Jonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | Link to this | Hansard source

The opposition will not be opposing this legislation, the Treasury Laws Amendment (More Competition, Better Prices) Bill 2022. Indeed, it was coalition policy in government—part of a significant program of reforms to assist small businesses by the former coalition government. It is worth noting, however, that the measure in this bill was one that blew a $500 million black hole in Labor's budget before it was even handed down. Prior to the election Labor claimed its policy to increase penalties under the Competition and Consumer Act 2010 would raise $557.7 million in its first four years. But Treasury's costings of the government's legislation show it will raise a mere $63 million in its first four years. Helpfully, the Assistant Treasurer clarified the government position on this black hole in a media interview recently, where he said: 'We've got to wear that. Obviously it's regrettable, but we've got to wear that and we've got to find other areas to ensure those savings are made up.'

In the budget handed down this week, we saw that the only new change to the tax system announced in the budget was a new tax on investments. Labor's sneaky new tax will slug people who invest their own savings and superannuation. Despite ruling out these changes before the election, Labor will hit retirees and investors with a new $555 million tax, depriving investors of franking credits which they have previously relied on. In classic Labor fashion they've mixed up their sums and introduced a new tax to pay for it. Labor want you to work hard so they don't have to. The opposition will be supporting this bill but will not be letting Labor off the hook on their failure to manage the budget, and we won't be supporting their higher taxes to pay for their poor budget management.

Carol Brown (Tasmania, Australian Labor Party, Assistant Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

The Treasury Laws Amendment (More Competition, Better Prices) Bill 2022 will deliver on the government's election commitments to help ease the cost of living by increasing penalties for breaches of competition and consumer laws, and to provide greater protections for small businesses from unfair contract terms.

Schedule 1 to the bill will increase the maximum penalty for anticompetitive behaviour under the Competition and Consumer Act 2010 as well as breaches of the Australian Consumer Law to ensure the price of misconduct is high enough to deter unfair activity, and to ensure consumers retain a robust level of protection.

In 2018, the Organisation for Economic Co-operation and Development found that the average and maximum competition penalties in Australia are substantially lower than those in other international jurisdictions. As a result, there is a risk that a breach of the existing competition law could be seen as an acceptable cost of doing business by some large firms.

Consumers and small businesses often lack the resources and bargaining power to effectively review and negotiate terms in standard form contracts they are offered by a larger party.

The existing unfair contract terms protections in the ACL and the ASIC Act provide that where a court finds a term is unfair, the term is void.

This approach has not provided sufficient deterrence against the use of unfair terms, which remain prevalent in standard form contracts.

The amendments introduce civil penalty provisions prohibiting the use of, and reliance on, unfair terms in standard form contracts. This will enable a regulator to seek a civil penalty from a court. The existing definition of an unfair term remains unchanged.

The government's expectation is that regulators will continue to take a reasonable and proportionate approach to enforcing the unfair contract terms protections, including affording businesses an opportunity to respond to allegations of unfair terms before commencing any legal proceedings.

The bill includes a requirement to review the reforms two years after commencement, and the government will also welcome feedback from stakeholders ahead of this review. I commend the legislation to the Senate.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

by leave—The government is to be commended for bringing forward this bill. It will increase penalties for anticompetitive conduct and it will expand the scope of unfair contract terms. The Greens will be supporting this legislation accordingly.

In particular, the Greens welcome the increase in civil penalties for various contraventions of competition and consumer law. Under the bill, maximum civil penalties for individuals—and I want to highlight those words, 'civil penalties for individuals'—including the CEOs and other executives of corporate Australia, will increase from $500 million to $2.5 million. As the government has explained, this will put penalties for anticompetitive conduct in Australia on par with those in comparable jurisdictions around the world. After nine years of the Liberal government dragging the chain, this bill will finally bring Australia up to scratch.

But I wish we could say this in other areas. Unfortunately, the good work that the government is doing here stands in stark contrast to their obsequiousness to the banks in other areas. The Financial Accountability Regime Bill, which is currently before the Senate, establishes a framework to hold the executives of banks, of insurers, and of super funds to account. Very similar to provisions in section 46 of the Competition and Consumer Act, the Financial Accountability Regime seeks to hold executives to account, not just for deliberately ripping off their customers but for failing to take reasonable steps to ensure that customers are actually not ripped off.

The Financial Accountability Regime—it might help senators to understand it to put it this way—is the banking equivalent of the effects test. But while this bill increases civil penalties for executives under the effects test to a maximum of $2.5 million, the Financial Accountability Regime, as proposed by this government, includes no such civil penalties for the executives of banks. So this government's position is to apply a maximum civil penalty of $2.5 million on executives who breach competition obligations but to give those executives a complete free pass if they breach their accountability obligations, which will set up Australia's banking accountability regime right at the bottom of the international rankings. It is an approach which makes absolutely no sense at all. It has zero internal coherence.

I've got to say it's a worrying sign because the government seems to be picking up where the previous government left off in going soft on the banks. The banking royal commission appears to be lost in the mists of time. This is how the rot sets in: from the chair of ASIC going soft on enforcement to the minister making clear the limits of this government's ambitions, including by not putting civil penalties in the Financial Accountability Regime. As Commissioner Hayne outlined quite rightly in his report, every time the government goes soft and the regulators go soft, the big banks interpret it as a sign they can just get back to business as usual and do what they want to do—which is, let's face it, to exploit their customers just as hard as they can so they can increase their profits just as much as they can. The banks need to be held to account. When the government finally wakes up to this obvious fact, the Greens will be ready to work with them to deliver an accountability regime that is consistent and fair and does the job to hold banking executives, finally, to account.

Carol Brown (Tasmania, Australian Labor Party, Assistant Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I table a correction to the explanatory memorandum relating to this bill.

Bill read a second time.