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Thursday, 28 August 1997
Page: 7365

Mr ZAMMIT(1.19 p.m.) —I am very pleased to rise to enter the debate in this Main Committee on the report of the Standing Committee on Industry, Science and Technology, Finding a balance: towards fair trading in Australia . I must say that this is one of the most balanced reports I have ever had the pleasure of being part of. It comes from a committee of 15 people, all of whom are dedicated to trying to find a way to assist small businesses to have a fair go, which I think is one of the major Australian traits.

I have been a member of parliament for some 18 months in the federal sphere, and for about 12 years before that in the state sphere. I have been involved by shopkeepers and tenants—reluctantly, on my part, but with no choice but to represent my constituents. If ever there was a tragedy of strongarm tactics being employed by those who have all the aces in the pack, this is one of the cases that I think should not have been allowed to go on for as long as they have.

The opposition has said that it gave voluntary codes of conduct a go. I appreciate that, but it has not worked. One of the questions we asked of all the people who came before us and who recommended the continuation of a voluntary code of conduct was: `Name one industry where the voluntary code of conduct has operated.' They could not, satisfactorily. No-one could, because it just does not work. There is no doubt that you need to underpin it by legislation, and that is one of the recommendations.

Where a retail tenant or a shopkeeper in a major shopping centre feels that, for whatever reason, they have been treated in an unfair and unconscionable way, there is nothing available to them, to fight back, other than to take legal action. But we all know that they cannot do that without going bankrupt. They just cannot take on the major shopping centres, with the tremendous facilities available to them—unlimited amounts of money, legal advice, and so on—and walk away without being hurt very badly or ending up being bankrupt, which is just as bad.

I recall a particular instance in one of my shopping centres, where I came to know the owner of the shopping centre quite well and I found that person to be a very reasonable person. He is not an Australian national, and he had to leave the running of the company in the hands of a real estate agent who claimed to have management expertise in dealing with difficult situations. I struck up a relationship with this person. I had to bypass the managers of the shopping centre because I was getting nowhere with them. I was fortunate in that he was very willing to listen to me and very willing to come to some agreement. In some instances, that just could not happen.

I well recall getting a phone call from the centre manager in one of my shopping centres. In fact, I mentioned publicly in the inquiry that this person contacted me. She said, `Your request'—for whatever it was; I do not remember the exact matter—`has been denied.' I said, `I'm not very happy about that, because I think what you did was unjust.' She said, `But let me warn you. You could be up for very serious charges. You may or may not have seen the New South Wales act that specifically stops someone from entering as a third party into a dispute between two other parties in a shopping centre arrangement.' I must say that I found that intimidating. I found it insulting, in the implied threat that she was going to arrange to take legal action against me for representing my constituents.

I recall receiving a phone call from the company involved. They apologised for any such threat, but they claimed that the threat was not made. I said, `It's your word against mine, but I would suggest that you have it investigated.' They wrote back to me after about a week and they talked around the subject, but they did not deny that I had been threatened. I then phoned the general manager of the company and said, `I've got my own advice. If you try and stop me ever again from carrying out my duties as an elected member of parliament, then I will take my own appropriate action. That sort of action is not the sort of thing that would be useful to you or to me, or to the parliament, but you leave me no choice.' If these people can act towards me in the way that they have, you can imagine how much more intimidating it must be for the shopkeepers and the tenants.

Let me give you specific examples of some of the things that have occurred. I know of a person who, in a shopping centre, owned a delicatessen-type shop and was selling cheeses and ham and all the sorts of things that are sold in a delicatessen. The shopping centre allowed the extension of a supermarket and allowed it in such a way that, within three metres of the shop, there was a delicatessen-type set-up. I suppose you can say that competition is competition, but I say up to a point.

If there were any goodwill involved from the centre management, they would have said to the supermarket, `You can go ahead and sell all the things that are sold at a delicatessen but not so close to the entrance of this other shop.' But they refused to do that. When I asked them about that they said, `We have no right to intervene in how a supermarket runs its business.'

Then I pointed out to the supermarket that on an hourly basis they would put specials out to undercut that little shop that had been there for 15 years. As soon as the little shop put their specials out, within an hour the supermarket would put their specials out, undercutting them.

I refer to the recommendations that the committee inquiring into fair trading brought down. I must say that it was very unique that we were totally united in our view on how to deal with this issue. The recommendations are to allow all little shops like the one I mentioned to do something about unfair and unconscionable conduct—which no doubt is what it is.

Of course, the thing that holds these shops back is that they cannot go to court. First of all, they have reached a stage in their lives when they are having difficulty paying the rent and having difficulty meeting the competition. The last thing they can do is find another $40,000 or $50,000 to go to court. Even if they went to court and won they would have to fight the shopping centre, which would say, `We think we've been unfairly treated by the court, and we'll appeal.' That means that the small shops would have to find another $40,000 or $50,000, and of course they just do not have that sort of money to fight back. This is a very complex situation that is facing Australians.

I want to refer to a couple of specific recommendations that I believe are extremely important. One is recommendation 2.3, regarding dispute resolution. The committee has recommended low cost mediation. In other words, the committee has said, `Let's not run off to court all the time; let's put in place a mechanism whereby an aggrieved party can go to someone and say, "You're an independent arbitrator; would you arbitrate between us?"'

We request that, whichever side the arbitrator comes down against, the arbitrator do the right thing without anyone having to go to court. We want to stop Australia heading down the path of some other nations of the world where they go to court at the drop of a hat to resolve difficulties that they may encounter. I think that that is one of the most important things that the committee has recommended—to allow low cost dispute resolution.

Also, the committee has said that it is very important that, in the event that the dispute resolution is not satisfactorily resolved, there be some mechanism by which an aggrieved party can go to a court without it costing them an arm and a leg—in other words, it does not do away with their right to defend themselves against something that is seen by them to be unfair and unconscionable conduct. That is not available to them at present. I think that that is one of the most important recommendations that we need to have a look at.

The other thing that I want to raise is the question of uniform retail tenancy acts and a contract that is uniform throughout Australia. With all of these different jurisdictions—six states and two territories—having their different rules and regulations and contracts, it is very important that there be one contract Australia-wide that everyone understands. People want to know how it can be used to resolve difficulties. They want the contract to be clear so that nothing is left out that may be used against a person who, unwittingly, may have signed a contract.

We had solicitors appear before the committee who admitted to us that despite all of their training, the thing that concerned them was not what was in the contract, but what was not in the contract. That was the difficulty. They admitted to us that they were not able to advise their clients satisfactorily because it was not just what you read, it was what was not in it that could cause grave difficulty.

I also want to talk about the lack of relocation clauses that apply to retail tenants. One of the things that concerns a lot of retail tenants is the fear of relocation. A shopping centre manager can go to a shopkeeper who has been there for a very long time and say, `We are going to move you.' They might reply, `Well, if I have to, I have to.' The manager then says, `You don't have a choice; you have to because that is the decision.' Then the shopkeeper asks, `What does it involve?' and the manager says, `We're going to move you around the back, around the corner.' The shopkeeper then says, `But no-one will know where we will be,' and they say, `Well, that's too bad.' The shopkeeper finally asks, `What about the fit-outs?' and the reply is, `That's too bad. You're going to have to pay for the fit-outs as well.'

That can be a tremendous drain on a retail tenant, and in many instances it virtually destroys them. It is not just the relocation of the shop from where they are known to another place where they are not known and which is perhaps difficult to find; they also have to find the money to do up the shop to the satisfaction of the centre management.

I feel that this is a very important step that the committee has taken in outlining all of the difficulties involved in running a small business. I feel that the recommendations that are made here are very sensible and moderate, and they are going to help small and medium sized businesses tremendously. They are also going to help property owners because they will be able to have some stability in the way they run their businesses. There will not be the threat of legal action back and forth on both sides.

I am very pleased to have contributed to this debate.

Debate (on motion by Mr Slipper) adjourned.

Main Committee adjourned at 1.34 p.m.