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Monday, 26 June 1995
Page: 1770


Senator McGAURAN (5.53 p.m.) —The significance of the Competition Policy Reform Bill 1995 before the Senate has not been lost on all the speakers who have taken part in the debate. It was acknowledged in the second reading speech of the Minister for Family Services (Senator Crowley), when she said:

It will establish processes and institutions to encourage competition, not just in particular sectors, but across the whole economy.

. . . . . . . . .

Implementing this policy is the most important single development in micro-economic reform in recent years.

. . . . . . . . .

These reforms affirm the role of competition policy as an explicit element of the broad range of considerations the Federal Government brings to policy decisions . . .

These are very worthy ambitions. The underwriting of the national economy with competition policy is even more urgent now, given our very miserable and ailing Australian economy. There has rarely been an occasion when senior business executives such as Don Argus from the National Bank have not taken the opportunity to ram home the need for accelerated micro-economic reform so that business costs and operations will be reduced and business made more competitive in the world markets.

  The criticism is always levelled at the glacial pace and the fatigue of the government's micro-economic reform agenda, particularly in the areas of industrial relations and waterfront reform. The government should be convinced if, for no other reason, than the benefits that reduced business costs and an efficient national economy will bring to long-term employment, real jobs and a sustained high standard of living. To this end, the Competition Policy Reform Bill is very welcome, be it a cautious step in the micro-economic reform agenda.

  Nevertheless, whatever competition policy might mean to senior executives and the mandarins of Canberra, to most Australians it is a very nebulous term. So the benefits to the Australian consumer are perceived to be, for example, lower electricity prices to the household because of state by state, company by company competition to win custom, not unlike the battle between Telecom and Optus. Again, in theory, the same will occur in regard to water—state utilities will be broken up and made far more competitive. So householders will have a choice when they switch on a light, pick up the phone or turn on the tap.

  No-one would argue that over the decades governments have operated these utilities inefficiently and more often as a cover for tax increases. However, the linchpin to the success, great or small, of the Hilmer ideology is the forming of the Australian Competition and Consumer Commission.

  The Competition and Consumer Commission will be formed from an amalgamated Trade Practices Commission and the Prices Surveillance Authority. Without a strong resources and encouraged Competition and Consumer Commission, this grand plan will degenerate into: monopolies and oligopolies; price collusions; and unconscionable conduct toward small business. The coverage powers of the Trade Practices Act and the monitoring provisions of the Prices Surveillance Act will be extended to the states.

  I acknowledge my colleague Senator Boswell's address regarding the need for a very strong hand to protect small business against what can go so very wrong with this competition policy—for example, the mad ideological push to deregulate taxis when commonsense and good business would dictate otherwise. That is why the Competition and Consumer Commission will be a very vital watchdog against unsubstantiated deregulation.

  I have confidence that this will occur given the strong presence the Trade Practices Commission has in today's marketplace. The Trade Practices Commission has stamped itself as a serious watchdog for small business and shown that it is prepared for its coming change to form the new super-watchdog, the Competition and Consumer Commission.

  Of late the Trade Practices Commission has stepped up its surveillance and enforcement of the act to protect the interests of small business and consumers. A recent example of consumer protection is the AMP case—and the best example yet. Policyholders in this case were protected against an attempt by Australia's biggest life insurance company to near-on fraudulently deny full and proper superannuation payouts simply based upon a trumped up technicality in the contract.

  Subsequently, the Trade Practices Commission forced the AMP to pay out well over $50 million to the policyholders—the largest payout in Australian corporate history. I single out the AMP Society's case as it is without doubt the biggest example of an attempt at big business deception. But there are many others. For example, the consumer protection carried out by the Trade Practices Commission in imposing a $5 million fine on Ansett and TNT after being found guilty of price collusion.

  Presently, the Trade Practices Commission is inquiring into price collusion between 1991 and 1992 between Mobil, Shell and BP which had the effect of reducing competition in petrol retailing. In the very same industry the Trade Practices Commission was able to negotiate a fair outcome for independent wholesalers and retailers before allowing the Caltex-Ampol merger to go ahead.

  In the retail sector, the Trade Practices Commission has shown its mettle, firstly, by investigating the treatment meted out to retailers by the managers of the nation's biggest shopping centres. It is not just the small retailers who were complaining. Many of the biggest fashion houses and chains were smarting at the way rents were set, outgoings determined and moves within centres negotiated.

  The Trade Practices Commission has created a great deal of controversy through these decisions and a great deal of animosity from big business who are predictably calling for the scalp of the chairman, Professor Allan Fels. However, the old adage is: if they are not criticising you, you are not doing your job. And this is a case in point.

  There are many more examples that time does not permit me to mention. If the Trade Practices Commission did not intervene, big business would distort the competitiveness of the marketplace to the detriment of small business and the consumer. This is why it is so important that the Trade Practices Commission's current powers be translated without any loss to the proposed commission. Moreover, it is important to retain the culture now built up around the Trade Practices Commission so as to prevent free-wheeling competition. If not, then the competition bill before us will fail miserably and we will be back in this chamber making the necessary amendments after so many have paid a very high price.