Senate debates

Monday, 14 August 2017

Bills

Competition and Consumer Amendment (Misuse of Market Power) Bill 2017; In Committee

6:17 pm

Photo of Sue LinesSue Lines (WA, Deputy-President) Share this | | Hansard source

The question is that the bill stand as printed.

Photo of Nick XenophonNick Xenophon (SA, Nick Xenophon Team) Share this | | Hansard source

Chair, I have some amendments, and I will get your guidance as to how they are to be dealt with. I think I'm the first on the circulated amendments sheet. I'm happy to deal with those as you wish. I won't be proceeding with some amendments, so I will be guided by you as to whether it's appropriate that I firstly withdraw a particular amendment that's on the running sheet. In respect of amendment (1)—and I'm not sure if there's an amended sheet to that effect, but I will be guided by you as to whether it's appropriate that the amendments are dealt with at this point in time, given the running sheet in respect of the bill.

The CHAIR: Senator Xenophon, are you indicating that you don't want to move (1) because (2) is linked to it?

Yes, that's right. So, in terms of sheet 8139, I seek leave for what is referred to in item 1A to be withdrawn, but I seek leave still to proceed with item 1B, which is the amendment after section 80C.

Leave granted.

The CHAIR: Senator Xenophon has removed item 1A. Senator Xenophon, are you now seeking to move item 1B and amendment (2) together, on sheet 8139?

No, because—and I apologise, Chair—

The CHAIR: That's OK.

I can explain this: in relation to subsection 2, that relates to 51(3) after the amendments to do with item 1A. I only want to move the amendment on the original sheet that is headed '1B After section 80AC,' which starts off with 'Insert: 80AD Divestiture where contravention of section 46' down to subclause 6. The amendment (2) on the original sheet relates directly to the amendment that I do not wish to proceed with. So, it only deals with the issue—sorry, Chair, I understand there is a fresh amendment and I apologise—

The CHAIR: Okay, Senator Xenophon: you're amending section 1 and seeking to move that?

It's on sheet 8139, revised and hot off the presses. While that is being circulated, can I just indicate that the reason I'm not proceeding with that earlier amendment is that it was drafted at a time when there was a damage-to-competitors clause considered by the Harper review. It's no longer necessary, particularly with the rewording of the legislation—

The CHAIR: Senator Xenophon, with regard to your voice, you've sought leave on that and leave was granted so I think it's understood. So it's probably best if you save your voice for the things you really want to move!

Thank you. I thank Senator Whish-Wilson for the Strepsil. I'm not sure which Strepsil it is, but I won't consume it until I've sat down. I move:

Amendment No. (1) on sheet 8139 revised.

It relates to divestiture, and that includes a whole range of provisions in terms of adverse cost orders, assistance where there may be—sorry, let's just stick with divesture. I will deal with adverse costs shortly because—

The CHAIR: What you are seeking to do is to move No. (1) on sheet 8139 as revised?

That's right. It relates, as I indicated in my second reading contribution, to the issue of divestiture powers.

6:22 pm

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

The government will not be supporting this amendment. The Harper review, like the Dawson and Harmer reviews before it, considered and recommended against establishing divestiture as a remedy to address misuse of market power concerns. At these reviews, each concluded that the existing range of available remedies is sufficient to deter misusers of market power and to compensate parties harmed by such conduct. Divestiture is not appropriate for breaches or misuse of market power as it would not target the conduct of concern.

But divestiture is currently available as a remedy for mergers and acquisitions which breach the Competition and Consumer Act. This is appropriate because the remedy directly targets and unwinds the transaction which breached the act. This would not be the case for section 46, where divestiture would at best be a blunt weapon which would not directly address the conduct of concern. The courts would then need to engage in the difficult task of restructuring what may be a highly-integrated firm to achieve this reduction in size. Moreover, there would be a high risk of unintended consequences—for example, a business or parts of it becoming uncompetitive or even unviable, which would be detrimental to consumer welfare.

As I've indicated in various reviews in this space—most recently the Harper Review but before it the Dawson and Harmer reviews—all looked at this and all recommended against it.

6:23 pm

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party) Share this | | Hansard source

Labor won't be supporting this part of the Nick Xenophon Team's amendment. We note that the divestiture provisions are an extension of comments Senator Xenophon has made in the past.

The potential for repeat offenders of anticompetitive conduct is certainly a concern Labor shares. Labor has a proposed reformulation of how base penalties under the Competition and Consumer Act are calculated. We took that to the last election and we have recommitted ourselves to it.

Labor has proposed that Australia adopt a European Union-type penalty system for anticompetitive conduct, which is based on 30 per cent of the annual sales of the relevant product or service multiplied by the number of years the infringement took place, capped at 10 per cent of annual turnover. This would have both a punitive effect on culprits and a disincentive effect on potential culprits. We also note that this is a considerable departure from the status of the Competition and Consumer Act and that the amendment itself would warrant further scrutiny. A divestiture power that judges may apply would be a change to Australian competition laws on a large scale. As such, the measure itself would need to be considered on its own merits rather than in tandem with the proposed effects test. Normally a measure of this scale would be better suited to an in-depth inquiry conducted by a body such as the Productivity Commission. Further to that, drafting would require extensive consultation with extensive stakeholder collaboration. We won't be supporting this section of Senator Xenophon's amendment tonight.

6:25 pm

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

I would like to start by noting Senator Xenophon's been nothing if not consistent on this over a long period of time. The Australian Greens would certainly like to continue the conversation on this with Senator Xenophon. The proposal in the amendment, which allows courts to make divestiture orders and enables courts to break up serious or repeat big business offenders, is an appealing one. I know the Harper Review didn't recommend it and instead suggested the power reside with parliament, but I would like to note that this is a very significant change in what's being proposed here tonight, and that warrants careful and stand-alone consideration, not just being a rider to this bill. This chance to change competition law, which we've got in front of us—on section 46—is critically important. Senator Xenophon, I've done a little bit of reading on the trust-busting legislation in the US. It's not used as often as people perhaps think it is, but nevertheless it's certainly something that interests me, and I would say to you tonight we will keep an open mind on it if it can be brought to this place with separate legislation.

As it is before us tonight, I'm not going to mince my words. If supporting this risks the other legislation going down—and the government said clearly tonight that they won't support it—then we won't be in a position to support this tonight. We would recommend that you bring this back to the Senate in the form of a private member's bill, and we'll give it due consideration.

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

Well, do it again.

6:27 pm

Photo of Nick XenophonNick Xenophon (SA, Nick Xenophon Team) Share this | | Hansard source

Can I just thank my colleagues from the government, the opposition and the Australian Greens for at least stating their position on this. I won't be seeking to divide on this. I understand where the numbers lie on this. But I will just make this point to Senator Cormann, respectfully. The fact that we have a merger and acquisitions power that allows for divestiture within the mergers and acquisitions context indicates that the power does exist and the concept of divestiture is not a novel one in the context of competition law in this country. It's a point that can be made to the opposition and to the Australian Greens. I believe the time will come when divestiture will be seen as an appropriate last-resort remedy where divestiture doesn't mean the whole company is broken up. It could be that, in one state or one marketplace where a company has behaved particularly egregiously and abused its market power, the court should have the right to say, 'You will be broken up in that particular market.' That to me is in some respects more targeted and more nuanced, in a sense, than having an approach where it's just an across-the-board 30 per cent fine or a 10 per cent fine on their turnover—which I'm not opposing from what the opposition is proposing. I think this should be in the toolkit of the courts.

In Europe, they do have divestiture powers. The reason you don't hear about them is that they're not used very often. It is a last-resort power and, as Senator Whish-Wilson said, they're not used much in the US, because it does change the culture of corporations. If a corporation realises and understands that it can be broken up in whole or in part by abusing its market power, that makes a difference to the culture of that corporation and their conduct in the way they deal with smaller companies down the supply chain. That to me would have a very beneficial and powerful role in changing corporate culture in this country in terms of the abuse of market power.

I am grateful to my colleagues for having the courtesy to indicate why they don't support this. My prediction is that eventually in this place we will have a divestiture power and it will be a good thing for competition law, for the conduct of businesses in this country and for competition and the chance it will give for small businesses and medium businesses to have a level playing field against the big guys.

Question negatived.

Proceedings suspended from 18:30 to 19:30

I have another amendment to move—I think now is the appropriate time—and, insofar as I need to, I seek leave to move that amendment.

7:30 pm

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

You do not need leave. Continue, please.

Photo of Nick XenophonNick Xenophon (SA, Nick Xenophon Team) Share this | | Hansard source

I was just being very cautious in this place. We have to be very cautious about all the things we do, like citizenship and all those sorts of things. I move amendment (2) on sheet 8139 revised in relation to cost orders:

(2) Page 13 (after line 8), at the end of the Bill, add:

Schedule 3—Adverse costs orders

Australian Small Business and Family Enterprise Ombudsman Act 2015

1 At the end of section 7

Add:

; and (h) conduct within the meaning of subsection 4(2) of the Competition and Consumer Act 2010.

2 At the end of section 15

Add:

; (c) to give assistance under Division 3A of Part 4 in advising on and preparing a person's case for a no adverse costs order under subsection 82(4) of the Competition and Consumer Act 2010.

3 After subparagraph 23(h) (ii)

Insert:

  (iia) assistance being given under section 74B (assistance in relation to a no adverse costs order in proceedings to recover the amount of any loss or damage as a result of contraventions of the Competition and Consumer Act 2010);

4 At the end of section 65

Add:

; (g) conduct, within the meaning of the Competition and Consumer Act 2010, that:

  (i) may be in contravention of a provision of Part IV of that Act; and

  (ii) affects, or may affect, a small business or family enterprise.

5 After Division 3 of Part 4

Insert:

Division 3A—Assistance where there may be a contravention of the Competition and Consumer Act 2010

74A Application of this Division

This Division applies if the relevant action in relation to which a person requests the Ombudsman to give assistance is conduct, within the meaning of the Competition and Consumer Act 2010, that:

(a) may be in contravention of a provision of Part IV of that Act; and

(b) affects, or may affect, a small business or family enterprise.

74B Ombudsman may give assistance in relation to costs order

(1) The Ombudsman may assist the person by doing either or both of the following:

(a) advising the person on the arguments that might be made, and the evidence that might be adduced, to satisfy a court that an order under subsection 82(4) of the Competition and Consumer Act 2010 should be made (a no adverse costs order in proceedings to recover the amount of any loss or damage as a result of contraventions of that Act);

(b) preparing arguments that might be made in satisfying a court that an order under that subsection should be made.

(2) Nothing in this section limits the functions, duties and powers of the Ombudsman under this Part in relation to the relevant action.

6 At the end of Division 2 of Part 5

Add:

91A Disclosure for the purposes of a no adverse costs order under the Competition and Consumer Act 2010

(1) This section applies if the relevant action in relation to which a person (the applicant) requests the Ombudsman to give assistance is conduct, within the meaning of the Competition and Consumer Act 2010, that:

(a) may be in contravention of a provision of Part IV of that Act; and

(b) affects, or may affect, a small business or family enterprise.

(2) A person assisting a small business or family enterprise may disclose to the applicant any document or information obtained by the person assisting the small business or family enterprise in the course of performing functions or duties, or exercising powers, in relation to assistance given to the applicant under section 74B.

Note: Section 74B allows the Ombudsman to give assistance in relation to a no adverse costs order in proceedings to recover the amount of any loss or damage as a result of contraventions of the Competition and Consumer Act 2010. This assistance may include advising the applicant on the arguments that might be made, and the evidence that might be adduced, in pursuing a no adverse costs order, and preparing arguments.

Competition and Consumer Act 2010

7 At the end of section 82

Add:

No adverse costs orders

(3) A person who brings an action under subsection (1) in relation to a contravention of a provision of Part IV may at any time during proceedings on the matter seek an order under subsection (4) from the court hearing, or that will hear, the matter.

(4) The court may order that:

(a) a respondent in the proceedings is liable for any of its costs in relation to the proceedings; or

(b) two or more respondents in the proceedings are jointly and severally liable for any of their costs in relation to the proceedings.

(5) The court may only make an order under subsection (4) if the court is satisfied that:

(a) the action has a reasonable prospect of success; and

(b) the action raises an issue that is not only significant for the applicant, but may also be significant for other persons or groups of persons; and

(c) the disparity between the financial position of the applicant and the financial position of the respondent or respondents is such that the respondent or respondents could use the possibility of a costs order that does not favour the applicant as a means to deter the applicant from pursuing the action.

(6) A person who appeals a decision of the court under section (4) is liable for any costs in relation to the appeal.

8 Application

The amendment of the Competition and Consumer Act 2010 made by this Schedule applies in relation to actions under subsection 82(1) of that Act brought on or after 1 July 2017.

This relates to adverse costs orders. As I indicated in my second reading contribution, no matter how good a piece of legislation is—and I think it is fair to say that this has good elements, but I believe it should have gone further. Notwithstanding that, we need an ability to have real access to justice for competition law in this country. As I indicated previously, there are many businesses who get advice from their lawyer saying there has been an abuse of market power—predatory pricing or whatever the breach may be—but the lawyer then advises their client, 'By the way, if you want to take this to court, you'll be spending a couple of million dollars and you might be up for an adverse cost order in the millions of dollars.' An adverse cost order could be $5 million, $10 million or $15 million, depending on the complexity of the case, because these can be complex matters.

What I have done here is to move amendments that—and I make no apology for this—are effectively lifted from the amendments that Senator Gallagher moved in her bill, a very good piece of legislation. I think Senator Gallagher was concerned I would be damning her with fake praise. I am praising with her real praise. There is a big difference between the two. My colleagues and I supported her bill, which I was very pleased to see pass the Senate last week as a private senator's bill, and I hope it will pass the lower house as well.

That bill sets a framework for the first time in this country to allow for real access to justice where there can be a whole range of measures: ensuring there are no adverse cost orders; having the office of the Australian Small Business and Family Enterprise Ombudsman act as part of the framework of this; enabling applications to be made for assistance and enabling the ombudsman to give assistance in relation to cost orders. It would provide a framework, as set out effectively in Senator Gallagher's bill, as incorporated in this amendment, to ensure that, once and for all, we can proceed to test the competition laws in this country in a way that would make sure they have real teeth. That is why I think Senator Gallagher's bill is such a good bill and why it needs to be incorporated in this particular amendment, to give real teeth to these competition laws.

Mr Temporary Chair—I know this is a bit unfair on you because I know you can't interject from the chair, but your interjection would be one of hearty support, I'm sure—you and the Nationals have had a very important role in driving competition law reform in this country and you should be congratulated for it. All I am seeking to do here is to ensure that this piece of legislation works as intended. It won't work as intended unless we have real access to justice. This is what these amendments are about.

7:34 pm

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

The government will not be supporting the amendment. The Senate might recall that similar amendments, if not the same amendment, was actually passed as part of a different bill so they arguably double-up what was dealt with before. We believe this is poorly thought out policy with significant implementation issues, which will not have any real practical benefits for small business. Enabling courts to grant cost waiver orders to small business at the outset of a case would raise significant practical issues. It is unclear how a court could be expected to assess the merits of a case at the start of a matter—that is, before evidence has been tested by the parties. This creates a significant risk of cost waiver orders being granted inappropriately.

The party in receipt of the no adverse costs order is incentivised to take up belligerent litigation tactics which are unhelpful for the court. This policy would also have workload implications for the Federal Court. The workload of the Federal Court would increase, as judges would be called up to make cost waiver assessments. The proposal to allow the Small Business Ombudsman to provide a professional opinion on the likelihood of a party successfully obtaining a no adverse costs order would appear to require the office to provide a form of legal advice which is not appropriate for a public statutory office of this nature.

It is not clear how a party who took up litigation on the basis of such an assessment and subsequently did not obtain an order in their favour could then withdraw from the litigation without a cost penalty. We will not be supporting these amendments.

7:36 pm

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party) Share this | | Hansard source

Thank you very much for the call. I also acknowledge Senator Xenophon's support for Labor's small business access to justice policy and    I thank him for his support last week. We appreciate the fact that these amendments of Senator Xenophon's have been split which allowed us to support this section of his amendments whilst noting that we strongly oppose this legislation as it stands. We voted that way at the second reading stage.

We are opposed to the effects test; however, we do support the lift of Labor policy into Senator Xenophon's amendment. I agree with him that, in terms of drafting that bill and formulating our policy prior to the last election, it was really about providing real access to justice for small and medium businesses. Anyone who spends any time with small business will hear stories of reluctance to pursue anticompetitive conduct based on the uncertainty of the costs associated with pursuing that and the acknowledgement that large corporations—big business—have very deep pockets. In terms of protecting their markets, they are prepared to dig deep into those pockets to ensure that small business doesn't pursue practical access to justice. That is exactly what these amendments sought to address in last week's bill and we certainly support the amendment here tonight.

In terms of some of the comments Senator Cormann just made in criticising this, there is a public interest threshold that would be assessed against the no adverse costs order amendments as part of our legislation. It's not predetermining every case. It is looking at cases where the court has decided that there is a public interest question at stake. But, having said that, we will be voting against this bill for the reasons I have already outlined at the second reading stage. However, we are happy to support Senator Xenophon's amendment.

7:38 pm

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

I won't speak for very long on this, because I think it's already been stated by the Labor Party—and the government to some extent—that this is a duplication, essentially, of what we considered in a private member's bill in this place only a few days ago. I understand there may be some slight differences, but this is something that Senator Xenophon has been talking about for some time. I am not sure if Labor got their idea from this but, nevertheless, I am sure you will be happy with the fact that we all agreed on a private member's bill in here that essentially does what you have been campaigning on for some time. We already voted for it. We commended the Labor Party for bringing it forward. I thank Senator Xenophon for his amendment, but we don't feel there is a need to support this tonight given we have just supported the private member's bill.

7:39 pm

Photo of Nick XenophonNick Xenophon (SA, Nick Xenophon Team) Share this | | Hansard source

Now is the time to support this amendment. This is something that Senator Gallagher and others in the Labor Party have done a lot of good work on—

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party) Share this | | Hansard source

You could actually amend the bill.

Photo of Nick XenophonNick Xenophon (SA, Nick Xenophon Team) Share this | | Hansard source

Here's an opportunity to amend the bill now. Here's an opportunity to progress this issue now. It is an opportunity that will make a difference to access to justice.

With respect to Senator Cormann, in terms of his comments, this is not about belligerent litigation tactics. I have a tiny law firm that knows a bit about litigation, and the biggest single impediment for small businesses to take on a big corporation is the adverse cost orders. The biggest single impediment for a small business to defend itself in a case, even where it could be meritorious in terms of their defence, is the cost orders that will crush them. Often, if there is some small element of risk, they will try and resolve the case, because the consequence of losing the case could be that their business would be destroyed or go into liquidation or that they would be personally bankrupted. The belligerent litigation tactics come from those with very deep pockets.

I have been talking about issues of access to justice for a number of years. Senator Gallagher has done terrific work on this, and none of that should be taken away from her or her colleagues who put up this bill that I am very pleased to support.

On the issue of a cost waiver, there has to be a public interest requirement. The cost waiver is one that will be used only in public interest cases. This won't open the courts to a flood of litigation, but it will open the courts to real access to justice for those who need it most. That's why I support this amendment.

7:41 pm

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

I want to get it on record, in case I wasn't clear, that we support the intention of this, as we did with the private member's bill, but the difference between us and the Labor Party is that this is not the main game. The main game is amending section 46, a law that we know is unworkable in this country and that we have been campaigning to amend now for some years. That's what we have before us here in the chamber today.

The government has made it clear they won't support this. Labor wants the Greens and others to support this, because they want the bill to be torpedoed. They want this to go down. But we have campaigned long and hard to get section 46 amended. That's the main game here today. We are happy to work with Senator Xenophon or Labor on their private member's bill, and we hope the government gives that consideration when it goes to the other place, but we are here tonight to get a very important reform in place in this parliament, and that is amending section 46 of the Competition Act.

Photo of Gavin MarshallGavin Marshall (Victoria, Australian Labor Party) Share this | | Hansard source

The question is that the amendment as moved by Senator Xenophon, No. 2 on sheet 8139 revised, be agreed to.

7:50 pm

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

I move Australian Greens amendment to the Competition and Consumer Amendment (Misuse of Market Power) Bill 2017 on sheet 8190:

(1) Schedule 2, page 8 (line 1) to page 13 (line 8), omit the Schedule, substitute:

Schedule 2—Telecommunications industry

Competition and Consumer Act 2010

1 Paragraph 151AJ(3)(a)

  Omit "45B, 46,".

2 Subsections 151AJ(4) and (5)

  Omit "45B, 46,".

3 Paragraph 151AJ(5)(a)

  Repeal the paragraph, substitute:

  (a) the assumption that subparagraphs 45(3)(a)(ii) and (b)(ii) had not been enacted;

4 Paragraphs 151AJ(5)(c) and (d)

  Repeal the paragraphs.

5 Subsection 151AJ(7)

  Omit "45B, 46,".

6 Paragraph 151AJ(7)(d)

  Repeal the paragraph.

7 Subsections 151BC(4) and (5)

  Repeal the subsections.

There is one amendment to this bill. It relates to schedule 2, on the telecommunications industry.

Just a little bit of background: the Competition and Consumer Act currently includes an effects test for the telecommunications industry, as well as giving the ACCC greater powers of intervention and the ability to issue competition notices against misuse of market power in the telecommunications industry. The bill before us tonight proposes to remove both these existing provisions on the grounds of duplication. Our amendment retains these powers.

Let me explain a little more about the existing provisions that are currently in place and why we wish to retain these. Division 2 of part XIB sets out the telecommunications-specific competition rule which prohibits a carrier or carriage service provider—called a CSP—from engaging in anticompetitive conduct. Essentially, this is an effects test applying only to the telecommunications market. Let's make this point very clear: we have, for all intents and purposes, an effects test in the telecommunications market right now. And let me make this point clear: stakeholders in the telecommunications industry have been knocking on our door, as I am sure they have on other senators' and MPs' doors, asking us to maintain the effects test as it stands—and I will call it an effects test—because it works for them and they have confidence in it.

My third point, to make it very clear, is that, if you support the Greens amendment tonight to retain this because you recognise that the telecommunications industry likes what's in there now and thinks it works, on principle you support an effects test—a broader effects test for other industries. Let's make that very clear.

What we have at the moment is an effects test applying only to the telecommunications market. Division 3 of part XIB grants the ACCC power to issue competition notices in respect of a contravention to the competition rule. That's called division 2. There are two types of competition notices, part A and B notices, that differ with regard to the particulars of the contravening conduct that the ACCC must include. The issuing of a competition notice requires a carrier or CSP to cease engaging in the identified anticompetitive conduct subject to high potential fines. Division 3 also allows for a person to apply to the ACCC for an order exempting specified conduct for the scope of the anticompetitive conduct provisions in division 2. Overall, by providing for the issuing of competition notices, division 3 enables the ACCC to respond quickly to anticompetitive conduct in the sector.

It is interesting to note also tonight, that Telstra is the only body that is calling for the removal of the ACCC's current intervention powers. We believe they should be retained because not only is the industry firmly of the view that they have worked and they are very confident in them but they give the ACCC the capacity to intervene early in the piece should they see potential misuse of market power. Further, given the rapidly-developing and asymmetrical nature of the telecommunications industry, the retention of the existing provisions is prudent.

I will finish by saying that I hope the Senate can support this amendment. I understand the government will be supporting our amendment tonight, and I thank them for this. I understand that Senator Xenophon will be supporting the amendment. I'm not sure about the other crossbenchers and I'm not sure of Labor's position. I'm guessing they won't be supporting this because this is an effects test—an effects test that seems to work and has the industry engaged and out there lobbying for it to be retained. I thank the government for their flexibility on this. We were working very closely with the telecommunications industry. This was a sticking point for them and for some senators in the Greens, and we thank them for keeping this in place. It's a very powerful symbol that an industry, like the telecommunications industry, believes that an effects test is effective, hence the logic for us transferring this more generally to section 46 for other industries' potential misuse of market power. It's what the ACCC have been asking for.

7:55 pm

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

The government will indeed be supporting this Greens amendment. This amendment will replace schedule 2 in the bill with a new schedule. The new schedule will retain the telecommunications-specific anticompetitive conduct provisions in part XIB but stop the new broader section 46 flowing through to that part. As introduced, the bill sought to repeal the anticompetitive conduct provisions in part XIB in light of the introduction of the broader and stronger general misuse of market power law in section 46. With the strengthening of section 46, it would not have been necessary to apply part XIB because section 46 effectively supersedes the competition law rule in XIB. It would also be inappropriate for section 46 to flow through unimpeded to part XIB because of the unique and heavy-handed enforcement mechanisms in part XIB.

Competition notices, which can result in significantly higher pecuniary penalties and the reversal of the onus of proof, are designed for a completely different legal trigger. Our view is that a strengthened section 46 will be able to address any misuse of power in the telecommunication industry. In addition, the Australian Competition and Consumer Commission continues to retain other targeted powers to deal with competition concerns in telecommunications. However, it has also become clear that the repeal of the part XIB rules is not supported by all senators. Given this, the government will support the alternative approach developed by the Greens. This retains the part XIB provisions but stops the new section 46 flowing through to part XIB. This approach will leave part XIB largely in place as it stands, with its own additional enforcement provisions but linked to the existing lower effects test. However, the new section 46 will not be enforceable using the disproportionate enforcement mechanism in part XIB. The amendment does not change the new section 46, which will apply to all sectors of the economy.

7:57 pm

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party) Share this | | Hansard source

Labor will be supporting the Greens amendment despite the very ungenerous speech by Senator Whish-Wilson. Coming from a party that just reversed its position on the amendment that Senator Xenophon moved around access to justice compared to their position last week, it was very ungenerous to then stand up and start attacking Labor when we are prepared to support your amendment, Senator Whish-Wilson—despite our overall concerns about the bill as a whole, and which we remain opposed to.

To just pick up on your argument, I would pose this question. If the amendment that you are moving is accommodated in the bill that the government has introduced, and extrapolating your argument that by supporting your amendment we obviously support the effects test, then my question would be: why are you moving this amendment? If this is dealt with under the government's bill, then why the need for the specific amendment that you are moving, Senator Whish-Wilson? It is entirely reasonable for Labor to support this amendment, as you yourself have recognised. You drafted this amendment and you have done a deal with the government, which forced you to oppose the access to justice provisions that you supported last week. Be up-front about it; don't then come swinging at us when we have legitimate reasons to be supporting this amendment as it deals with safeguards in the telecommunications sector, a very specific issue, rather than the much broader application of the section 46 amendment. We are happy to support it. Our position is consistent. By doing so, by supporting it, it does not mean that we will be supporting the broader application of section 46, which we remain opposed to.

7:59 pm

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

I can't let that go unchallenged.

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party) Share this | | Hansard source

You can actually.

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

It's interesting—

Senator Gallagher interjecting

You're screaming blue murder because we didn't support Senator Xenophon's amendment. If you think that's really important, why did you bring your private member's bill in here in the first place? You were trying to put up a smokescreen so you didn't have to vote for section 46. We all know why you didn't vote for section 46, a very comprehensive reform that we have been campaigning on for years. Why bring the private member's bill and waste the Senate's time and money if you thought we were going to get this amendment here tonight? I didn't hear from Senator Xenophon before tonight about his amendment on costs. If I had, we may have had a different considered position. All I know is that we voted on Labor's private member's bill a couple of days ago but that no-one came to see the Greens to support this amendment. Don't accuse us of being hypocrites.

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

The question is that Australian Greens amendment (1) on sheet 8190 be agreed to.

Question agreed to.

The CHAIR: The question is that the bill, as amended, be agreed to.