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Thursday, 2 December 1976
Page: 3169

Mr Antony Whitlam (GRAYNDLER, NEW SOUTH WALES) - Clause 16 is a most outrageous provision introduced by the Government. This provision will, in effect, destroy the Tribunal. Honourable members ought to be in no doubt about the central importance of the exemption powers in the workings of the Tribunal. Section 18 of the Act, which deals with notification of proposed price increases, is the central provision of the Prices Justification Act. The exemption power is absolutely vital to the administration of that provision. I read very briefly what the Tribunal had to say about this power in its annual report for the year ending 30 June this year. It stated: the exemption power contained in the Prices Justification Act complements the notification power in 2 very important ways; first by providing an optional power and second, by providing the Tribunal with the means of exercising a discretion based on the circumstances and nature of individual cases.

The Tribunal has used that power to develop 12 categories of cases in which it grants exemption. The conditions of the exemption are largely standard in those categories. The Tribunal comments that the development of those categories has been of enormous practical value both from the Tribunal's and the companies' points of view. What the Government is proposing now, especially in the amendment just moved by the Minister for Business and Consumer Affairs (Mr Howard), is that the grant of an exemption by the Tribunal cannot be made subject to any condition. I want to show how important it is that when granting an exemption the Tribunal ought to be able to impose conditions. The bona fides of the Minister, quite frankly, in this exercise is open to grave doubt. When he introduced the Bill on 1 1 November he stated:

The Government expects that in most cases exemptions will not be subject to reporting conditions.

He concluded:

The thrust of these changes is to ensure that exemptions are of real benefit to companies and that they do not have associated with them the onerous reporting conditions attaching to the notification procedures.

Since 1 1 November he has talked to someone else and someone else has convinced him that no conditions ought to attach to exemptions at all. He gave us no good reason why. He mentioned earlier by way of interjection that he was not in favour of the retail industry being subject even to the notification provisions of section 18. If one looks at that very difficult question of the retail industry one will see that it is precisely in that business that the Tribunal has developed exemption procedures that seem to work quite well. At page 43 of its annual report the Tribunal says:

.   . the new exemptions-

That is, in relation to the retail industry- provide a better surveillance of the retailer's operations yet there is little requirement for information not normally compiled by the companies in the course of their business operations.

Just how is it proposed that the Tribunal or in fact the Government is going to have any knowledge of what is going on in these industries unless the people who get the exemptions are subject to conditions on the way in which they conduct their businesses and unless they have to provide the Tribunal with a continuing body of information so that it remains expert in price surveillance? The Tribunal pointed up at page 45 of its report how very important is the information that comes to it as a result of the conditions imposed under exemption authorisations. Talking about inquiries pursuant to section 16 of the Act it said:

The initiative for these investigations came through advices received from the major retailers as a condition of retail exemption orders, from information about higher costs supplied by prescribed companies in support of notices of higher prices, and from information provided by members of the public.

Of the 3 ways in which the Tribunal gathers information which leads to a section 16 inquiry situation, the most important is the continuing reporting of conditions imposed under the exemption authorisations. Yet the Minister proposes to do away with those conditions. Not only does he propose to do away with those conditions prospectively but he proposes also to do away with them in relation to exemptions already granted. Of course, that is completely outrageous, because the kinds of matters in this new legislation to which the Tribunal is to direct its attention in granting authorisations were not statutory requirements at the time those previous exemptions were granted. It means in effect that where the Tribunal has granted exemption on one set of circumstances, and the Tribunal has said it will grant the exemption subject to certain conditions, the Minister is now saying that the exemption will stay in place; the conditions will not apply. Of course I can anticipate what the Minister will say, and that is that it is perfectly possible for the Tribunal at any time to revoke its authorisation of the exemption. He ought to be aware that to do that in every one of these cases where there is an existing exemption which imposes conditions would throw the whole system into chaos.

The orderly development of price surveillance, if that is what the Government wants, depends upon reliable information being provided to the Tribunal on a continuing basis. The way in which that is done under exemption, where an exemption is granted, is to impose conditions. The alternative is to revoke those exemptions and to insist in every case that there be a notification of the proposed price increase. How otherwise can the Tribunal develop any information? If one looks at the new provisions which the Government has inserted in relation to the exemption power one will see that in the proposed new subsection 8a which the Minister talks about as producing the integration of the provisions of the Prices Justification Act with those of the Trade Practices Act. He says in his second reading speech:

In respect of the first of these elements the Bill in effect copies the monopoly provision of the trade practices legislation. This will promote a greater consistency of approach between the deliberations of the Tribunal and the Trade Practices Commission regarding the nature and structure of markets.

What absolute rubbish. Anybody familiar with the provisions of the Trade Practices Act would know that whether one is a monopolist or not is only one of the considerations that affect the many provisions of that Act which relate to competitive behaviour. The key question at which the Government ought to be looking is whether in fact there is price competition. That would be a relevant consideration for the granting of an exemption. But the fact that a company is or is not a monopolist is a complete red herring. The provisions of the Trade Practices Act relating to restraint of trade which govern price fixing, to exclusive dealing, to resale price maintenance and all these objectionable practices affecting competition and which affect cartels are directed to competition. It is not central to the question whether the company or groups of companies involved are monopolies. So it is a complete red herring, and to suggest in any event that this will lead to a greater integration of the work of the

Tribunal and the Trade Practices Commission is nonsense.

The Tribunal is under staffed at the moment, as the Minister ought to know. The Tribunal has no expertise of the kind that the Trade Practices Commission has in relation to markets and the competitive effects of different companies' activities in those markets. This provision is designed to give a wink and a nod to the Tribunal that if it can determine that a company is not a monopolist then it ought to be given the benefit of the doubt and it ought to be granted an exemption. That is clearly just not good enough. The exemption power contained in the provisions dealing with the notification of proposed price increases is absolutely central. By weakening it in this fashion the Government is ensuring that the Tribunal will not have access to the continuing knowledge and information which it needs about markets, about price movements in particular industries and in particular companies. One only has to look at the kind of information in the annual report for last year to see that it will not be available another time.

I want to say one other thing in relation to this legislation. The Minister talks about monitoring activity. How on earth is he to monitor activity when the Tribunal does not have this information? In his statement tabled on 16 September the Minister talked about a greater use of section 16. The Government has been in power for about a year and yet we have seen no use of section 16 and I do not expect that we ever shall. In any event how will the Government ever know what the activity is in any particular industry area unless it gets the information, which will be denied to it as a result of the provisions which it is introducing into this chamber tonight?

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