Barnaby Joyce (Queensland, National Party) Share this | Hansard source

Thank you, Senator Brandis. Since the Boral decision in 2002 there has not been a successful prosecution of a predatory pricing case. The law obviously had to be changed. It had to be fixed. There had to be some clarity put into it. Section 46(1AA) was brought in by the former Treasurer, Peter Costello. It was later termed the ‘Birdsville amendment’. Why did we call it the Birdsville amendment? It was because we did not want to spend the next month talking about ‘proposed section 46(1AA)’. That just did not have the gravitas that was required. For the record, and for all those cynics out there, it was faxed from the Birdsville Hotel, not written in the Birdsville Hotel. It is lucky we were in Birdsville, because otherwise it could have been the ‘Hamilton amendment’ or the ‘Ascot amendment’ or gosh knows what. But we were in Birdsville, it seemed like a good name for it and that is how it came to be known.

This amendment brought something that people could clearly understand—that is, if a person who is engaging against you has substantial market share, they are big in the market, then you have access to the courts. You do not win your case just because you can prove they are big. You then have to go to court and prove your case. And the court is not a fool. The court is not going to sit back and say, ‘Just because someone is big and they are selling a product that is cheap and you are inefficient, we are going to award the case for you.’ The proof is that, of the 75 cases that have already been brought before the ACCC—it may be over 100 now—none have been deemed to be in breach of the act. That in itself possibly leads to another question: are the ACCC being diligent enough in their oversight of that? That is the next question that we will progress to.

All the Birdsville amendment did was to give Australian citizens the right to at least get access to the courts and to justice. It should have been anachronistic for us to have had such predetermined access to the courts as the market power test. That was removed and the market share test came into place. But once someone gets to court they then have to prove that there was the purpose of:

• (a) eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market;
• (b) preventing the entry of a person into that or any other market; or
• (c) deterring or preventing a person from engaging in competitive conduct in that or any other market.

This is obviously something that would require a deal of acumen.

The idea was put up that this amendment would knock out Christmas sales. It did not. Last year there were lots of Christmas sales. It did not knock out Christmas sales. Why? It is because they are not for the purpose of removing a competitor from the market and they are not sustained. One would probably find that they are not even below cost. I remember a classic example of when someone from one of the major corporate entities who was very upset by this amendment came to my office. I asked, ‘Do you sell below cost for a sustained period for the purpose of removing your competitors?’ He looked at me and said, ‘No, I do not.’ I said, ‘If that is the case, you have nothing to worry about because you are not in breach of the act. This is just not going to cover you.’

At its simplest, this amendment brought back a sense of clarity to the law. Over a period of time, as Senator Brandis has well pointed out, jurisprudence will define the act and it will grow and precedents will be set. But what we have now is no more than people trying to second-guess precedents that do not exist because no case has ever held up by use of the Birdsville amendment. So why we would get rid of a piece of legislation that has not even been tested in court can only be by reason of one issue—that is, those who have a great deal to gain by the continued market centralisation that has happened in this country, which has forced up grocery prices and fuel prices, have got in the government’s door and have done extensive lobbying so as to change its position around. That is why the government is trying to repeal this.

It seems peculiar in the extreme that a government that paraded itself before the Australian people as wanting to deal with, amongst other things, grocery prices and fuel prices would make as one of its primary acts the repeal of the Birdsville amendment and give those people who have exploited the Australian consumer the keys to the till again. That is exactly why section 46 (1AA) of this obscure little act is so offensive—not to the man and the woman on the street and not to the small businesses who lobbied over years to get this in place—to those who have been the persecutors of the Australian consumer by their centralisation of the market place, using a mechanism that they know full well has the capacity to destroy competition.

That is the reason that you have come in here tonight to get rid of the Birdsville amendment. The sneaky little way of embellishment to bring this about is through the take-advantage test. Once more, the take-advantage test has raised the sceptre that if you can do it with or without market power it is not a breach of section 46. If you can do the action, with or without market power—because market power is back in under the government’s legislation—then it is not a breach of section 46. I could therefore say: ‘Well, I am selling below cost for three years while I put this business out of business. But I could have done that with or without market power, so I am not in breach of the act.’ It is the most sneaky little get-out clause that you have been well briefed to insert into this act so as to look after the people who have been well and truly looked after by this nation’s lack of attention to the trade practices laws that other nations have benefited from.

I bring to the attention of this chamber section 18(2) of the United Kingdom’s Competition Act 1998. To dispel this illusion that the Birdsville amendment is something onerous and unseen in any way, shape or form in any other nation, 18(2) says:

(2)

Conduct may, in particular, constitute such an abuse if it consists in—

(a)

directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

(b)

limiting production, markets or technical development to the prejudice of consumers;

(c)

applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage—Imagine how that one would go down in some of the shoppping malls—

(d)

making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of the contracts.

That is the United Kingdom—hardly some sort of retrograde in the economic world; in fact, I would say it is a nation that has a substantive well-tested trade practices act. But maybe it is just the UK that is unique, so I looked at section 51 of the Canadian Competition Act. This is what is outlawed there:

Every one engaged in a business who:

(a)

is a party or privy to, or assists in, any sale that discriminates to his knowledge, directly or indirectly, against competitors of a purchaser of articles from him in that any discount, rebate, allowance, price concession or other advantage is granted to the purchaser over and above ...

You can see the context. These are far stronger than that which is placed in the market share test in the Birdsville amendment. If we really wanted a lift, these sections of the act would make for a far stronger trade practices act than we already have. But even with that small movement that we delivered for small business, people have come out kicking and screaming to get rid of it.

Small business knows where their bread is buttered. This is not Barnaby Joyce’s or anybody else’s amendment; this is small business’s amendment. This is the whole purpose of the conservative side of politics: to be the bastion that protects the freedom that is enmeshed in the capacity for someone to be master of their own ship. That is what I think binds together the parties that form the conservative side of government in this Senate: the belief that you must have access to that freedom to be allowed to be your own boss, for your actions to be determined more fully in the outcomes of your life. That is why we on this side protect this mechanism for people to continue on that path. Unfortunately, the trade practices record in Australia has been one of centralisation. Unfortunately, the consequence of that without a doubt—and you only have to look at fuel prices today and what is happening with grocery prices—has been the exploitation of the Australian consumer. All these paltry and pathetic attempts that the Labor Party have put up—Fuelwatch, ‘grocery watch’, we are almost heading to ‘school watch’ and we will end up with ‘pensioner watch’—stand in proxy for good legislation, which, historically, was delivered to Australia from this side of the chamber.

The Labor Party want to move back to this very narrow interpretation of the take-advantage test. They also want to move back to the market power test. Both these tests, irrespective of the gloss the government put on it later on, completely remove the capacity of the Australian citizen to recourse under law for actions that would remove their ability to be in the market place, which is something that I have not even really heard about from any section. Minister Bowen has really struggled with this one. He really has been at sea. I have not heard one example from the government: ‘This is where the Birdsville amendment has affected competition, and this was the consequence.’ Not one. Graeme Samuel is a man who has had an interesting epiphany of late.