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Tuesday, 11 October 2005
Page: 104


Senator JOYCE (6:13 PM) —The introduction of the Trade Practices Legislation Amendment Bill (No. 1) 2005 is of crucial importance to the National Party, and I think it is good to reiterate what Senator Boswell said. He said that the bill introduces a crucial new reform which is of great importance to small business and farmers: a cheap and simple notification process for collective bargaining. The new notification procedure gives small business and farmers a simple instruction process to get together to negotiate for better commercial outcomes with large suppliers or customers in the buying of inputs and the marketing of their goods and services. I agree with those sentiments expressed by Senator Boswell, which reflect schedules 2 through 12 of the Trade Practices Legislation Amendment Bill (No. 1) 2005.

During the recent campaign for Senate seats in Queensland, where the National Party campaigned in its own right, we took to the people of Queensland four issues. One of those issues was zonal taxation, which, as everybody knows, is the capping of tax rates in depressed regional areas as a stimulus to further economic growth and a stimulus for small business—to rejuvenate an area, to make the economy grow and broaden and to take it away from that agricultural boom-bust drought-prosperity cycle. We talked about the mandating of ethanol. We are starting to move in that direction and we would like to see a bit more movement. We want to look over the horizon and see an alternative fuel policy into the future so that Australians can maintain the freedom to drive a car at an affordable price.

We talked about core family values because we believe that the family is the fundamental unit which drives society and that, if you have the family unit right, a lot of your other social problems move away. There is no social security policy that will replace a family. We also talked about the overcentralisation of the retail market and our belief that it has gone too far. It was a real head-nodder at speeches we gave around the countryside. People were on board with that. They believe the market is overcentralised and that Australia needs to do something about it. Currently, we have 77 per cent of the retail market controlled by two organisations. Just think of all the dollars you spend every day on retail trade. To have so much of that controlled by two organisations is not a healthy thing.

We made a contract with Queensland that, when we came here, we would represent them on those four issues, and I intend to do that. Because they believe in us they gave us this seat; that seat is now used to gain the majority in both houses. I acknowledge it is one of many seats, but it is one of the seats nonetheless. So we have a special contractual relationship because we had to campaign in our own right in Queensland and they were the promises we made. In my maiden speech, to follow that issue up, I talked about strengthening the power of the ACCC and section 46 of the Trade Practices Act. I mentioned that, if there were a clash between small business and big business, I would be on the side of small business. This frames the current problems I am having with schedule 1 of this legislation.

The purpose of the economy is not to produce the lowest priced product for the end consumer. That may be a consequence of a good economy but it is not the purpose of the economy. The purpose of the economy is to create the greater nexus between the wealth of the nation and its people, and it generally does that through small business. Our job in this parliament is to maintain the management of that, to make sure that small business prevails and gets a fair go, to make sure that small business can start from the ground up, that a person can start from the ground up and attain their goal and that freedom that they get from small business.

We have had so many instances where it has looked like that might be slipping away. Newsagents, some of the horticultural producers, pharmacies and a lot of small retail shops in regional towns or in suburbs feel that they are over a barrel. They feel threatened and do not feel that they have the ability to go on in the manner in which their parents or grandparents probably went on before them. Our job in this parliament is not only to say we support that but also to publicly show we support that and to do it in such a forum as this, the elected body in this Senate chamber they have sent us to. Why do we believe in this freedom to go into business? The freedom to go into business is a mechanism that gives us our own personal freedom. In politics, we have to allow the greatest freedom for the individual that does not impose upon the freedom of others. That is the aspiration within politics.

One of the key freedoms you can have is the freedom to start your own business, build it up, see it progress and hand it on as a legacy to your children. That is a key aspiration we hold. Some people talk about their future within a company. Some people like to have their own future managing their own affairs, their own future that they determine. I side with those people and I want to support them. I believe the birth of a new business gives birth to an aspiration that you can pursue. It also allows the development of new products, new ideas and new managerial techniques. It gives the whole economy a greater breadth, a breadth to go forward. On the conservative side of politics—and, I suppose, even on the Labor side of politics—it is a fundamental good that we try to encourage.

Currently, with 77 per cent of the retail market controlled by two organisations, we would have to say that freedom is slipping away somewhat. The ‘national champion’ argument pays little regard to the ‘freedom of Australians to be in business’ argument. Mergers and acquisitions are the stepping stones by participants in the market to a position of centralisation that inhibits this freedom. As such, Senator Boswell was instrumental in including the provision that you cannot have a merger that is likely to have the effect of lessening competition in the market. The ACCC works under this auspice. As such, it is something that should be maintained in its current form. Currently the ACCC approves 98 per cent of mergers. The other two per cent do not pass, and they do not pass for a very good reason.

The Australian Competition Tribunal, however, works from a different format—the format of the public benefit. I will now refer to the Law Council of Australia for an outline of what public benefits are. Public benefits include increased exports, increased substitution of domestic products with foreign goods, increased international competitiveness of Australian industry and efficiency gains. It does not mention anything about participation from the ground up of small business, keeping a broad participation in the marketplace and maintaining the fundamental freedom of someone to start with nothing and build their business up. It does not speak to that issue; it speaks to another issue. The ACCC was a protector of that initial goal of not fundamentally reducing competition in the marketplace and, by doing so, maintaining people’s ability to start a business and grow. One would hope that that is a fundamental belief of anybody on the conservative side of politics.

The public benefit argument obviously runs in complete conflict to what I was walking around Queensland talking about with my Senate team. It also works at an angle to what I was speaking about in my maiden speech. The difference between what the ACCC represents and what the Australian Competition Tribunal will represent is 40 days—that is, if the ACCC in 40 days does not approve or come up with the decision on a merger then it is deemed to have not approved it and it heads off to the Australian Competition Tribunal. Someone could ask, ‘What’s the issue with that?’ The fact is that once it gets to the Australian Competition Tribunal they then have three months to approve it as opposed to 40 days. They can then apply for an exemption to take it out to six months, so we now have six months as opposed to 40 days. There is a disparity between the power of the ACCC and the premise on which it examines the legislation. I feel that is an unhealthy thing.

The Australian Competition Tribunal, as an example of the culture of the place, approved the trans-Tasman merger of Air New Zealand and Qantas. This would allow one operator to have 95 per cent of the trans-Tasman route. I agree at the outset with Peter Costello’s statement about the Dawson inquiry: it was to show a true balance between big business and small business. I think schedule 1, however, moves away from that and gives more power to big business at the expense of small business.

What we have got to do, I feel, is see a split in this legislation so that we can clearly understand the two issues that are being dealt with: schedules 2 to 12 and schedule 1. I want to reiterate what this legislation will mean: 40 business days for the ACCC to pass a merger, and it makes that decision on the basis of competition or likely competition. Schedule 1 says:

The commission cannot grant a clearance unless it is satisfied—

the ACCC—

that the acquisition would not have the effect, or be likely to have the effect, of substantially lessening competition in a market.

What schedule 1 will allow is that:

The Tribunal cannot grant the authorisation unless it is satisfied the acquisition would result, or be likely to result, in such a benefit to the public that the acquisition should be allowed to take place.

So it is the public benefit argument which does not take into account the aspirations of people to start a small business. This is further backed up by Hugh Morgan, who says:

... mergers will not be allowed to proceed if they substantially lessen competition, unless the impacts on competition are clearly outweighed by the public benefits.

In summary, it is not a minor change. If it were a minor change it would be able to stand alone in its own piece of legislation. But it is not a minor change and it has to sit with other pieces of legislation to get through. If the decision was inconsequential there would be no reason for it to be in this bill. I refer to the Business Review Weekly, which said there will be people champing at the bit with a whole raft of new mergers to take advantage of this. They are the mergers that we said in our campaign we would protect against.

Finally, splitting the bill also reflects that when legislation comes into this house it is not a carte blanche. You cannot expect legislation to go straight through. There is a review process, and it continues on. That is a healthy thing for the Australian people to see. I appreciate the ability to stand on this side of house and to make that statement. I can refer, unfortunately, to my colleagues on the other side of the house and see the freedom they have had. The last time someone in the Labor Party crossed the floor was in 1988: Graeme Campbell, 17 years ago. For his efforts, he was kicked out. That is the sort of freedom that you have on the other side of the house. Unfortunately, that lack of freedom might be a reason why there is currently a majority held by this government in both houses.

I would like to encourage the freedom on both sides of the house to be able to state what you truly believe so that not only can we talk about freedom in business but we can talk about freedom within this house—freedom to say what you truly believe and freedom for the Australian people to see this debate in its entirety in this chamber, on the public record rather than hidden in other vehicles which do not truly report to the Australian people.

It is disappointing and always humorous to hear the Labor members on the other side who rail against the National Party, calling them doormats, this, that and everything else. Yet, when you look at their actual record, they not only do not have the courage but are terrified to ever step out of their box and exercise the freedom that this nation gave them—the freedom to vote on certain issues and probably at a difference to their party. It is a shame that in the thing that protects the freedom of our nation you are not actually free.

My intention is to support schedules 2 to 12 but not to support schedule 1. I have given my reasons for that and I am thankful that we still have the ability in this parliament to express our differences of opinion and show people that just because you have a majority in both houses does not mean you are not going to have a review of legislation.

Sitting suspended from 6.29 pm to 7.30 pm

 (Quorum formed)