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Tuesday, 30 November 1965


Mr SNEDDEN (Bruce) (AttorneyGeneral) . - The contributions of honorable members in this debate have been most interesting. They have covered the full range of possible views in relation to the subject of the control of restriction in practices of trade. On one side of the scale certain members of the Opposition have said that the Bill does not go far enough and that they would like to construct a bill which would so interfere with the freedom of business that it would depart completely from the philosophical basis of this piece of legislation. The philosophical base for this piece of legislation is as set out in the long title to the Bill: "An Act to preserve Competition in Australian Trade and Commerce to the extent required by the Public Interest ". That is what I believe the Bill does. Most of the views which have been put forward were tendered, largely, for the purpose of being constructive. I am sure that all honorable members who have played some part in the debate did so for that purpose. Certainly it was the way in which I received their views, and I am sure it is the way in which they were received by other honorable members who were listening to the debate. I have enjoyed sitting here throughout this debate.

This Bill deals with completely new ground. Therefore, the legislation, very properly, is not designed to be extreme. Extreme legislation would not be the correct type of legislation in this situation. Nor would it be proper, in the Government's view, to be content to do nothing. So this Bill is really standing, in a broad sense, in the middle of the spectrums revealed in this debate. I believe that the view expressed in the legislation is the view of the great majority of my colleagues in the Liberal Party and of my friends in the Australian Country Party, whether they be parliamentary members or members of the great political organisations to which we belong and the colours of which we fly in this Parliament.

To suggest that this Bill has been affected by the pressures of so-called big business is nonsense - complete nonsense. To make that allegation is a mere slanging technique. It forgets the reality that these political parties have been in government for 16 years, and the portents indicate that they are likely to remain in government here for a great many years to come. It overlooks this reality completely because these parties are vigorous parties with vigorous policies and are subject to no sectional force whatsoever. On the other hand - and I say this just as a passing reference, as my honorable friend is so fond of saying - the Australian Labour Party is captive to a very big sectional force and it is that which prevents the Labour Party from being a true national party. I say that because at all times that sectional force or sectional view must dominate the views of that party.

This Bill is the collective decision of Cabinet. It is a Bill to which I wholly contributed my own views. It is a Bill which represents a very sound decision by the collective wisdom of the Cabinet of this Government. I believe it will be an effective Bill in the way it operates and achieves its purposes. Let me take this opportunity to reiterate some of the essentials of the Bill. First, as expressed in the long title of the

Bill, it is a bill to preserve competition in Australian trade and commerce to the extent required by the public interest. It is not appropriate, in the view of the Government, to leave to private regulation the arrangement of such things as prices, the identity of new entrants to business, or the persons who may supply or receive the supply of goods. It is not appropriate to leave that to private regulation unless private regulation is capable of being examined to see whether it is in fact compatible with the public interest. The Bill, therefore, proceeds on the basis that those things which, by agreement between competitors, have as their purpose a restriction in relation to five categories which are set out in the Bill must be capable of examination by the tribunal. It does not proceed on the basis that they are likely to be held incompatible, nor on the basts that they are likely to be held compatible. It proceeds on the basis that examination is necessary to determine this point

The next step in the procedure, if I may reiterate it, is that in a bill such as this there ought to be, in the Government's view, at all times the desire for certainty. This is a point which was made with great clarity by my friend, the honorable member for Sturt (Mr. Wilson), in connection with these matters of trade and commerce in the community. Contrast that, if you will, with the United States of America and with Canada where there is not certainty. In the United States it is a decision of choice. In Canada it is a constitutional necessity for there, the power to legislate in this field depends upon the criminal power. But to have certainty, which is most desirable, I believe, in the legislation, means that you must have an administrative as distinct from a criminal process. It is the criminal process which leads to the uncertainty because people engaged in trade and commerce act in trade and commerce in such a way and then have to run the risk that at a later point in time they will be prosecuted for an offence and perhaps found guilty when at the time they committed the offence they did not know, and sometimes could not have known, whether it was likely to be against the law. If you have a criminal process you have uncertainty. On the other hand, if you have an administrative process you have, at all times, certainty. So in the desire to have certainty the Bill proceeds upon the basis of an administrative or sub-legislative process. Certainty of lawfulness was thereby achieved. The certainty of lawfulness is this: putting aside, if I may, for the moment, collusive tendering and collusive bidding which are prohibited, and regarding everything else as excluding them, it means that nothing is unlawful until such time as a tribunal, having examined it from the point of view of public interest, says that from that point of time that practice is unlawful. So the certainty is that it is certainly lawful up until that time, but after that time it is certainly unlawful. Having opted for this certainty it means an administrative process instead of the criminal process.

If we come back to the constitutional reality, in our Commonwealth Constitution, there is a separation of offences, made clear in the boilermakers' case, as it is colloquially called, so that the judicial power has to be in a body which is created, according to the Constitution, as a court; but the administrative power cannot be exercised by a body which is invested with judicial power! Nor can judicial power be exercised by a body which is invested with administrative power and which does not have the tenure of life occupancy of the office required by judicial office. That being so, we could not have a court to make the administrative decision. It has to be an administrative body. So at that point of time the logic develops and you go to an administrative body for this purpose. We cannot use a court; therefore, we erect a tribunal specifically for the purpose.

Let me come to the next point in the process, and that is the need for fact for the tribunal to consider in reaching its decision. At the point of fact, there is a choice. The first possibility is an investigatory process, which we all know and understand in relation to criminal matters and which, of course, is part of the procedures under the Sherman Act, the Canadian Combines Investigations Act, and indeed our own Australian Industries Preservation Act, where the investigation is carried out by the police, because an offence against the law is involved. This procedure seems most inappropriate where the criminal process is rejected. We then have to find facts in a different form, and the fact-finding method on which the

Government determined was that of a register. The register is the system adopted in England. The English system is not inhibited by our constitutional restriction of the separation of the judiciary and the administrative process, so England has a court which in fact exercises the administrative process. That is not available to us, so we have a register which is similar to the British system of registration.

The British register is open and the New Zealand register was open. But the reports from the Registrar of Trade Practices in England indicate that a mere handful of people look at the register. New Zealand abandoned registration and the reason given for abandoning registration was the very absence of public interest in the register. When we come to the register, we want it as a fact-finding process. The next question is: Will it be costly? Will it be an intolerable burden on business? Is it something which, as a means of obtaining fact, will have a consequence too great for business reasonably to endure? I have here photostat copies of four documents which constitute the registration of a typical practice in the United Kingdom register. These four documents are not even drawn specially for the purpose. They are just picked up, they are in existence, they are given to the register, and the act of registration is thereby completed. I think it is also relevant for me to point out that the agreements registered in the United Kingdom total approximately 2,700.

If this is a fact-finding process, should it be an open or a closed register? The Government came to the conclusion that it should be closed, because an open register has not proved successful where it has been available. It is a fact-finding process for an individual person who has the responsibility of taking matters before the tribunal. So, for these reasons, the Government decided that it should be a closed register. Another reason was that, if it were an open register, we would perforce need to have two registers - one the open register and the other the closed register which contained within it matters which in the public interest and in the private interest ought not to be disclosed to the general public. The Bill reflects the Government's decision that this should be a closed register.

Sitting suspended from 5.59 to 8 p.m.


Mr SNEDDEN - Mr. Speaker, before the suspension of the sitting I had reiterated some of the essential features of this Bill. I pointed out that this is new legislation covering new ground and that therefore it ought not to be extreme. Nor is this measure extreme. It ought not to be extreme, and the corollary is that we ought not to be content to do nothing in this field. So this Bill has come in. It has been the product of most intensive consideration by the Cabinet and I wholeheartedly concur in the decisions of the Cabinet and the Government. I believe that this Bill will provide effective machinery and will achieve what it is intended to do.

I had pointed out that the need for certainty in relation to activities in trade and commerce impelled the decision by the Goverment that this measure should be noncriminal in form and, on the contrary, should be administrative or sub-legislative in its approach. It has been drafted in a way that will ensure this. The conclusion that the Bill should be administrative in its approach having been reached, the realities of the constitutional separation of powers come fully into force. The result is that the proposed Trade Practices Tribunal is and must be an administrative tribunal and is not and cannot be a court. I had mentioned registration before the suspension of the sitting and had pointed out that this will be a fact finding procedure appropriate to this approach. The contrary type of procedure would be the investigatory process that would be appropriate to a form of control based on criminal procedures.

I now proceed to point out that the Commissioner of Trade Practices will have certain powers, but they will be limited powers and will be consistent with a limited approach. If there were a criminal procedure, there would be no need for any limitation of powers. In a criminal approach, we would have an investigatory process applicable to breaches of the law. We would have a police investigation process. But honorable members will find that under the terms of this Bill the powers of the Commissioner will be limited. He will have power to require answers to written questions. He will have power to require the production of documents. But it is a far cry from the Commissioner's issuing a request for answers to written questions to his receiving answers in writing through the police investigatory process under which a crossexamination procedure is adopted. So the Commissioner will have limited powers. What I must point out to the House, of course, is that he will have no role in enforcement. His role will be exclusively that of maintaining the proposed Register of Trade Agreements, of engaging in consultations with parties and of taking matters to the Trade Practices Tribunal. Neither the Commissioner nor the Tribunal will have any part in the enforcement procedures. Those procedures will be taken only before a court.

My friends, the honorable member for Isaacs (Mr. Haworth) and particularly the honorable member for Sturt, have asked me to reconsider the provision for compulsory registration of agreements. I have given the closest scrutiny to the point since the honorable member for Sturt raised it and I have come to the conclusion that the approach in the Bill is correct and that compulsory registration would be proper. I understand very well the reasons why the honorable gentleman put his proposal. I have looked at it in the light of those reasons, but I cannot bring myself to the conclusion that any procedure other than compulsory registration would be appropriate.

I pointed out, Mr. Speaker, that the Register of Trade Agreements will be a closed register, and this raises the issue of private proceedings. If there were to be private proceedings before the Tribunal, the Register would need to be open to access by private parties. But the Government adopted the attitude that if there were a private complaint that private complaint would be about a personal manifestation of a collective agreement. This would relate, for instance, to a discrimination against an individual or a refusal to deal with an individual. A refusal to deal with an individual except on terms disadvantageous to that individual would be an individual manifestation of a collective arrangement. If there were a situation in which 10 people, for example, had a private complaint, it might be that all 10 would have the complaint against all the parties to an agreement. The consequence is that there could be a multiplicity of complaints and if the individual making a complaint required his individual complaint to be dealt with we would not get down to the essentials of the matter - the agreement standing behind the individual manifestation. So, if an agreement is examined by the Tribunal, which finds it to be contrary to the public interest, and then, in the process of the certainty of approach, says that it must cease, the individual manifestations themselves will atrophy because the agreement that propped them up has been determined to be contrary to the public interest.

The next point that I make relates to the question: Who determines this question of consistency with the public interest? The answer is that it is determined by an independent tribunal. Let me emphasise that it will not be a court and it cannot be a court. It cannot be clothed with judicial powers. The Trade Practices Tribunal will be an administrative tribunal of a sub-legislative kind. It will be an independent tribunal dominated by lay members. The two lay members will outnumber the judicial member. The judicial member will be President of the Tribunal and, as such, will conduct its proceedings. This will not be a court of law. There may be criticism levelled against it on the ground that the strict rules in relation to courts will be absent. The reason for the absence of the strict rules applying to courts is that this will not be a court. Nor can it be one. Any attempt to make this Tribunal a court would be unconstitutional unless we scrapped the idea of certainty and came back to the criminal process. I do not think that the House would want us to do that. I do not believe that even those honorable gentlemen who sit on the other side of the chamber would want that, except, as they say, in relation to some particular things.

It would be a mistake to think of the procedures of this Tribunal as the procedures of a court. If it were a court, I would not wish - and the Government would not wish - to part from the strict rule of law. But this will not be a court: Where enforcement takes place in a court - that is, for failure to register, for collusive tendering or collusive bidding or for contempt - proceedings will be before a court of law and there the strict rules of law will apply. They should be required there. So it is that before the proposed Tribunal there will not be strict rules of evidence. The reason is that many of the matters involved will need to be provable by way of the record of some particular activity. This may be academic or by way of an article in a journal of economic record. On the other hand, it could be by way of the minutes of a meeting that had been held. Things of that kind, if put to strict proof before an administrative tribunal that is not a court, would only make the procedures long and more costly to parties and would, I think, tend to prevent that tribunal from reaching the essential decision - the determination whether a particular activity was consistent with or contrary to the public interest.

This brings me to the question of appeals, Mr. Speaker. We have heard the criticism that what is provided for will not amount to a true appeal. I believe I should say that this is not an unfair criticism. Indeed, it is one that I expected. Of course, it is not a true appeal, nor can it be a true appeal because, unlike the courts, there is no hierarchy. In the courts one can go from the Court of Petty Sessions to the County Court, or can start at the Supreme Court and appeal to the Full Supreme Court and then the High Court of Australia. But that hierarchy is not contemplated in the Bill. We propose to have "an administrative tribunal. If there is to be an appeal from that tribunal, to whom does one appeal? If greater quality is needed it will mean setting up another tribunal, but we are looking for the best quality for the Tribunal established under the Bill.

What leads anyone to believe that better quality will be found in a superimposed tribunal which is an appeals tribunal? The answer is that 'it will not be found. Therefore, we are driven back to the situation that if the initial tribunal has three members, the appeals tribunal would have a multiplicity of members. If the initial tribunal has two lay members and there is a dominance of lay members, the appeals tribunal would need to have four lay members and three judicial members, so the appeal would be to a tribunal of seven members. I should think that this is really taking the matter too far. What the Government contrived - I say " contrived " with no hesitation at all, because I think it is a wonderful resolution of the problem - was a provision for an appeals tribunal of three judicial members who cannot substitute a determina tion for that in which the lay members dominated. The appeals tribunal can point out an error in law, an inconsistency or an absence of consideration of a matter of public importance. Having identified it and having pointed it out, it can then send the matter back to the Tribunal which is composed with a dominance of lay members of the best quality that it is possible to appoint to the Tribunal.

The next point that I come to is the amendment which has been moved by the Opposition. I regret that I do not have more, time to deal with the amendment in detail, but an opportunity may present itself at the committee stage. The first point made by the Opposition was that there should be a referendum. The point about this suggestion is that we do not know the full extent of the Commonwealth legislative power in rela-tion to interstate matters. The Deputy Leader of the Opposition (Mr. Whitlam) made a small error on Thursday night in speaking of the decision of the High Court last year. He said that the High Court upheld the validity of section 4 of the Australian Industries Preservation Act. The essence of the decision was not as to the validity of that section but as to the extent of the interstate power of the Commonwealth and what constituted an interstate transaction. In that case the High Court made it perfectly clear, by unanimous judgment, that the legislative power of the Commonwealth was far more extensive than was ever thought prior to that decision. For this reason I think it inappropriate at this stage to launch out on a referendum proposal. At this point of time I think the Commonwealth Parliament should exercise its legislative power. In due course, no doubt, the extent of that legislative power will be defined. If I may express the situation graphically, in concentric circles the outer circle is the entire area of trade and commerce and the inner circle is the interstate element of that trade and commerce. How close that inner concentric circle is to the outer boundary has not yet been determined, but the result of the decision last year showed that it was much closer to the outer boundary than we had ever thought.

I should mention also that there is a question of State complementary legislation. Clause 8 of the Bill has been drawn to enable States to pass complementary legislation and to use the machinery accorded by this Bill. We think that is a matter for each individual State. No doubt the States will not made a decision on this point until they see the Bill passed by this House. I expect that to be the next step in this process.

Another point made by the Deputy Leader of the Opposition in his proposed amendment was that resale price maintenance has not been covered. In its collective sense it is covered. What is not covered is the individual will of a particular person who says: " I want all my articles to be sold at a certain price." That individual is not assisted by the legislation to enforce that price, but if the price is not observed he has the capacity to withhold supplies from the person who is selling at the lesser price. 1 think this is consistent with the philosophy of the Bill. As to consistent price cutting and monopolisation, these are included in the Bill, but are included as being examinable rather than as offences. They are examinable simply because this is an area where there should be certainty. This is not an area in which people should be led to the stage where they take action and subsequently find they can be prosecuted for an offence.

The final point was that of mergers. I think I should say emphatically that the Government's view of this matter is that at this stage such a control is not desirable. Whether or not such a control is desirable at any point of time must be judged by the contemporary conditions of the day. The Government has reached the conclusion in relation to mergers that that is not the situation today.

Question put -

That the words proposed to be left out (Mr. Whitlam's amendment) stand part of the question.







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