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Wednesday, 17 August 2011
Page: 8444

Dr LEIGH (Fraser) (10:19): The philosophy of those of us on this side of the House is that free markets are the mechanism best developed to generate wealth in society, to raise living standards and to ensure that Australians have the opportunity of work and leisure that is part of a fulfilling life. We on this side of the House recognise that free markets work best when accompanied by appropriate regulation—such as the Trade Practicesw Act 1974 originally brought in under the Whitlam government in 1975. Appropriate regulation such as the Fair Work Act 2009, brought in under this government; legislation that realises that it is critical to strike the right balance between employers and employees. This is a balance which those opposite apparently supported in the last election but which, by now taking the lead from the member for Bennelong, they have begun to abandon, with a new attack on penalty rates and an attack on the overall notion that free markets work best under proper regulation.

The bill before the House today, the Competition and Consumer Legislation Amendment Bill 2011, began its life as a bill under the now Minister for Trade, Dr Emerson. It was a product of extensive consultations. The bill does three things: it provides greater clarity to the provisions of the CCA regarding mergers and acquisitions; it streamlines and clarifies the unconscionable conduct provisions; and it corrects some minor drafting errors.

Public consultations, conducted in 2008 and 2009 by the member for Rankin, identified the importance of getting the term 'market' appropriately defined. This bill will replace references to 'a market' with references to 'any market'. That will clarify that a court or the ACCC can consider the competitive effect of a merger or acquisition on multiple markets in any one investigation. This amending legislation will ensure that a court or the ACCC looks beyond the primary market in which the merger or acquisition would occur.

The second area is in relation to the definition of 'market' in section 50(6) of the CCA. The bill will delete the word 'substantial' in the definition of 'market'. That will clarify that the competitive effects of a merger or an acquisition on a local market can be considered under section 50. That will ensure that a court or the ACCC can examine a merger or acquisition in any market, regardless of its size or its geography.

The bill also makes changes in relation to the unconscionable conduct provisions, which will streamline and clarify the operation of the provisions. It will unify the consumer and business related provisions of the ACL and the ASIC Act, replacing sections 21 and 22 of the ACL with a single provision that will apply to both consumers and businesses. The bill will amend the mirrored provisions in sections 12CB and 12CC of the ASIC Act, which will reflect these changes to the Australian consumer law.

The bill will clarify the unconscionable conduct provisions by inserting interpretive principles into the acts that will assist courts in applying the prohibition, as well as improving stakeholder understanding of the meaning and scope of the prohibition. There have been substantial improvements in legislative drafting over recent decades, partly to ensure that courts have as much information as possible to help them interpret statute laws. These interpretive principles are derived from existing case law, so they will be clarifying rather than altering the effect of the statutory prohibition against unconscionable conduct. Those principles will include, for example, that unconscionable conduct is not limited by unwritten law; that the prohibition applies to systems of conduct or patterns of behaviour; and that a court can examine the terms and progress of contract in considering whether conduct to which the contract relates is unconscionable.

Finally, as I have mentioned, the bill corrects a number of minor drafting errors in the CCA that were the result of the passage of legislation by this House in 2010. Overall, the measures in the bill will improve the operation of Australia's competition and consumer laws. They will clarify the breadth of matters to be examined by a court or the ACCC in considering whether a proposed merger or acquisition would substantially lessen competition in the market. They will unify the prohibition against unconscionable conduct and provide the courts with greater guidance in its application. Overall, this is legislation which is part of Labor's commitment to free and effective markets, but markets which are appropriately regulated.

I was very proud recently to speak to students in Marist College. Mary-Lou Minty, their economics teacher, brought me in and we had a wide-ranging conversation with the boys about the major principles involved in economic reform. They understood—perhaps even better than some of those opposite—the importance of getting the balance right with regulation. Letting the market rip can often produce outcomes which give less growth, less improvement in living standards and less productivity. Getting the balance right in competition law, as in industrial relations, is critical to improving the living standards of all Australians. I commend the bill to the House.