Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

Small business is the backbone of our nation. There are some two million small businesses across Australia, and well in excess of 20,000 across the Corangamite and Geelong regions. As I said in my first speech in this place, more than 80 per cent of these businesses are operated by sole traders or have fewer than five employees. They need to be supported by policies which allow them to thrive, and grow, and employ our next generation of Australians.

The issue is that the market share of the big players—particularly in the supermarket and appliance sectors—are, to a large degree, crushing small business. Nowhere else in the world do two supermarket chains dominate as they do in Australia. Woolworths and Coles have a combined 72.5 per cent of the $82-billion grocery sector. Our root-and-branch review of competition law, chaired by Professor Ian Harper, is one of the important steps we on this side are taking to stand up for the engine room of our economy. Whether it is the abolition of the carbon tax, extending unfair contract protections to small business, or the Harper review, our government has had the courage to ask the hard questions, to fight the status quo and to stand up for small business. Frankly, major reform is required. In December last year, Coles admitted—after denying any wrongdoing—that it had engaged in unconscionable conduct by demanding rebates and other payments from suppliers. In essence, Coles was engaging in a form of corporate blackmail, as I call it: if suppliers did not pay these arbitrary gap payments, the implicit threat was that they would be cut off and essentially destroyed. The ACCC is seeking $10 million in penalties and further payments to repay the suppliers. I fully commend the ACCC and its Chair, Rod Sims, for commencing proceedings against Coles. But for most small businesses litigation is not possible; when subjected to such market abuses they have neither the capacity nor the resources to fight back.

One of the biggest issues killing so many small businesses, particularly in rural and regional Australia, is anticompetitive price discrimination. Time and time again, small and independent operators tell me they simply cannot compete on price. In some cases the big players are retailing goods at a price less than the independent owner can access at wholesale. Small businesses want and deserve a level playing field.

Until 1995, price discrimination was prohibited under section 49 of the Trade Practices Act. This meant that a supplier could not sell to a buyer at higher prices unrelated to economies of scale, which meant that small businesses could not be sent to the wall by duopolies, such as the supermarkets, intent on destroying them. In some sectors now the pricing gap is so large—around 15 to 30 per cent—that it allows the two or three large operators to sell profitably all day at prices below the cost to operate of all other competitors, thereby ensuring the eventual demise of the competitive market place. Over a period of some 20 years we have seen anticompetitive price discrimination gradually send businesses to the wall. That is why every OECD country in the world, other than Australia and New Zealand, has legislation to expressly prevent this abuse.

A healthy, competitive market is good for jobs and good for families. It helps small businesses to thrive and country towns to prosper, and keeps prices down. That is why the decision to repeal the prohibition on anticompetitive price discrimination, made by the Keating government, needs to be re-examined. The Harper review in its draft report has not gone down this path, relying on the more general provision relating to abuse of market power; but for the sake of jobs and small business, in my submission, it needs to.