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Tuesday, 28 August 1906

Senator CLEMONS (Tasmania) . - It is all very well for the Minister to use wild phrases, such as " rebates are vicious," but if he were better acquainted with the subject, or, at any rate, if he were to think more carefully before he spoke, he would hesitate before he said straight away that a rebate is a vicious thing. One of the most ordinary forms of rebate is that which is given by, a tradesman to a large customer. In commercial life nothing is commoner than for a tradesman to say to a customer, " If you send me 100 tons, I shall give you a rebate."

Senator Playford - No. He says, "I will give it to you at wholesale price."

Senator CLEMONS - No, he does not.

Senator Playford - That is what the peopleI deal with say. They never talk of rebates.

Senator CLEMONS - A carrier does not talk about the wholesale price. If I am going to enter into ai contract with a carrier to take 50 tons of goods, he may have a tariff. If I say to him; "I am prepared to give you 1,000 tons-

Senator Playford - He will say, " I will do it for so much."

Senator CLEMONS - No; the carrier will say, " Then I will give you a rebate," and the term is properly used there. In Australia, there is no system more universal than that of giving a rebate in consideration of the quantity of goods offered. It is absurd for the Minister to talk about that sort of thing being vicious. To so stigmatize that form of commercial transaction is ridiculous.

Senator Dobson - If a man gets a ton of tobacco from the Tobacco Trust, it will give him a rebate of 2d. perlb.

Senator CLEMONS - Yes, because the man is taking a large quantity. Is a rebate vicious because a man takes a quantity? The amendment provides that if the defendant offers any rebate, refund, discount, or reward upon the condition that the person deals with the defendant to the exclusion of other persons dealing in similar goods or services, it shall be an offence under the Act. Does the Minister consider that the provision would apply to the case of a contract being entered into for a term of years in consideration of getting a rebate? Suppose, for instance, that a trader were to agree with a customer that, if the latter would enter into a five years' contract, he would grant him a rebate on his ordinary terms. Does he intend the Committee to pass a provision which would affect such a transaction? I ask Senator Best to say whether it would apply to a case of that kind ?

Senator Best - Of course, it would not, unless there was a stipulation for exclusive trade.

Senator CLEMONS - The stipulation for exclusive trade would be contained in the duration of the contract.

Senator Best - If it were a stipulation for exclusive trade, then it would apply.

Senator CLEMONS - I ask Senator Best to say whether, in his opinion, it is desirable that the case I put just now should come under the provision. Does the Minister consider that it should?

Senator Playford - I think so, from its wording. If a man entered into a contract for a certain period, and he said, " I bind you to get these goods from me, and from nobody else, during that period," it would come under the provision.

Senator CLEMONS - The Minister will agree with me, I think, that that is a normal form of contract. Does lie think that in commercial life it is a bad thing to give a contract for five years on one side, and to give , a rebate on the other, in consideration of getting the contract ? Is that the sort of thing that we wish to put down? Any number of traders or carriers have a fixed tariff or rate. It is quite possible for such a carrier or trader to offer a rebate to a customer in all bonâ fides.

Senator Playford - It depends upon what the honorable senator calls a rebate. If a carrier quoted one rate for a 50-ton lot and another rate for a 100-ton lot, would he call that a rebate?

Senator CLEMONS - It would come underthe head of either a rebate or a refund, or a discount. And the consideration would be the getting of a contract for a period of years, during which, undoubtedly, any other person would be excluded from dealing with that customer. If this paragraph were enacted, it would make a tremendous inroad upon ordinary methods of trade. I cannot believe that many honorable senators think that such a departure would be desirable at the present time, or that a custom which is found in every trading community is necessarily bad. I ask honorable senators whether it is a bad thing for a man to be prevented from giving a refund because he gets a five years' contract ?

Senator Staniforth Smith - Would it not have to be shown that it was an injurious as well as an exclusive contract?

Senator CLEMONS - It might be held to be a restraint of trade. I had that point in my mind when I was appealing to Senators Best and Playford.

Senator Best - This amendment does not relate to restraint of trade, but to unfair competition.

Senator CLEMONS - Might it not be held to be unfair for a man to tie down a customer for a term of years because a rebate was given to him ? I can quite conceive that it might be held by some persons to be unfair as against all others engaged in that industry or trade. But we ought to hesitate before we pass a provision of this character without giving full consideration to the wide-spread effect it might have on trade and commerce. Surely, in passing a Bill which is called an Australian Indus tries Preservation Bill, we do not want to harass and impede honest trade?

Senator Playford - Of course not.

Senator CLEMONS - Is the granting of a rebate dishonest?

Senator Playford - I do not think it is.

Senator CLEMONS - Is it dishonest for one man to give another man a refund or rebate because he accepts a five years' contract ? I do not think it is dishonest ; but I see very great danger in passing a provision which, says that that is wrong. I ask the Minister not to agree to the amendment straight away. I agree with him in regard to many of the evil practices which have been carried on under the name of rebates. I do not for a moment defend any malpractices, but I wishto avoid the error of punishing the innocent when we are chasing the guilty. I think that the Minister would be well advised if, before agreeing to the amendment, he would take advice on the point which I have raised, and possibly on other points which may be suggested. Surely he does not want to do an injustice to honest traders ! He has stated that, in his opinion, the case I cited would come under the amendment. I believe he recognises withme that such a case would carry with it no dishonesty.

Senator Playford - There is no dishonesty in any rebate !

Senator CLEMONS - At times there may be. A little while ago the honorable senator said that all rebates were vicious.

Senator Playford - According to the honorable senator's argument, there is no dishonesty at all in rebates.

Senator CLEMONS - I hope that the Minister will withdraw that remark, because he is not quoting me fairly. I have already said that I agree with him that in many respects rebates are most objectionable. But it does not necessarily follow that every rebate is bad. If, however, it is bad, I ask the Minister to say whether, in the instance I gave, it is harmful or wrong?

Senator Playford - The provision would only apply when the rebate was granted to the exclusion of other persons.

Senator CLEMONS - For a term of five years other persons would be excluded in the case I cited.

Senator Dobson - It must be in restraint of trade to come under the amendment at all.

Senator CLEMONS - Might it not be held to be in restraint of trade ?

Senator Dobson - If it came under the amendment it would have to be.

Senator CLEMONS - Perhaps the honorable senator does not understand the question. I hope that the Minister will not attempt to rush the provision through without giving it fuller consideration.

Senator Playford - It has been considered.

Senator CLEMONS - I ask the Minister to postpone the clause, and let us deal with other clauses.

Senator Playford - This amendment has been on the contingent notice-paper for some time, and I have had the advantage of considering it with my colleagues.

Senator CLEMONS - Has the Minister considered such a case as I have cited ?

Senator Playford - Yes, practically the same case.

Senator CLEMONS - I cannot vote for the amendment.

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