John Williams (NSW, National Party) Share this | Hansard source

I would like to contribute to this debate on the Competition and Consumer Amendment (Misuse of Market Power) Bill 2017—certainly not for 20 minutes, but just to put a few points on the record.

This recommendation is a result of the Harper review, and it is about maintaining competition. Let me expand on that. If you start a small business and you start to become successful, one of two things is going to happen: big business, the big end of town, are either going to buy you out or they are going to squash you out. Make no mistake about that: if you're a threat to big business they will squash you out.

For years I have asked the question: how do we make section 46 effective? The purpose test simply has not worked. I have had many discussions with a bloke I have a huge amount of respect for, Mr Allan Fels, the former boss of the ACCC. Allan Fels was telling me: 'You need an effects test.' Let me explain this to those in the chamber and those in the gallery.

If I were part of a big multinational company, say we had 300 stores, and we started up a branch in a country town that had a successful small business just poking along, employing seven, eight or 10 people, we could sell at cost—we could sell at a ridiculously low price. Under the purpose test, if I were a small business and I or the ACCC had to take them to court to prove that the purpose for that big business selling at half price was to send me broke, that was a very difficult case to prove. Now, with the effects test, I can simply go to the ACCC and say, 'The effect of this big business charging $10 for some product in all their stores around Australia but charging $5 in the store opposite me in the street is sending me broke.'

This is about maintaining competition. I'm surprised the Labor Party are not supporting this. This is about maintaining competition and seeing competition that means small businesses can survive. I give an example: I know many small businesses—the corner stores. Where do they buy their cans of Coca-Cola? They go to Coles and Woolworths and buy their Coca-Cola there when it's on special. Why? Because they can buy it cheaper at a retail price from Coles or Woolworths than they can by buying directly from Coca-Cola. That is a fact. Why? Because when Woolworths and Coles order their Coca-Cola, they order in umpteen pallets. They bulk purchase, with a big discount. The small business at the corner of the street can't do that.

That is what the direct responsibility of the amendment to section 46 of this legislation is: to see the effect of the business is not to use their power, their strength and their might simply to squash a small business or to move into town—especially in country towns—and squash a small business that has been established there. It could have been a family business that might have been there for generations; it might be the local IGA. But the big business can't go in and say: 'Righto, this town is growing. It's got a good future. We'll sell it at half price or even less,' simply to cripple and shut down their opposition.

That is unfair, and as Senator Bernardi said, it is about fairness. I believe that life is about fairness, and the current section 46 is not treating small business fairly. That's why we need this amendment. As I said, and I will repeat it, it is to maintain competition. If we're going to have a situation where the big end of town, the multinationals, can squash their small businesses in competition, we're going to have three or four companies run this nation in retail.

Master Grocers Australia has welcomed the bill. The National Farmers' Federation says that the effects test will help protect Australia's 135,000 farm businesses from unfair marketplace conduct, which will in turn drive innovation and jobs growth for the Australian economy. The Australian Small Business and Family Enterprise Ombudsman strongly supports a business environment that allows small businesses to participate in markets and to compete on their merits alongside larger businesses. This freedom depends on the existence of a level playing field, where those with substantial market power are effectively prevented from using that power to lessen competition.

The Institute of Public Accountants highlighted the effect that Australia's concentrated market structure has on competition, noting that small or medium-sized businesses are vulnerable to exploitation or exclusion by firms with substantial market power. The current situation is simply David and Goliath; and, as the biblical story says, it is not often that David wins. So this should be supported from all around the chamber. I am very confident that Senator Xenophon and his team will support this. Senator Xenophon and I, and many others in the National Party, especially Senator Canavan, and many in the Liberal Party as well, have been on about this. Craig Kelly is one who says this might not be the whole answer but it may be helpful. But we cannot have this situation for small business. I am referring largely to small business in the smaller regional cities and growing regional towns, not so much the big cities. But certainly it could be the case in a big city that a big business comes in and cuts the price; and it can do that because of its bulk purchasing power, the huge volumes that many of these big businesses purchase when they order their stock.

I think this is a very fair piece of legislation. As I said, it will encourage competition. The more of your opponents you can cripple and shut down the less competition there is. It is good to rely on small businesses for service. Small businesses are renowned for good service and the friendly service they provide, but there's a limit on that when it comes to price. You can provide all the service you want but if you're double the price of your competitor, customers will look for the discounts and the best deal, especially to save a dollar with the cost of energy prices and so on. Here is a situation where we will have some fairness in the market through this effects test, some fairness with the powers given the ACCC under section 46 and some fairness to not only allow existing small businesses to survive but to give incentive to future generations of Australians who want to start a small business. This will say: if you want to mortgage your house on a low-doc loan, if you're going to have a go, we're going to make a level playing field out there; we're going to see that the big end of town doesn't do the Goliath bit and stomp on you.

This legislation is very fair. I question why some opposite are not supporting it. I question why they are anti-small business and supporting big unions and big business all the time. Small business is the biggest employer in our country. They are the hard workers. Many in small business do not have superannuation and do not pay themselves penalty rates. They work on weekends and public holidays to save costs because they simply cannot afford to employ many people on weekends and public holidays. They work hard and deserve to be rewarded for their efforts. This legislation adds weight to that. It is a sad situation when we lose something in Australia. I think hard work should always be rewarded. But under the current legislation, the purpose test in section 46, hard work is not enough. It is very disappointing when people work hard only to find that they get put down the financial tube, their business goes belly up, because of the power, might, purchasing power, tactics and strategies of huge businesses, multinational businesses in many cases, who simply squash their opponents. I commend the bill to the Senate and I hope for support. If Labor and the Greens are not supporting this bill—I hope the Greens are: Senator Whish-Wilson has been very familiar with small business in his life. And I hope the crossbenchers support this bill to give a go in this very competitive world.