House debates

Monday, 27 March 2017


Competition and Consumer Amendment (Misuse of Market Power) Bill 2016; Consideration in Detail

7:21 pm

Photo of Scott MorrisonScott Morrison (Cook, Liberal Party, Treasurer) Share this | | Hansard source

I present a supplementary explanatory memorandum to the bill and I seek leave to move government amendments (1) to (3) together.

Leave granted.

I move government amendments (1) to (3):

(1) Clause 2, page 2 (table), omit the table, substitute:

(2) Schedule 1, item 1, page 3 (line 25) to page 4 (line 4), omit subsection 46(2).

(3) Schedule 1, item 2, page 6 (lines 8 to 20), omit subsection 46(2).

Photo of Mark CoultonMark Coulton (Parkes, Deputy-Speaker) Share this | | Hansard source

The question is that the amendments be agreed to.

Question agreed to.

7:23 pm

Photo of Bob KatterBob Katter (Kennedy, Independent) Share this | | Hansard source

by leave—I move amendments (1) to (9), as circulated in my name, together:

(1) Schedule 1, page 3 (before line 3), insert:

Part 1—Main amendments

(2) Schedule 1, item 1, page 3 (line 4), omit "Section 46", substitute "After section 46".

(3) Schedule 1, item 1, page 3 (line 5), omit "Repeal the section, substitute", substitute "Insert".

(4) Schedule 1, item 1, page 3 (line 6), omit "46", substitute "46AA".

(5) Schedule 1, item 2, page 5 (line 21), omit "Section 46 of Schedule 1", substitute "After section 46 of Schedule 1".

(6) Schedule 1, item 2, page 5 (line 22), omit "Repeal the section, substitute", substitute "Insert".

(7) Schedule 1, item 2, page 5 (line 23), omit "46", substitute "46AA".

(8) Schedule 1, page 7 (after line 35), at the end of the Schedule, add:

Part 2—Consequential amendments

Competition and Consumer Act 2010

3 Subparagraph 6(2)(b)(i)

  After ", 46", insert ", 46AA".

4 Subsection 51(3)

  After "46", insert ", 46AA".

5 Paragraph 84(1)(b)

  After "46", insert ", 46AA".

6 Subsection 86(1A)

  After "46", insert "or 46AA".

7 Subsection 10.04(1)

  Omit "section 46", substitute "sections 46 and 46AA".

8 Subsection 51(3) of Schedule 1

  After "46", insert ", 46AA".

(9) Schedule 2, item 9, page 10 (line 17), after "46", insert ", 46AA".

In moving these amendments I was just observing that in recent years in this parliament the NDIS was, I think, a wonderful initiative, and I think tonight we are doing something about the oligopoly of the two great supermarket monsters. We are unlike any nation on earth. I refer you to the inquiry done in 1990, I think, in which it was said that Woolworths' and Coles' market share had grown from 50.5 per cent to, in one series, 72 per cent, and in the other series, 68 per cent. So, in the space of nine years they have grown from 50 per cent of the market to an average of 70 per cent of the market.

According to their own annual reports, they have had around 2½ per cent growth in their market share in the years since, which leaves them at close to 100 per cent actually. We remain the only place on earth where we have only two people to sell food to and only two people you can buy food from. There are hundreds of manufactures in Australia who face exactly the same situation—they have only two people to sell to and we the consumers have only two people to buy from, because of their domination of the market. On odd occasions my wife bought some beverages from Dan Murphy's, because she thought it was privately owned, but it turned out it was anything but privately owned.

Turning specifically to the amendments, I must admit that this was a tricky one. It took me a while and I had some great assistance to help me get my head around it. The current act says that 'A corporation that has a substantial degree of power in a market shall not take advantage of that power … for the purpose of … eliminating a competitor'. I will not go on to the other details. So, it applies if they have a substantial degree of the market, which, of course, Woolworths and Coles do, and they take advantage of that power for the purpose of eliminating a competitor.

I have been many times to Rod Sims at the ACCC and said, 'Please, please, please,' and he said, 'No, I can't prove purpose.' On a careful analysis of the act there is a second section in the act that states, 'the purpose of a person may be established for the purposes of'—gobbledegook—'a corporation'—and this is the important part—'may be taken to have taken advantage of its power'. What that means in plain English is that the purpose can be interpreted, assumed, as existing. So the purpose is not necessary or essential. That makes section 46(1), (2) and (3) a very powerful section. But who is going to contest it? Not even the ACCC is going to fight that battle. There is some vagueness, but still I think it is a fair call to say that the word 'purpose' is in fact overcome by the effect of section 46(7). (Time expired)

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The member for Kennedy's time has expired but the member has again sought the call.

Photo of Bob KatterBob Katter (Kennedy, Independent) Share this | | Hansard source

To explain what I am saying here I must use a specific example. In my home town of Mt Isa-Cloncurry—in Mt Isa an IGA opened up. Some will argue that suddenly there was a plethora of specials at Woolworths and Coles in Mt Isa. Whether that was the cause or not, whether that was the purpose of the plethora of specials and advertising, suddenly the IGA was closed down. Under the existing laws if the IGA bloke had had the money to contest it I think he had a very strong case under section 46. Similarly, in Townsville, at Garbutt, a large suburb in Townsville, there was a very big IGA there and it was closed down under fierce competition from Woolworths and Coles. Again, under the old act they had a very valid case. So the old act looked after Garbutt and it looked after Mt Isa—a big city and a small town.

Now, the new act strengthens the case for the IGA in Mount Isa. It says we do not have to prove purpose at all anymore. It is just an effect test. So, we are as right as rain in Mount Isa. We are much stronger—