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Friday, 26 November 1965

Mr WILSON (Sturt) .- Liberalism has been defined as the right of the individual to do as he likes so long as he does not interfere with the freedom of others. Free enterprise has been defined as the right of enterprise to conduct its affairs as it thinks fit so long as it does not interfere with the freedom of other enterprises. Liberalism has never meant licence to harm others. Free enterprise has never meant freedom to conduct an enterprise in such a way that it harms other enterprises. Acting in accordance with the philosophy of liberalism and freedom, this Government after its election to office in 1949, set about removing the shackles from industry; it abolished rationing and controls and revived freedom. Since 1949, this country has made most remarkable progress. Today, Australia is one of the most prosperous countries in the world. More people wish to migrate to Australia than to any other country. More capital is coming to Australia than to any other country. We can virtually say that today Australia is the envy of the world. Australia has made this remarkable progress without any trade practices legislation other than the Australian Industries Preservation Act. That, however, does not mean that we should simply sit by and do nothing when we see certain practices carried on that are harmful to the community. At the sams time, we must be exceedingly careful that in our attempts to prevent harmful practices we do not put controls and restrictions upon industry that will retard progress and growth.

Mr Irwin - The medicine is worse than the cure.

Mr WILSON - As my friend said, it may be that the medicine is . worse than the cure. The Government of the day has the responsibility of seeing that any action taken to stop harmful practices does not harm individuals and undertakings that are carrying on their business to the benefit of the community as a whole.

I want to examine this legislation within the scope of those principles. Can we stop harmful practices without imposing unnecessary controls and restrictions that will retard the progress of industries that are not engaging in harmful practices? When the former Attorney-General delivered a statement in this House on the proposed legislation dealing with restrictive trade practices, as they were then called, I had to inform him that I could not support the legislation because it was too comprehensive. It put out a net that would have interfered with every trade and business in this country. It was completely overall and comprehensive. It would have affected everybody down to the small greengrocer and the newspaper boy standing on the corner. It would have retarded progress and growth and would have introduced harassing controls and restrictions on the management of business. At that time I wrote to the Attorney-General - 1 have the letter before me, but it is rather too long to read - and set out the reasons why I was opposed to the legislation. I said that the legislation made the Government a busybody, that it interfered with industry and that in an endeavour to catch the guilty it placed onerous restrictions on the innocent.

I am delighted to see that, in the Bill now before the House, much of that interference with normal trade and industry is removed. The previous legislation required all agreements and practices to be registered. That would have meant that people who were carrying on practices that were not contrary to the public interest would have had to register those practices and people who had entered into agreements that were not contrary to the public interest would have had to register those agreements. The result would have been that, there being so many practices, the register would have been completely cluttered. Every business in the community would have been interfered with and the growth and development of the country would have been affected. I am glad that some note has been, taken either of my representations or of representations made by somebody else, because . now we find that practices do not have to be registered. However, I regret that agreements still have to be registered.

I cannot see the logic behind forcing an individual, company or firm to go to the expense and trouble of registering an agreement that is not harmful to the community. I hope that even at this late stage the Attorney-General (Mr. Snedden) will see fit to remove the provision requiring the compulsory of agreements. I cannot see that that would weaken the Bill in any way. The authorities would still have power to call for the production or registration of an agreement if such agreement were thought to be harmful to the community. My whole basis of approach to the Bill has been on the principle I enunciated at the beginning of my speech. Does a practice interfere with the liberty and freedom of other businesses? If we examine the legislation from that point of view, we do not see any necessity to register agreements. However, the Bill has gone a long way towards removing the objectionable features of the previous proposal and now only agreements and not practices have to be registered.

Another feature of the Bill that I can wholeheartedly support is the provision that nobody commits an offence until it is proved that his agreement or practice is contrary to the public interest. This is different from the very objectionable legislation in the United States of America and the United Kingdom. There a person can go to a lawyer -the best lawyer in the land - and say to him: " This is an agreement or practice that 1 want to enter into. I believe it to be in the interests of my industry." The lawyer can go into it and say: " In my opinion, that is perfectly lawful". If the company then undertakes that practice and if a court later decides that the legal advice originally given was wrong, the company will find itself subject to a heavy fine and the directors sometimes find themselves in goal. They have committed an offence purely because the law is uncertain. There should be no uncertainty in the law. Therefore, in determining whether an agreement or a trade practice is contrary to the public interest, the Bill very properly provides that an offence has not been committed until the Tribunal has held the agreement or practice to be contrary to the public interest. In other words, if the authorities think a certain practice is contrary to the public interest they will notify the person or the company concerned that the practice is considered to be contrary to the public interest.

Certain negotiations will then go on. The Attorney-General has introduced a very wise procedure of conciliation. The authorities and the company will get together. The authorities will say: " We think this practice is contrary to the public interest and we urge you to stop it ". The company might then say that, in its opinion, the practice is not harmful to the community. The two sides will confer and discuss the matter and in most cases they will be able to reach a mutual agreement. But if they cannot come to a mutual agreement, the matter will then go to the Trade Practices Tribunal. If the Tribunal, after hearing both cases and all the relevant evidence, considers the practice is contrary to the public interest, the company will then be told that it must cease carrying on the practice. Even up to that stage, no offence will have been committed. If the company continues to carry on the practice after the Tribunal has said that the practice is illegal because it is contrary to the public interest, then for the first time an offence will have been committed. The good features of this Bill are that the law will be made certain by the means I have indicated, lt will not be as it is in the United States of America and the United Kingdom where no-one knows with certainty what the law is. When the law is declared and made certain, the person concerned has already committed an offence.

This Bill has many good features and for that reason I propose to support it. Subject to what 1 have said about compulsory registration, I consider that there are very few objectionable features in the Bill. I am hopeful that between now and the final passage of the Bill, the Attorney-General will see the light of day and remove the completely unnecessary proposal for the compulsory registration of agreements. The result of that provision will be that thousands and probably hundreds of thousands of agreements with companies will have to be registered. In many cases they will be agreements of such a type that it would not matter whether they were registered or not but those concerned will have to go to a lot of unnecessary and endless trouble. The registries will be cluttered up with all sorts of agreements that have no reference to harmful practices at ail. What is the advantage to the community in building up a huge bureaucracy to deal with something that is not a harmful practice? Surely if it is alleged that an agreement is a harmful practice, a simple provision giving the Commissioner the right to call for the production and, if you like, registration of the agreements he considers harmful would be much more preferable to a complete dragnet direction that all agreements have to be registered if there is a possibility that they relate to restrictive trade practices.

Mr Haworth - Just to ascertain whether they are good or bad agreements.

Mr WILSON - Yes, to see whether they are good agreements or bad agreements. I wish to refer now to a few remarks which were made by the Attorney-General and which I support wholeheartedly because they express principles in which I strongly believe. In opening his second reading speech the Attorney-General said -

The purpose of this Bill is to preserve competition in Australian trade and commerce to the extent required by the public interest.

Sitting suspended from 12.45 to 2.15 p.m.

Mr WILSON - Mr. Speaker, before the suspension of the sitting I had pointed out that it was the duty of the Government to govern and of the trader to trade. The Government should be free to govern and the trader should be free to trade untrammelled by government interference so long as he does not interfere with other traders or act contrary to the public interest. This Bill aims at dealing with agreements and practices that are found to be contrary to the public interest. I emphasise the words " that are found to be ", because no offence will occur until a practice or an agreement has been thoroughly investigated by a proper tribunal and held to be contrary to the public interest. Even then, there will be no offence unless the trader continues to carry on that practice contrary to the order of the Tribunal. I pointed out earlier that under the terms of this measure practices will not have to be registered. But, for some reason that I cannot understand, agreements will have to be registered. This, as I pointed out, is my objection to the Bill. I cannot see why a perfectly innocent agreement between two traders which no-one suggests is contrary to the public interest should have to be registered. That seems to me to be an unwarranted interference with normal trade and commerce. I cannot see that this provision will serve any good purpose.

If a person considers that he is adversely affected by an agreement all that he will have to do will be to go to the proposed Trade Practices Tribunal or the Commissioner of Trade Practices and say: " So and So has entered into an agreement that is acting adversely to my interests." The Commissioner or the appropriate authority will then have the right to call on the trader concerned to produce all agreements in relation to the particular matter. They could be examined and the very fair and sensible procedure set out in this measure could then be followed. Why should all agreements be registered when only agreements that are contrary to the public interest are in question? Therefore, Sir, as I stated earlier, 1 hope that the Attorney-General will have another look at this aspect of the Bill.

I congratulate and commend the Minister on the splendid machinery provided in this measure for the examination of prac tices and agreements that may or may not be contrary to the public interest. He does not propose to do as has been done in other countries. He does not propose to drag people into court and put them in the position of having to prove, often at great cost to themselves, that they are not carrying on a practice or participating in an agreement that is contrary to the public interest. As I see the machinery provided in this measure, it means that the appropriate authority will say to the trader concerned: "I consider that there is a possibility that your agreement or practice is contrary to the public interest." The authority and the trader will then have a conference and talk the matter over. Conciliation may even be considered. But the trader will be given every possible opportunity, without the intervention of any court and without any formal procedure, to satisfy the authority that his practice or agreement is not contrary to the public interest. Only after the resources of all that friendly machinery, if I may so describe it, are exhausted and only if the authority still believes that the practice is contrary to the public interest and the trader still maintains that it is not, will there be a hearing by the Tribunal. At that hearing each side will have the right to put all its evidence and to state its case fully. The independent Tribunal will then come to a decision. But even when it has made its decision, there will still be no offence. An offence will occur only if a trader, in defiance of the decision of the Tribunal, continues to carry on the practice or participate in the agreement.

I believe that a splendid procedure has been thought out by the Attorney-General. It will provide what is lacking in other countries - certainly. The trouble in other countries is that a trader never knows for certain whether his practice is legal or illegal. He will certainly know in this country because a practice will become illegal only after the Tribunal has said: "Your practice is illegal. You are not to continue it any longer". If the trader continues it after that, he deserves all the punishment he gets.

I now want to state the reasons why I support this Bill. The Minister, in his second reading speech, said -

The purpose of this Bill is to preserve competition in Australian trade and commerce to the extent required by the public Interest. Competition is an essential ingredient of any free enterprise economy.

I believe in freedom. I believe in a free enterprise economy. I believe that competition is essential to maintain a free enterprise economy. The Minister later quoted a statement made by somebody else which described the Government's philosophy in these terms - . . a free enterprise society was desirable, in that it provides for its citizens to be at liberty to participate in the production and distribution of the nation's wealth, thus ensuring competitive conditions which tend to initiative, resourcefulness, productive efficiency, high output and fair and reasonable prices to the consumer ... the Government believed that practices which reduce competition may endanger those benefits which we properly expect and mostly enjoy from a free enterprise society.

I wholeheartedly support those views which were quoted by the Attorney-General in his second reading speech. He went on to say -

.   . there may well be some practices, restrictive in nature, which are in the public interest.

With that, I entirely agree. That being the case, Sir, I ask the Minister: Why must agreements that are in the public interest be registered? He went on to say -

The Government's purpose has, at all times, been to produce legislation that will be effective without constituting any unnecessary interference to business.

I believe that, with one exception, the Minister has given effect to that purpose. The one exception is that he proposes to compel the registration of innocent agreements. Further, the Attorney-General said -

The Government has recognised that the effectiveness of the legislation will depend upon the ability of the administrative machinery set up under the Act to handle the work load imposed on it . . .

There would be no difficulty in implementing the Bill effectively if there were no need to register innocent agreements as well as guilty ones. The Attorney-General proceeded -

The Bill will cover five types of agreement which have certain common characteristics. For example, they must be between persons who are carrying on businesses for the supply of goods or services and those businesses must be competitive with each other. ... By the agreements one or more of the parties must accept a restriction on bis freedom to compete . . .

This is a tremendous improvement on the legislation that was announced at an earlier date. It limits the agreements that have to be registered to what are called horizontal agreements - to agreements between persons carrying on the types of business that normally would be competitive - whereas under the previous suggestion everything was to be covered, whether it was described as a horizontal agreement, a vertical agreement or any other type of agreement. This is a very good and sensible limitation because it will enable the authorities to get at the real evils without interfering or meddling too much with trade and commerce. The Attorney-General also said -

Except for collusive tendering and collusive bidding-

I do not think any honorable member would attempt to justify collusive tendering or collusive bidding as being lawful and therefore I have no objection to those two devices being declared illegal - the principle which is maintained throughout the Bill is that no agreement or practice is made illegal until it has been examined and a determination has been made that it is contrary to the public interest. 1 think that that is the most important feature of the Bill because it provides the certainty which was lacking in the previous legislation, the certainty which is lacking in England and the certainty which is lacking in America. I believe that the AttorneyGeneral, very cleverly and skilfully, has found a way past the difficulty by providing for proper examination of unlawful types of agreement at proper hearings and for declarations to be made that practices must be stopped when they are found to be illegal.

Therefore, I support the Bill, but I urge the Attorney-General to give consideration to what I believe is its great weakness - the compulsory registration of all agreements whether or not they are contrary to the public interest.

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