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Friday, 26 November 1965

Mr DUTHIE (Wilmot) .- Mr. Speaker,this legislation has been talked about and written about for a long time, and there have been many stops and starts in its progress, but now that' it is with us it comes as an anti-climax. I am sure that many honorable members feel that way about it. The legislation has taken from three to four years to produce. It started off as a roaring lion, but today it is a tame and almost toothless lion. It has been to the dentist and quite a lot of its teeth have been pulled out deliberately. However, it is a miracle that under such a government as this we have the kind of legislation now before us. The arch-supporters of capitalism and of so-called private enterprise have brought down a Bill which will restrict the activities of private enterprise and of capitalism to a certain extent. To me, that is a miracle. " We of the Opposition support this legislation but we would rather have had the legislation of three or four years ago as envisaged by Sir Garfield Barwick. The main difference between this side of the House and the Government side at the moment is that we on this side want the legislation to be strengthened and those on the Government side want it to be weakened. But at least we have something- before lis which I hope will be passed by both Houses of the Parliament and which, in later years, can be amended and strengthened if necessary. I think that will be necessary.

Sections of big business. look upon this legislation as gross interference with what they regard as their right to carry on illegitimate business practices. They claim that the legislation is striking at the citadel of capitalism itself. Already in this House we have heard four speeches from Government members who have been vitriolic in their attacks on the legislation. I refer to the honorable members for Isaacs (Mr. Haworth), McMillan (Mr. Buchanan), Balaclaca (Mr. Whittorn) and Sturt (Mr. Wilson). In most of his speech the honorable member for Sturt was grossly critical of Part V of the Bill. This debate has already revealed grave differences of opinion on the Government benches about the legislation. It is no wonder that the Attorney-General (Mr. Snedden) has been so long in getting this Bill into legislative form and in having it approved and brought into the Parliament for debate. One wonders how some of the honorable members opposite who have spoken already could possibly support the legislation when the vote on it takes place at about 6 p.m. on Tuesday next.

Why is this legislation necessary? It is recorded that of 1,250 trade associations in Australia, at least two-thirds, or about 810, had organised restrictive agreements. That is the first reason. Restrictive practices are in existence and have to be checked. The second reason, in my opinion, why the legislation is necessary is the massive immorality of big business, as shown by the recent activities of H. G. Palmer Pty. Ltd., the Reid Murray group and other huge enterprises in Australia. They have broken down under the weight of dishonesty and cheating. Those are the two reasons why we have this legislation before us, even in this tame form.

Who are the people who are being hit by these practices? First, there are the small investors. 1 think we should protect the small investor if we protect anybody. The pensioners, the workers and the farmers are also being hit by restrictive and monopolistic trade practices. It seems, Mr. Speaker! that we are passing through the sunset of oldfashioned free enterprise. I smile when I hear Government members like the honorable "member for Sturt talk lovingly and tearfully about free enterprise. We used to have free enterprise, but now we must regard it as almost an event in the history of Australia. Free competition at the honest grass root level of past times is rapidly d\sappearing under the ruthless onslaught of monopolisation and takeovers. Large scale takeovers have reduced true private enterprise and true independent trading to puny proportions. If this tendency continues, by the turn of this century there will hardly be one example of truly free enterprise, truly private enterprise or truly independent enterprise left in Australia. I see a tombstone in the cemetery of capitalism and on it is written: " Here lieth free enterprise: Died a slow death at the hands of monopolies, financial moguls, dishonest dealers, takeover merchants and restrictive trade practices." The letters " R.I.P." do not appear on the tombstone because there is not peace for free enterprise, although apparently it has been buried in the way that I have mentioned.

The most amazing phenomenon of recent years under this Liberal and Country Party coalition Government has been the process of nationalisation by monopolisation. Here we have had the arch opponents of government nationalisation sweeping all adherents of government nationalisation out the front door while permitting private nationalisation groups to come in the back door under the guise of monopoly. If in the eyes of Liberalism one form of nationalisation is wrong so also must the other form be wrong in fact. Herein lies the Government's hypocrisy. Until now, after about 16 years in office, the Government's hypocrisy has been seen in this phenomenon. The Government condemns a suggestion of government nationalisation of activities like banking or production but it has allowed monopolies and restrictive trade to kill the business of the little man and to kill true competition between business enterprises throughout Australia. In other words, within its policy it has encouraged the creeping paralysis of nationalisation by monopolisation to go on unchecked. That is another reason why this Bill is before us at the moment. Monopoly enterprise is rapidly replacing private enterprise; restrictive enterprise is replacing free enterprise; and combination is replacing competition. Anyone who does not think so is either moving about with his eyes shut or just does not want to see.

Some very interesting comments have been made in the course of this debate, especially by some honorable members on this side of the chamber. Last night the Deputy Leader of the Opposition (Mr. Whitlam) in what was in my opinion one of his best speeches, said -

Prices are determined, not by competition in the market place, but by management in the board rooms.

Truer words could not have been spoken. I come now to the efficacy of this Bill. Will it work? That is the 64 dollar question. We are putting tremendous power in the hands of one man by passing this measure. That is amazing from a government like the present Government. It is proposed that the Commissioner of Trade Practices will have tremendous responsibilities. He will be assaulted from all sides by business people, and his will not be an enviable job. One of the weaknesses that I see in the legislation is that the Commissioner will not be answerable to Parliament for his decisions. In this respect the Bill is unlike the British Act, a copy of which I have before me at the moment. In a booklet "Industry in Britain: Organisation and Production " prepared for the British Information Services, an article on monopolies and restrictive practices states at page 17 that no order can be made by the British Monopolies

Commission under the Restrictive Trade Practices Act 1956 without the approval of Parliament. In Australia the Government is bypassing the voice of the people, which is the Parliament in a democracy. I believe that some day, if this Government does not do so, a Labour government will bring the actions and the orders of the Commissioner to the Parliament for scrutiny and ultimate approval or otherwise.

Mr. Goss,secretary of the Wholesale Wine and Spirits Merchants Association of Tasmania, said in a letter that he sent to all members of the Parliament that the Tribunal is apparently intended to be an autonomous body and not answerable to Federal Parliament like other instrumentalities such as the Tariff Board. He said that he believed it was highly desirable that the Tribunal should be answerable to Parliament. Of course it is desirable. That is one of the main criticisms that I have of the Bill, in a broad sense. My next criticism is that the Bill repeals the. famous Australian Industries Preservation Act, 1906-1930. The Australian Industries Preservation Act is a piece of legislation that Liberal governments have never used; it has been allowed to gather dust on the shelves. That Act provides an excellent weapon for any government that wishes to help to preserve what may be called truly free enterprise in Australia, but it is now to go by the board as a result of this new legislation. That is a great pity. There has been little consultation between the Attorney-General ( Mr. Snedden) and the States on this very important legislation. The Deputy Leader of the Opposition mentioned this last night and quoted the exact words of the Victorian Minister who introduced that State's Collusive Practices Bill. That Minister said that there had been no consultation with him about the legislation. That is a great pity, because the legislation will affect everybody in every State. Even if the States do not bring in complementary legislation this measure will apply at the Federal level in all States. The AttorneyGeneral has assured us of this. At the moment Western Australia has legislation similar to this. Tasmania has done a magnificent job in bringing down in May of this year a report of a royal commission. I shall quote part of that report a little later. Apart from Victoria, all States either have or are contemplating not exactly the same legislation, but similar legislation. Actually the States are condemnatory of this Bill. Apart from the legislation to which I have referred, there is no evidence of other restrictive trade practices legislation in any State. That makes it more important that there should have been consultation between the Attorney-General and the States on every aspect of this important and pioneering legislation.

Why has there been a delay of four years in producing this legislation? We know what has been going on behind the scenes. There has been tremendous pressure on the Government to pull out the teeth of the Barwick proposals, and there has been pressure on the Government backbenchers from big business in their electorates. All this has been going on for nearly four years and that is the main reason for the delay. Honorable members on this side of the chamber did not believe that the Bill would ever hit the deck. However, finally the Prime Minister (Sir Robert Menzies) stood everybody up and decided that the Bill was to be introduced and would go through. We are now in the process of putting it through. This legislation does a lot of things but, interestingly enough, some of the important things are left out. I just want to mention one comment made by the honorable member for Cunningham (Mr. Connor) last night. He said of the Bill-

It claims to be comprehensive in covering re strictive agreements and practices, yet it contains no proposals for the control of mergers and takeovers or for the control of individual as distinct from collective resale price maintenance.

The degree of market concentration which prevails throughout the Australian economy is unusually high and particularly so in comparison with the American, British and Canadian economies.

There are other factors not covered by the legislation. When honorable members compare this Bill with the legislation of Great Britain and the United States - the United States legislation came into operation in about 1910 when the Sherman anti trust laws were introduced - they will be amazed at how much has been left out of this legislation. Why should unfair, unjust and illegitimate business practices receive better treatment here than in any other country. Perhaps it is because this is the first time that Australian legislation of this type has been brought in. Perhaps by the time our act has been in existence as long as the British and American acts we may provide for more stringent penalties, but at the moment our legislation is not to be compared with the acts of those two countries.

We have had much evidence of collusive tendering. This is a new feature and one of the evils of big business. I should like to quote from the "Advocate", a newspaper which circulates within my electorate. It is published in Burnie, which is within the electorate of the honorable member for Braddon (Mr. Davies), but like the " Mercury " which is published in Hobart and the " Examiner " which is published in Launceston it circulates throughout the electorate of Wilmot, which covers half the island of Tasmania. I have to read three daily newspapers to keep in touch with what is happening in my electorate. On 27th July of this year the following report appeared in the " Advocate " under the heading "Oil firms' identical tenders 'restrictive practice ' - Councillors claim " -

The council decided-

That is, the Ulverstone Council - to take up with the Commonwealth Government the question of whether the identical tendering was, in fact, a restrictive practice.

Further on the report continued -

The Warden (Cr. Little) said Government departments and city councils were being supplied with petrol at 7}d. a gallon less than councils.

He asked why there should be a difference between country councils and city councils and Government departments. In his opinion, the identical tendering by the oil companies amounted to a restrictive trade practice.

Several private organisations in the Ulverstone Municipality were buying their petrol at a lower price than the council paid. "As the Council can buy through the Supply and Tender Department practically all other items it requires, I feel that petrol should be handled on the same basis," Cr. Little added.

The Council Clerk, Mr. Gane, is reported as saying -

As far as practicable, all other items supplied by the Supply and Tender Department are available to the Council at the same price as that paid by Government departments.

That day the Council had a very interesting discussion about collusive tendering by the oil companies for council petrol supplies and the way in which it kept prices up higher than the prices at which the Council could get petrol from other sources.

Mr Benson - Where was this?

Mr DUTHIE - It was in Ulverstone on the north-west coast of my State. In the marvellous report of the Tasmanian royal commission, which has been the only royal commission into this type of practice yet held in the history of Australia-

Mr Malcolm Fraser (WANNON, VICTORIA) - There was one in Western Australia.

Mr DUTHIE - Not a royal commission?

Mr Howson - Yes, there was.

Mr DUTHIE - I apologise. I am very solicitous where Tasmania is concerned, but I would not like to undo anything that Western Australia has done. Good luck to that State. I propose to quote from the report of Mr. John McBain Grant, who was the Tasmanian royal commissioner. In that document, which consists of 84 pages, are many evidences of collusive tendering in our island State. At page 18 of the report, the commissioner states -

Mr. L.G. Morgan, Secretary of the Housing Department, testified that when his Department called for tenders on August 24, 1964 for the supply of 100 automatic electric storage water heaters of 40 gallons capacity, there was no difference in the prices submitted, whereas previously quotations had not been identical. From the evidence relating to the Hot Water Systems Manufacturers' Association of Tasmania it can be seen that this collusive tendering was the result of the horizontal price .agreement reached by members at their inaugural meeting on July 11, 1964. . . .

Those members deliberately planned collusive tendering for these items. Then the report continues -

Mr. Poulson,manager of the Supply and Tender Department, stated that until the middle of 1964 the prices quoted for the supply of petroleum products were the same for all the oil companies and the contract used to be allotted equally among the tendering companies.

However, later last year they decided not to put in collusive tenders. Probably they became scared about this kind of legislation being introduced. Evidently they have abandoned the practice as it affects the Supply and Tender Department. The commissioner also quoted this example -

Mr. S.Harris, Deputy Stores Superintendent at the Hydro-Electric Commission gave evidence of identical quotations being received from four Australian manufacturers from whom the H.E.C. called for tenders for the supply of multi-core control cable, while for the supply of electric light meters the Australian manufacturers-

Listen to this - and the representatives of oversea manufacturers quoted identical prices. The agreements and arrangements which are responsible for level or collusive tendering in these cases were beyond the power of the Commission to obtain.

So we see that not only the four Australian companies that were supplying multi-core control cable but also overseas companies were submitting identical tenders to the Hydro-Electric Commission. At page 19 the Commissioner reported -

Mr. E.Poulson gave evidence of identical tenders being received for sports goods, picks, mattocks, axes, shovels, cement, nails, galvanised water pipe and fittings, steel of various classifications, plywood, plain and barbed wire, mesh wire, spanners, vices, screwdrivers, automotive parts and accessories, air compressors, tyres, rubber belting and books. For all of these products the nature of the restrictive trade practice producing level tendering is described in Appendix C under the heading of the appropriate trade association.

That is a fantastic gathering in of a variety of items in relation to which there was collusive tendering. I now quote the final paragraph on page 19 of the report -

In all the examples given above collusive tendering either forced a buyer to obtain goods from abroad or has had the effect of raising Australian prices in which case the possibility that, in the absence of these practices, the goods might have been obtained from local sources, cannot be ignored.

What the Commissioner was trying to say was that, because of collusive tendering and the keeping up of prices by agreement between the suppliers, with one level of prices and one profit margin, many people in Tasmania have had a look overseas for the items concerned and have got them from overseas at a price lower than the price which was submitted as a result of collusive tendering. This has forced us to import goods unnecessarily, thus eating up valuable reserves overseas. I have drawn attention to a very important example of what is happening under the system of collusive tendering. We have proof beyond doubt in the commissioner's report. I should now like to refer to two or three paragraphs on the same subject which appear at page 31 of the report. The key to the report of any royal commission is to be found in its conclusions and recommendations. This is what the commissioner said -

Examination of the activities of about 70 Tasmanian trade associations, the majority of which covered firms engaged in wholesale and retail trade, reveals that approximately two-thirds of the associations were involved in restrictive trade practices as defined above.

Mr Coutts - Are they all crooks down there?

Mr DUTHIE - No, only two-thirds of them. The Commissioner said further -

The effect of most restrictive trade practices is to cause prices to be higher than they would be otherwise.

Dr J F Cairns (YARRA, VICTORIA) - -"Where did this happen?

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