Monday, 27 March 2017
Competition and Consumer Amendment (Misuse of Market Power) Bill 2016; Second Reading
It is my great pleasure to rise and speak on the Competition and Consumer Amendment (Misuse of Market Power) Bill 2016 and place on record my strong support for this important reform. This is a very important reform. The bill before the parliament today to amend section 46 of the Competition and Consumer Act 2010 is all about standing up for small business, is all about ensuring there is a level playing field and is all about ensuring that we do not continue to see the sort of anticompetitive conduct, dominated by the likes of Coles and Woolworths, which has in many respects served to squash or diminish small businesses.
We have seen some dreadful examples—and where was the Labor Party? Where was the Labor Party in standing up for consumers and small businesses when we saw shocking conduct by the likes of Coles and Woolworths in demanding, unlawfully and improperly—I say a sort of corporate corruption, frankly—rebates from their suppliers that were designed to push suppliers to the wall? What we are seeing from the Labor Party is, 'Yes, the status quo is fine.' The status quo is not fine. What we heard from the member Kingsford Smith, who spoke before me, is just rubbish. As a strong Liberal, I am very proud to stand up for this reform, and the coalition is very proud to stand up for this reform, because we have seen in section 46 a provision that is not properly working.
The Harper review recommended strengthening section 46 of the act after finding that the current law regarding misuse of market power is not reliably enforceable and does not effectively target and deter anticompetitive conduct, to the detriment of Australian consumers. The government has adopted a recommendation from Harper—who did a superb job, I have to say, and I want to put on record that very important point—to create a commercially and legally robust law to prevent firms with substantial market power from engaging in conduct which harms competition in Australian markets. This is not about preventing a large supermarket chain from discounting. What we heard from the member opposite in the previous contribution is just rubbish. This is about ensuring that, whether you are a big business in this country or whether you are one of Australia's more than two million small businesses, which make up more than 97 per cent of all businesses, you can operate as a business on a level playing field. The reformed section 46 will prohibit a corporation:
… from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition in markets in which they directly or indirectly participate.
Treasurer Scott Morrison made it very clear in his media statement on 1 December 2016 that:
The new provision will more effectively address anti-competitive conduct, protecting the process of competition rather than individual competitors.
These reforms represent an important step towards ensuring Australia's competition laws are fit for purpose and support competition in a dynamic economy. They are a key part of the Government's response to the Harper Review, which is all about increasing choice and delivering better services and outcomes for Australian consumers.
This has been a pressing issue in Australian competition law over a long period of time. It has been supported very strongly by the ACCC. I have to say that Chairman Rod Sims, leading that organisation, is on balance doing a very good job of tackling these issues of failure to comply with competition law. I think he has led the way, along with the likes of Professor Allan Fels and Professor Harper, in illustrating and demonstrating that this is no longer fit for purpose.
This reform modernises competition law by simplifying it and by strengthening the protections for small businesses from economically harmful, illegitimate, anticompetitive behaviour by big firms with market power. As we know, this is done by the introduction of an effects test.
The economic case for this reform is extremely strong. No other country, except New Zealand, allows monopolists to harm competition. This is what the Labor Party is supporting: a proposition where if you have a monopoly or a duopoly, in the case of the large supermarkets, you can conduct yourself in a way that harms competition in the market. I say that because the 'misuse of market power' provision was simply not working. The threshold was too high. It was simply too onerous for a smaller business to go to court and argue that there had been a breach.
In recommending this change, Professor Harper has recommended a reform that ensures there will be continuing protection of legitimate competitive behaviour, which is why I say to members opposite that it is just absolutely wrong and improper to argue that this will prevent some sort of healthy discounting in the market. I think history will prove me to be correct on that important point. It recognises that the line between competitive and anticompetitive behaviour is not drawn by having a purpose test but by having a proper economic test. We know that this is opposed by sections of big business, but it is strongly supported by small business, farmers and consumers.
I want to reflect on the contribution I made on this issue on 3 March last year, when I congratulated the 20 industry bodies calling on our government to amend section 46. Let me mention some of these bodies, all coming together to say that the current law is not working. As I mentioned when I started my contribution, we have seen some terrible examples of abuse of competition law from the likes of Coles and Woolworths, which basically, almost frankly, tried to blackmail their suppliers by demanding, improperly, rebates. Some of the conduct has been terrible. Coles and Woolworths have had legal repercussions. In Coles' case, in fact, it incurred a fine of some $10 million.
We will not tolerate this. We will not tolerate a legal system that allows this to happen. Where the law requires strengthening we will firmly stand behind all businesses, big and small, to ensure that we have a robust market. That is the essence of a free market. It is not to protect the big boys. It is not to protect those who have the power. The essence of a free market is in protecting competition and in standing up when there is anticompetitive conduct in the market. I want to reflect on the alliance of bodies that called for reform—so it is simply not true that most voices are against this reform: the Australasian Convenience and Petroleum Marketers Association, the Australian Chamber of Commerce and Industry, the Australian Booksellers Association, the Australian Hotels Association, the Australian Retailers Association, Australian Dairy Farmers, the Australian Newsagents' Federation, the hairdressing association, the Commercial Asset Finance Brokers Association, the Convenience and Mixed Business Association, Fresh Markets Australia, the Central Markets Association of Australia, MGA Independent Retailers, Independent Contractors Australia, the Motor Trades Association—the list goes on and on.
The current provision simply is not working. I want to put on the record that I consider it to be disgraceful that the Labor Party is not supporting a change in this provision. We are seeing once again a case of the Labor Party saying one thing and doing another—we have sent it on the issue of penalty rates. Might I say that I do want to question the Labor Party's motivation. We all know—and we have had a lot of evidence on this before this parliament in recent weeks—about some of the dirty deals that are being done where young workers have had their penalty rates stripped from them altogether because of deals between the likes of the SDA union, the shoppers union, which is one of the most powerful unions in the country, and the likes of McDonalds, KFC, Woolworths and Coles. There is absolutely no doubt that Labor, metaphorically, is firmly in bed with these large companies and I find it a disgrace that the Labor Party is not prepared to stand up for fair competition and not prepared to stand up for our farmers, our consumers and our small businesses.
So, how ironic is it—and everyone in this parliament knows—that the Labor Party have been doing these deals? That is why they are not backing this reform—because they are in bed with the likes of Woolworths and Coles and other large employers. That is why we have introduced our corrupting benefits bill—because we have heard much evidence in this parliament in recent weeks about the inappropriate payments that have been received by unions, which just coincidentally happened to occur at the same time as these EBAs have been negotiated, EBAs that have left young workers in McDonald's receiving something like $26 an hour on a Sunday with no penalty rates whatsoever and other businesses and other workers being paid at least $10 more an hour. That is what the Labor Party is doing out there in the workplace: dirty deals in conjunction with unions like the SDA. And this is the result. So, we need to look behind what the Labor Party is saying tonight in this debate and we need to see their motivation.
I make the same point on multinational tax avoidance—again, a case of the Labor Party saying one thing and doing another. It is another failure by the Labor Party to stand up for those big multinational companies who were ripping off Australian workers. And it is an absolute disgrace that the Labor Party has opposed our measures to combat multinational tax avoidance, again backing their mates. Frankly, I know—and we all know in this parliament—that there is a great deal of embarrassment by Labor members that they did not support that particular bill, which has now resulted in our government collecting $2 billion in tax liabilities from multinationals, which has come from a range of sectors in the energy, resources and e-commerce sectors by the Australian Taxation Office.
So, when we hear about hypocrisy, look no further than this Labor Party—a Labor Party that does not have the guts, does not have the courage, to stand up to the big boys in town and say 'Enough is enough.' And as I say, we did not hear those voices when Coles and Woolworths were systematically ripping off hardworking men and women who had spent a lifetime building up their business. And even after that conduct, even after they had been caught, even after they had been fined, even after they had paid their penalty, I was getting complaints into my office; there were still stories of suppliers being told what they had to do and not do when it came to repaying Coles and Woolworths with their sleazy rebates.
So, I say, on behalf of the Turnbull government, that I am very proud of this reform. This shows that we are determined to stand up for all businesses. This shows that we are determined to stand up for jobs. I commend this bill to the House.