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Wednesday, 24 November 1965

Mr SNEDDEN (Bruce) (AttorneyGeneral) . - by leave - Mr. Speaker, honorable members will recall that the second reading debate on the Trade Practices Bill 1965 has stood adjourned since 19th May in order to afford the public an opportunity to subject its provisions to scrutiny and to make representations. The Government has given close consideration to the representations it has received, and has concluded that certain amendments to the Bill are desirable. I shall formally move these amendments during the Committee stage of the debate - which it will now be appropriate to resume at an early date. However, as it is desirable that honorable members have notice of the proposed amendments before the resumption of the debate, I have today made available to them two documents. One consists of a schedule of the proposed amendments while the other sets out the text of the Bill in a manner that indicates at a glance the changes that are involved. Words that are to be omitted by the amendments are printed in italics. New words are printed in black type. The schedule of proposed amendments is available at present on the table. Copies of both the documents that I have mentioned and copies of this statement will forthwith be distributed to honorable members at their lockers to make it simpler for honorable members to obtain this material and to assist the parliamentary officer in charge of papers.

For the most part, the proposed amendments are self explanatory. Many of them involve no change of substance, their purpose being merely to make the text clearer and more certain in meaning. Some will make explicit what is at present implicit. However, some of the proposed amendments do go to the substance of the legislation, and the House will be assisted if I take this opportunity to make an explanation of them now rather than wait until they are moved in Committee.

One of the more important changes of substance provided for by the amendments will make it possible for members of the Trade Practices Tribunal to be appointed to serve on a part time, instead of a full time, basis. The Government has concluded that this change is necessary because the work of the Tribunal will not be likely, particularly in the early stages of the operation of the legislation, to occupy its members full time. There will probably be some periods when the number of inquiries before the Tribunal will require it to sit continuously. But there will be other periods when there will be no matters immediately ready for hearing and therefore no need for the Tribunal's services. I point out in this connection that many of the investigations undertaken by the Commissioner of Trade Practices and his staff will not lead to inquiries by the Tribunal. In some instances, the investigations will serve to satisfy the Commissioner that there is no need for proceedings, while in others the need for a Tribunal inquiry will be removed by successful consultations under clause 48 or by the abandonment of agreements or practices that the parties themselves have come to conclude have little prospect of being found to be compatible with the public interest. There is in the Bill provision to enable parties to give undertakings to the Tribunal during the course of a hearing. An undertaking might be given at a very early stage of a hearing. If this were to happen there could be left a gap, so to speak, in the matters before the Tribunal ready for hearing.

From what I have said honorable members will appreciate that, if the members of the Tribunal had to be appointed to serve on a full time basis - that is, on terms requiring them not to engage in other employment - there would be periods when they would be without any work to perform. The Government has accordingly concluded that there is a need for the Bill to be amended so that members of the Tribunal can be appointed on terms that do not forbid them from being engaged in other employment when their services on the Tribunal are not needed. The proposed amendments accordingly provide for the repeal of clause 17 and for certain consequential, amendments to clause 11.

The provision in clause 11(1.) for a member to be appointed for a specified period of years is not to be changed. There will thus be a panel of members appointed for specified periods, and, as circumstances require, divisions of the Tribunal will be constituted from the members on the panel. In deciding that the Bill should be amended to permit members of the Tribunal to serve on a part time basis, the Government has been conscious of the importance of the Tribunal's functions and of the need for it to be constituted by men of the highest calibre. In case honorable members might consider that the proposed amendment might make it difficult to find persons of the appropriate calibre who are willing to accept appointment, I would reassure them by saying that it should have precisely the opposite effect. The Government will be able, and in fact it proposes, to appoint as the presidential members persons who are already of judicial status. When the services of these persons as members of the Tribunal are not required, they will resume their normal judicial duties. For the other members, the Government will be able to draw upon the services of persons who, after distinguished careers in the business world, have ceased to have responsibilities that are incompatible with membership of the Tribunal.

Clause 37 (1.), which deals with monopolisation, has been re-drafted. The differences between the existing and the proposed provisions are as follows: First, the existing provision refers to a person " in a dominant position in a line of trade or commerce in Australia ". The proposed provision refers instead to a person "in a dominant position in the trade in goods of a particular description, or in the supply of services of a particular description in Australia ". The meaning of the new words is more certain, but no change of substance is involved.

Secondly, clause 37 covers three specific classes of conduct. The two classes covered by existing clause 37 (1.) (a) are qualified by the introductory words " by virtue of, or for the purpose of maintaining his dominant position ", while the corresponding qualification of the class covered by section 37 (1.) (b) is that the person concerned " takes advantage of his dominant position ". Under the proposed amendment, these distinctions between the qualifications that are applicable to particular classes of monopolisation conduct are removed. Whatever class is involved, it will be necessary that the person concerned " takes advantage of" his dominant position. The phrase " takes advantage of a dominant position " appropriately describes the basic ingredient of the Government's conception of monopolisation, and possible confusion will be avoided by dropping the other phrases to which I have referred.

Thirdly, the class covered by clause 37(1.) (a) (i) has been denned in the amendment with more precision. The class is confined in terms by the amendment to inducements to refuse to deal. The inducements covered by the provision are to be examinable if they are resorted to by persons taking advantage of their dominant positions. Honorable members will have in mind that other inducements to refuse to deal are examinable by virtue of clause 36(l.)(c) if they are by a trade association or by a person acting in pursuance of an agreement with another. The trade association or the agreement in clause 36(l.)(c) is the correlative to the dominant position in clause 37 (l.)(a)(i).

Fourthly, existing clause 37(l.)(b) has been re-drafted in the light of representations that, in its present form, it might be construed as being applicable on every occasion on which a person in a dominant position fixes or determines his prices or terms of conditions of dealing. This, of course, was never intended. The proposed amendment makes it clear that the provision is applicable only when the prices, or conditions of dealing constitute impositions in the sense that they would not be possible if the persons fixing them were not in their positions of dominance. The re-drafted provision appears in the amendment as clause 37 (l.)(c).

Fifthly, existing clause 37 refers to " a part of Australia" without specifying any test that the Tribunal is to apply in selecting such a part. Apprehension that the Tribunal might find that, say, a country town is a " part of Australia " will be allayed by the insertion of a new provision, clause 37 (1A), which expressly directs the Tribunal not to take as " a part of Australia " an area that does not include the whole of a State or Territory unless it is satisfied that it is appropriate to do so having regard to the substantial size of the area and its significance as a market area.

Provision for the Commissioner to furnish to the Attorney-General, for presentation to the Parliament, an annual report with respect to his operations under the Act is contained in a new clause, clause 104a. Similar provisions are to be found in many other acts conferring powers on statutory officers.

In my second reading speech I indicated that the Government was giving consideration to the provisions needed to deal with trade practices in relation to ocean shipping. I referred then to the fact that there are a number of special problems associated with the framing of such legislation. While the Government has made much progress in its consideration of these complex problems, there are some aspects of the legislative proposals it has in mind to deal with ocean shipping which call for further consideration before the proposals are introduced into this House. The Government is mindful in this connection of the need to avoid any precipitate action which could have harmful effects upon shipping services or upon our relations with other countries. Accordingly, the Government has decided to defer the introduction of its ocean shipping proposals until the next session of Parliament. In the meantime, ocean shipping will remain subject to the Australian Industries Preservation Act 1906-1950 and will be excluded from the operation of the present Bill. The necessary amendments for this purpose are proposed in clauses 4 (1.) and (2.), 38 (i) and 39 (2a).

Proposed clause 4 of the Bill provides for the repeal and amendment of relevant provisions in the several acts by virtue of which the Australian Industries Preservation Act is at present applicable in the Australian Capital Territory and in the Northern Territory.

There is the definition in clause 35 (2.) of businesses competitive with each other. It is proposed to amend this clause so that businesses that are merely "likely to become " competitive with each other are not treated as already being so competitive.

Exemptions are proposed in respect of two classes of exclusive dealing conditions. One of the classes covers arrangements by which a person obtaining a lease or licence of land agrees to acquire from the owner of the land goods or services required in connection with the conduct of a business on the land. The other class covers arrangements by which a person borrowing money or obtaining credit for the purpose of carrying on a businsess agrees to acquire from the person providing the finance, while the loan or credit is outstanding, goods or services required for the purposes of the business. Neither exemption is to be applicable to a condition that is imposed by a trade association or by a person acting in pursuance of an agreement with a third person. As unilaterally imposed exclusive dealing conditions are not examinable under the Bill except in relation to monopolisation, the practical effect of the amendments will not be great. They merely recognise that there are limits to the extent to which the legislation should go in preventing an owner of property from disposing of it subject to conditions.

Amendments are proposed to ensure that an application to the Commissioner for an extension of time within which to register an agreement does not prove to be ineffective because of an inability on the part of the Commissioner to deal with it before the expiry of the normal 30 day period.

Under a new provision, to be inserted as clause 42 (8.), an application for extension of time will need to be made within the thirty day period, but once it has been made, the time for registering will not expire until at least 14 days after the Commissioner has informed the applicant of his decision. This provision will not preclude the Commissioner from granting such longer extension as may appear to him to be warranted in the circumstances.

A proposed new provision, clause 48 (3.), provides for consultations under clause 48 to be conducted on a without prejudice basis, if a party to the consultations, other than the Commissioner, indicates a wish that they should be conducted on that basis. Statements, admissions or offers made in consultations conducted on a without prejudice basis will not be admissible in proceedings before the Tribunal except with the consent of all the parties to the proceedings.

It is proposed to enable a person with whom the Commissioner has been having consultations under clause 48 to ensure, after the consultations have been in process for a reasonable time, that the question whether the relevant agreement or practice is contrary to the public interest is not left in a state of uncertainty. The new provision, which is to become clause 61 (2.) (b), will enable such a person to obtain an order from the Tribunal directing the Commissioner to institute proceedings in respect of the agreement or practice.

Proposed amendments to clauses 55 and 56 indicate the circumstances in which the Commissioner may institute proceedings in respect of an agreement or practice that has already been terminated. The amendments require that a presidential member of the Tribunal must be satisfied that there are reasonable grounds for believing that if proceedings are not instituted, another agreement or practice similar to the one that has been terminated will be entered into or engaged in.

Proposed amendments to clauses 55 and 56 provide for the Tribunal to have a discretion to decide whether proceedings should be continued if the relevant agreement or practice is terminated or varied while the proceedings are in process.

It is proposed to amend clause 61 to enable a negative clearance to be obtained even though n» new capital is to be employed in the venture for which the clearance is necessary.

Another proposed amendment provides for the insertion of a new provision, clause 61 (3b), under which a negative clearance under that section will remain effective for such period as is specified in the instrument granting it, being a period of not less than five years. After the specified period the effectiveness of the clearance will depend on there being no material change of circumstances.

Under the proposed amendment to clause 62 the members constituting a Review Division are not to include the presidential member who presided over the proceedings under review.

The proposed amendment to clause 66 (2.) withdraws the discretion which the Court has under the existing sub-clause to decline, for special reasons, to answer a question of law referred to it by the Tribunal.

Amendments are proposed to strengthen existing provisions to protect the rights of persons not in breach of the legislation. Amendments to clause 51 will emphasise that a determination that an agreement or practice is contrary to the public interest has only a prospective operation. They will also make it clear beyond doubt that the mere making of such a determination does not affect the legality or enforceability of transactions entered into in pursuance of the relevant agreement or practice.

An amendment of clause 69 will ensure that the rights of persons who are not in breach of the legislation are protected irrespective of whether those rights arise out of, or are merely dependent upon, transactions involving breaches by other persons.

Amendments to clause 97 will make clear that the public are to have access to the record of the Tribunal - subject only to any direction that may have been given under clause 73. A related amendment, to clause 49 (2.), will require determinations of the

Tribunal to be recorded in the records of the Tribunal.

It is proposed to insert a new provision, clause 86 (3a), under which it will be a defence to a prosecution for collusive bidding if the defendant satisfies the Court that the agreement in question was not made for the purposes of a particular auction and that it had been registered and not found by the Tribunal to be contrary to the public interest. An almost identical provision in relation to collusive tendering is already contained in the Bill in clause 85 (4 ).

Proposed amendments to clause 87(1.) ensure that agreements between partners in relation to the terms of their partnership and agreements between trustees in relation to the conduct of a business carried on by them as such trustees do not fall within the definitions of a collusive tendering agreement or a collusive bidding agreement.

As the present Bill is unlikely to become law before the Decimal Currency Bill-

Mr Whitlam - Will we not get it through this week or next?

Mr SNEDDEN - But it will not become law. As I have said, as the present Bill is unlikely to become law before the Decimal Currency Bill, there will be a need for amendments to convert the penalties in this Bill to decimal currency. The amendments that are necessary for this purpose will be moved in Committee, although they are not shown on the schedule of 'amendments that 1 have distributed.

Mr.Whitlam__ While thanking the

Attorney-General for the helpful statement and memorandum that he has just given us, might I ask whether, before the debate resumes, he will be able to give me an answer to the question I asked him on 1 4th September concerning negotiations with the States and supervening practices which have come to his notice or that of other Government bodies?

Mr SNEDDEN - I would hope to be able to provide the honorable gentleman with an answer to so much of the question as I am able to answer some time tomorrow morning.

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