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SPEECH TO PARLIAMENT: TRADE PRACTICES BILL

Speeches October 11 2005

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The ACCC adopted International Competition Network guidelines on timeframes, information requirements and releasing reasons for its decisions.

It made these changes in response to criticism from business about the inefficiency of its procedures.

It was these inefficiencies which provided the justification for the amendments concerning mergers in this Bill.

Businesses have welcomed these changes and say they are working. But despite this, the Government is still proceeding with these merger amendments – which are unnecessary.

So what’s really going on here?

After all, the ACCC is already approving 98 per cent of merger applications.

The Government appears to be rushing through changes to deal with the two per cent of mergers that don’t succeed – plus ones that nobody is game to own up to.

The real question is ‘what’s in the bottom drawer?’

Would the current prohibition on bank mergers stand up on the Australian Competition Tribunal’s test?

On the face of it, the Four Pillars policy may be rendered meaningless under the Tribunal’s rules.

It was only two months ago that it was revealed the National Australia Bank had secretly planned to take over the ANZ and the Commonwealth Bank had informal merger discussions with Westpac.

Do these proposed changes also mean it will be easier for a company like Toll to take over Patricks?

These changes effectively sideline the ACCC and significantly boost the powers of the Tribunal, which is a quasi-judicial body staffed by judges and business executives.

Small business and consumers will need legal representation to appear before the Tribunal and my concern is that the Tribunal will not be exposed to the wide range of views and concerns on mergers that are currently put to the ACCC, and which form a key part of the ACCC’s decision making process.

I am also concerned that ACCC chairman Graeme Samuel has publicly threatened to shut down the popular informal approvals process – which is currently used for the vast majority of mergers – if business ‘games’ the regulator by manipulating the proposed new merger rules.

Mr Samuel has also warned that the government’s proposed new system would be “all over the place” as some businesses might exploit the rules.

On the other hand, this Bill contains provisions which are beneficial to, and important for, small business.

Collective bargaining for small business will be easier by streamlining procedures to apply for immunity under the Act.

The new notification proposal will make it easier for small businesses such as panel beaters to bargain collectively with big businesses, such as Promina and IAG.

However, I am concerned that the price for supporting this amendment on collective bargaining is too high, despite the benefits for small business.

The benefits for small businesses such as panel beaters must be weighed against the impact on small business and the community generally of even more mergers.

The best way to proceed is to split this Bill so we are not forced into this position of having to choose between supporting collective bargaining and opposing more mergers.

Those of us who think that having even more mergers is a good thing can vote for them. I will not be among them.

On the other hand, those of us who believe that the playing field in which panel beaters and other small businesses operate, should be more level, can do something to make that happen.

For my part, I do not believe the case has been made for allowing more mergers and tilting the playing field further in favour of big business, and I cannot support it.

As I have already mentioned, 98 % of mergers are already being approved, and that’s good enough for me, and I think it’s good enough for most.

Consequently, those who share my concerns are in an impossible position.

We are being presented with an all or nothing situation.

This is not good policy and we do not need to be in this position.

There is a better way.

For these reasons, at the appropriate time, I shall move to have the Bill split as an instruction to the committee as a whole, after the Bill has been read a second time.

That way Senators can look at each of the major components and decide how they will vote.