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Friday, 26 November 1965


Mr WHITTORN (Balaclava) .- I say at the beginning that the AttorneyGeneral (Mr. Snedden) seems to have given some respectability to this piece of legislation, which was originally known as the Restrictive Trade Practices Bill, by altering the title to Trade Practices Bill. Let me tell the House, in terms as strong as I can use, that I object to this legislation. I object to it because, in my view, it opens up the way for unjustifiable intrusion into the normal business affairs of secondary industry and tertiary industry and intrusion by the Government and its officers into the affairs of free enterprise, about which they know very little. We, as a Liberal Party and Country Party coalition, have gone to the polls at every election since 1949 on the promise that, as a Government, we would set the canvas to enable free enterprise to carry out its affairs in the normal and proper way. We were swept to the Government benches in 1949 on the promise that we would give relief to industry, commerce and trade from oppressive legislation then on the statute book and placed there by the Australian Labour Party.

As I have said, since then we have gone to the polls on the central premise that it was the job of private enterprise to bring the economy to normality with the aid and encouragement of the Government. Since that time we have gone into each election campaign saying that the economy was booming, that there was very little inflation and that free enterprise, with the assistance of an unrestricting Government formed by the Liberal Party and the Australian Country Party, had induced these conditions. I believe, Sir, that we are now about to complete the cycle by returning to the situation of 1949 and intruding and intervening in the affairs of private enterprise by introducing this oppressive legislation which will serve no good purpose for the economy of Australia.

In 1949 we set about sweeping away the cobwebs that entangled free enterprise and commerce. We are now about to reintroduce the conditions that prevailed at that time. I have said before among my colleagues and members of this coalition Government, and I repeat now, that there are certain areas in trade and industry in which intervention may be advantageous to the community. But I say that these are very limited areas. The Government and particularly the Attorney-General should specify more definitely where these areas are. Neither the present Attorney-General nor his predecessor, Sir Garfield Barwick, has made any attempt to specify the areas in which the protection of the public interest will best be effected by this restrictive form of legislation. In April last year, when addressing a seminar on restrictive trade practices convened by the Victorian Employers Federation, the AttorneyGeneral was questioned about public interest. In reply he said -

I have never seen a piece of legislation in which the legislator or the draftsmen -

He meant the Parliamentary Draftsman and his staff - felt confident to define public interest, because public interest changes from day to day, almost certainly from year to year.


Mr Killen - Who said that?


Mr WHITTORN - The AttorneyGeneral said it when addressing a seminar convened by the Victorian Employers Federation in April 1964. That tells me, Sir, that when the Commissioner of Trade Practices and the Trade Practices Tribunal get under way they will be able to change the form of attempts at encroachment on industry and private enterprise from day to day, almost certainly from year to year. I say that the Government must define the restrictive trade practices that apparently prevail in this country. It must define them more specifically and more lucidly so that industry and private enterprise will know what this legislation is about. We as a government will be responsible for its gazettal and in 5, 10 or SO years' time it will be useless for members of a free enterprise government to say that we at this time did not intend the legislation to be altered or interpreted in the way in which changes will be effected over the years by succeeding governments, the Commissioner and the Tribunal. Once the Government defines more specifically what restrictions have been taking place in trade and industry the list can be added to or reduced as experience shows changes to be necessary. But the present Attorney-General and, indeed, the Government want us to go ahead full blast in attacking this problem. They want us to use a sledgehammer to frighten industry and commerce into submission.

I say that this Bill will serve no useful purpose in protecting the public interest. That is why I object strongly to the imprecision and uncertainty to which it will subject chief executives of commerce and industry throughout Australia. The previous Attorney-General, Sir Garfield Barwick, stated that he and officers of the Department had made what he described as extensive investigations in all States of the Commonwealth and he was convinced that practices not conducive to the public interest were in operation. Let me quote his words. He said -

During my investigations ... I have accumulated a good deal of material as to the existence of various practices in the Australian community.

Of course, there are plenty of practices in the Australian community that have nothing to do with businesses and nothing to do with the public and they are good for the people who practice them. But the Attorney-General - both the previous one and this one - have been far too general in their explanations of the advantages to be gained by the public from legislation of this type. If the investigations made by the previous Attorney-General and by bis Department were so wide, then the present Attorney-General should be able to nominate, not only industries, but the particular firms that are using these practices to prevail over other firms. I feel sure that when the present Attorney-General was a back bencher he prepared some of the information that was referred to by Sir Garfield Barwick.

This measure, I feel, is an intrusion into the affairs of private enterprise and the statement that we are now freeing private enterprise of its own restrictions does not make sense. The history of trade practices legislation in other countries, particularly in the United Kingdom and in the United States of America, has produced substantial and authoritative opinion that legislative action is not effective in enforcing competition throughout the economy. How can the businessman be induced to change his tactics in his business approach by enforcement? How can a public servant talk to a businessman and say: " Thou shalt do this in this way; thou shalt do that in some other way "? The businessman has been trained to use the way he knows best.

So far as the Australian economy is concerned, our country has had tremendous growth over the last 15 years and the public - all people in Australia - have benefitted to a remarkable extent as a result of this growth in the economy. In the circumstances, I share the doubts of all the doubters. I feel that this legislation will do no good for private enterprise and do no good for the public interest of the little people of Australia.

The executives who are now engaged in extensions to their industry must feel that they will halt their efforts until they have ascertained just what this Bill means to their efforts and what it means to their company. The present good relationships which exist between private enterprise and the Government must be shattered when this legislation has been gazetted. I believe that it has been business management and business itself that have converted Australia from a semi-industrial country to one where the economy is at a high pitch, where there is not too much inflation and where 66 per cent, of the work force is now being used by that section of the industry to which this Bill is directed. We now have 66 per cent, of the work force employed in secondary and tertiary industries and it is these sections of industry that will be affected and will come under fire by the Attorney-General, by the Commissioner and by the tribunal when the legislation has been gazetted.

It was in 1950 - 15 years ago - that this Government stripped away the bulk of controls imposed by the previous Labour Government. Now we are ready to reimpose intervention by government in the form of this creaky, meddlesome piece of legislation which will bestow no benefit whatever on the business activities of Australia or on the working man of Australia. Once this legislation is gazetted, 66 per cent, of the work force will be under fire by the Commissioner and by the tribunal. I say that this legislation is creaky because, virtually we have had two second reading speeches on this measure. The previous AttorneyGeneral laid on the table in December 1962 a paper setting out the proposals of the restrictive practices legislation. In May of this year the present Attorney-General delivered to the Parliament his second reading speech on this legislation and even as recently as Tuesday of this week he initiated 45 amendments. He describes them as being minor amendments, but the fact remains that three days ago he outlined 45 changes to the Bill. I am sure that there are honorable members on this side of the House who will introduce further amendments. I am sure that the Opposition, too, will introduce amendments to the Bill. So it is creaky. It has taken the AttorneyGeneral's Department five years to issue to this Parliament a piece of creaky legislation that intrudes into the affairs of the community.

I say that it is meddlesome because it does intrude into the business of private enterprise - into the affairs of commerce. Businesses know best what is good for themselves and for the community at large. All companies, all managements, like to employ as many people as they can, and that has happened in this country since this Government took over the treasury bench in late 1949. I say that this legislation is misguided because business managements cannot be forced by government servants into making decisions or attacking the problems of business. This work cannot be done under duress. Yet the Attorney-General, his Department, and the Government believe that they can force businessmen to do these things in a different manner and in circumstances different from those in which they have operated over the last 15 or 20 years. It is my view, as I have said, that it is private enterprise that has transformed the economy of Australia since 1950 when this so-called private enterprise Government started to lift restrictions that were directed against private enterprise, manufacturing interests and commerce.

From the point of view of public benefit, the working man has never had it better than he has as a result of private enterprise on the one hand and the business activity of private enterprise on the other hand. Comparisons can be made between what an adult working man obtained in 1950 as a result of working one hour, or even 2,000 hours over a given time, and what he can obtain today. I should like to outline to the House some information that has been produced by the Bureau of Census and Statistics and which was given to me by the Institute of Public Affairs. In 1950 an average male factory employee needed to work for 14,500 hours to purchase a home. In 1965 he needs to work for 9,200 hours or less than threequarters of the time that he needed to work in 1950. To purchase a bedroom suite he needed to work for 200 hours in 1950 but in 1965 he needs to work for only 150 hours. That takes into account the same bedroom suite and the increased prices that prevail in 1965. To purchase a Holden car, which is a working man's car, he needed to work for 3,770 hours in 1950 but in 1965 he needs to work for only 1,950 hours.

I have on my list nine items that are useful to a man who runs a home and who is looking after his family. In 1950 this man would have needed to work for 19,137 hours to purchase those items, but in 1965 he would need to work only 11,560 hours. In other words, the little man in the community - this is where public interest comes in - needs to work now only 60 per cent. of the time that he needed to work in 1950 to buy the same items. Let us hear an explanation from the Attorney-General, and from the Opposition if you like, about where public interest fits into a set-up like that.

Many members of this House must be descended from Rip Van Winkle. Otherwise they would not talk about public interest as they do. Apparently many honorable members cannot appreciate what private enterprise - industry and commerce - has done for Australia generally and for the working man in particular. If they take the trouble to do a little research and read some of the information that has been made available by the Bureau of Census and Statistics and other bodies in the community, they must come to the conclusion, as I have, that today the working man is affluent and can do things that he never expected in 1950 to be able to do. The only time that members on this side of the House talk about what private enterprise has done for the community and about what the Government has done to set the pattern to ensure that private enterprise will be able to do as they suggest is at election time, when we go to the polls and tell the populace how good we have been in setting that pattern for private enterprise. But now we are prepared to introduce this aggressive, oppressive legislation to control this section of the community which has done excellent work for Australia.

I wonder why the chief executives of companies have not been more vocal. They have had opportunities to tell the Government a good deal about this legislation. I should say that they have not been vocal because they have not really understood how powerful this legislation will be or how wide will be its scope over their affairs in future. In 1950 when Mr. Fairless, the then president of the United States Steel Co., was under pressure from government servants acting under America's anti-trust legislation, he said: "The only way a businessman can be sure of obeying all the laws is just to go broke ". Admittedly that is an exaggeration, but nevertheless it is largely true. Many companies in Australia will find in the years to come that they will be oppressed by government servants or by the Commissioner of Trade Practices. Businessmen will have to surround themselves with legal advice to ensure that they give the right answers to the Commissioner and the people who represent him. The trade practices laws, or anti-trust laws as they are called, of the United States of America are oppressive. They have had a profound and not too wholesome effect on company behaviour. The same sort of thing will happen here within a few short years. Companies will have to hide information from government servants because they believe that they cannot trust them and that the information might be given to their opposition.

I wonder how many businessmen realise what is involved in registration. Do they know that it is a costly and cumbersome instrument and that it will throw an unnecessary financial burden on the business community? Do business executives realise that agreements for registration include " any informal implied understanding"? What does that mean? The present Attorney-General, under the pressure of questions asked by the Victorian Employers Federation in April last year, went to great lengths to explain how specific this legislation was. He said -

I want to enlarge a little on this statement--

That is, a statement that he had previously made to this gathering - that only certain well defined practices are covered by the Government's proposals. The position is that certain practices of a limited number of clearly defined descriptions will become registrable practices - practices that by their nature are likely to eliminate or reduce competition. 1 think more clarity emerges when it is understood thai defined practices are registrable.

Does this mean the same as " any informal implied understanding"? 1 wonder whether it does. The Bill provides that the Commissioner will operate within the meaning of the term " any informal implied understanding ". There is quite a difference between those words and the explanation that was given to the Victorian Employers Federation by the Attorney-General. The provision of the Bill relating to failure to register an informal implied understanding makes present managements potential criminals punishable in industrial courts with a fine of up to but not exceeding £1,000. Indeed, there would be additional heavy legal costs because the particular company under fire from the AttorneyGeneral's Department, or the Commissioner, would have to ensure that it gave the right answers to the Commissioner and to the Tribunal. Again I ask: Which is correct - the explanation given by the Attorney-General, or the words contained in the Bill itself? I repeat that the Bill is so wide in its scope that liability on the part of any company to register will require it to obtain legal advice.

How many of us realise that the cost of administration of this form of legislation in America amounts to a tremendous sum? Indeed, I had the advantage of obtaining from Sir Leon Trout of Queensland, Past President of the Australian Chamber of Commerce, some figures mentioned by him when he gave an address at the John S. Mcinnes Memorial Lecture in Brisbane in October last year. Sir Leon Trout said that he had independent information from America to the effect that the administration costs - the government cost - of this form of legislation there was 15 million dollars and that it had been calculated by independent authorities there that lawyers' costs would amount to an additional 100 million dollars and the cost of executive involvement in this form of legislation a further 100 million dollars. In all, the annual cost of trade practices legislation to the American nation is 215 million dollars. A quick conversion to Australian currency tells me that it would cost America £100 million Australian to organise, manage and oppress the people of that country each year. Taken on a per capita basis, that means that this legislation would cost the Australian people, Australian industry, commerce and management, nothing less than £5 million and perhaps anything up to £10 million a year.

Never let anybody tell me that this added expense to the country's affairs will reduce prices. Indeed, in any country of the world that the Attorney-General or the Government can mention where this form of legislation is operative, there has been no known reduction in the price of goods to the community in general. Therefore, why should we intrude on the community with this tremendous, oppressive legislation?

My time is becoming short, but I do challenge the Attorney-General to prove that reductions in prices will be effected by this form of legislation. Indeed, I ask the Government to obtain information from any country in the world where it has been proved that any tangible benefit to the public interest has resulted from this form of legislation. It is impossible to add to the cost of any commodity and then say: " We will now reduce prices ". 1 wonder whether the Attorney-General realises that the biggest factor involved in the gross national product of Australia is wages. They are responsible for 50 per cent, of our costs. Does he know that another of our major costs is transport, that 30 per cent, of our overall cost is attributable to the cost of transport? When we add the cost of wages and transport together, we have only 20 per cent. left. It seems to me, therefore, that we are taking a somewhat small part of the build-up of expenses in Australia and attacking it first.

I wonder how many members of the Labour Party realise that a small addition to this Bill would ensure that the trade union movement - the workers themselves - would come under fire. I refer in particular to over award payments that are now being made to adult male workers in Australia. Over award payments are beneficial to the individual, and they are obviously beneficial to the companies concerned; otherwise they would not make them. In 1961, the Bureau of Census and Statistics produced an excellent book called "The Labour Report of 1961." It will be producing another one early next year. On page 76 of that book the Bureau points out that 15.2 per cent, of adult male employees in Australia receive over award payments of between £2 and £3 a week, that 15.7 per cent, receive over award payments of between £3 and £4 a week, that 17 per cent, receive over award payments of between £4 and £5 a week and that 9.7 per cent, receive between £5 and £6 a week above award rates. There are 2,553,000 adult male employees working in Australia. Taking the average of these over award payments at £3 per week, this means that, each week, £7,500,000 above the award rates is being paid to the little men, the workers of Australia. Taking 50 weeks as a working year, this means that over award payments totalling £375 million are made to the workers of Australia each year.

I believe I could make a good case to support an argument that the public interest would be benefited if our costs of production were reduced by this £375 million a year. Does the Labour Party realise that the Bill can be altered by the insertion of a provision to ensure that manufacturers, distributors and people engaged in commerce do not make these over award payments? I should like every unionist who is listening now to understand what the Labour Opposition - and some members on this side - will say about this Bill, because the workers will be the ones most affected in a negative way once this legislation is gazetted.

As I said earlier, I believe that we are turning the clock back to 1949 by introducing this oppressive legislation which is directed against the private enterprise sector of the economy. I share the doubts of all the doubters that the excellent relationships that now exist between private enterprise and the Government will be benefited by this form of legislation. I say again that trade practices legislation in other countries has produced a profound and not always wholesome effect on company behaviour and the behaviour of company executives. I object to the legislation because of its high costs to the community, because of its high cost to the little man, and because it will inflict high costs on the Australian worker.







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