David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Hansard source

I would like to take this opportunity to thank honourable members who have taken part in this debate on the government's Competition and Consumer Amendment Bill (No.1) 2011. The government's intention to introduce these new laws was announced in December last year as part of its compre­hensive package of reforms to the banking sector to empower families, support smaller lenders and secure the flow of credit to our economy. We have worked closely with the Australian Competition and Consumer Commission since mid 2010 to carefully design these amendments and we have consulted extensively on draft legislation with businesses, legal experts and other stakeholders. The government's bill reflects the results of these consultations and is an effective and targeted way to address anticompetitive price signalling in the banking sector.

The bill closes a gap in the anticom­petitive conduct provisions of the Competition and Consumer Act 2010, fulfill­ing the government's commitment to crack down on anticompetitive price signalling and get a better deal for consumers in the banking sector. These laws will build on our 2009 reforms to strengthen Australia's cartel laws by banning signalling designed to keep interest rates higher. These laws will be initially applied to the banking sector, where the ACCC has told us there is strong evidence of banks signalling their pricing intentions to each other in a bid to undermine competition.

The bill adds two new prohibitions to the act to address anticompetitive price signalling and information disclosures. First, the bill prohibits outright the private disclosure of pricing information to one or more actual or likely competitors. This prohibition is targeted at those disclosures which are the most clearly anticompetitive and harmful to consumers. Second, the bill gives the ACCC the power to take action against any bank which signals its pricing intentions to a competitor for the purpose of substantially lessening competition.

The bill provides a comprehensive set of exceptions to ensure that legitimate business activities are not captured by the prohibitions and today I will move amendments so that further exceptions are provided that give clear guidance to business around what conduct is and is not subject to the prohibitions. More specifically, disclosures made in the ordinary course of business will not be subject to the outright prohibition. Disclosures in relation to corporate workouts, syndicated lending arrangements and credit distribution arrangements will also be explicitly exempt from the outright prohibition.

Consistent with the existing anticompe­titive conduct provisions in the act, the bill also provides notification and authorisation arrangements for businesses to seek immunity from action under the new prohibitions where they can demonstrate that their conduct provides a net public benefit. Like other prohibitions in the act, breaches of the prohibitions will be subject to civil penalties of up to $10 million, 10 per cent of a business's annual turnover or three times the benefit of the conduct, whichever is higher. The bill demonstrates the governm­ent's strong, ongoing commitment to promoting competition in the banking sector. Anticompetitive price signalling and information disclosures are used by compet­itors to facilitate prices above the competitive level. They can lead to inefficient outcomes for the economy and ultimately higher prices for consumers. The government's bill will provide the ACCC with effective and targeted tools to ensure that banks who signal their prices to competitors to undermine competition, to the detriment of Australian consumers, can no longer get away with it.

Again, I wish to thank all members for their contribution to this debate. I commend the bill to the House.

Question negatived.

Original question agreed to.

Bill read a second time.

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