Ted O'Brien (Fairfax, Liberal Party) Share this | Hansard source

It is the purpose test that has really been assessed as the key failure of the current regime, due to it being too difficult to prove and too specific in its application. How do you prove one's purpose in doing something? How do you prove what one's intent is? It almost reminds me of the song the nuns in the convent sing in the Sound of Music: 'How do you catch a cloud and pin it down?'. It is just all too hard. How do you prove one's real intent? The application of the purpose test has also proven to be too specific, with cases typically seeking to challenge the purpose of an activity undertaken by one firm against other single entities, whereas the idea behind the act was to protect the process of competition itself.

Essentially, this bill seeks to address these flaws in the existing act by swapping the test of 'intent' or 'purpose' with a test of 'effect'. What is more, it is to relate not so much to an activity by one powerful firm towards another single entity, but rather to the question of whether such activity adversely impacts the competitive process. In other words, what counts is whether the little guy actually gets done over by the big guy, regardless of whether the big guy says he meant it or not. If, when this happens, competition is lessened, or is likely to be lessened, then that is enough for it to be against the law.

Clearly, this bill is to be contested. There is no point in denying that. A number of large corporates and their representative bodies are opposed to what it proposes. Small and medium sized entities, which are the bedrock of our economy, and who are most vulnerable to any misuse of market power, are very much in favour of the bill. Some opposition from the bigger end of town is no doubt based on the fact that the current regime has been in place for a long time; they are familiar with it and they would prefer the certainty it offers, along with simple continuity. I get that. Some have said that it could have a material impact on the speed and nature of business decision making and cause delays or changes in investment decisions. Obviously we want our big corporates to continue to invest, but we want those investments to be in line with community expectations that they will be fair and reasonable, not unfair—especially in regard to small and medium businesses.

The Harper review of competition policy, which in 2014 recommended the changes to section 46 that this bill engages, recognised the arguments that were being put by both sides and concluded that, on balance, these changes should be made. The government undertook its own augmentative investigation and discussion around the proposed changes and agreed, early last year, that the Harper review was right and that the changes should be made. The Senate Economics Legislation Committee came to the same conclusion.

As we know, the Labor Party opposes the bill, but its position is, as ever, full of contradiction and of opposition for the mere sake of being in opposition. The opposition Treasury spokesman, who is almost as big a critic of big business as his leader and deputy leader, is suddenly animatedly pro the big end of town when it comes to section 46. The shadow Treasurer does not see any need for change, arguing that the amendments will 'dull' investment, while at the same time, almost with the same breath, he argues against corporate tax cuts, which would positively impact investment and, subsequently and just as importantly, jobs. In other words, on this issue Labor is simply playing a tactical game of opposition politics—it supports the big end of town and then it attacks the big end of town, never with consistency in debate but simply with a view to acting as an opposition. But Australians are better than that. I am sure the vast majority of Australians want those that possess substantial market power to be held to account.

Some people who oppose this bill argue that it represents a breach of faith with the free market economy in that it meddles with Adam Smith's infamous invisible hand and thus undermines the notion of free trade. With all due respect to some otherwise learned warriors who run that line of argument, they have misread their economic theory and, what is more, they have certainly misunderstood the working of the real market economy. I say this as an unashamed, unabashed disciple of the free market and of free trade. Trade that is not fair is trade that is not free.

Small businesses know this best. In my home state of Queensland, there are 414,000 small businesses—that is 97 per cent of all businesses—each employing less than 20 employees. It is even higher in regional Queensland, including in my neck of the woods, on the Sunshine Coast, where around 32,000 small businesses constitute 98 per cent of the total. Should these companies be ring fenced and protected from competition? No, absolutely not—and nor do they want to be, because people who back themselves in private enterprise are not typically shrinking violets who are scared of competition. They are people who are prepared to invest their own bucks in an opportunity and to fight in the marketplace. They are every bit as talented and every bit as competitive as those who operate in large enterprise, but they have a right to compete on a level playing field, and that is what this bill seeks to support. A level playing field is absolutely consistent with the principles of free trade, because free trade is fair trade. It is on that basis that I support the bill and commend it to the House.

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