Mr FITZGIBBON (1:22 PM) —The Trade Practices Amendment Bill (No. 1) 2000 is a wide-ranging one which proposes around 14 amendments to the Trade Practices Act 1974. Those amendments include a whole range of small business and consumer protection initiatives and all of those will be supported today by the opposition. Many of the amendments relate to enforcement and penalty provisions. I will leave those aside. I do not think they need discussion at any great length. I have indicated the Labor Party supports them and we invite those changes, in particular those changes which relate to consumer protection.

Many of the amendments, particularly the enhanced enforcement and penalty provisions, are important protection measures for the Australian consumer and, of course, flow from the Australian Law Reform Commission's report dating back to 1994. They include increasing the maximum penalties under the act to $1.1 million for offences against the consumer protection provisions, providing the court with the ability to impose non-monetary penalties such as community service orders, probation orders and adverse publicity orders for contravention of the act, extending the limitation period of the act to six years and ensuring the courts give preference to compensation over fines and pecuniary penalties. I repeat that the opposition supports those measures.

Items 3 and 4 introduce a very sensible amendment, one which I moved in this place earlier this year during the debate on A New Tax System (Trade Practices Amendment) Bill 2000. Extraordinarily, on that occasion the government voted down my amendment. As is acknowledged in the Bills Digest, I later introduced the provision by way of a private member's bill on June 5 this year. The amendment will ensure that in future the Trade Practices Act unconscionable conduct provisions do not override state and territory laws that are not inconsistent with the Trade Practices Act.

The request for the so-called savings provisions first came from the New South Wales government in 1988 when it introduced new retail leases legislation to provide small business retailers with an easy to access, low cost, dispute resolution process. That very effective legislationI congratulate New South Wales small business minister Sandra Nori on itis yet to be proclaimed in New South Wales because of fears it may be found to offend section 109 of the Constitution. Section 109 of the Constitution provides that when a law of a state is inconsistent with the law of the Commonwealth the latter shall prevail and the former shall, to the extent of the inconsistency, be invalid. This amendment should have been introduced into this House at least a year ago. The delay in doing so has been unacceptable and I know it has been a matter of some concern to the New South Wales government, but I welcome the fact that the government has finally chosen to move on it.

Three of the amendments to the Trade Practices Act contained within this bill flow from the unanimous recommendations of the Joint Select Committee on the Retailing Sector of which, of course, I was a member. For me these are the amendments of most interest in the bills and those to which I will devote most of my comments today. Those amendments, first, insert the term `region' into section 50 of the Trade Practices Act. Section 50 is the merger provision. The second will raise the transaction limit under 51AC of the Trade Practices Act from $1 million to $3 million. Of course, 51AC is the new provision offering protection to small business against the unconscionable conduct of larger players in the market. The third amends the act to allow the ACCC to take representative action and to seek damages on behalf of third parties for breaches of part IV of the act, including, of course, the all important sections 46 and 47. I welcome to the House the member who chaired that committee I mentioned earlier.

These changes are welcome, if a little late. The first expands the definition of what constitutes a market under section 50. It will allow the ACCC to take into account when considering a merger application or any like proposal the impact on competition within a particular region. Currently the act defines a market as a substantial market for goods and services in Australia in a state or territory. The amendment contained within this bill will allow a much broader definition and therefore allow the ACCC to consider the likely impact of an acquisition or a merger in a particular region. The joint select committee had in mind here the notion of creeping acquisitions, particularly in rural and regional Australia where you will find that one particular acquisition of an independent store by a Coles or a Woolworths may not in itself constitute a lessening of competition in a wider market, but certainly over time a number of like acquisitions could certainly impact upon competition in a given rural or regional community or a rural region. I congratulate members of the National Association of Retail Grocers, who were probably most responsible both for the establishment of the inquiry and for giving it the necessary profile to ensure that it was taken seriously and that the recommendations were effective. Labor first committed itself to the inquiry prior to the 1990 election and the coalition reluctantly committed itself to it following our decision to do so.

The second amendment in this bill emanating from that retail inquiry is the lifting of the transaction limit under section 51AC of the Trade Practices Act. The raising of the limit from $1 million to $3 million will ensure that all firms have access to this new protection against unconscionable conduct, which we see evidence of from time to time from the larger players. Labor warned at the time that the $1 million transaction limit was far too low, particularly for those high volume low margin small business people like service station operators, for example. Speaking of service station operators, I have to say that this bill would have provided an excellent opportunity to make some other amendments to the Trade Practices Act, including one which I have been proposing for some time. That is an amendment to make exclusive fuel supply arrangements between the major oil companies and petrol retailers, or indeed any fuel retailers for that matter, contrary to section 47 of the Trade Practices Act.

This is an important amendment. As a public policy issue, fuel prices are at the top of the tree for the general community. I have been saying for some time that this simple amendment to the Trade Practices Act would for the first time introduce real competition at the wholesale level by allowing service station operators to shop around for their fuel rather than be tied to an exclusive arrangement with one oil company. This is a proposal which enjoys the support of the ACCC, the National Farmers Federation, the Motor Trades Association of Australia, a number of state consumer affairs ministers and, more recently, the Western Australian government's petrol pricing issues committee, which is dominated by the conservative Court government. This idea is more important than ever before because of the GST-induced increase in petrol prices that we have seen, which is very clear now.

We are grateful to Access Economics, who yesterday again confirmed that the government is enjoying an enormous windfall as a result of the GST's impact on fuel. Again this puts to rest the idea that the oil companies would enjoy savings in terms of better wholesale taxes and those savings of around 1.5 cents or 1.6 cents could then be passed on to the consumer. As Access has pointed out, those savings are fictional. They are unrealistic and indeed largely based on an appreciation in the Australian dollar. I do not think there are too many punters around at the moment putting their house on the likelihood of a significant rise in the Australian dollar over the next little while. This morning we heard from the Australian Automobile Association, which appeared before the federal parliamentary Labor Party's petrol committee. Its spokesman put the government's current fuel windfall at something in the order of $2.5 billionif you also factor in the windfall from the resource grant tax.

These are important issues at the moment, and I would have thought this bill provided the government with a perfect opportunity. We have a number of trade practices amendments here. We could have simply inserted that additional amendment into this bill, which would, as I have said, have declared any exclusive supply arrangement between the major oil companiesor any company for that matterwith a reseller of fuel restricted under the Trade Practices Act, in particular, section 47.

The third amendment contained within the bill which flows from the retail committee's recommendation is the proposal to extend to the ACCC power to take representative action under Part IV of the Trade Practices Act. This is nothing new, Mr Deputy Speaker, as I suspect you would know. This recommendation also came from the Reid committee, an earlier committee looking at small business issues, in particular tenancy issues, and one which is eminently supportable and makes a lot of sense. The ACCC already has the power to take representative action under Parts IVA and V of the act, and it makes sense to extend that to Part IV. I understand the reasons it is not in Part IV already are largely historical and date from the time when different ministers had different responsibilities for different parts of the act. It is time that inconsistency was addressed.

This is, of course, a simple concept that would give the ACCC the opportunity to recover damages on behalf of an injured partya small business personwho has been subject to some sort of foul play that breaches sections 46 or 47 of the Trade Practices Act, whether it be predatory pricing or any other type of offence under that part of the act. While the ACCC is in court prosecuting the offending party it can gather compensation for the small party that has been injured. That is eminently sensible. At the moment larger players can be fined up to $10 million for these offences but, of course, that $10 million goes back into general revenue for the government. No part of that $10 million can be passed on to the injured party. This is a sensible amendment and both the Reid committee and the Joint Select Committee on the Retailing Sector unanimously recommended it. Both committees were made up of members of parliament from all political parties represented in this place. It is only right that the government picked up the amendment, even if it has been a bit slow in doing so.

These are the three amendments that flow from the committee's recommendations. I express my disappointment that a number of other recommendations were not adopted. In other words, the government has dropped the ball on the unanimous recommendations of the committee. That is very disappointing, in particular the failure to make the retail code that comes from the inquiry a mandatory one obliging all participants in the industry to participate. Of course, making the code voluntary gives the larger players the opportunity to opt in and out of the code. In franchising, the government has been happy to embrace a mandatory code and it should have done so with respect to the retailing code as well.

Mr Brough —It was a voluntary one first.

Mr FITZGIBBON —The parliamentary secretary indicates that the government has said that if in time the code is not successful in addressing many of the industry concerns that flowed from the retailing committeeand there were many of them; there were some very sad cases illustrating the impact unfair practices have had on smaller players in the retailing market as there were, of course, during the earlier Reid committee processthe government would look at enhancing it in such a way as to make it mandatory. I appreciate that interjection. I just do not understand, having embraced a mandatory code in the franchising sector, why the government does not just grab—

Mr Brough —Because it was voluntary at first.

Mr FITZGIBBON —I appreciate that interjection from the parliamentary secretary as well. Yes, it was voluntary at first and what happened?

Mr Brough —It didn't work.

Mr FITZGIBBON —It did not work and the government was forced to move to render the code mandatory in the franchising sector. Why not? Why give people the opportunity to opt in and out when the code does not suit them? More importantly, the mandatory nature of the code is very important when it comes to negotiating those things that will be contained within the code, because if people have the ability to walk away from the negotiation process at any time obviously that gives them significant leverage when debating and negotiating what lies within the code. That is only common sense. I move:

These recommendations on which the government has dropped the ball were not revolutionary. I know that any larger player doing the right thing within the sector need not fear them at all. I had a very good briefing from Coles Myer this morning about what it has done to embrace the spirit of the committee's report and, indeed, its recommendations, including the code. It demonstrated that it has made some significant changes which make me feel more comfortable about transparency and its ability, or lack of it, to play the game unfairly at the expense of smaller players. I do acknowledge that.

The recommendations this government has failed to embrace are not revolutionary and should not have raised any great fear for those larger players operating in the market. The establishment of the uniform national retail tenancy code speaks for itself. We have a hotch-potch of retail legislation across this country. It is particularly difficult for those who operate in more than one state, but some of that retail legislation is very good. I have already referred to the New South Wales government's legislation and its very good low cost, easy to access dispute resolution mechanisms, but others fail dismally and I think it is time for the Commonwealth to show some leadership on this issue. There could be arguments about the constitutionality of the Commonwealth being involved. If that is a problemand I do not concede that it isthere is nothing to stop the Commonwealth bringing the states together in council to embrace a uniform code that would adopt the sorts of principles that have been adopted by the government in New South Wales, a system that I expect will work exceptionally well.

I turn to the second part of my amendment: the call on the government to facilitate open debate about the full impact of the GST on the viability of small firms. The Prime Minister has demonstrated on a number of occasions during question time this week that he is totally and absolutely out of touch with what is happening in the small business sector, despite a growing pool of business peak groups and media commentators warning of the real dangers faced by small firms. The Prime Minister, the Treasurer and even the Minister for Employment, Workplace Relations and Small Business refuse to acknowledge the difficulties small business is facing at the moment. Let me share with you, Mr Deputy Speaker, some of those views. The first came from the latest edition of Business Review Weekly. It says:

That is a pretty hard hitting criticism from quite a reputable magazine. What was the Prime Minister's response to the Business Review Weekly article? He said:

The next comment came from Mr Rob Bastian, the Chief Executive Officer of the Council of Small Business Organisations of Australia. Referring to the business activity statement, he said:

The key words are, `The paperwork burden is just getting worse.' This is in reference to a policy of a Prime Minister who promised the small business community that their paperwork burden would be halved.

Mr Wilkie —Didn't he mean to say there'd be half as many small businesses?

Mr FITZGIBBON —I appreciate the honourable member's interjection when he says that maybe he meant he was out to halve the number of small businesses. Certainly international experience is that there will be fewer small businesses operating in the market over the next 12 months than there were prior to the introduction of the GST. When we put this matter to the Prime Minister in question time, again he went into denial; he did not accept the proposition put. Let me share with the House what Mr Bastian, who has been a fairly consistent supporter of the government, particularly on tax issues in recent years, said to that. He said:

Yet what does the Prime Minister say in response? He said:

They were the remarks that he did not accept the proposition put by the Business Review Weekly or Mr Bastian, or the growing pool of accountants and accounting organisations around this country who now agree that we have had too much reform too fast, if we can call it reform. Some call it the introduction of a flat tax, whether they have the ability to pay or not. I do not, but I use the word very loosely. We have had too much change and many small business operators are struggling.

Do you know what they want from the Prime Minister, Mr Deputy Speaker? All they really want is acknowledgement. They want the Prime Minister to come in here and accept that he has got a few things wrong, he understands their problem and is committed to doing something about it. Acknowledgement: it is a pretty simple thing; but he remains in denial and simply says he does not accept the proposition put by those highly respected media commentators. He is going to have to start beginning to offer some acknowledgement.

We saw the Morgan and Banks survey last week, which was a damning criticism of the government's policy. Something like 92 per cent of small business people say profitability is down as a result of the introduction of the GST. Why? Firstly, they are spending so much time filling out paperwork they do not have time to run their business, to focus on the things that really mattertheir core area of service and sales. Secondly, the government was so desperate to get through the political mire of the GST it went out there with a big stick and said to the small business community, `You get that business activity statement wrong or you exploit prices and you may find yourself up for a $10 million fine.' That is pretty scary stuff for a one-, two- or three-man or woman small business operator. What do they do? When in difficulty, trying to work out how to apply the GST to their prices, they default to safety. They say the best thing they can do here is increase their prices less than they should as a result of the GST to ensure they do not make a mistake and therefore do not face the consequences that flow from a breach of the new provisions of the Trade Practices Act. They are absorbing the GST into their profit margins. This explains partly why the government got one piece of good news on the lower than expected inflationary impact of the GST in the first quarter after 1 July. It is because more than one million small business people are not passing the GST on. They are absorbing it into their profit margins, and they cannot keep doing that forever. There will be a crisis somewhere down the track.

Maybe we will see that become manifest with the deadline for the business activity statement, which is effectively tomorrow, because Monday is too late. Maybe we will see it become more manifest with the return of the second business activity statement, when people are not getting wholesale sales tax credits and have already raided every cookie jar available to fund the cash flow problem created by the first business activity statement. I am not crying that the sky is falling. Indeed, I think the member for Cook would concede that, as shadow minister for small business, I have been very cautious over 12 months not to do that very thing. My view is that, having lost the war on the introduction of the GST, the best thing the opposition can do is identify the real issues and do all we can in opposition to facilitate amendments in this place to make the GST fairer and less complex. I say we will continue to do that. The government can call it roll-back or finetuning, whatever they like, but the fact is that we have now had around 1,550 amendments to the government's new `simple' tax system. We will continue to push for changes which will make life easier for the small business community.

I have done a survey in my own electorate on the GST. Can I say to honourable members that I did my best to do it in a scientific way, not using a push poll method or any method that would deliver the results I was looking for in order to make a political point. The key question in that survey was the first one, which simply asked: (1) if the GST has had a positive impact on your business, (2) if it has had a negative impact, (3) are you unsure, or (4) is it too early to tell, or something like that. Fifty-two per cent of small firms in my electorate said that the GST had had a negative impact on their business. Another large slice said they were still unsure. Those people further on in the survey, when given the opportunity at the end to make a general comment, made very negative remarks about the impact of the GST. So if you extrapolate those across and include those with those who said it had negative effects, the figure was more like 61 per cent.

The government is in denial, absolutely in denial. Either that or it is just displaying complete arrogance with respect to the way small business regards the GST and it must now act. (Time expired)

Mr DEPUTY SPEAKER (Mr Nehl)—Is the amendment seconded?

Mr Wilkie —I second the amendment and reserve my right to speak.