Jane Hume (Victoria, Liberal Party) Share this | Hansard source

I rise today to continue my speech on the Competition and Consumer Legislation Amendment (Small Business Access to Justice) Bill 2017. I previously spoke on Thursday 11 May. On that occasion, I reminded the chamber that Labor has constantly opposed good-quality, sensible and pragmatic policies that those on this side of the chamber have put forward to look after small business and that their hypocrisy on this issue knows no bounds at all. Those 3.2 million businesses that currently employ more than six million Australians are, in fact, the engine room of the economy. They're the small businesses that we go to every day: the small manufacturers, the fish and chip shop down the road, the bakery, and the small grocer on the corner. They're the people who keep our economy going and keep our economy alive. Only a coalition government genuinely looks after small business. Labor, as we know, looks after big business. Big business is what feeds the hungry and insatiable beast of the trade union movement. It looks after big business and big union mates, but it never comes to the rescue of small business—not with any genuine credibility—and this bill is absolutely no different.

The Competition and Consumer Legislation Amendment (Small Business Access to Justice) Bill 2017, proposed by Labor, if enacted would see private litigants given a power to request a no adverse cost order at any stage of a competition case that is a Part IV action under the Competition and Consumer Act—that is, any stage of a competition case that they have brought before a court under the proposed subsections 82(3) to 82(4). If a court grants such an order, the legal fees of the defendant would be prevented from being transferred to the litigant in order to make a no adverse cost order. A judge must then be satisfied that the action has a reasonable prospect of success, raises an issue that may be significant for persons or groups other than the applicant, and that the disparity between the respective financial positions of the applicant and the respondent is such that the respondent could use the possibility of a cost order against the applicant as a means to deter the applicant from pursuing the action. That is proposed in subsection 82(5). It is also proposed in this bill that the small business and family ombudsman would provide assistance with advising private litigants on the arguments that might be made and the evidence that is needed to satisfy a court to grant that particular no adverse cost order.

It will come as no surprise, of course, that those on this side of the chamber, the government, do not support this bill. The main reason for that is that the bill fails. It overpromises, and will fail to deliver its objectives. There is no point in Labor promising to access justice for small businesses when the current law, section 46, is broken. Indeed, if Labor are genuine about supporting small businesses they should, instead, support the government's changes to section 46 of the Competition and Consumer Act 2010. That recommendation was part of the Harper review, which released its final report on 31 March 2015.

The report made 56 separate recommendations on Australia's competition framework, which covered most sections of the economy. The Prime Minister, the Treasurer and the Assistant Treasurer all emphasised, on the release of the report, the government's commitment to strengthening Australia's competition policy. They commented:

…the amendment of section 46 to deal with unilateral anticompetitive conduct is an important step to ensure Australia has the best possible competition framework to support innovation and boost economic growth and jobs.

Indeed, as I have mentioned previously, the Minister for Revenue and Financial Services, the Hon. Kelly O'Dwyer, explained how those proposed amendments would support and promote pro-competitive conduct in business for the ultimate benefit of Australian consumers. The minister said:

These amendments will make markets work better for the benefit of all Australians and help to lift our long-term productivity growth. They will ensure that all businesses can compete on a level playing field—

a term that is a very familiar refrain in this debate—

rewarding innovative and dynamic businesses that provide the best services at the lowest cost. This will benefit households by giving them more choice and better value products and services.

It is section 46 that is broken. This bill is entirely unnecessary, and the changes to section 46 that the government has proposed would genuinely level that playing field for small businesses to ensure that they can compete on merit against those businesses that have substantial market power. The changes to section 46 balance small business to big business market relationships and will do far more to assist small businesses than the proposed bill that is once again under discussion today. These changes are necessary, and they are championed by the small business sector.

The piece of legislation we have before us today is expensive and time-consuming. Labor's policy actually encourages small businesses to engage in litigation. It actively encourages litigious behaviour and potentially vexatious litigation. It does not, however, assist in the resolution of disputes at the earliest available opportunity or at the least cost to parties and to the courts. Labor's policy will in fact do the very opposite of that. It will encourage businesses to commence litigation. The applicant and proceedings will still have very high legal costs and a high evidentiary burden in challenging legal thresholds to establish a breach of the current section 46. The seeking of the order itself carries with it a legal cost in satisfying the court that the order satisfies the hurdle tests—a cost which would be borne by the small business applicant. And, if the court grants a no adverse cost order, the applicant must still fund its own case. The case is likely to be complicated by the legal argument about the facts and addressing the expert advice brought by the respondents. The cost to the applicant for its own legal representatives is still likely to be very, very high.

The bill fundamentally also changes the role of the Australian Small Business and Family Enterprise Ombudsman from advocacy and assistance. In particular, the addition of this function would severely limit the Australian Small Business and Family Enterprise Ombudsman's ability to advocate on issues, which is such a key function for this agency.

Additionally, Treasury does not consider that the Labor Party's estimate of costs of $1 million accurately reflects the full cost of this policy. It doesn't appear to account for the increased workload of the Federal Court, and it doesn't appear to account for the significant change to the Australian Small Business and Family Enterprise Ombudsman's functions and the increased resourcing of that agency. The most important issue here is for small businesses to beware of false friends. They are like ivy. They decay and ruin the wall they embrace. To the 3.2 million businesses that currently employ more than six million Australians, Labor is, indeed, a false friend.