Senator SCHACHT (12:17 PM) —I rise to speak to the Trade Practices Amendment (Fair Trading) Bill 1997 . As Senator Cook and other Labor Party speakers have said, we will not delay the bill but we will seek to put a number of amendments to improve it. I suspect they will be very similar to amendments moved by the Democrats and the Greens. We believe the amendments will substantially strengthen the bill in the way it can protect and enhance small business in this country.

There is only one reason we have this bill before us which details, in a number of significant ways, changes to the Trade Practices Act to offer better protection to small business. Above all else, the previous minister for small business in this government, Mr Prosser, made such an unholy hash of his responsibilities when he was the minister that he had to be dismissed by the Prime Minister. We had the extraordinary example of a then minister for small business being a major commercial landlord owning buildings and renting them to small business yet being in charge of reviewing retail tenancies for the small business community in Australia—an absolute conflict of interest if ever there was one. Yet it took nearly two months for the Prime Minister to realise that the conflict of interest was untenable and that Mr Prosser would have to go. When Mr Prosser defended himself—in the parliament and elsewhere—by saying that he saw no conflict of interest, it was the height of the theatre of the absurd.

He had made such a mess of protecting and promoting small business interests in Australia and, when he was finally sacked, the damage done to the government was so extensive that the new minister, Mr Reith, realised that no amount of comforting statements would be accepted by the small business community and that action was needed. In particular, the Reid report and the unanimous recommendations from that bipartisan committee of Labor and Liberal members from the lower house would have to be substantially implemented.

Until the demise of Mr Prosser it was clear that, if Mr Prosser had had his way, the Reid recommendations would disappear into some dusty pigeonhole, never to emerge again. I again congratulate my parliamentary colleague the shadow minister for small business, Mr Martin, for the role he played in exposing Mr Prosser's conflict of interest as small business minister, which led to the government having to take this report seriously.

Senator Boswell has spoken in this debate, as leader of the National Party in this place. As a former minister for small business, I place on record that I think he is, without doubt, the most genuine spokesperson for small business from either of the two coalition parties. When I was small business minister, he was genuine in raising with me a number of issues about how to improve the situation for small business. He raised them with considerable passion at times—in this place, at committee level and in private with me. I have always been amazed because I would have thought that the most relevant person for the coalition to appoint as minister for small business would have been Senator Boswell. But, because Senator Boswell holds true to himself and always speak openly and honestly—even if it is against the dictates of the government's line—he finds it difficult to get a guernsey on the front bench as a minister, and I respect him for that.

Senator Vanstone —So what do you think of yourself when you didn't speak out when your government did things you disapproved of?

Senator SCHACHT —After your performance in higher education and schools, I think you have paid the biggest penalty of all. The Prime Minister has decided what he thinks of your ministerial performance by comprehensively sacking you.

Honourable senators interjecting—

The ACTING DEPUTY PRESIDENT (Senator Patterson) —Order!

Senator SCHACHT —Madam Acting Deputy President, Senator Vanstone got dumped by the Prime Minister for failing—

Senator Carr —After doing his dirty work.

Senator SCHACHT —to do all the dirty work. After all but destroying the tertiary education system in this country, and many other things, she got comprehensively dumped. But, despite being humiliated, she apparently copped it sweet. She did not whinge or make any complaint. She did not come in here and say, `Mr Howard has been unfair to me.' She copped it sweet as apparently she still could be the Minister for Justice, running around with the Federal Police trying to find Mr Skase somewhere in the world.

Even when I was the minister for small business I put on the record that I thought Senator Boswell was the most creditable figure in the then opposition to speak on small business, because he genuinely spoke about it. When I introduced my Trade Practices Amendment (Better Business Conduct) Bill—a bill containing many provision similar to those in the bill now before us—Senator Boswell made it quite clear that he supported it. He thought it was a major step forward for the advantage of small business.

That did not make him too popular with the Libs from the top end of town, the Liberal Party from Melbourne—including the now Treasurer, Mr Costello—and other big business interests who were trying at that time to do everything to ignore having to declare a position on whether or not they would support my bill. During the election campaign, right up until election day, Mr Howard would not commit himself on support of my bill.

Senator Vanstone —But this was three years ago.

Senator SCHACHT —But, Senator, Senator Boswell did. As I say, I acknowledge the fact that he is the only creditable figure to speak on small business, irrespective of whether he is in government or opposition.

The Liberal Party in the end would always give in to the interests of big business. It was only the fact that Mr Prosser made such a mess of defending big business and that his conflict of interest was so palpable that, after two months of slowly rotting on the scaffold, the Prime Minister had to sack him. The only way to recover the standing of the government on this issue was to accept some of the major recommendations of the Reid committee—and that is why we have the bill before us.

Mr Reith has made himself a hero within some sections of the Liberal Party in that he is now prepared to produce this bill. As I say, we support the thrust of the bill, but we will be moving amendments to strengthen the bill even further to the advantage of small business.

As both the Reid report and other people in here have commented, including Senator Boswell—and as Senator Murray, who spoke just before me, eloquently explained: there is no doubt that the economic power of big business, when in dispute with small business, is usually the deciding factor in the determination of that dispute. When I was small business minister I had plenty of evidence that, if there was a contractual dispute, big business was able to use its financial power to drag the dispute out for a lengthy period of time in the courts so that, in the end, it literally starved the small business person into submission.

A provision that I produced in the better business conduct bill was that the Trade Practices Commission, now the ACCC, would have the ability to take the case, if they thought it substantial and significant, on behalf of a small business complainant to the court, and it would fund it so that there would be an equality in the dispute before the court. In that way, the economic power of big business would not be able to always crush the small business operator.

Though we had tried voluntary codes of practice, particularly in the franchising area, it was clear that they were not going to work, unless they were backed by a strengthened Trade Practices Act; that the code of practice would be enforced by appropriate legal remedy that could be quickly taken. This, again, is where the late unlamented Mr Prosser said, `Well, we'll have a voluntary code of practice in franchising'—and, as Senator Murray pointed out, he was quite willing to have that code of practice administered by the franchisors in taking over the franchisees' interests. We would have had what in other cases people would have thought pretty odd: an employer organisation representing the trade unions. This would have been the proposal; he was quite happy if there were a voluntary code of practice for franchising, but basically it would run and administered by the franchisors in Australia.

An inquiry we did in my time as minister showed that something like 20 per cent of franchisors were in dispute with their franchisees. That was an unacceptably high level of dispute, where franchisors were being sued by their franchisees, because the franchisees had been misled because the disclosure levels were not being properly adhered to by the franchisors. It is clear that you will have to have a franchising code that has teeth in it, that is a uniform code and that is actually backed by legislation—and that is administered independently, and not just by the franchisors.

We believe that, rather than relying on the phrase `unconscionable conduct', the bill should be amended to use the phrase `unfair conduct'. This will strengthen the bill. Properly used, `unconscionable conduct' with other provisions would be a strengthened provision. But we believe that `unfair conduct', as recommended by the Reid committee, is the way to go, and we will support those amendments.

But the biggest weakness in this Reid bill is the fact that the minister and the government have not accepted the Reid report's recommendations to legislate for uniform retail tenancies in this country. There is no doubt that this is the major area of continuous dispute between small retailers and their landlords: the contractual arrangements small retailers have to enter into to get access to reasonable outlets in big shopping centres, other shopping centres; this is a continuous matter of dispute. We have all heard the horror stories, as tabled and written up in the report of the Reid committee, of the way in which there is a take it or leave it attitude given to the small retailer who wants access to a shop in a big shopping centre.

We believe that to leave it to the states and territories so that we end up with eight different codes of practice reliant on different state and territory legislation will only create confusion. In that confusion, the big end of town will always have the advantage because they will be able to use their economic power to impose their will on small business. Having a uniform retail tenancy code that is legislated and backed nationally is the way to provide the best and most simplified protection; protection that will be easily understood by all and not be confused by having different codes in different states.

I know that the Liberal Party has an ideological objection and says that this is centralising more power in Canberra. The irony is that, if you really want to help the ultimate small people in this country—small business—there must be a decent code at the national level. If you want to put them in a weaker position in the community, you will have six state and two territory codes operating. That will weaken small business. At times you do need strong, clear, firm, national legislation to protect the weakest in the country. That is the irony. I suspect the Liberal Party says for ideological reasons that this is a state issue, but in doing so they are inhibiting and weakening the position of the people they profess to support.

We will also be moving an amendment to the provisions in the bill which limit the application of transactions to those of less than $1 million over five years. This could mean that a large number of small businesses would not get the protection that this bill claims it will provide to them. We will certainly be moving amendments that clarify that particular provision.

This is a very important bill. The opposition does not deny that. We are disappointed that the minister did not take the last full step on the Reid recommendations in a number of areas to achieve a bill that all small businesses in Australia would welcome. There is no doubt that, whatever the success of this bill, it will be regularly revisited because the issues that small business are concerned about in the balance of economic power between them and big business will always be a matter of debate.

When I introduced legislation in my time as minister, I did not say that this was the end of the line or that the ultimate peak had been reached for the protection of small business. We have a dynamic economy; one that is always economically changing. Therefore, one should always keep these sorts of legislative requirements under review.

When I was small business minister the support I received from the Small Business Forum was very useful. We had input or advice to government about what issues were of particular concern to small business. The issues that this bill deals with in part, but not completely, were consistently the main issues raised with me as minister for small business. I am sure that in another 10 years when we attend small business forums of one form or another, these issues about the balance of economic power between big and small businesses will still be the major issues discussed among small business people.

Most of the people at the Small Business Forum would not be regarded as natural supporters of the Labor Party, but they were willing to support what we tried to do at the end of 1996. It is with regret that when the election was called we were unable to debate the bill at that time. Nevertheless, the Labor Party at that time put on record in its bill our commitment to help small business.

The present government, which was then in opposition, refused to declare its position on better business conduct in the bill, as it had refused to declare its position all through the 13 years we were in government about the way to improve the Trade Practices Act to help small business.

Senator Murray mentioned Senator Spindler, who was a former Democrat senator on the Legal and Constitutional Committee. He and I made recommendations to change the provision of the Trade Practices Act from `dominance of the market' test to `a substantial lessening of competition'. I was on the committee at the same time as Senator Spindler. I strongly supported that change. I think Senator Spindler and I were the only two members of that committee, and a minority, who even went a step further and said that the Trade Practices Act and the then Trade Practices Commission—now the ACCC—should have a permanent power of divestiture, such as the power invested by the American Congress into the appropriate regulatory bodies in America. That is a standing power of divestiture that I think has been used only two or three times in almost 80 years of history of American trade practices law. But the fact that it is there has meant that on many occasions a big business has decided to step back from some of its more robust activities.

I supported that with Senator Spindler. It was not taken up by my government or this government but that is an issue. As there is more and more concentration by big business in the running of the economy and its influence on the economy, the divestiture issue will be raised again. It is certainly raised by the small business community. There is no doubt that, if the test that we now have of substantial lessening of competition had been available in the eighties, the creation of Coles Myer would probably not have been allowed. Most people—maybe even the shareholders of Coles Myer—might think now that that was not a bad idea in view of all the turmoil that company has been through. In future further mergers of that kind will not be allowed to take place.

We commend the thrust of this bill to the Senate, but we do commend very strongly our amendments. In particular, the amendment I would certainly like to see carried by the Senate is the establishment of the uniform retail tenancy code in Australia. I believe that will help more small businesses than any another matter before us today. I commend my shadow ministry colleague Steve Martin for putting these amendments forward and hope we can win the Senate on them. (Time expired)