THURSDAY, 16 FEBRUARY 2016
SUBJECT/S: Introduction of Labor’s Access to Justice legislation into Senate; Government’s wacky effects test.
ANDREW LEIGH, SHADOW MINISTER FOR COMPETITION AND PRODUCTIVITY: Today, in the Senate, Labor's Small Business Spokesperson Katy Gallagher is tabling a bill to provide access to justice for Australian small businesses.
One of the things that often deters small businesses from taking on the big end of town for their anti-competitive conduct is the prospect of being hit by a big costs order. They know they'll have to pay their own lawyers' costs but they are scared that if they lose, they might have to pay for the armies of QCs that the big end of town puts together to take them on.
So what Labor has said is that we ought to have provisions for when a small business is bringing a case – that doesn't just benefit them but benefits the entire economy – that small business know at the start of the lawsuit they won't be facing the prospects of paying the other side's costs.
Labor's access to justice proposal is one which will see the Small Business Ombudsman tasked with providing no-cost legal advice to firms which are looking at taking on a case but are seeking a 'no adverse costs' order. It's an idea that was put to the Government in its competition review. It's an idea which has been put to Labor by a range of small business groups, who want to see a fairer deal.
The Australian economy isn't competitive enough. More than half of our industries are concentrated, by the standard measure of the biggest four firms having more than a third of market share. It's not just in baking and supermarkets, but it's also in telecommunications, in petrol retailing, and in a host of other sectors were we see too little competition. The access to justice proposal is just one of a suite of Labor reforms to ensure consumers get a better deal.
We've proposed ramping up the penalties for anti-competitive and anti-consumer conduct, because Australia's current penalties are too low. They are well below what you see in other comparable countries. We've proposed also giving the competition watchdog – the Australian Competition and Consumer Commission – a market studies power, which means it can use investigative powers to go in and look at an industry, scrutinise it and make sure there is enough competition in that industry.
I've written recently about the challenges of tacit collusion in petrol. Petrol retailers using big data to drive up profit margins, rather than helping consumers. We see the challenges right across industries. Whether it's flushable wipes, which as you know – aren't, or whether it's the challenges that we face in our banking sector, which has become less competitive over recent years.
Labor is the party of competition. We have a proud record of competition going back to the Whitlam Government – the introduction of the Trade Practices Act – right through to Chris Bowen's actions in criminalising cartels.
But the Government just wants to play posture politics. Their proposed effects test is a whacky idea that was rejected by Malcolm Turnbull, Mathias Cormann, and other relatively sensible members of cabinet when it came before the Abbott Government's cabinet in 2015. Yet, as part of a deal to win support from Barnaby Joyce and the loony-right of the party, Malcolm Turnbull now wants to inflict an effects test on the Australian people.
Let's be clear, an effects test won't help consumers. It could imperil uniform pricing – which currently in many cases sees retailers charge the same price for dry goods in Toorak and Toowoomba. They say don't think they'll be able to keep doing that under an effects test. It could create uncertainty, stopping a retailer opening a local Bunnings or a Kmart in a regional area. Even one of the supporters of an effects test – the Council of Small Business – says that, as currently drafted, it could create a lawyer's picnic. So an effects test is bad public policy, which is why 10 of the last 12 competition reviews have recommended against it. By contrast, Labor's plan – the important Access to Justice bill being introduced today in the Senate by Katy Gallagher, and our suite of pro-consumer measures such as higher penalties and a market studies power for the ACCC – will make a tangible difference to help consumers.
JOURNALIST: How much would you like to see the penalties increased by for anti-competitive businesses?
LEIGH: In the case of anti-competitive businesses we believe that the European approach of looking at a multiple of the ill-gotten gains is the right way to go. It shouldn't be the case that companies see the fines as just a cost of doing business. They ought to be deterred by the prospect that if they do the wrong thing, the penalties will be significantly larger than what they'd otherwise face. And in the area of consumer penalties, we think the $1.1 million penalties are just a slap on the wrist. Look what happened to Nurofen when they were making misleading statements. They managed to make millions of dollars on their painkillers and yet faced only a maximum $1.1 million fine. That's not good enough. That's why we believe that fine should be raised to a maximum of $10 million to make sure that consumers aren't ripped off.
No other questions? Thanks everyone.
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