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Tuesday, 11 February 1986
Page: 70

Senator GARETH EVANS (Minister for Resources and Energy)(7.07) —in reply-The Trade Practices Amendment Bill 1985 is the culmination of a very extensive review exercise which began publicly back in February 1984 with the issuing of a very comprehensive Green Paper. It was a very overdue review process, given that it is some eight years since the Act was last comprehensively reviewed. I believe that the process of the debate and consultation that has gone on since February 1984, although protracted over two years, has been a very worthwhile and constructive one. It is a matter of some pleasure to me that the Bill to emerge finally from this process, although it obviously has not won the unanimous endorsement of those opposite, is in its essentials very much the kind of collection of reforms that were in fact an integral part of the original Green Paper proposal. I am pleased to note that those reforms have stood up so well to the kind of scrutiny that they have received over the last two years. It has been very intense scrutiny.

The main opposition being expressed to this amending Bill-this is a theme that has come through what Senator Durack, Senator Puplick and Senator Short among others have had to say-is the notion that somehow it is anti-business and an involvement in unnecessary intervention and regulation by government in the affairs of business and generally a product of this Labor Government's alleged obsession with interfering with the freedom of business choice at all available opportunities. I reject absolutely that kind of criticism. The best way to do that is not simply by swapping counter-rhetoric of my own of the kind we have heard but rather by mentioning quite specifically the main things that this Bill is about and why it is that that kind of description is wholly inappropriate.

Part IV of the Act is directed at freeing up markets and making them more competitive. That is what that part of the Act and these amendments to that part of the Act are all about. Undesirable private regulation is reduced, leaving competition as the regulator. The amendments do not depart from that policy. In fact, many of them-for example, the streamlined authorisation procedures-decrease the administrative costs to which firms may be put. The amendments, specifically those to section 46 which perhaps in many ways is the centrepiece of this Bill, are aimed at reinforcing the protection afforded to innovative businesses wishing to enter new markets or to expand in existing markets by preventing large firms abusing their market power for the purpose of preventing that entry or expansion. In this sense businesses that compete aggressively but fairly can only benefit from the amendments to section 46. The amendments to section 50, concerning mergers, in no way change the existing policy underlying the merger provisions. They rather prevent proposed parties to mergers or acquisitions forming elaborate schemes to deliberately circumvent the Trade Practices Act. The amendments to streamline authorisation procedures will enable mergers which result in desirable industry rationalisation to proceed more quickly.

I turn now to the consumer protection provisions in Division 1 of Part V. While these protect consumers from misleading or deceptive conduct they also protect reputable businesses by preventing unscrupulous traders using unfair tactics, such as making false representations, to gain an unfair advantage over their more ethical rivals. Evidence of this is the fact that most civil litigation under Division 1 involves one trader suing a rival trader for breaching the Act. Most of the amendments here involve tidying up loopholes. There are very few provisions imposing new obligations on business. Again I make the point that there is no cost involved to reputable businesses in observing the Act because the Act prohibits only those types of conduct on which unscrupulous traders rely to gain an advantage over their rivals. Reputable businesses do not engage in the types of conduct in the consumer protection provisions that are prohibited by the Act.

The product recall provisions which have attracted a degree of specific attention from a number of people, most recently Senator Short, as was stressed in the second reading speech of the Attorney-General (Mr Lionel Bowen) and in the debate in the House of Representatives, provide reserve powers which can be exercised only where the relevant industry voluntary recall procedures are inadequate or do not exist. While a mandatory recall, like a voluntary one, obviously imposes costs on business, the public interest in removing dangerous and unsafe goods from circulation is paramount. We believe that this regulation is necessary to ensure public health and safety. There are adequate review procedures to safeguard the interests of suppliers here and I do not think there can be criticism on that ground.

So generally we believe that what has been done here is quite defensible and the reference to it as involving some sort of overzealous regulatory assault is quite misconceived. Again it is unfortunate in this respect that so much attention was paid to the review of business regulations produced by the Business Regulation Review Unit in January this year because much of the flavour of that report has been substantially misconstrued, I think in some instances quite deliberately. Let me quote from page 5 of that report what is said about the regulatory activities engaged in by the Trade Practices Commission and other bodies of similar ilk. The relevant passage reads as follows:

The functions of the officers classified as engaged in regulatory activities are, like those of regulation itself, diverse. As well as activities designed significantly to modify market outcomes they include activities which may be. . . described as pro-competitive as in the case of functions of the Trade Practices Commission.

At the end of the list of points there is the following comment:

In these as in other areas, the activities doubtlessly confer benefits, which in many, perhaps most cases will outweigh the costs.

That is the flavour of this paper. It does recognise that there are many instances where the benefits of regulatory activity do in fact conspicuously outweigh the cost and it is the very strong view of the Government that this trade practices area we are debating today is one such area.

Senator Durack made the point, as did Mr Spender in the other place, that extra burdens, as he describes it, have an effect on business but not on trade unions. I simply make the point that these references to trade unions, which Senator Baume is also keen to pursue, are quite misconceived in the context of this legislation. There simply has been no change in the relationship between unions and the trade practices machinery under the Trade Practices Amendment Bill. The situation is exactly the same as it was when the Act was last amended by the then Government at the insistence of the present Leader of the Opposition, Mr Howard. So any point that is made about the impact of this legislation on trade unions or the lesser impact of it as compared with the impact on business is I think again misconceived.

A further category of criticism we have been listening to concerns the Government amendments brought forward and circulated in this chamber this afternoon. This is a rather churlish criticism because those amendments themselves reflect the Government's keen attention to consultative processes and its keen desire to accommodate as many criticisms as it is possibly sensible and rational to do. We had such a significant number of amendments because we have gone absolutely out of our way to accommodate representations by large organisations, particularly the Law Council of Australia on which Senator Durack has been hanging his hat. One is entitled to be a bit grumpy, on behalf of the Government, if one is damned when one does not have regard to representations one has received and then one is damned if one does have regard to them by nitpicking objections to the quantum-

Senator Durack —You did not have regard to enough of them. That is the complaint.

Senator GARETH EVANS —I got the impression that Senator Durack was resisting the sheer volume before him. Certainly that flavour came through in Senator Baume's rather familiar little excursion on this sort of subject, the suggestion being that we cannot make up our mind. We have had no difficulty in making up our mind. We have demonstrated, as always, flexibility, humanity, wisdom, common sense and charm in responding to the representations made to us.

A number of specific points have been made by various people about particular provisions. Most of those can most sensibly be picked up in what obviously will be a fairly prolonged Committee debate, which, now, mercifully, will occur next week rather than this week. I make one point in response to Senator Puplick's excursion on the subject of section 50a, concerning off-shore mergers. His complaint was that that provision does not apply to Australian companies acquiring overseas businesses. The short point is that he is absolutely right. It was never intended to inhibit expansion overseas by Australian firms. The only concern addressed in this Bill-we believe the only concern that ought to be addressed in this sort of legislation-is off-shore mergers which do adversely affect the Australian market.

I conclude by addressing just one more criticism, because it is very central to the attack made on the amendments as they affect Part V of the existing Act, put forward by Senator Durack. I refer to the comment about the consumer protection provisions in the legislation and the allegation that they duplicate legislation existing in most of the States, Queensland and Tasmania not having yet been impressed by the need for consumer protection legislation. Of course it is a concern and would be a concern if there were unnecessary duplication. That is the very kind of regulation that infuriates business most, and exactly the kind of regulation that all of us are keen to avoid. Let me make it absolutely clear that the consumer protection provisions of the Act in the form in which they now appear in this amending Bill are the basis of an agreement, between the Commonwealth and all the States, including Queensland, that these provisions, the language of these clauses, be uniformly enacted around the country. This agreement was made at ministerial council level. What we are talking about here is uniform legislation with the Commonwealth's legislation addressing corporations, because that is within the Commonwealth's constitutional power, and the States of course addressing particularly the application of these provisions to sole traders or firms which are outside the scope of the corporations power.

In relation to product recall, it was the States that wanted the Commonwealth to introduce the measures and most of them have made it absolutely clear that they are happy to replicate the Commonwealth's measures. I am instructed on the question of bureaucratic overkill that when all the people in the country who will be dealing with product safety are added together we come up with the grand total of 19 bodies. That number of bodies is all that will exist for this purpose. So this spectre that has been created of a duplicated bureaucratic apparatus made worse by the Commonwealth obsession with further regulatory activity of the kind embodied in this Bill is simply misconceived and a very unfortunate mischaracterisation of what is a very constructive piece of legislation. I commend it to the Senate.

Question put:

That the Bill be now read a second time.