Small Business
Page: 735
Ms DIANE BEAMER: My question is addressed to the Minister for Small Business. Will the Minister inform the House of issues affecting small business in New South Wales?
The SPEAKER: Order! I could not hear the question because of the member for Wakehurst. I ask the member to repeat the question.
Ms DIANE BEAMER: Will the Minister inform the House of issues affecting small business in New South Wales?
Mr JOSEPH TRIPODI: The Labor Party has been built on a tradition of fighting for workers' rights. We on this side of the House are proud of that record. With our friends in the union movement much has been achieved to make workplaces fairer and to provide pay justice for working families. To achieve this we have had to determine where the power rests in the workplace and to correct for it. It has always been about a balance between master and servant. That has been the Labor way for over a century, and we have always got it right.
In the twenty-first century the story remains the same but the players have changed. The traditional struggle between employer and employee is now joined by the struggle between small and big business. Not only does the law need to protect traditional workers; it needs to protect the new generation of workers—those involved in small businesses and the owners of small businesses. New South Wales has supported thousands of small businesses and this sector continues to grow. Small businesses, which employ half of Sydney's workforce, are a vital part of the Australian and New South Wales economies.
Members on both sides of the House share the view that businesses should be allowed to conduct their affairs free from government involvement, unless intervention is absolutely necessary. Business should occur in a competitive environment and on a level playing field. The best companies are those that succeed by providing for their customers. The law covering the level playing field and the framework for competition is the Federal law, but unfortunately it has been left to deteriorate over the past few years to the comprehensive disadvantage of small businesses. There are a number of reasons why small business is disadvantaged, but it often comes down to having comparatively little power in the marketplace.
Small businesses are vulnerable by nature and need a level of protection against the abuse of market power. It is the role of the Federal Government to provide protection against the abuse of market power. Today I inform the House of the fundamental failure of the Federal Government to do just that, that is, to protect small business against big business. The Trade Practices Act is the key piece of legislation regulating competition. Big businesses left to their own devices will engage in a range of anticompetitive practices. For example, they can engage in predatory pricing where they sell at under cost, forcing small businesses to shut and thereby creating a commercial environment that enables them to raise their prices afterwards, or they can buy up their competitors and accumulate more market power.
The SPEAKER: Order! I call the member for Clarence to order.
Mr JOSEPH TRIPODI: The Act covers a number of areas designed to protect consumers and small businesses from this sort of behaviour, but there are now serious doubts about the strength of the Trade Practices Act and the power of the regulator, the Australian Competition and Consumer Commission [ACCC], to deal with this sort of action. This doubt was created by a High Court decision in 2003 known as the Boral case. The new interpretation of the abuse of market power provisions in the Act sets the bar extremely high for small businesses trying to prove predatory behaviour by a big competitor.
When this decision came down there was condemnation across the board, including from the Australian Competition and Consumer Commission and small business groups. The Senate economic references committee reviewed the legislation and paid particular attention to section 46, which covers the abuse of market power. In March 2004 the committee made some good recommendations dealing with predatory pricing and unconscionable conduct. That was more than three years ago. The Federal Government did not agree with all the recommendations but, on the issue of predatory pricing, the Federal Treasurer said in his response to the committee that the Trade Practices Act should be amended so that below-cost pricing was covered by section 46.
Since then there have been drafts, reviews and discussions but, unfortunately, no action has been taken to provide protection for small business against the practices of big business. My colleague the Hon. David Campbell fought hard, through the ministerial council process, to push this agenda forward, but unfortunately the Federal Government resisted it all the way. The Australian Competition and Consumer Commission and the State governments were ready to support amendments and Treasurer Peter Costello admitted at the time that they were necessary, but he has done nothing to fix the problems confronting small businesses in Australia. Mr Costello has let big businesses loose, with the law on their side, for over three years and the economy has suffered as international agencies now report that Australia has one of the most concentrated economies in the world.
With the advent of the forthcoming Federal election the hearing of the Liberal Party has suddenly improved. Suddenly it can hear the voice of small business. The small business constituency is sick of being forgotten, its interests being neglected and the Liberal Party pandering to big business. At last, two weeks ago today, the Australian Financial Review reported on its front page that the Treasurer would be pushing through amendments as a priority. We have heard nothing since then. Apparently he wanted those amendments to go through in this current session of parliament, but nothing has occurred since the publication of those newspaper reports. There has been no official announcement and no press release other than that newspaper story. The New South Wales Government called on the Treasurer to give us the details, but unfortunately we are still waiting.
The SPEAKER: Order! I call the member for Clarence to order for the second time.
Mr JOSEPH TRIPODI: We are still awaiting a response from the Federal Government. After two weeks nothing more has been said on the issue, either by the Treasurer or by Fran Bailey, the Federal Minister for Small Business and Tourism. The support is there from across the community. The New South Wales Government brought up the issue at small business ministerial council meetings in 2005 and 2006. The head of the Australian Competition and Consumer Commission, Graeme Samuel, has claimed that section 46 does not do what it was intended to do, and needs to be changed. Small business groups are keen to see the law address the imbalance that has been occurring since 2003. Senator Barnaby Joyce and Senator Steve Fielding have weighed in on the issue, and just last week the Liberal member for Gilmore, Joanna Gash, moved a private members' motion on this issue. So there is bipartisan support for change.
Government backbenchers and crossbenchers in the Senate want to see reform in this area but, unfortunately, there has been no response from the Federal Government, no action, no draft bill and no further discussion other than that reported in the Australian Financial Review . The question today is: Why has it taken Peter Costello three years to start the reform process to protect small business, and what is he proposing? Many people want to know exactly what Mr Costello proposes. Do not get me wrong: We are keen to see change in this area. We want to put change on the agenda but we want to know whether the proposals that were leaked to the press without any details represent real change or whether they are simply more window dressing.
Not only those on the Labor side want reform in this area. Many others are seeking change—particularly the 645,000 small businesses in New South Wales. They want answers. They want to know what relief amending the Trade Practices Act can provide. It is a serious question for small business, a serious reform issue in the competition law area, and a question that has remained unanswered since the Boral case in 2003. The Treasurer owes it to small business to come clean about his plans. The Australian economy needs this reform, and small businesses need a level playing field that gives them a chance to compete in the workplace. I do not need to remind the House that competition reform is on the Labor agenda. A Labor government introduced competition laws—albeit quite a while ago—and a Labor government appointed a national competition council. Labor introduced those reforms because we are serious about protecting small business. We are serious about providing for consumers, we are serious about having a competitive economy and we are serious about reform.
Mr Adrian Piccoli: Point of order: I refer to previous rulings of the Speaker about the length of answers, and your comments today in the Sydney Morning Herald.
The SPEAKER: Order! I ask the Minister to resume his seat while the point of order is being taken.
Mr Adrian Piccoli: The Minister is clearly wasting time to avoid another question being asked.
The SPEAKER: Order! I have heard enough. The Minister's reply is relevant to the question asked. He is not repeating himself, and I urge him to continue.
Mr JOSEPH TRIPODI: There is a long history of the conservatives gagging small business and ignoring small business interests so I am not surprised that they are trying to do it again today. It is a well-known fact that Australia has one of the most concentrated economies in the world. There are few industries in this country where there is not a duopoly. That situation was created over the past decade because the Australian Competition and Consumer Commission did not have the power to explore, investigate and then prosecute regarding anti-competitive practices. That is a great shame because the economy has suffered. The potential of the Australian people has not been fulfilled because the Federal Government has failed to bite the bullet when it comes to reform in the competition area.
Unfortunately, no champions of small business are sitting on the other side of the House or on the Government benches in Canberra. This is a very serious issue. Fran Bailey has failed to understand and implement the reforms necessary in this area. The Australian Competition and Consumer Commission cannot run cases for small business. Why? It is because the laws are weak. Graeme Samuel has said that the commission will not run cases under the current law because it is too weak to protect small businesses. That is a great shame, and it is time for reform.
Question time concluded.