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Tuesday, 2 February 2016
Page: 125

Ms MacTIERNAN (Perth) (20:09): It is with considerable enthusiasm that I support the Competition and Consumer Amendment (Payment Surcharges) Bill 2015. I think it is very important that, as we move increasingly towards an economy based on the use of credit cards, we ensure that we have some basic consumer protections in place. It is very important that we ensure that consumers, in purchasing an item using a credit card, do not find themselves with an unexpectedly large surcharge.

I do note the comments of the member for Hughes. I have some sympathy with his sentiment. Many of my constituents, as the discussion about this matter has unfolded and as the discussion about the behaviours of banks unfolded through the recent Senate inquiry, have argued that banks should be more heavily regulated and that their interest charges should be regulated. The member for Hughes has expressed his faith in the markets, saying that we do need to have competition and that merchants and banks should be free to set the charges as they wish. In a perfect world, where you are studying economics 101, that might be an appealing idea, but we are all very aware of market failure and of the problem of the increasing concentration of power.

Mr Craig Kelly: Have you been to Venezuela?

Ms MacTIERNAN: I have not. I am waiting for a parliamentary delegation to visit Russia.

Mr Craig Kelly: No—Venezuela. I know you like Russia; they fixed it up. Venezuela was the place.

Ms MacTIERNAN: Yes, they really did. I think Boris Yeltsin did a fabulous job—I mean, creating those oligarchs! How inspired was that! How has that taken that country forward? That is the logical consequence of some of the nonsense that you are talking, member for Hughes. I do not totally disagree with the member for Hughes. I do think it is important that we not overregulate the market. But we need to understand the power of the banks within our economy. The profits that these banks are making! We have the four big banks who, between them, made $29.97 billion in profit in just the last financial year. We have CEOs on extraordinary, mind-boggling remuneration packages. So this is not really a perfect market.

I put it to you, member for Hughes, that you are not concerned about the small business down on Main Street. Small businesses are not charging these avaricious rates of surcharge on their product. These companies are trying to keep themselves competitive. Indeed, we find that it is the big companies that are the issue—those like the taxi industry, until relatively recently, that have a legislated monopoly. It is the airlines. It is where you have a small number of players—entertainment promoters. It is not the small punter, the blue-collar worker, the plumber, the candlestick maker or the seller of clothing among the parties engaging in this avaricious conduct that has to be contained.

I say to the member for Hughes and to others: we need to think about this far more profoundly because we are going to see increasing distortion in our marketplace—and not just in the area of banking. Over the summer vacation I had the opportunity to read the very interesting book The Internet Is Not the Answer. It refers to all of the hype and rhetoric concerning the digital age and how we are going to see the democratisation of business, where anyone sitting in their garage or lounge room will be able to set up their own little business, and to those people who have been the first movers—those people who had that first opportunity and that first moment of genius to leverage off that very substantial public investment that constituted the creation of the internet, the World Wide Web and the computer. That development was the result of public investment and a great deal of scientific and technological collaboration, and the great effort between the 1940s and the late 1960s has largely been privatised.

What we see is that, far from this being the most incredibly democratic processes, that early advantage, that access to scale, that access to the development of algorithms where people are teaching the system to become better and better the more you use it means that it is going to be harder for entirely new entities to break in. Indeed, it is the case when we look at the Googles and the Facebooks and the enormous size of those companies. It is really making it as completely farcical as the member for Hughes's support for the oligarchs of Russia to believe that these are people that are somehow or other going to be engaged in the democratisation of our society.

We will need to keep a very vigilant eye on the developments that are taking place within the digital economy. It is fabulous that we have got the sense that we can have this great burst of innovation—and I am sure we can. But if you look at what is really happening, who really is dominating the digital space? It really is a relatively small number of companies. So, whilst we might have tens of millions of small apps and operations going on—proposals, projects, small offerings—when you look at the bulk of the commercial activity on the net, you will see it is dominated by a very small number of players who have obtained a very ridiculous and, I believe, underserved level of reward.

Of course we understand that we want an energetic, entrepreneurial business world and that people will want to get a return from their creativity, from their hard work and from their energy. I completely and utterly understand that. But instead of that being measured in the millions, that it is now being measured in the billions—and even billions are no longer good enough to satiate the needs of your average digital entrepreneur; we are talking about tens of billions. This is going to then create a much greater role for government to look at the imperfection of the market and to really reconsider some of the language around the ability to attain the joys and benefits of competition, because if we have such a small number of players obviously we do not have competition.

Even in the land of the free that was recognised. After the emergence of the first class, I suppose you might say, of the great robber barons in 19th century United States, we saw a whole series of legislated reforms that came in to claw back on that power. We saw the introduction of antitrust legislation. We saw the introduction of a whole raft of laws that were designed to limit the role of monopoly. We have done the same in Australia through our Trade Practices Act. Some of us would obviously like to see our Trade Practices Act be somewhat stronger than it is, but there is no doubt that the intent is to recognise that there can be market domination, there can be unfair practices and there can be conduct that does need to be scaled back, because the market forces alone are not sufficient to create justice in those circumstances,

Again, I very much support this legislation. We are not about wanting to overregulate, but I think the real trick is, as the legislature, for us to determine where there has been a substantial breakdown in competition and where the result to the bulk of the community is not a good one. That is when we need to make a decision that does not tie us relentlessly to a mantra of 'competition is all good', because we understand that we have structures in our society that are effectively very anticompetitive. We need to be mindful and vigilant of that, constantly analysing our institutions, constantly being aware of the changes that are occurring exponentially in the structure of our economy. With that, thank you.