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Wednesday, 4 July 1906
Page: 1012

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) . - For reasons which I stated on a previous occasion, I desire paragraph b to be omitted. In order to test the opinion of the Committee on that point, and not to interfere with any honorable member who may desire to move an amendment at a later stage, I move -

That the word " or," line 8, be left out.

If that amendment be carried, then paragraph b will have to be omitted.

Mr Isaacs - This will be taken as a test in a similar provision in the next clause ?

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Yes. Paragraph b of clause 4 has no relation to trusts or combines, at any rate, it does not restrict them within Australia as- paragraph a does?. It is simply a provision - and really, to some extent, it is in contradiction of paragraph a - that there shall not be action which would destroy or injure by means of unfair competition any Australian industry. That means that there shall be no unfair competition which would reduce the price of goods in that industry. Consequently, while the design of paragraph a is to prevent persons from imposing heavy prices, and taxing the community by their combinations, a combination of firms within Australia may constitute a gigantic trust, and the provision of paragraph b is simply that there shall be no unfair competition with that industry so organized.

Sitting suspended from 6.30 to 7.30 p.m.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I do not know whether the Attorney-General was present when, earlier in the day, I made some remarks on this clause, but I then tried to show that* if the paragraph under discussion was meant to deal with competition between Australian industries, there should be a clearer definition of " Australian industry." A clear distinction is drawn as to competition from abroad, . which, if it unfairly interferes with Australian industries, would, of course, come under this part of sub-clause 1. But as regards competition between Australian industries, or in Australian industries - that is, the case of one part of an industry competing with another, which the Minister of Trade and Customs stated might be brought under the sub-clause - there is no indication as to what an "Australian industry " is. The industry might be an industry of all Australia taken as a whole, or it might be an industry confined to a State or to a city.

Mr Deakin - Could the honorable member call either of the last two mentioned an Australian industry ?

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I should like to point out to the Prime Minister what I previously said' when he was not present.

Mr Deakin - I heard only part.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I then instanced a case in which competition might occur in the same industry carried on in two States, and pointed out that that competition, while it might injure the industry in one of the States, might not injure the industry as a whole in Australia. The coal industry of New South Wales has already been referred to, and it might compete and injure the coal industry of Victoria. But even if the New South Wales coal industry did destroy the Victorian industry, the Australian industry as a whole would not be injured or destroyed Yet the Minister of Trade and Customs informed us that in such a case action might- be taken under this subclause.

Mr Isaacs - I think there must be some misapprehension.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - When the Minister of Trade and Customs spoke he instanced the case of harvesters.

Mr Isaacs - Well, of course, in a sense that might be so.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - If it is only an industry of Australia as a whole which is to be injured by Australian competition

Mr Isaacs - By any competition.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I am talking of the applicability of the subclause to Australian industries, which the Minister said would operate in such a case. If it is only an industry of Australia as a whole that is to be injured by Australian competition, it seems to me that the sub-clause fails to deal with the matter at all. However, I shall not enlarge on that objection, seeing that I have had another opportunity of drawing attention to it. A further objection isi that the subclause seems to be more fiscal than trust restraining. Although paragraph b is introduced in a ' clause dealing with trusts, there is nothing to prevent the formation of Australian trusts.

Mr Isaacs - It does not deal wholly with trusts, but with any person.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - But there is nothing to prohibit the formation of Australian trusts, which mav injure or destroy a trade in Australia which is not strictly an Australian trade.

Mr Isaacs - Only by monopolizing it.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Either by monopolizing, injuring, or destroying.

Mr Robinson - The trade would still be there.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I want to point out that there is no reciprocity.

Mr Isaacs - An industry would not be destroyed except with a view to monopoly.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - An 'industry might be destroyed apart from any such intention. If the Attorney-General will allow me, I will explain. While the operation of trusts, or persons, unfairly competing with Australian industries, is supposed to be dealt with and restricted or prevented, if an Australian industry chooses to form a combination, or if any person in that industry chooses to so conduct his business as to unfairly compete with any other business in Australia, which would not be termed an Australian industry - such as the distribution of goods from abroad - there is perfect liberty to do so.

Mr Isaacs - Clause 5 will prevent that as much as possible.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - That clause deals only with companies.

Mr Isaacs - But clause 7 deals with monopolies.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It is not a question of monopolizing.

Mr Isaacs - It must be one or the other.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - If an Australian industry can injure or destroy another Australian industry without monopolizing the latter, so it can injure or destroy such an industry as I have indicated.

Mr Isaacs - Can the honorable member give an instance of an Australian industry injuring any other Australian industry without a view of monopolizing?

Mr Robinson - Monopolizing is not punishable unless it is to the detriment of the public.

Mr Isaacs - Certainly.

Mr Page - How would Mr. Bent's wire netting monopoly fare under this clause?

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - That is a new Australian industry to be conducted by tHe Government, and carried on, not by Government employes, but by Government prisoners. What I wish to emphasize is that paragraph b is more fiscal than anti-trust. Provision is made to insure that an Australian industry shall not, by unfair competition, injure or destroy another Australian industry ; but if an industry consists of importing and distributing goods from abroad, there is no reciprocity - there is no provision by which an Australian industry can be prevented from adopting unfair means to destroy that industry, which may not be Australian, but British.

Mr Page - That is exactly what Mr. Bent's industry will do.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - That is an illustration of how an Australian industry - if we may so call it - such as is proposed to be established, may be used to destroy, by what some people might consider unfair means1, a British industry - because industry extends not merely to the manufacturing, but to the trading in and distributing of goods. Such action by an Australian industry is allowed full play under the paragraph ; and, therefore, I say that it is more fiscal than antitrust. For these reasons I am of opinion that the clause wants thoroughly re-drafting in order to define "Australian industry." The clause ought to show how far an industry must extend before it can be called Australian - whether unfair competition between the same industry in two States would be interfering with an Australian industry, or whether the interference, injury, or destruction has to affect the industry throughout all Australia. Them, if the clause is not to be fiscal, there should be some reciprocity, so that other industries, which are valuable to Australia and to the Empire - industries in which our fellow British citizens are engaged - shall not be destroyed by making it penal on the part of a British industry in these markets, while Australian industries are perfectly free to operate in the same objectionable manner, in regard to the British interest, without any restraint. As; paragraph b stands, I am bound to oppose it, and in order to test whether it should or should not be omitted. I have moved the omission of the word " or " in line 8, so that there may be no interference with any subsequent amendment that it mav be desired to submit.

Mr. ROBINSON(Wannon) [7.42J.- This particular paragraph is extremely difficult to construe. The coal industry, which has been instanced bv the honorable member for North Sydnev, is carried on largely in New South Wales, to some extent in Victoria, and to a smaller extent in Western Australia. It is admitted on all hands that the coal industry in Newcastle is conducted in more favorable circumstances than it is in either Victoria or

Western Australia. If the question involved in this paragraph is left to a jury, it will mean that juries taken from any of the States I have mentioned may give totally, different verdicts. A Newcastle jury, which had to construe the effect of the operations of the coal vend, would naturally take a most favorable view of those operations, which, of course, tend to increase the trade of the port. But if the members of that coal vend were tried by a jury from Korumburra, or from the Collie, in Western Australia, they_ would have but a slight chance to escape being found guilty of a breach of the law. The AttorneyGeneral said that a combination could foe dealt with under clauses 7 or 8 for attempting to monopolize the trade of the Commonwealth. But, according to the Bill, an attempt to monopolize, or an actual monopolization' - if I may use the term - of trade and commerce is not punishable unless it is with the design of controlling the industry to the detriment of the public. It seems to me that the clauses referred to by the Attorney-General do not carry the matter any further. In the case of the coal vend - I only take this as a concrete case-r-its competition is deemed to> be unfair because it is a commercial, trust. I do not think there is any question that the vend is a commercial trust; but if it were not so, competition bv a large colliery owner in Newcastle might be punishable under clause 6, because such competition would probably result in lower remuneration for labour. It would have that effect in Jumbunna and Outtrim if the competition were successful. It would also result in disorganizing Australian industry in Victoria, though it would probably have an opposite effect in Newcastle. It seems to me that this portion of the Bill1 - which I presume is meant to deal with monopolies within our boundaries - attacks a portion of an industry because that portion may have facilities for capturing the bulk of the trade to the detriment of other portions of the industry. I think we ought to have a definition of " Australian industry " ; or else we should allow the defendant an opportunity to take his case before a full bench of the High Court, for the purpose of obtaining a legal definition on this point.

Mr Isaacs - There is that power of appeal under the law.

Mr ROBINSON - That meets my objection on this point. Otherwise we are irc this position : that a man who does injure a certain portion of an Australian industry may be attacked under this clause for having done something which is inimical to the interests of the public generally. The last few words of paragraph b -

Having due regard to the interests of producers, workers, and consumers - must also 'be considered. It is held by a number of people that the maintenance of collieries in Jumbunna, and of a colliery in Western Australia, has a distinct effect in the interests of producers, workers, and consumers, by keeping down the price of coal. I shall not discuss whether or not it has that effect, but a number of people believe that it has; and a jury might be taken from persons with that impression in their minds from the start. That being so, it appears to me that a coal mine-owner in Australia might have his business and his safety imperilled under this paragraph. It appears to me that the paragraph involves 1 fiscal matter, and does not deal with the repression of a local monopoly. I should like to hear from the Attorney-General a more ample justification of it than we have had. I have an open mind on the question, and if he can show me that paragraph b is a necessary part of this anti-trust legislation, I shall support it, just as I supported turn with regard to paragraph a. I think he made his position quite clear as to that ; and if he can make his position equally clear to my mind with regard to paragraph b, I shall support that also.. But at present it does not seem to me to have any relevancy to dealing with trusts that are treated, or which grow up in Australia under Australian conditions; because the only way in which the mischief the paragraph, aims at attacking can grow up is by one portion of an Australian industry getting the better of another portion. If, of course, there is a well-established Australian industry which is attacked by another Australian industry - that is to say, by a rival product - it is quite possible that the competition of some later development of science, or of some later natural development, may injure the. older industry, just as, for example, the discovery of oil wells in Australia would give a staggering blow to the coal mines which we have in various parts of the country. I do not suppose that any jury would find that such a case came under the provisions of this Bill.

Mr Isaacs - If such a thing were to happen, the new industry would be one the preservation of which would be beneficial to the (Commonwealth.

Mr ROBINSON - That may be so; but a jury might find that it was not beneficial. If the trial took place in a part of the country where the old industry was looked upon as the better industry - and that might easily happen - the jury might find that the old industry was advantageous to the Commonwealth, and that its competition with the new industry ought to be preserved. It is a matter as to which I am looking for information from the Attorney-General, and I hope that he will throw some light upon it, as he usually does.

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