Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

This Trade Practices Amendment (Small Business Protection) Bill 2007 amends section 87 of the Trade Practices Act 1974 to allow the Australian Competition and Consumer Commission to take legal action on behalf of persons who have suffered or are likely to suffer loss or damage as a result of unlawful secondary boycotts.

Currently, the ACCC cannot take such action even though it is able to do so in relation to all other forms of anticompetitive conduct under part IV of the Trade Practices Act. There is no good reason for excluding secondary boycott conduct. The government believes that people affected by unlawful secondary boycotts should have access to the same remedies as people suffering loss or damage as a result of all other forms of anticompetitive conduct under part IV of the Trade Practices Act.

The relevant secondary boycott provisions are contained in sections 45D and 45E of the Trade Practices Act.

A secondary boycott involves action by two or more people acting in concert, which prevents a third party, such as a potential customer or supplier, from dealing with or doing business with the target. The innocent third party, who has nothing to do with the dispute, which is the subject of the direct boycott, suffers loss or damage as a result of the boycott.

Sections 45D and 45E of the Trade Practices Act deal with two types of secondary boycotts. Section 45D prohibits two persons from acting in concert to hinder or prevent a third person from supplying or acquiring goods or services from the target of the boycott, where the purpose or likely effect of the conduct is to cause substantial loss or damage to the business of the target.

Section 45E prohibits a person from making an agreement with a trade union for the purpose of preventing or hindering the supply or acquisition of goods or services between that person and the target of the boycott. At present, the ACCC is able to investigate and prosecute unlawful secondary boycotts under sections 45D and 45E, but it cannot bring representative actions—that is, the ACCC cannot seek compensation for damages on behalf of parties affected by a contravention of the provisions.

On previous occasions when parliament has considered extending representative action to these provisions, the debate has centred on whether the provisions themselves should form part of the act or whether they should be reclassified as questions of industrial relations.

On this issue, the government’s position is clear: this is a matter of competition policy because trade is adversely affected in the market affected by an unlawful boycott. Secondary boycotts can have a significant impact on our economy. They disrupt trade, they reduce output and they inhibit competition. It is important that we provide a strong disincentive for those people who would target, intimidate and bully small business by applying a secondary boycott to that business.

As the provisions are part of the Trade Practices Act, it makes sense to allow the ACCC to have consistent enforcement powers across all the provisions in part IV.

In relation to concerns about extending the ACCC’s capacity to take representative actions, it should be emphasised that the government’s changes will not create a new cause of action. Unlawful secondary boycotts are already prohibited by the Trade Practices Act, and the ACCC can currently obtain substantial penalties against parties who contravene sections 45D and 45E. These reforms are about enabling the ACCC to bring a representative action seeking compensation and other remedies.

The ACCC takes into consideration a number of factors in determining whether it will bring a representative action, including the resources available to those affected to bring their own action. Therefore, these reforms will be of particular benefit to Australian small businesses that often do not have either the time or resources to commence legal action.

For over 10 years, the government has committed itself to implementing reforms which provide fairer outcomes for small business. This commitment is in recognition of not only the significant contribution small business makes to our economy, but also of the fact that the nearly two million Australian small businesses often lack the power and resources to take action when they experience unfair treatment. This is particularly so in relation to secondary boycotts, as small businesses operating on tight margins and with limited cash flows find it difficult to bear both the cost of the secondary boycott and the burden of initiating legal proceedings.

As a result of this bill, those who would inflict economic damage on small Australian businesses under sections 45D and 45E of the act will no longer be able to do this with impunity. Instead, they will be held to account for the economic damage that they cause as the ACCC will, for the first time, be able to bring a representative action on behalf of those small businesses.

The government reaffirms its commitment to stand up for small business against thuggery and intimidation. It is vital, both for our economy and our way of life.

These amendments will achieve greater consistency in the administration of the Trade Practices Act and provide Australian small businesses with greater protection from unlawful secondary boycott conduct.

I commend the bill to the House.

Debate (on motion by Mr Albanese) adjourned.