Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

in reply—I thank all honourable members who participated in this debate today on the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008. In 1998 the OECD recommended that member nations ensure that their competition laws halt and deter hard-core cartels. In 2003 the Review of the Competition Provisions of the Trade Practices Act, otherwise known as the Dawson review, recommended the introduction into Australian law of criminal penalties for serious cartel conduct. The Dawson review concluded and recommended as such that criminal penalties were an effective deterrent to serious cartel behaviour. The introduction of this bill into parliament demonstrates our commitment to prevent and deter serious cartel conduct. It brings Australia into line with over 15 OECD nations that provide for criminal sanctions for such conduct.

This bill is overdue. Many honourable members have made that observation. It would have been better if it had been introduced by the previous government in response to the Dawson review. The Dawson review reported in 2003, almost six years ago to the day, at the end of January 2003. In turn, the Dawson review was in response to the 1998 recommendation of the OECD. So for 10 years we have been talking about this issue. The previous government announced that they would implement the decision of the Dawson review. They did that in 2005. It took them two years to consider the results of the Dawson review. The previous Treasurer, the member for Higgins, then announced that he would implement the legislation. Draft legislation was prepared but it was never released, never introduced. The previous government squibbed, reneged, on their commitment. The member for Fadden said the previous government had had this on their radar for some time. He was saying that that was a good thing. Well, they had it on their radar but they never pulled the trigger; they never brought the legislation to the House. They never implemented the very serious recommendations of the Dawson review.

This government has listened carefully to concerns around the trade practices community and industry around this bill. This is a complex piece of public policy to deal with. There are nuanced questions to be approached. While the bill is modelled on international proposals and the OECD model, there are of course changes necessary to ensure its effective operation in the Australian context. We have acted quickly but also very cautiously. I released for public comment in January last year the legislation that was prepared for the previous government. We then instigated a roundtable of trade practices experts—criminal lawyers, trade practices lawyers, academics and practitioners—to help us work through some of the nuanced issues. I met with that panel extensively. One of the members was the honourable member for Isaacs, Mark Dreyfus QC, and other members I acknowledged in my second reading speech. We made very considerable changes to the first draft legislation and then released the final legislation late last year. On 3 December the government referred the bill to the Senate Economics Committee for inquiry and report, which is appropriate for a big and complex piece of legislation which has nuanced issues to consider.

I would like to turn to some of the issues raised by honourable members during the course of the debate. I thank all who contributed from the other side, from the government and from the cross benches. I think all three Independents contributed to this debate. The member for Cowper led for the opposition and supported the broad thrust of the legislation, which I welcome. It does represent a considerable change of approach from the opposition given their reluctance to move on this issue during their time in government, but I do welcome their support. The honourable member for Cowper legitimately raised issues relating to the joint venture defence. It is a complex and nuanced issue. The Senate inquiry instigated by the government has received submissions expressing concern that the joint venture defence is too narrow and would limit legitimate business activities. Similarly the Senate committee has received submissions saying that the joint venture defence is too broad and would allow illegitimate cartel conduct to go unpunished. That underlines just how complex this issue is, and it is something that we spent a considerable amount of time on and I personally spent a considerable amount of time working through.

I found compelling the evidence of the Canadian experience, where the joint venture defence is broadly drafted and has been used, in the views of many, to provide a shield for illegitimate cartel conduct. We need to be careful that in drafting defences we do not allow illegitimate and what should be illegal cartel conduct to be hidden under the guise of a joint venture. I said throughout the drafting process that I was open to sensible suggestions, and I continue to remain open to any sensible suggestions. I think we have got the balance right but, if there are sensible suggestions which come out of the Senate process, of course I will consider them and take them on board. But it is a complex and nuanced issue and we have spent a considerable amount of time working on it, and I think the government have largely got the balance right.

The honourable member for Pearce in her contribution questioned the 10-year jail term and said that she thought 10 years was too long, which I found, I must say, surprising and disappointing. There are a number of offences, as the member for Lindsay pointed out, with 10-year jail terms. There is a 10-year prison sentence for directors who wilfully defraud or deceive a body corporate and for directors who fraudulently appropriate the property of a body corporate. These are very serious corporate offences, and cartel conduct is among these most serious corporate offences and should therefore be dealt with as such. So I strongly reject the criticisms of the member for Pearce that 10 years is too long a jail term and that we should have embraced seven years. I think it is a good thing that Australia will have equally the longest jail terms in the world, with the United States, for serious cartel conduct. There is much evidence that, when people are contemplating operating a cartel, the biggest disincentive is not a fine, because that is a cost of doing business; it is the prospect of losing their liberty—of being imprisoned for a very considerable amount of time. Ten years sends that message.

I have to turn to the contribution of the honourable member for Mackellar. I have to say in all seriousness that it was a particularly unfortunate contribution. This is a very serious matter, and I found the honourable member for Mackellar’s contribution—I do not say this lightly, and I have already thanked the opposition for their support—particularly unfortunate. She did a number of things. She attacked the chairman of the ACCC. We are used to that and the chairman of the ACCC is used to that; I do not think he will lose any sleep over that. She attacked his integrity. But what she also did was to ignore the longstanding convention of the House of Representatives that members do not comment on cases before the courts—the sub judice rule. We are all tempted to do it from time to time; sensible members resist. For the honourable member for Mackellar to do that in a criminal case—and House of Representatives practice makes it clear that honourable members should be particularly careful in criminal cases—is something that the honourable member should reflect on. The Leader of the Opposition should reflect on her behaviour in this matter and should deal with the honourable member for Mackellar’s contribution, which was particularly unfortunate.

The honourable member for Mackellar made it clear that she opposes this legislation. Despite the fact that the opposition is supporting it, the honourable member for Mackellar said on a number of occasions that she opposes this legislation. Presumably she opposed the recommendation of the shadow minister in the joint party room, and I have no doubt that she opposed the previous government in this matter. Perhaps that is one of the reasons the previous government did not act—because some on the other side hold these views.

The honourable member for Mackellar said that financial penalties are quite adequate and that there should not be a jail term for cartel conduct. We could not disagree more strongly. The honourable member for Mackellar has shown that she is completely out of touch with the impacts that cartel conduct has on the Australian people. The honourable member for Mackellar has shown that she is soft on cartels. The honourable member for Mackellar appears to believe that cartel conduct is legitimate business activity, and she should be condemned for her contribution, which is one of the most outrageous contributions in this House I have heard in my relatively brief time in the House. It was the most outrageous contribution I have heard in the House in four years, and I would encourage the Leader of the Opposition to deal with the honourable member for Mackellar for breaching the sub judice convention, personally attacking the integrity of the chairman of the ACCC and completely ignoring the longstanding convention of the House of Representatives.

As I say, this is an important piece of legislation. Serious cartel behaviour is theft from consumers and is dealt with as such in the legislation. I understand that cartel cases are difficult to prove and notoriously hard to prosecute. Accordingly, it is appropriate that the legislation be well drafted. What the contributions from the honourable members opposite are notable for, as much as for what they say, is what they do not say. I do not mean that as a criticism, because it shows that we have reached a level of agreement in the House about some of these issues that, frankly, I expected to be more controversial. We thought deeply about giving the ACCC the power of telephone tapping, in conjunction with the Federal Police in the Federal Court, and I made the decision to recommend to the cabinet that we give the ACCC and the Federal Police those powers. I thought it might be controversial. The honourable member for Cowper expressed support for that, which I welcome. We also removed the necessity which was in the legislation prepared for the previous government to prove the intent to act dishonestly. Again, I found compelling the evidence from the United Kingdom when I met with the chairman of the United Kingdom Competition Commission partly to discuss these matters, which have made prosecutions in the United Kingdom very difficult indeed. Again, with the exception of the honourable member for Mackellar, I do not believe that any honourable member on the other side criticised that decision, which I welcome.

I will deal with the comments of the honourable member for New England, which I am sure he would agree were not particularly germane to the bill before us but which were nevertheless important. I will not deal with them in detail, because that would be appropriate at a different time, but I welcome his support for this bill. I am in the process of arranging for the Petrol Commissioner to brief honourable members on both sides, and I will arrange for the Petrol Commissioner to brief the honourable member for New England and his colleagues on the cross benches on the current situation in relation to petrol prices—the impact of the reduction in the Australian dollar and how that intersects with world oil prices and also with diesel—because I think he raises legitimate points. He is quite right that they also get raised with me on a regular basis inside and outside the House, and I understand his concern and the concern of other honourable members. I think it would be beneficial to have a briefing from the Petrol Commissioner, whom I obviously speak to on a very regular basis. He keeps me apprised of movements in the market, and I think it would be of benefit to honourable members to receive that briefing.

As I said, serious cartel behaviour is theft from the Australian consumers—theft which we will not tolerate and theft by the powerful from the powerless. This bill evens the ledger. It is another step to ensure that competition is not just a construct or a theory but a reality in the Australian market. Competition is the key means for ensuring that consumers get the best product or service for the lowest price. It also protects those businesses doing the right thing—businesses out there working hard, putting in tenders, reducing their prices to try and get business, and not colluding with the people who should be their competitors. Businesses doing the right thing deserve to know that businesses doing the wrong thing will be dealt with in the strictest possible way. The bill delivers on our commitment to introduce this legislation within 12 months of taking office but, as I say, we have done that in a cautious and considered way and with full consultation. There are some who think it goes too far and there are some who think it does not go far enough, but I think we have struck the right balance and so I commend this very important piece of legislation to the House.

Question agreed to.

Bill read a second time.

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