record because it would not have been picked up. He said, 'This is a government that is all over the shop like a dropped pie.' That is exactly the visual image: the detritus all over the floor of a government that has no position on anything of substance, and it is on the watch of Abbott and Hockey—a disaster for businesses across this nation. (Time expired)

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

I do not mind starting this debate by acknowledging that normally Senator O'Neill's contributions are worth listening to.

Senator Fifield interjecting—

My apologies, Senator Fifield: they are usually worth listening to. This is, unfortunately, a very significant departure from that. On the first point, Senator O'Neill is grossly misinformed. If Senator O'Neill is going to take as her sole source of evidence information in the media, she is off to a very poor start. Secondly, and I suspect more significantly, is this point: not once in Senator O'Neill's contribution did we hear Senator O'Neill present a point of view. Does she support reform of section 46 or does she not support reform of section 46? Does she support the concerns of small businesses or does she not support the concerns of small businesses? Senator O'Neill quickly dropped to the bottom of the political barrel by not even addressing the substance of the issue.

The third point is this: Senator O'Neill wants to make it a crime for members of parliament to come to the parliament or to their party rooms and express points of view on behalf of their constituencies. If that is a crime, that speaks not of the welfare of the modern Liberal Party and the National Party; that speaks of the problem inside the modern Australian Labor Party. I think that as adults and as senators we can be mature enough to recognise one important issue, and that is that reform of section 46 is a contentious issue. It deserves to be a contentious issue because this is the first time in 20 years that this nation has had a proper document on which to gauge future reform of competition laws in this country. It is right that we should be having a debate on this issue. It is more than right that members of the Senate, members of the House of Representatives and, indeed, members of the modern Liberal Party come to this place representing the views of their local constituents.

It is interesting on another point: we do not often hear questions or debates from the Labor Party about issues important to small business. Very rarely do we hear issues of debate important to small business brought to the Senate by the Australian Labor Party. I could not help but reflect on part of Senator Abetz's answer to the question from Senator O'Neill when he recounted what the former Labor leader, Kim Beazley, had said. He had said that the Labor Party is no friend and does not pretend to be a friend of small business in this country. That is shameful!

But what we saw today in question time was a retreat, perhaps even a defeat, because Labor did not seek to spend much of its time on the China free trade agreement. One question was asked, but none of its other time was spent on the issue of the China free trade agreement. You cannot come into this place pretending to be concerned about small business but ignore the very real economic opportunities that arise from the free trade agreement with China. That leads me to think that Labor is in retreat or has been defeated in the arguments that it has been trying to put over recent weeks and months around the China free trade agreement. It is very obvious why they might be in retreat and why they might be feeling defeated. It is because Bill Shorten and the modern Labor Party in the Australian parliament have no friends in the Labor Party when it comes to its position on the China free trade agreement.

What did the Premier of South Australia, Mr Weatherill, have to say about the debate on the China free trade agreement in just the last 24 hours? He said it was time to step aside from the hysteria put about by the modern Labor Party who pretend today to be an interested in small business and in the welfare of Australian workers. Let me end with a quote from Mr Weatherill. Mr Weatherill said— (Time expired)

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Senator, you have now run out of time. I did grant you a lot of latitude in respect to the later part of your comments, given that the question before the chair is simply: the answer to the question asked by Senator O'Neill.

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Once again the chaos and dysfunction of this government are on display for all to see. It is quite clear that the moral authority of the Prime Minister and the Treasurer have been irrevocably damaged by the events of this year. Many of the decisions that the Prime Minister has made, described as captain's picks, have been found completely wanting. It is worth reflecting on the reasons behind this collapse in the authority of the Prime Minister. We have just marked the first two years of the Abbott government, and for the first time in over 20 years more than 800,000 Australians are out of work, with the unemployment rate increasing from 5.7 per cent to 6.3 per cent. We know that annual economic growth is now below trend in every quarter under this government. Families are suffering from cuts of over $6,000 a year, and cost of living pressures are increasing. Sick Australians are paying GP tax by stealth. Schools and hospitals have been cut by $80 billion, and students are facing the prospect of $100,000 university degrees. Australians are paying more tax than at any time since the Howard government, and under this scenario the Prime Minister is talking about jacking up the GST. The budget deficit has doubled. At every turn the Australian government has betrayed Australian jobs, from manufacturing to defence and renewable energy. Is it any wonder that the authority of the Prime Minister and the Treasurer has collapsed in this scenario and that that is leading to chaos and dysfunction within the government?

Senator O'Neill has made reference to a recent report concerning the coalition's caucus discussions. It appears that recently the Prime Minister sought to shut the door on the small business sector's hopes for an effects test to curb the misuse of market power by big business, only to find that a number of backbenchers, who have already been named by Senator O'Neill, sought to put pressure on the Prime Minister to adopt the position of the small business minister, Mr Billson, on the effects test. This is quite clearly an example of where we have a dysfunctional situation, where there is open defiance of the Prime Minister's position. The Prime Minister apparently told the joint party room that he was taking the Harper review recommendation seriously; however, he went on to say that the debate had become too 'theological'. That is a rather unusual position for the Prime Minister to take—having set out the position, it now appears that the party is continuing to grapple with this issue.

I want to take up Senator Smith's assertion that this issue has not been looked at before. The issue of an effects test has been considered in 12 reviews since 1976—10 have recommended against its introduction, and that includes the Dawson review in 2003. I understand that that review rejected the proposition of an effects test, and that was also endorsed by then Treasurer Costello and Minister Hockey. We are finding that this is a government which, in contrast to the opposition's very clear position on this issue, seems to be gripped by analysis paralysis. It is not able to make a decision, mainly because the Prime Minister himself is not respected within the Liberal and National parties. The Prime Minister appears to have let the small business minister off the leash to put out his case for these ill-thought out changes. Labor is not in favour of abuse of market power—of course we are not—but we have other mechanisms that we are prepared to pursue. In government we did address this issue by bringing together some of the major supermarket retailers and the National Farmers Federation in an attempt to come up with a code of conduct. There are sensible propositions, but this is a government that clearly is incapable of bringing those forward.

Jo Lindgren (Queensland, Liberal Party) Share this | Link to this | Hansard source

Those opposite are not talking about policy, they are talking about politics. I have to agree with my colleague Senator Smith—those opposite should not believe everything they read in the media. How hypocritical they are, when they were in power for six years and did not take competition policy seriously. If those opposite were serious about it, they certainly would have grappled with the issues and taken this review on, as we have. The Harper Competition Policy Review is the first comprehensive review of Australia's competition policy framework in more than 20 years. The proposed amendment to the misuse of market power test is one of more than 50 recommendations contained in the Harper report. The government is continuing to consider recommendations of the Harper review of competition policy, and the government will respond appropriately to those recommendations from the review in due course.

Healthy competition is one of the surest ways to lift long-term productivity growth, incomes, economic prospects and performance. It drives enterprises to excel and to find new ways to delight customers—new offerings, new entrants, better value and choice. A key responsibility of any government is to ensure that the right settings are in place to enable efficient businesses, big and small, to thrive and prosper, and that the contest to win customers is determined on merits, not pure financial muscle. Our government is serious about getting it right. That is why the Abbott government commissioned Professor Ian Harper and his panel to conduct a root and branch review of the competition policy, laws and institutions—the first comprehensive examination in a generation. The Harper report's 56 recommendations seek to lay the groundwork for a more competitive and flexible economy and to make markets work better for the benefit of all Australians. Despite Harper's broad remit, a single recommendation aimed at making the important misuse of market power—section 46—provisions more workable, effective and procompetitive seems to attract nearly all of the media attention and interest group advocacy. Our competition laws must be effective and enforceable in preventing dominant companies misusing their market power to fortify the position or protect their market share by restricting competition and/or drawing new entrants.

The reframing of section 46, as recommended by the Harper review, attempts to align the provision to its core economic objectives, bring the misuse of market power provision somewhat closer towards a principle-based approach, balance the pro-competitive and anticompetitive impacts of conduct both in the short and long term and, in theory, reduce the risk of unintended consequences.

Some argue that the Harper reframing of section 46 will reduce productivity, chill investment and lead to higher prices. The reverse is true.

The application of the SLC test captures anticompetitive conduct but also allows firms to gain market share by being more innovative and efficient than their rivals, since this benefits consumers and raises productivity. Innovation is at the heart of competitive conduct. Even where innovation and strategic investments lead to market dominance, the courts and ACCC would not regard that as a lessening of competition.

Misuse of market power cases are rare and, even with the proposed changes to section 46, will continue to be so. Since the turn of the century, neither the full Federal Court nor the High Court have heard scarcely more than a case every two years.

Harper's recommendations focus on the public interest, since healthy competition is what is best for the vitality of our economy and delivers durable benefits for consumers. Is there any alternative superior proposal—one that will deliver durable benefits for consumers, raise our productivity and economic performance, while giving adequate consideration to the concerns of some parties about uncertainty? I do not think so—not at this stage, anyway, from those opposite. If there is, one thing the government would welcome is suggestions from the Labor Party, particularly if they start getting serious about this and start considering the need to implement the Harper review recommendations.

Jenny McAllister (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I rise also to take note of the answers to the questions asked by Senator O'Neill to Senator Abetz. As per usual, Senator Abetz's answers do not tell us very much about the subject matter of the question. What they do tell us is a great deal about the dysfunction, the disunity and the disarray that we have all come to expect from the government.

Just to be very clear and in answer to some of the other contributions to the debate, Labor does not support the effects test. I come here really to offer my condolences to the Minister for Small Business, because it cannot be very pleasant being publicly hung out to dry by your Prime Minister. As recently as the beginning of August, Minister Billson was reported in The Australian Financial Review as being absolutely confident that the government was going to be pursuing this measure. Yet, just this week, it has been kicked into the long grass by the Prime Minister and the Treasurer because they are absolutely terrified about the debate and the division within their own party room.

I also wish to offer my condolences to the business community. Two years ago this government promised that Australia was open for business. Instead, all we have seen is uncertainty, caused by this government's chronic inability to make a decision or, worse, to even produce a stable environment in which the business community can make their decisions.

The issue of the effects test is characteristic of this much broader pattern. On this issue we had concerns. We came out and said so in a very straightforward manner what our concerns were and the community knew what we were about. The PM clearly shares our concerns. However, he has not made a decision one way or the other. He has not commissioned any further inquiries or tried to get any more information and he is not open to debate about the issue in any way at all. Instead, he has delayed the decision. He is unable to make difficult decisions. And we do not just see it on this issue. We see it on the issue of marriage equality where, instead of allowing the party room to make a decision, that issue has also been kicked into the long grass, pushed off into the never-never where 'We might have a plebiscite or a referendum, but we certainly won't deal with it until after the next election.'

Why is it that the Prime Minister seems unable to make a decision? It is essentially because this is a government that is riven by division. There is disunity in the cabinet. How do we know that? We know there is a divergence of views, because members of cabinet speak about them constantly to the media. We hear about it all the time because they tell us. They have leaked conversation after conversation to the national media. They even leaked the talking points which instructed them not to leak to the media but instead to communicate to the media that cabinet was functioning perfectly well.

A government that needs talking points to explain to us that its government is functioning perfectly well is a government that is unable to function at all. It is normal to have different views in a party room and that has been explained to us very carefully by members opposite. But you can expect cabinet ordinarily to back any decision. This Prime Minister clearly cannot trust his cabinet to do even that.

The day after the decision to defer this matter was made by the PM, the Minister for Small Business said to the WA Chamber of Commerce and industry:

And you would have read, I am sure in recent days, I am getting smacked around by trying to get the competition rules right.

Well, the people whom he is getting smacked around by are the people on his own side. He is being smacked around by the Prime Minister, the Treasurer and the Minister for Foreign Affairs.

I say to those opposite but, more importantly, to those people out there in the community that it is time for us to see the grown-up government that we were promised. In the two years that we have had to endure this government, we have not seen anything like it. We have seen division and dysfunction. We have certainly not seen decision making in the public interest.

The government do not stand for anything at all, except for the pursuit of power. They are a government that are not interested in jobs for ordinary people. They are a government that are only interested in their own jobs. (Time expired)

Question agreed to.