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Wednesday, 11 February 2009
Page: 927

Mr CHAMPION (1:44 PM) —I rise to support the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008, which is greatly needed and long overdue. I say to the member for Mayo that this is about stopping illegal conduct, not about stopping entrepreneurialism. Cartels undermine the very idea of a competitive economy. They keep prices at artificial levels, they lock people out of markets, they stifle innovation, they prevent moves towards efficiency and productivity and they enrich those who collude. They are hostile to the public interest, they are hostile to the Australian consumer and they are hostile to the Australian businessman and businesswoman.

As Professor Paul Kerin has observed, in small markets like the Australian economy the opportunities for collusion are much more available than in larger economies. It is much easier to collude in Australia than it is in the US. I think that is something that the man or woman in the street also knows. So it is important that we act and that we act with enough force to push the message home that this behaviour is completely unacceptable.

Cartel conduct is effectively extortion—often to the tune of millions of dollars. I cannot for the life of me see why a car thief, a bank robber or a person practising extortion should go to prison while company executives can walk free after colluding with each other to set artificially high prices and to enrich themselves in the process. Professor Allan Fels quite rightly points out that conduct of this nature is not a victimless crime. The victims are real people who are being cheated out of real money. This government will not stand by and watch Australians being exploited by white collar criminals intent on extortion by stealth. We will act.

This legislation is about punishing those people who do the wrong thing, but it is also about deterrence. It is about sending a message to Australian consumers that they do not have to put up with cartels any longer and also to individuals, whether they are based in Australia or overseas, that if you collude in this way then you are a criminal pure and simple, and the government agencies will take action against you. We make absolutely no apology for the fact that this legislation is amongst the toughest in the world. It establishes criminal penalties for serious cartel conduct. The penalties for these offences are: for an individual, a maximum term of imprisonment of up to 10 years and a maximum fine of $220,000; and, for a corporation, a fine that is the greater of $10 million or three times the value of the benefit from the cartel or, where the value cannot be determined, 10 per cent of the annual turnover.

Importantly, the bill allows for telecommunications interception as well as other measures to be used as an investigative tool against those who are suspected of collusion and also for the protection of whistleblowers who assist the ACCC in their investigations. These are important provisions because they deter people from acting and they also give the ACCC an ability to adequately investigate cartels.

These provisions will bring us into line with similar provisions in the United States. The United States is, of course, famous for its antitrust provisions, first introduced by President Teddy Roosevelt. The member for Kennedy also referred to Roosevelt; it did scare me a little that the member for Kennedy and I both went to Roosevelt when we were looking at this bill. Roosevelt said in 1911:

Not only should any huge corporation which has gained its position by unfair methods, and by interference with the rights of others, by demoralizing and corrupt practices, in short, by sheer baseness and wrong doing, be broken up, but it should be made the business of some administrative government body, by constant supervision, to see that it does not come together again, save under such strict control as shall insure the community against all repetition of bad conduct.

That was in 1911. Trust busting was part of a great campaign in the public interest, so I think it is timely that nearly 100 years later Australia is finally putting these provisions into our competition law. I think it is absolutely necessary, particularly when you look at the history of these sorts of practices.

The Dawson review into the competition provisions of the Trade Practices Act was completed in 2003 and recommended that cartel behaviour should, for the first time, be punished with criminal sanctions. Since then, the ACCC has issued warnings on 15 separate occasions that this sort of legislation was both necessary and urgent and that it would enable us to better deal with criminals at home and to cooperate with law enforcement agencies around the world.

The Labor Party heard these warnings and the Rudd government has stuck to its promise to introduce legislation within 12 months of coming to office. We hope that the parliament will take the opportunity to make up for lost time, support this bill and give Australian consumers the protections they deserve. After years of indecisiveness and inaction, and after an inordinate amount of consultation, it is now time to act.

When the government released its draft bill last year, the ACCC Chairman, Graeme Samuel, who has been referred to in other contributions, welcomed it and said that it was ‘a high point for 2008’. He told the Age newspaper that the legislation:

… brings us into the big league … It enables us to co-operate a lot more effectively with other regulators around the world.

The government is now taking action to make sure that these criminals are punished and that potential criminals are deterred from undertaking cartel conduct. Most importantly, we are ensuring that Australian consumers are protected and that Australian businesses are allowed to function in a truly prosperous and competitive environment. I commend the bill to the House.