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Friday, 26 November 1965

Dr J F Cairns (YARRA, VICTORIA) .- After expecting this legislation for five years and nine months, the Opposition at last welcomes its appearance in the Parliament. AttorneysGeneral and many other people have laboured on the legislation for that length of time, but I think it is legitimate to say that it is labour that has brought forth only a mouse. The Opposition does not oppose the legislation and does not propose to amend it in the many places where we think it should be amended. We think that the legislation is altogether too intricate - too bureaucratic in many ways - to make a constructive programme of amendment possible. However, we propose one simple general amendment to the motion for the second reading. I support that amendment, which reads -

That all words after "That" be omitted with a view to inserting the following words in place thereof: - " this House notes with approval that, in response to public pressure, the Government has introduced this limited Bill but deplores: -

(1)   the Government's failure to hold a referen dum, as unanimously recommended by the Joint Committee on Constitutional Review in its reports presented to the House on 1st October 1958 and 26th November 1959, to give the Parliament power to make comprehensive national laws with respect to restrictive trade practices; and

(2)   its abandonment of a substantial part of the proposals of the former AttorneyGeneral, for legislation on restrictive trade practices and monopolies, as outlined to the House on 6th December 1962 particularly with respect to resale price maintenance, persistent price cutting, monopolisation and mergers."

The amendment points out a number of the significant things in relation to this Bill. This Bill is before us today because of public pressure. The Government of big business the Executive of private enterprise, would not be seeking to regulate, even to the extent that it is now, the activities of private enterprise, were it not for public pressure and a belief that, having committed itself as long ago as March 1960 to the provision of legislation of this kind, it could no longer postpone the introduction of the legislation, as it has postponed it for almost five years and nine months.

The amendment moved by the Opposition also points out that the Government is unwilling to seek adequate power to deal with restrictive trade practices because it does not really want effective power to deal with them or with what it calls private enterprise. If it did, it would know that, with the support of every political party in Australia, it would have an excellent chance of having carried a referendum proposal to remove all the constitutional difficulties and the legal loopholes that exist in this legislation. This is the test of the sincerity of the Government in respect of this legislation: If it were true that the Government wanted to legislate effectively in respect of restrictive trade practices, the first thing that it would have done would have been to put a proposal in a referendum, as unanimously recommended by the Joint Committee on Constitutional Review, which Committee included members of the Government parties. The Government would have had the support of every political party in Australia in this respect. The proof of its insincerity is that it does not want effective power to interfere with its own managers, the people who control it and the kind of organisations to which this relatively ineffective legislation is expected to apply.

I believe that it is necessary for the House at this stage to compare the attitude of the Government on this matter with its attitude on other matters. There has been delay and prevarication on this matter. It is almost six years since the Government first announced that it would consider legislation of this kind. The Government recog nised the need for legislation of this kind in March 1960 when, through the medium of the Governor-General's Speech, it said -

The development of tendencies to monopoly and restrictive practices in commerce and industry has engaged the attention of the Government which will give consideration to legislation to protect and strengthen free enterprise against such a development.

So the Government had already given attention to the matter; it had been thinking of the matter before March 1960. Now, after a period of about five years and nine months, we have before us a Bill which has been weakened considerably in that intervening time.

One is entitled to compare the Government's attitude to the introduction of this piece of weakened legislation to deal with free enterprise with its attitude to the workers and trade unions. Recently we debated a bill to amend the Stevedoring Industry Act. It did not take the Government five years and nine months to bring in that amending bill. It was introduced in this House one day and we were told that we had to debate it the next day and that it had to be passed before the end of that week. We had to sit on a Friday in order to do that. The Government does not take five years and nine months to introduce legislation to deal with the workers and trade unions.

The honorable member for Wannon (Mr. Malcolm Fraser) has told us that this is a pioneering field. It is a field in which the Government has been pioneering for more than five years and nine months. It is a field in which the Sherman Act was passed in the United States of America in 1890 - 75 years ago. This, we are told, is a pioneering field. Does the honorable member for Wannon know these things? Does he think that a field in which there has been activity for 75 years is a fair example of a pioneering field? The honorable member for Cunningham (Mr. Connor) pointed out yesterday that legislation against such restrictive practices has been enacted in Denmark, France, Holland, Japan, Norway, Sweden, West Germany and the United Kingdom. Is this a pioneering field? It is a field in which there has been legislation for 75 years, and every country comparable to Australia has had legislation of this kind for a great many years. I notice that the honorable member for Wannon read his speech. So his statement that this is a pioneering field was a considered one; it was not just a slip of the tongue.

When one compares this legislation with, say, the Stevedoring Industry Act, one finds a very great difference. As far as it goes as a piece of legislation to combat restrictive practices this Bill, in my opinion, confers considerable powers. It can be effective. It can be just as effective as it is made to be, and I wonder whether the Government intends that it be made effective. As a piece of legislation to combat restrictive practices this measure would pass the test. But when one has a careful look at it one sees just how weak it is. Consider, for instance, clause 43, which provides for a failure to furnish particulars to be deemed an offence. It provides for a penalty of £1,000. But sub-clause (4.) says - * (4.) It is a defence to a prosecution for an offence against this section if the person charged satisfies the Court that -

(a)   he did not, within the time allowed for the furnishing of the particulars, advert to the question whether particulars of the agreement, variation or determination were required by any law to be furnished to the Commissioner, and that his failure to advert to that question was not attributable to a desire to avoid, or to indifference to, his obligations;

(b)   he reasonably relied on another party, or on a trade association of which he was a member, to ensure that the required particulars were duly furnished; or

(c)   he believed in good faith that particulars of the agreement, variation or determination furnished to the Commissioner by him within the time allowed complied with the requirements of the law,

Mr Crean - Can a prosecution then be brought against the person who did not do it - the agent?

Dr J F Cairns (YARRA, VICTORIA) - Yes. A prosecution can be brought against the person who did not do it. Then we come to clause 48 which provides that the Commissioner has to consult the parties with a view to avoiding proceedings. A restrictive agreement is arrived at and the Commissioner is required to consult the parties, not to prosecute them. The clause reads, in part -

48.   - (1.) The Commissioner shall not institute proceedings under the last preceding section unless he has first carried on, or endeavoured to carry on, either personally or through members of his staff with adequate knowledge of, or experience in, industry or commerce, consultations with the persons who would be the other parties to the proceedings, . . .

Compare that with the Stevedoring Industry Bill. Was there any provision in that Bill that anyone on behalf of the Government should consult the Waterside Workers Federation, or even the Australian Council of Trade Unions? Any consultation in that direction would have to come as a result of a good deal of public pressure. On the other hand, in that Stevedoring Industry Bill, which was produced one day and required to be debated the next and passed before the end of the week - not a matter that was stretched out over five years and nine months - there was provision to take out of existence the Waterside Workers Federation and substitute another organisation designed by the Government in its place. Is there any provision in this Bill for the Government to take such a drastic step with regard to an organisation that enters into a restrictive agreement? What a contrast there is between the attitude of the Government-

Mr Bowen - The honorable member is not seriously suggesting that this legislation is similar?

Dr J F Cairns (YARRA, VICTORIA) - I am not seriously suggesting to the honorable member for Parramatta that the Government would be serious in doing anything about what it calls free enterprise in this respect, except to create a smoke screen behind which it thinks it might be able to win votes at the next election. I am suggesting that if the honorable member has the kind of judicious capacity that a Queen's Counsel is presumed to have, he would see some merit in the contrast which I am making between the attitude of the Government in relation to this legislation and its attitude in relation to the Stevedoring Industry Bill. One also is entitled to consider the attitude of the Minister for Trade and Industry (Mr. McEwen). In answer to a question by the honorable member for Lalor (Mr. Pollard) in this House recently, the Minister for Trade and Industry said -

I shall be very glad to give the honorable member, who was Minister for Commerce and Agriculture in the Labour Government, the benefit of the attitude of my Party and myself. My attitude is that neither the Australian Country Party nor its parliamentary members should decide what is the correct policy for a primary industry. It has always been the policy of my Party that those who produce, own and sell a product are the best judges of the way in which their own property should be treated. It is the function of my Party to see that the will of those who produce and own the product is carried into legislative and administrative effect.

Let us consider the attitude of the Minister for Trade and Industry. He will not interfere with anyone who produces or sells a product, except in the way that the person who produces and sells the product wants him to do. That is what he does in respect of a primary product such as wool. He will not come away from this assumed attitude of neutrality on the wool referendum because it is a product, as he defines it, of the country. What is his attitude to this legislation? The Minister for Trade and Industry knows that there is a great deal of objection from free enterprise, as the Government calls it, to the legislation that is before the House today. He knows that the Government is imposing things upon the so-called free enterprise in this legislation. He is prepared to accept that position. Presumably, he is prepared to vote for it.

Let us contrast his attitude in that regard with his attitude when the product is labour that somebody is selling. Did the Minister hesitate to support the Stevedoring Industry Bill because the Government had not consulted with the Waterside Workers Federation? Did he require prior consultation on that occasion? Did he ask for a referendum of the Waterside Workers Federation before the Government introduced the Stevedoring Industry Bill? One has only to consider the so-called principles of honorable members opposite to see how one sided the principles are.

Mr Freeth - The honorable member ignores the fact that there is a long history to the stevedoring industry legislation. It dates back to the Chifley Government.

Dr J F Cairns (YARRA, VICTORIA) - Of course there is, and it is about time that we had a long history of legislation to regulate the people for whom the Minister for Shipping and Transport stands - the monopolies and the big businesses for which the Minister is the agent in this House. I refer to the shipping companies which dominate the export trade.

They have been his responsibility for some considerable time. It is about time we had a long history in this regard. Of course, we have a long history of legislation to regulate labour, and it is a very one-sided history. The monopolies have grown in power and the Minister has applauded this. No doubt he has received his compensations from what has been going on, because he has been associated with business in his time. This is the attitude that honorable members opposite normally adopt. They want to regulate labour, and they are doing so. They claim that there is a long history of such regulation.

It is clear as I think almost every honorable member who has participated in this debate has recognised that restrictive practices exist which are, in fact, most harmful. Almost everybody who has spoken in the debate has given extensive evidence of the nature and extent of restrictive practices. The Deputy Leader of the Opposition (Mr. Whitlam), in his speech, referred to an inquiry which had shown that about 32 industries in Australia were identified as highly concentrated. Among those industries in which only one company was producing the total Australian production were refined zinc, pig iron, ball and rubber bearings, linoleum, industrial gases, sheet glass and writing paper. Those industries in which there were only two companies producing the whole output were steel making and rolling, steel sheeting and sugar refining. Industries in which there were three companies producing the total output were matches, alkalis and chlorine, electric lamps, radio valves and television tubes and glass containers.

The extent of concentration and centralisation of industry in Australia is probably greater than in any other country. The extent of concentration comes as a surprise to most people when they hear of it. It comes as a surprise to know, for instance, that in 1961 there were 57,782 factories in the whole of Australia but that of those factories only 1,813, or 3.1 per cent, of them, employed over 51 per cent, of the people employed in all factories. It is fair enough to say that if they had over 51 per cent, of the employees they also had over 50 per cent, of the income and output of all of the factories in Australia. That is to say, 3.1 per cent, of the factories had over 50 per cent, of the output, income and employees of all factories. Turning to companies we find that 1.7 per cent, of the tax paying companies possess 61.7 per cent, of the taxable income of all companies, and they probably also possess over 60 per cent, of the output and the staff of all companies as well. It is fair to say that probably fewer than 3 per cent, of all the economic units in Australia, fewer than 3 out of 100 - probably some 2,000 or 3,000 of them - possess over 60 per cent, of the income, output, staff, machinery and power to make decisions in the Australian economy. That degree of concentration is probably as great as that which exists in any country.

In these circumstances there are bound to be restrictive practices. The honorable member for Wilmot (Mr. Duthie), who spoke a little while ago in this debate, quoted from the report of an inquiry that had been made in Tasmania. That inquiry revealed the extent to which there were restrictive practices in that State, and these practices are probably greater in some of the mainland States than they are in Tasmania. These restrictive practices should be outlawed. I think this Bill goes some of the way, and if it is used effectively it could achieve results that will be beneficial to the Australian economy. But the Bill does not go very far. It creates an intricate and costly bureaucracy and I think the criticisms that have been made in respect of this have considerable validity in them. One only has to refer to clause 35 and clauses 23 to 34 in Part III of the Bill to see how extensive this bureaucracy might be.

It might well be better to create specific, described conditions as clear as possible and to allow those conditions to create offences for which the offenders could be taken to a court and tried like anyone else who breaks the law. If one cannot be sure of what the nature of the offence has to be, then, of course, some kind of an inquiry is justified. An example of this was the Tasmanian inquiry that the honorable member for Wilmot mentioned. I think that we have to ask ourselves the question: What particular condition is it that we are endeavouring to get at and to stop in respect of restrictive practices? It is not that thi practice itself is something that can be objected to. There is very often no reason why people should not combine and act together. Sometimes such a combination produces a beneficial result. What is complained about - and this, I think, is of the essence of the matter - is that restrictive practices can lead to excessive prices. They can lead to exploitation. It is the excessive price aspect, the exploitation of the restrictive practices, that makes them objectionable. Once we direct our attention to the fact that we are concerned with the higher prices than otherwise should be charged - with the exploitation - then, I think, we see the total significance of the problem that we are endeavouring to meet by legislation of this kind. I have previously cited in this Mouse the opinions of leading economists, such as Dr. H. C. Coombs, Governor of the Reserve Bank, who said -

The tendency for prices to " creep " upwards in periods when total demand is not excessive, and even when it is mildly deficient, derives in part from . . . those who make decisions in business. . . .

Consider the pricing policies of industrialists and traders. No doubt some degree of competition prevails . . . but there are degrees of monopoly and tacitly accepted practices which mean that prices are determined by management rather than by the market for a wide range of goods and that within significant margins producers can decide at what prices their goods will be sold.

This tendency for prices to be higher than they should be, this tendency for exploitation that exists significantly in a concentrated monopolistic type of economy, is a natural and indigenous condition of an economy of that kind. There is nothing, I think, that restrictive practices legislation of this kind can do to deal with that problem. In the United States we have an economist as distinguished as Dr. Coombs is in Australia, namely, Gardner Ackerly, the Chairman of the President's Committee of Economic Advisers, who says -

In the above analysis I have, in effect, argued that the inflationary process is essentially an administrative one. . . . Whether aggregate demand is excessive or deficient, the problem of inflation needs to be analysed in administrative, that is, essentially political terms, and on the price as well as the wage side.

The result of this kind of examination is that the overwhelming part of the price problem - the problem where prices are higher than they should be; where there is a degree of exploitation in prices - does not come from restrictive practices at all. It comes from the natural state of a centralised, concentrated form of industrial structure.

Recently in our own country the Vernon report dealt also with this problem in respect of tariffs, and pointed out that in the Australian economy tariffs have contributed to the creation of this kind of centralisation or monopolisation of industries. It pointed out that it would be unreasonable to go on forever giving tariff protection without some undertaking about price policy. It stated -

A request for an undertaking about price policy if high protection is given would not be unreasonable, especially where the product concerned is an essential raw material.

I think it is apparent that while some good can come from restrictive practices legislation of this kind, it is only a very marginal matter in relation to the main problems of the economy in respect of the improper price increases with which we have to deal.

In conclusion, I think that we have reached the stage in this country where there is a significant division in the governing parties. This has emerged in a number of respects in the last couple of weeks. There is a relatively progressive or liberal wing of the Government parties, those who are prepared to go as far as they are going in supporting restrictive practices legislation of the kind produced by the AttorneyGeneral, but sitting behind the Ministers who are responsible for this is a very considerable opposition. The honorable member for Balaclava (Mr. Whittorn) said that he was totally against this legislation. It will be interesting to notice how he votes. The honorable member for Sturt (Mr. Wilson) said, in effect, that he was prepared to support this legislation only because it had been weakened in such a way that it would probably not be effective. The honorable member would not have supported the legislation that was proposed in the first place by the former Attorney-General, Sir Garfield Barwick. This opposition to the relatively progressive section of the Government parties is a matter of considerable significance. Those who oppose the members of their parties who would be prepared to go as far as this Bill goes are a good deal more backward than anyone in the British Tory Party. This legislation would be accepted by almost every member of that Party. The division in the ranks of the Government parties showed up a week ago in respect of economic sanctions on Southern Rhodesia. The Prime Minister (Sir Robert Menzies) took a stand in favour of economic sanctions. Almost every other member of the Government parties who spoke in that debate was against sanctions. It is of significance to the House and to the nation that the coming retirement of the Prime Minister will increase and strengthen the reactionary section of the Liberal Party. This will become a problem of no little significance in Australian politics in the relatively near future.

One can notice the inadequate examination that has been made of this legislation by, for instance, the honorable member for Wannon (Mr. Malcolm Fraser), who supports it. He spoke of the wool sales at Portland, where wool buyers got together and refused to buy wool that was to be sold there. The wool buyers did not want another wool selling centre to be established. What the honorable member for Wannon forgot to tell us - this is an indication of the inadequacy of his analysis of the Bill - was whether he thought the legislation would have any relevance to the Portland case. He told us that it was necessary to have legislation of this kind. He told us that the events at Portland had been dealt with because the Victorian Government had threatened to introduce legislation if the wool buyers continued with their boycott. But the Victorian Government has not yet introduced that legislation. So the honorable member for Wannon left us in doubt whether he thought this Bill would have any relevance to a case such as the refusal of wool buyers to buy wool at Portland. Presumably that is an intrastate matter in respect of which this legislation would not be effective.

Mr Malcolm Fraser (WANNON, VICTORIA) - The Australian Council of Wool Buyers is a national association of wool buyers and-

Dr J F Cairns (YARRA, VICTORIA) - Is it the honorable member's view that this legislation will apply to the Portland case?

Mr Malcolm Fraser (WANNON, VICTORIA) - Yes, certainly.

Dr J F Cairns (YARRA, VICTORIA) - The honorable member forgot to mention that when he was speaking. I would have thought that he would have mentioned it. If honorable members opposite who are interjecting will look at " Hansard " they will find that the honorable member for Wannon did not say whether he thought this legislation would be relevant to the Portland case.

The final point I want to make concerns export franchises and agreements. The Department of Trade and Industry has announced that over 700 companies are. involved in 1,100 agreements which are restricting exports from this country. What is the answer of Government supporters to this? The answer was given to us by the honorable member, for Wannon. He said that he did not think these were the kind of agreements we wanted to catch by legislation of this kind. Agreements to restrict exports are becoming more and more significant ever day. They have to be caught in some way.

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