25th Parliament · 1st Session
Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 9.30 a.m., and read prayers.
– The Minister for Housing will be absent from the House until the end of the parliamentary session. During this period he will undergo hospital treatment. In his absence I ask that questions ordinarily addressed to him, in his capacity either as Minister for Housing or as Minister representing the Minister for Customs and Excise, be directed to the Minister for Supply.
– I ask the Treasurer: Can he say what means will be used to introduce into the Australian Capital Territory the stamp duties that were foreshadowed in the Budget? Will legislation be introduced in this House or will the vehicle be an ordinance of the Australian Capital Territory? Recognising that in the States duties of this kind are levied by governments elected by the people in the areas affected, is the Treasurer completely determined not to have any consultations with local elected bodies or organisations representing community interests? Will the Treasurer make a statement as soon as possible of the details of the proposals, indicating when the duties will be imposed, the rates at which they will be imposed, and the transactions which will be affected? Finally, will the right honorable gentleman say whether there is any truth in current reports that the Treasurer is considering abandoning the proposals?
– I welcome the question because I have read in the local Press references to my remoteness, aloofness, and arrogance - other unpleasant epithets were used - because apparently I am not disposed to receive at this stage direct representations on these matters. I assure honorable members that in the course of a year I receive literally hundreds and, I would say, virtually thousands of requests for interviews in relation to matters of taxation of various kinds. It is quite impracticable to have personal contacts in all of these cases. It is my usual custom to suggest that representations be put to me in writing. If I then find that an interview is necessary in order to have a complete understanding of what is proposed, this can be arranged. I think it can be said that honorable members, when they feel that they have a need to put to me representations that come through their constituencies, have little difficulty in achieving that result either by direct access to me or through my office.
In the case in question, whilst the Government has expressed a general attitude of policy, no detailed proposals have been worked out to a point where discussion would be either practicable or profitable. I can assure the honorable member for the Australian Capital Territory that, when the Government’s mind has been more clearly formed on the details of this matter, we shall, as is our custom, either give some public indication of that or give either him, as the elected spokesman for the Territory, or some appropriate representative body from the Territory, an opportunity to put their views.
– I ask the Minister for Trade and Industry a question. He may recall answering last year a question concerning a shortage of superphosphate in Victoria last season. Can he tell the House what is the present position? Is it correct that one company is in the position of either not accepting further orders or of accepting them only for delivery after June next year? Is it correct that another company has now abandoned the long standing procedure of filling orders in order of their acceptance and is now putting quotas on long standing clients and agents? Has the Minister any information that he can give the House on the intentions of W. R. Grace (Aust.) Pty. Ltd. concerning a new fertiliser works at Portland, following final acceptance of its offer for Cresco Fertilisers Ltd. shares?
– The honorable member for Wannon was good enough to tell me that he wanted this information. I have certain information, but I am not satisfied that I am in a position to give him a completely satisfactory reply. I undertake to secure as much information as I possibly can and to give it to the honorable member and the House early next week.
– I direct a question to the Minister for Trade and Industry. In view of the importance of the wool reserve prices plan referendum to the Australian economy, I ask: Is it correct to say that neither as Minister for Trade and Industry nor as Leader of the Australian Country Party he has any views either way on the relevant legislation? If so, who decided to introduce the legislation in the Parliament, and why did his Party vote for it? Furthermore, if he is eligible to vote in the referendum, will he vote “Yes”, “No”, “ Informal “, or will be abstain from voting?
– Order! The Minister for Trade and Industry is not answerable to the House on how he will vote in the wool reserve prices plan referendum.
– Mr. Speaker, I am going to tell the House I have already voted “ Yes “. I am a wool grower. I have the right - indeed, in my opinion, the obligation - to express myself as an individual on this matter; and I have done so already in the direction that I have just mentioned. I am also a Cabinet Minister; and as such and as the Leader of my Party, as I have said before, when any great sector of the Australian population makes a proposal to the Government in the interests of that sector of the population, I conceive it to be the duty of the Government to give consideration to that proposal. If, on the face of it, it appears to be beneficial to that sector of the community and in the public interest, then the Government will give support to it. We have done that time and time again in the case of primary industries. Of course, we have done it in different manners in respect of almost every sector of the population.
– Not in respect of wages.
– Yes, in respect of wages. What the wage earners wanted was an arbitration court. The wage earners have been given an arbitration court. Honorable members opposite can name no sector of the Australian population that has not at some time or other conveyed its desires to a government. I believe that every government has given consideration to those representations, and where a government has adjudged a proposal to be in the public interest it has acted accordingly. There is a very long record of action of this kind by governments and by this Parliament. In this case the proposal appeared to the Government to be a valid one and, consistent with our policy, we have asked the growers in the wool industry to express by a referendum their desires.
– The Minister did not do that with the tobacco industry.
– We did do that with the tobacco industry, but in a different manner.
– Order! There is too much interjecting from the Opposition side. The honorable member for Bendigo is acting as if he were the official interjector for the Labour Party. If he persists he will be dealt with. He brings discredit on his own organisation and on the Parliament.
– If I may comment upon a very ineffective interjection, Mr. Speaker, the tobacco growers, voting individually, have elected tobacco boards in three States. Those boards, speaking for the growers, have conveyed their views to this Government and this Government has acted accordingly. This is completely consistent with our attitude to every primary industry and completely consistent with our attitude to every sector of the Australian economy.
– I ask a question of the Minister for the Army. It has been reported by cable that malaria has affected United States troops in Saigon. How severe is this attack and what action has the Australian Army medical service taken to combat this disease amongst our own servicemen? Does the Army intend to send its own medical team to Saigon to ensure that the maximum safeguards are taken consistent with active service conditions?
– I read reports of this matter for the first time this morning and
I have already initiated inquiries to find out whether the reports are correct and whether Australian soldiers in South Vietnam are affected in any way. When these inquiries are completed I will give the honorable member further information. So far I have had no reports that the drugs being used by Australian soldiers have not proved effective against malaria. If there were any doubt about their effectiveness I think I would have heard of it because the Director-General of Medical Services has arrived back only in the last few days from a tour in South Vietnam during which he has been looking at matters such as this. However, I will give the- honorable member further information when I have concluded my inquiries.
– I wish to ask the Minister for Health a question. Is it a fact that many Aborigines in the Northern Territory have died as a result of an epidemic of measles? Is the Minister aware that the Government of Western Australia has for some time been carrying out a programme of immunisation of Aborigines against measles? Why has not a similar programme been carried out in the Northern Territory, and what steps have been taken to remedy the existing situation?
– I made a statement on this matter last night. The measles epidemic in the Northern Territory has reached fairly serious proportions. It is amongst the Aboriginal population in Arnhem Land. We have diverted practically the whole of our medical resources in the Northern Territory to this area to deal with it. So far, the epidemic has been just contained. If it appears likely to continue, we will undertake a vaccination campaign. The reason why we have not yet undertaken vaccination in this area is that we are not certain of the effectiveness of the vaccine that is produced in the United States of America. Reports indicate that it is only partly effective. Under the present circumstances, it will be used by us only as a last resort. I can assure the honorable member that, if the epidemic continues, we will try everything possible to prevent further deaths and see that the best possible assistance is provided.
– I address a question to the Acting Minister for Defence. Is there any substance in a report that an Australian Army patrol has been airlifted into west New Guinea in a combined operation to clear helicopter landing strips close to the Indonesian border? Are troops from the Pacific Islands Regiment spending a period of one month on this border? If so, what work are these troops carrying out?
– I was a little concerned when I saw a statement on this matter in the “ Australian “ of, I think, yesterday, and I made some inquiries. 1 would like to be precise in the answer which I give to the question. There are no visiting Australian troops currently located or engaged in building helicopter pads close to the Indonesian border. There are some Australian troops presently undergoing routine acclimatisation and orientation training approximately 100 miles from the border. Current operations by troops of the Pacific Islands Regiment are not, as suggested, part of any plan related to West Irian. Pacific Islands Regiment troops patrol the general border area as part of their long-established normal routine of maintaining contact with isolated areas throughout the Territory. Their work in clearing helicopter pads is designed to facilitate such routine patrolling.
– I address a question to the Minister for the Army. As Army operation “ Sprinkler Two “ is reported to have been delayed by the late arrival of chartered aircraft, I ask: What plans are in hand to correct the position of the Army’s dependency on civilian transport? As there are known cases where Ansett-A.N.A. has had to borrow or charter planes from Trans-Australia Airlines to meet its additional commitments, will the Minister say what percentage of Army transport contracts are let to each of our two major airlines?
– To the best of my knowledge, the arrangements made by the Army to charter aircraft from the civilian airlines for this purpose or for any other purpose have been satisfactory. I will get the detailed information which the honorable gentleman has requested and supply it to him.
– My question is directed to the Minister representing the Minister for Civil Aviation. In view of the rapid development of the Parramatta district and of the size and importance of the City of Parramatta, will the Minister make inquiries into the possibility of establishing a landing strip for light planes and a landing ground for helicopters in the district before all suitable sites have been taken up for other development?
– I cannot hold out very great hopes for the honorable member because I know that with aircraft operating from Kingsford-Smith, Bankstown and Richmond airports, this area is particularly congested at present. The Department of Civil Aviation has some difficulty in controlling adequately all the aircraft in the area. However, I shall refer the question to the Minister for Civil Aviation and get a reply as soon as I can for the honorable member.
– I direct a question to the Minister for Trade and Industry. In answering questions regarding the forthcoming referendum on the proposed reserve prices plan for wool the right honorable gentelman has made it abundantly clear that he and the Australian Country Party which he leads are absolutely against any Government action which would restrict, control or in any way regulate primary production or any part of it unless the growers be first consulted and approve of such action. In view of these statements by the Minister why was the Australian dairy industry not consulted before the recently concluded New Zealand - Australia Free Trade Agreement was signed? Was it because the Leader of the Country Party well knew that 90 per cent, of the producers would welcome the opportunity to reject this measure, which they are quite rightly convinced will react to their very great detriment? Is the Minister interested in consulting the farmers only when he is reasonably sure beforehand that they will agree with what he proposes to do?
– The honorable member for Capricornia exaggerates what I may have said in respect of primary production, but his question is clearly related to the effects on the dairy industry of the New Zealand - Australia free trade area. It is widely known that the honorable member for Capricornia and some other Labour Party members have been canvassing vigorously in their electorates to incite the Australian dairy industry to oppose the New Zealand - Australia Free Trade Agreement.
– Yesterday the Minister said he would confer before he made a decision.
– Order! The honorable member for Oxley will remain silent.
– The honorable member for Oxley is one of the main inciters. I can understand the genuine concern of dairy farmers who, in circumstances of drought and low overseas prices, are perturbed that any arrangement made by the Government might seriously impair their wellbeing. I sympathise with the dairy farmers, but surely it is the duty of the Parliament and of parliamentarians to see that the dairy farmers are aware of the facts. Surely it is more their duty to see that the facts are not misrepresented to the dairy farmers. I have stated the facts on the floor of this House quite clearly on a number of occasions just as I have clearly stated them to the chosen representatives of the dairy industry.
In respect of cheese - in a campaign on which the honorable members for Capricornia, Oxley and Wide Bay have all participated - I shall take about two minutes to state the facts again. The facts are these: There has hitherto been a duty of 6d. per lb. on cheddar cheese brought from New Zealand, with no quantitative restriction, and the outcome has been that in the last year 260 tons of cheddar cheese were imported and the required duty paid. The 260 tons came into competition with a domestic production of cheese of about 60,000 tons. The effect of the free trade area will be to permit in the first two years a maximum of 400 tons of cheese a year to be imported. That is 140 tons more than was imported in the last year.
A calculation based on the worst assessment that the importing of 100 additional tons of cheddar cheese from New Zealand will require the Australian dairy industry to export an additional 100 tons at a realisation of some pennies a pound less than the domestic realisation shows, my advisers tell me, that the price reduction in terms of butter fat and the return to the dairy farmer will be one-tenth of a farthing per lb. That is not serious for the dairy industry. But there are advantages that flow from this. In the first place, where there has hitherto never been any limit on the quantity of cheese that could be imported from New Zealand, the Agreement itself stipulates that there shall be a quantity limitation in each of the first two years of 400 tons and, in the fifth year and thereafter, of 1,000 tons a year.
– What about pig meats?
– The honorable member is getting hurt on cheese and I shall hurt him worse on pig meats in a moment. The dairy industry will lose, at the outset, onetenth of a farthing a pound and in the fifth year a little more. As against that there will be, by a treaty signed, a ceiling after five years of 1,000 tons a year upon the quantity of cheddar cheese that can come in from New Zealand. There will be, for the first time, a condition that this cheese will only come into Australia at a price agreed between the Dairy Board of New Zealand and the Australian Dairy Produce Board. A reference has already been made to the Tariff Board to consider whether cheeses other than cheddar cheese require further protection in Australia. This was requested for the dairy industry and was accorded.
These events occur in circumstances in which this Parliament has been voting regularly each year £li million for the support of the Australian cheese industry. The dairy industry is not going to be hurt by this. I address myself to the whole of the Australian Labour Party and say this: The greatest market for Australian manufactured goods - and it is in manufacture that employment is mostly created in Australia - is the New Zealand market. I would ask the whole of the Australian Labour Party, in the interests of the workers in this country as well as in the interests of the relationship between Australia and New
Zealand, to pause before engaging in a campaign to try to destroy an amicable arrangement which is mutually good for our two countries.
– I direct a question to the Minister for Trade and Industry. It refers to the efforts of the right honorable gentleman to seek an increase in sales for certain Australian exports in Japan. Did he find any likelihood of increases in sales of Australian wines and brandies, in view of the serious surplus existing in these industries, or alternatively of canned or dried fruits? Secondly, did he find the increasing trend of demand for Australian cheese - cheddar cheese - in Japan maintaining its rate of increase, which could alleviate any over-supply of cheddar cheese on the Australian markets?
– In discussing the items of trade in Japan, it became clear, as I and others have known, that the Japanese are not, by and large, drinkers of the type of wine that we produce. There is but a modest importation of Australian wine and brandy and I could not hold hopes, in my own judgment, that there will be a substantial increase in the importation to Japan of Australian wine or brandy, or a very big increase in the importation of canned fruit, because Japan is a very big exporter of certain types of canned fruit, particularly mandarins. There has been a very heartening expansion of the importation of Australian cheese. I had discussions about butter, in respect of which our prospects do not appear to be good, but I am hopeful that these may be improved.
The great opportunities for Australian foodstuffs in Japan are to be found, in the first place, in sugar and in wheat. I believe there will be a substantial increase in the exports of Australian beef to Japan. There is no limitation today on the importation of Australian sheep meat into Japan. These are the industries to which we can look for substantial expansion, but there has been quite a big expansion in cheese exports to Japan. May I observe that to conduct negotiations with Japan, the United States of America or other countries, I need to have recourse to the argument that countries ought not to close their markets against agricultural products. This argument would be completely defeated if my own record were that I had closed this market against the importation of agricultural products.
– My question is directed to you, Mr. Speaker. I preface it by saying that you have always impartially and, I think, correctly reproved members who have sought to use question time for the purpose of disseminating political propaganda rather than to seek information. Has your attention been drawn to a comparison made by a well known political correspondent between the operation of question time in the House of Commons and in this House wherein he states that our question time suffers because of the verbosity of Ministers in replying to questions? Could the practice adopted by some Ministers of using question time as a vehicle for blatant party politics, as on two occasions yesterday, be considered?
– Order! The subject of questions without notice - or question time, as the honorable member described it - is a matter for the Standing Orders Committee. With regard to procedures in the House, the Chair is dependent entirely upon the co-operation and goodwill of all honorable members. Faults are not to be found on one side only. Every effort is made to enable the business to flow smoothly. However, a few honorable members are inclined to disregard this aim, and that makes things very difficult for the Chair. At times an honorable member may appear to be a little more severly dealt with than the circumstances would seem to warrant, but honorable members do not always see the pattern of conduct from the rear.
– 1 ask the Treasurer whether, under the arrangements between the Commonwealth and the States of New South Wales and Queensland for drought relief, it is permissible for the State Governments to provide loan funds from the State Treasuries, administered by a State rural or agricultural bank, to be made available through the agency of normal lending institutions to bona fide drought affected graziers and farmers by way of long term low interest loans for carry-on and restocking purposes, provided applicants are regarded by State authorities to be appropriately qualified for such assistance.
– Mr. Speaker, as the Prime Minister has pointed out to the House, we have conveyed to the Premiers of the drought affected States a general expression of the willingness of the Commonwealth Government to support financial action which the State Governments believe to be necessary in order to assist drought affected farmers to carry on their farming operations and to deal with difficulties they have experienced as a result of the drought. We have not attempted to lay down in any detail how this should be done. We believe that the State Governments are in a better position than is the Commonwealth Government to decide the needs of those affected inside the boundaries of their States and the use that can be made of the appropriate State instrumentalities for this purpose. I believe that the State rural banks are well suited to deal with requests which might come for special assistance. To the extent that the State Governments found it convenient to make finance available for this purpose through those instrumentalities, that would enjoy the support of the Commonwealth Government.
– I desire to give an example of how a question should be asked. I ask the Treasurer: Will he ascertain the truth of the claim that at least £75 million of bad debts is owing to hire purchase companies in Australia? If the claim is anywhere near the truth, will he ask his colleague, the Attorney-General, to examine again the banking power contained in the Constitution with a view to the introduction of legislation to regulate the activities of hire purchase companies?
- Mr. Speaker, I suppose you have satisfied yourself that this question does not raise a matter of policy which it is not usual to deal with at question time. Paying deference to the responsibility and leading position of the honorable gentleman, I shall study the question. The information as to the total losses estimated in hire purchase transactions came from Mr. Edwards, a senior figure in the Hire Purchase Conference. I do not know precisely the sources from which this information was derived but 1 shall check with the Treasury officers who are in a position to guide me to see whether I can supplement this answer with further information for the honorable gentleman.
– I address my question to the Minister for Trade and Industry. It relates to the statements made by a number of Australians returning from Britain and Europe to the effect that Australian products, particularly those of good quality, are noticeably absent from display windows and shops. Would the Minister care to comment? If necessary, would he endeavour to have the situation remedied through our Trade Commissioner Service?
– I think that the statement to which the honorable member refers is completely valid. I am sure it is a fact that in many populous areas Australian items of trade are not exhibited for sale. The explanation, which to me appears rational, is that the total quantity of a particular Australian item - it may be wine, cheese, butter, canned fruits; the kind of things that lend themselves to advertising - is not a very big proportion of the total requirement of the populous areas of the United Kingdom and Europe. Those who own and market the products have come to the conclusion that they will sell to the best advantage if they advertise in areas where they can offer for sale continuously all the year round the items they have been advertising. This has led them to zone the United Kingdom, for example, and to concentrate their advertising in certain areas. Having concentrated their advertising, they then ensure that the product is continuously available for sale in that area. This course of action has led to a conscious intention to abstain from advertising in other areas. I think this is the correct practice to adopt, but I am by no means a competent judge of the matter. All I can say is that the practice has been decided upon by those who own the products on advice received from the best advertising specialists whom they have consulted and hired to conduct their campaign.
– Is the Minister for External Affairs aware of a recent report that due to the escalation of the war in Vietnam by the United States the shares of the Bell, Sikorsky, Vertol and other aircraft companies rose sharply on the New York Stock Exchange, Bell shares rising by 47 per cent., Sikorsky shares by 55 per cent, and Vertol shares by 68 per cent? Does he think that sections of any community should profit from war?
– I am not aware of the facts alleged by the honorable member regarding the New York share market, but I would differ from his opening statement and the premise on which he based his question, namely, that the war in South Vietnam has been escalated by the United States. I see the effort by the United States, by South Vietnam and by ourselves as a response to aggression, not as a deliberate escalation of the conflict on our side.
– My question is directed to the Acting Minister for Primary Industry and I ask it with full realisation of the very proper attitude he has taken in support of the Prime Minister’s view that he is neither for nor against the wool referendum. Has his attention been drawn to an article in the last issue of the “ Pastoral Review and Graziers’ Record “, the most authoritative and senior newspaper in the grazing industry? Does he realise that this newspaper, which until recently supported the “ Yes “ case has now found it necessary on review of the facts to support the “ No “ case? Is he aware that this newspaper, having traversed the arguments, said this-
– Order! The honorable member has drawn attention to the newspaper. He cannot quote from it.
– Very well, Sir. Is he aware that this newspaper criticises the Minister for Primary Industry as being unaware of the financial risks in the scheme and says that this lack of awareness is apparently shared in what the newspaper refers to as the highest circles in Government? Will he have this matter drawn to the attention of the Minister for Primary Industry so that even at this late stage he may understand what is involve I and will he-
– Order! The honorable member will direct his question.
– Will he give leave to have the newspaper incorporated in “ Hansard “?
– As I have not seen the article, I am not prepared to make any comment on it.
– May I direct a friendly question to the Minister for Trade and Industry? In view of the fact that the honorable member for Wannon, a member of the Liberal Party, myself, a member of the Australian Labour Party, and the Minister for Trade and Industry, a member of the Australian Country Party, will all vote “ Yes “ at the wool referendum, does the Minister think that that is a very good reason why all wool growers should vote in that way?
– I think, when the honorable member asked his friendly question, he gave the friendly answer.
– I address my question to the Minister for the Navy. I refer to tenders called for the construction of a number of patrol vessels for the Royal Australian Navy and I ask: Were tenders received from Western Australian firms? Will Western Australian firms be given an opportunity to tender for the additional vessels which, I believe, will be required?
– Tenders for the 14 vessels for which contracts have been entered into were called not only in Australia but overseas as well. Amongst the tenders received was one from a firm in Western Australia. Because its capability was not known, technical experts from my Department and the Department of Supply went to Western Australia and had a look at the firm concerned. As the honorable member is aware, the contracts were let to Evans Deakin & Co. Pty. Ltd. and Walkers Ltd. of Queensland. All I can say about the other six vessels is that the details of their procurement have not yet been determined. However, I assure the honorable member that the contract for these will be let to an Australian firm.
– My question is directed to the Treasurer. He will recall that on 26th October I asked him a question in this House suggesting an investigation by the Insurance Commissioner into investments made by the Mutual Life and Citizens Assurance Co. Ltd. in H. G. Palmer (Consolidated) Ltd. In reply, the Treasurer stated that the Insurance Commissioner had been having discussions with the assurance company in relation to its general investment procedures. I now ask whether the Commissioner has decided to take any more formal action in the matter as a result of these discussions?
– I understand that the Commissioner, whose first inquiry was into the investment procedures to which the honorable gentleman has referred, has now decided to widen the investigation into a formal investigation of the kind he is empowered to make under Division 7. of the Life Insurance Act 1945-1961. This Division of the Act guides the Commissioner in the conduct of his investigations and lays down the procedures to be followed in any further action which may appear to him to be necessary or proper to deal with the situation.
– Mr. Speaker, I wish to make a personal explanation.
– Does the honorable member claim to have been misrepresented?
– Yes. I have been misrepresented by the Minister for Trade and Industry (Mr. McEwen). The Minister accused me and two other members of the Australian Labour Party of egging on dairy farmers in our electorates to oppose the New Zealand - Australia Free Trade Agreement, particularly as it concerns the importation of cheese and pig meats. This is not so. The situation is just the reverse. In my representations, I have been egged on by such people as members of the dairy co-operative associations-
– Order! The honorable member may make his personal explanation but he must not debate the matter.
– I wish to name the people who have made representations to me and egged me on. I do not intend to go further than to mention them. They are the dairy co-operative associations, branches of the Queensland Dairymen’s Organisation and the Australian Dairy Industry Council.
– I wish to make a similar personal explanation. I claim that the Minister for Trade and Industry (Mr. McEwen) has misrepresented my purposes in my electorate in relation to this Agreement. I have never at any time sought the opportunity to make any comments on the New Zealand - Australia Free Trade Agreement. It is only as a result of a flood of invitations that I have spoken on this matter. The invitations have come from dairymen’s organisations. So numerous are they that I have had to cancel a week of my Christmas holidays.
– Order! The honorable member cannot make any further comment on the matter. He has made his point.
Debate resumed from 25th November (vide page 3254), on motion by Mr. Snedden -
That the Bill be now read a second time.
Upon which Mr. Whitlam had moved by way of amendment -
That all words after “That” be omitted with a view to inserting the following words in place thereof: - “ this House notes with approval that, in response to public pressure, the Government has introduced this limited Bill but deplores: -
the Government’s failure to hold a referen dum, as unanimously recommended by the Joint Committee on Constitutional Review in its reports presented to the House on 1st October 1958 and 26th November 1959 to give the Parliament power to make comprehensive national laws with respect to restrictive trade practices; and
its abandonment of a substantial part of the proposals of the former AttorneyGeneral, for legislation on restrictive trade practices and monopolies, as outlined to the House on 6th December 1962 particularly with respect to resale price maintenance, persistent price cutting, monopolisation and mergers.”
.- I say at the beginning that the AttorneyGeneral (Mr. Snedden) seems to have given some respectability to this piece of legislation, which was originally known as the Restrictive Trade Practices Bill, by altering the title to Trade Practices Bill. Let me tell the House, in terms as strong as I can use, that I object to this legislation. I object to it because, in my view, it opens up the way for unjustifiable intrusion into the normal business affairs of secondary industry and tertiary industry and intrusion by the Government and its officers into the affairs of free enterprise, about which they know very little. We, as a Liberal Party and Country Party coalition, have gone to the polls at every election since 1949 on the promise that, as a Government, we would set the canvas to enable free enterprise to carry out its affairs in the normal and proper way. We were swept to the Government benches in 1949 on the promise that we would give relief to industry, commerce and trade from oppressive legislation then on the statute book and placed there by the Australian Labour Party.
As I have said, since then we have gone to the polls on the central premise that it was the job of private enterprise to bring the economy to normality with the aid and encouragement of the Government. Since that time we have gone into each election campaign saying that the economy was booming, that there was very little inflation and that free enterprise, with the assistance of an unrestricting Government formed by the Liberal Party and the Australian Country Party, had induced these conditions. I believe, Sir, that we are now about to complete the cycle by returning to the situation of 1949 and intruding and intervening in the affairs of private enterprise by introducing this oppressive legislation which will serve no good purpose for the economy of Australia.
In 1949 we set about sweeping away the cobwebs that entangled free enterprise and commerce. We are now about to reintroduce the conditions that prevailed at that time. I have said before among my colleagues and members of this coalition Government, and I repeat now, that there are certain areas in trade and industry in which intervention may be advantageous to the community. But I say that these are very limited areas. The Government and particularly the Attorney-General should specify more definitely where these areas are. Neither the present Attorney-General nor his predecessor, Sir Garfield Barwick, has made any attempt to specify the areas in which the protection of the public interest will best be effected by this restrictive form of legislation. In April last year, when addressing a seminar on restrictive trade practices convened by the Victorian Employers Federation, the AttorneyGeneral was questioned about public interest. In reply he said -
I have never seen a piece of legislation in which the legislator or the draftsmen -
He meant the Parliamentary Draftsman and his staff - felt confident to define public interest, because public interest changes from day to day, almost certainly from year to year.
– Who said that?
– The AttorneyGeneral said it when addressing a seminar convened by the Victorian Employers Federation in April 1964. That tells me, Sir, that when the Commissioner of Trade Practices and the Trade Practices Tribunal get under way they will be able to change the form of attempts at encroachment on industry and private enterprise from day to day, almost certainly from year to year. I say that the Government must define the restrictive trade practices that apparently prevail in this country. It must define them more specifically and more lucidly so that industry and private enterprise will know what this legislation is about. We as a government will be responsible for its gazettal and in 5, 10 or SO years’ time it will be useless for members of a free enterprise government to say that we at this time did not intend the legislation to be altered or interpreted in the way in which changes will be effected over the years by succeeding governments, the Commissioner and the Tribunal. Once the Government defines more specifically what restrictions have been taking place in trade and industry the list can be added to or reduced as experience shows changes to be necessary. But the present Attorney-General and, indeed, the Government want us to go ahead full blast in attacking this problem. They want us to use a sledgehammer to frighten industry and commerce into submission.
I say that this Bill will serve no useful purpose in protecting the public interest. That is why I object strongly to the imprecision and uncertainty to which it will subject chief executives of commerce and industry throughout Australia. The previous Attorney-General, Sir Garfield Barwick, stated that he and officers of the Department had made what he described as extensive investigations in all States of the Commonwealth and he was convinced that practices not conducive to the public interest were in operation. Let me quote his words. He said -
During my investigations … I have accumulated a good deal of material as to the existence of various practices in the Australian community.
Of course, there are plenty of practices in the Australian community that have nothing to do with businesses and nothing to do with the public and they are good for the people who practice them. But the Attorney-General - both the previous one and this one - have been far too general in their explanations of the advantages to be gained by the public from legislation of this type. If the investigations made by the previous Attorney-General and by bis Department were so wide, then the present Attorney-General should be able to nominate, not only industries, but the particular firms that are using these practices to prevail over other firms. I feel sure that when the present Attorney-General was a back bencher he prepared some of the information that was referred to by Sir Garfield Barwick.
This measure, I feel, is an intrusion into the affairs of private enterprise and the statement that we are now freeing private enterprise of its own restrictions does not make sense. The history of trade practices legislation in other countries, particularly in the United Kingdom and in the United States of America, has produced substantial and authoritative opinion that legislative action is not effective in enforcing competition throughout the economy. How can the businessman be induced to change his tactics in his business approach by enforcement? How can a public servant talk to a businessman and say: “ Thou shalt do this in this way; thou shalt do that in some other way “? The businessman has been trained to use the way he knows best.
So far as the Australian economy is concerned, our country has had tremendous growth over the last 15 years and the public - all people in Australia - have benefitted to a remarkable extent as a result of this growth in the economy. In the circumstances, I share the doubts of all the doubters. I feel that this legislation will do no good for private enterprise and do no good for the public interest of the little people of Australia.
The executives who are now engaged in extensions to their industry must feel that they will halt their efforts until they have ascertained just what this Bill means to their efforts and what it means to their company. The present good relationships which exist between private enterprise and the Government must be shattered when this legislation has been gazetted. I believe that it has been business management and business itself that have converted Australia from a semi-industrial country to one where the economy is at a high pitch, where there is not too much inflation and where 66 per cent, of the work force is now being used by that section of the industry to which this Bill is directed. We now have 66 per cent, of the work force employed in secondary and tertiary industries and it is these sections of industry that will be affected and will come under fire by the Attorney-General, by the Commissioner and by the tribunal when the legislation has been gazetted.
It was in 1950 - 15 years ago - that this Government stripped away the bulk of controls imposed by the previous Labour Government. Now we are ready to reimpose intervention by government in the form of this creaky, meddlesome piece of legislation which will bestow no benefit whatever on the business activities of Australia or on the working man of Australia. Once this legislation is gazetted, 66 per cent, of the work force will be under fire by the Commissioner and by the tribunal. I say that this legislation is creaky because, virtually we have had two second reading speeches on this measure. The previous AttorneyGeneral laid on the table in December 1962 a paper setting out the proposals of the restrictive practices legislation. In May of this year the present Attorney-General delivered to the Parliament his second reading speech on this legislation and even as recently as Tuesday of this week he initiated 45 amendments. He describes them as being minor amendments, but the fact remains that three days ago he outlined 45 changes to the Bill. I am sure that there are honorable members on this side of the House who will introduce further amendments. I am sure that the Opposition, too, will introduce amendments to the Bill. So it is creaky. It has taken the AttorneyGeneral’s Department five years to issue to this Parliament a piece of creaky legislation that intrudes into the affairs of the community.
I say that it is meddlesome because it does intrude into the business of private enterprise - into the affairs of commerce. Businesses know best what is good for themselves and for the community at large. All companies, all managements, like to employ as many people as they can, and that has happened in this country since this Government took over the treasury bench in late 1949. I say that this legislation is misguided because business managements cannot be forced by government servants into making decisions or attacking the problems of business. This work cannot be done under duress. Yet the Attorney-General, his Department, and the Government believe that they can force businessmen to do these things in a different manner and in circumstances different from those in which they have operated over the last 15 or 20 years. It is my view, as I have said, that it is private enterprise that has transformed the economy of Australia since 1950 when this so-called private enterprise Government started to lift restrictions that were directed against private enterprise, manufacturing interests and commerce.
From the point of view of public benefit, the working man has never had it better than he has as a result of private enterprise on the one hand and the business activity of private enterprise on the other hand. Comparisons can be made between what an adult working man obtained in 1950 as a result of working one hour, or even 2,000 hours over a given time, and what he can obtain today. I should like to outline to the House some information that has been produced by the Bureau of Census and Statistics and which was given to me by the Institute of Public Affairs. In 1950 an average male factory employee needed to work for 14,500 hours to purchase a home. In 1965 he needs to work for 9,200 hours or less than threequarters of the time that he needed to work in 1950. To purchase a bedroom suite he needed to work for 200 hours in 1950 but in 1965 he needs to work for only 150 hours. That takes into account the same bedroom suite and the increased prices that prevail in 1965. To purchase a Holden car, which is a working man’s car, he needed to work for 3,770 hours in 1950 but in 1965 he needs to work for only 1,950 hours.
I have on my list nine items that are useful to a man who runs a home and who is looking after his family. In 1950 this man would have needed to work for 19,137 hours to purchase those items, but in 1965 he would need to work only 11,560 hours. In other words, the little man in the community - this is where public interest comes in - needs to work now only 60 per cent. of the time that he needed to work in 1950 to buy the same items. Let us hear an explanation from the Attorney-General, and from the Opposition if you like, about where public interest fits into a set-up like that.
Many members of this House must be descended from Rip Van Winkle. Otherwise they would not talk about public interest as they do. Apparently many honorable members cannot appreciate what private enterprise - industry and commerce - has done for Australia generally and for the working man in particular. If they take the trouble to do a little research and read some of the information that has been made available by the Bureau of Census and Statistics and other bodies in the community, they must come to the conclusion, as I have, that today the working man is affluent and can do things that he never expected in 1950 to be able to do. The only time that members on this side of the House talk about what private enterprise has done for the community and about what the Government has done to set the pattern to ensure that private enterprise will be able to do as they suggest is at election time, when we go to the polls and tell the populace how good we have been in setting that pattern for private enterprise. But now we are prepared to introduce this aggressive, oppressive legislation to control this section of the community which has done excellent work for Australia.
I wonder why the chief executives of companies have not been more vocal. They have had opportunities to tell the Government a good deal about this legislation. I should say that they have not been vocal because they have not really understood how powerful this legislation will be or how wide will be its scope over their affairs in future. In 1950 when Mr. Fairless, the then president of the United States Steel Co., was under pressure from government servants acting under America’s anti-trust legislation, he said: “The only way a businessman can be sure of obeying all the laws is just to go broke “. Admittedly that is an exaggeration, but nevertheless it is largely true. Many companies in Australia will find in the years to come that they will be oppressed by government servants or by the Commissioner of Trade Practices. Businessmen will have to surround themselves with legal advice to ensure that they give the right answers to the Commissioner and the people who represent him. The trade practices laws, or anti-trust laws as they are called, of the United States of America are oppressive. They have had a profound and not too wholesome effect on company behaviour. The same sort of thing will happen here within a few short years. Companies will have to hide information from government servants because they believe that they cannot trust them and that the information might be given to their opposition.
I wonder how many businessmen realise what is involved in registration. Do they know that it is a costly and cumbersome instrument and that it will throw an unnecessary financial burden on the business community? Do business executives realise that agreements for registration include “ any informal implied understanding”? What does that mean? The present Attorney-General, under the pressure of questions asked by the Victorian Employers Federation in April last year, went to great lengths to explain how specific this legislation was. He said -
I want to enlarge a little on this statement–
That is, a statement that he had previously made to this gathering - that only certain well defined practices are covered by the Government’s proposals. The position is that certain practices of a limited number of clearly defined descriptions will become registrable practices - practices that by their nature are likely to eliminate or reduce competition. 1 think more clarity emerges when it is understood thai defined practices are registrable.
Does this mean the same as “ any informal implied understanding”? 1 wonder whether it does. The Bill provides that the Commissioner will operate within the meaning of the term “ any informal implied understanding “. There is quite a difference between those words and the explanation that was given to the Victorian Employers Federation by the Attorney-General. The provision of the Bill relating to failure to register an informal implied understanding makes present managements potential criminals punishable in industrial courts with a fine of up to but not exceeding £1,000. Indeed, there would be additional heavy legal costs because the particular company under fire from the AttorneyGeneral’s Department, or the Commissioner, would have to ensure that it gave the right answers to the Commissioner and to the Tribunal. Again I ask: Which is correct - the explanation given by the Attorney-General, or the words contained in the Bill itself? I repeat that the Bill is so wide in its scope that liability on the part of any company to register will require it to obtain legal advice.
How many of us realise that the cost of administration of this form of legislation in America amounts to a tremendous sum? Indeed, I had the advantage of obtaining from Sir Leon Trout of Queensland, Past President of the Australian Chamber of Commerce, some figures mentioned by him when he gave an address at the John S. Mcinnes Memorial Lecture in Brisbane in October last year. Sir Leon Trout said that he had independent information from America to the effect that the administration costs - the government cost - of this form of legislation there was 15 million dollars and that it had been calculated by independent authorities there that lawyers’ costs would amount to an additional 100 million dollars and the cost of executive involvement in this form of legislation a further 100 million dollars. In all, the annual cost of trade practices legislation to the American nation is 215 million dollars. A quick conversion to Australian currency tells me that it would cost America £100 million Australian to organise, manage and oppress the people of that country each year. Taken on a per capita basis, that means that this legislation would cost the Australian people, Australian industry, commerce and management, nothing less than £5 million and perhaps anything up to £10 million a year.
Never let anybody tell me that this added expense to the country’s affairs will reduce prices. Indeed, in any country of the world that the Attorney-General or the Government can mention where this form of legislation is operative, there has been no known reduction in the price of goods to the community in general. Therefore, why should we intrude on the community with this tremendous, oppressive legislation?
My time is becoming short, but I do challenge the Attorney-General to prove that reductions in prices will be effected by this form of legislation. Indeed, I ask the Government to obtain information from any country in the world where it has been proved that any tangible benefit to the public interest has resulted from this form of legislation. It is impossible to add to the cost of any commodity and then say: “ We will now reduce prices “. 1 wonder whether the Attorney-General realises that the biggest factor involved in the gross national product of Australia is wages. They are responsible for 50 per cent, of our costs. Does he know that another of our major costs is transport, that 30 per cent, of our overall cost is attributable to the cost of transport? When we add the cost of wages and transport together, we have only 20 per cent. left. It seems to me, therefore, that we are taking a somewhat small part of the build-up of expenses in Australia and attacking it first.
I wonder how many members of the Labour Party realise that a small addition to this Bill would ensure that the trade union movement - the workers themselves - would come under fire. I refer in particular to over award payments that are now being made to adult male workers in Australia. Over award payments are beneficial to the individual, and they are obviously beneficial to the companies concerned; otherwise they would not make them. In 1961, the Bureau of Census and Statistics produced an excellent book called “The Labour Report of 1961.” It will be producing another one early next year. On page 76 of that book the Bureau points out that 15.2 per cent, of adult male employees in Australia receive over award payments of between £2 and £3 a week, that 15.7 per cent, receive over award payments of between £3 and £4 a week, that 17 per cent, receive over award payments of between £4 and £5 a week and that 9.7 per cent, receive between £5 and £6 a week above award rates. There are 2,553,000 adult male employees working in Australia. Taking the average of these over award payments at £3 per week, this means that, each week, £7,500,000 above the award rates is being paid to the little men, the workers of Australia. Taking 50 weeks as a working year, this means that over award payments totalling £375 million are made to the workers of Australia each year.
I believe I could make a good case to support an argument that the public interest would be benefited if our costs of production were reduced by this £375 million a year. Does the Labour Party realise that the Bill can be altered by the insertion of a provision to ensure that manufacturers, distributors and people engaged in commerce do not make these over award payments? I should like every unionist who is listening now to understand what the Labour Opposition - and some members on this side - will say about this Bill, because the workers will be the ones most affected in a negative way once this legislation is gazetted.
As I said earlier, I believe that we are turning the clock back to 1949 by introducing this oppressive legislation which is directed against the private enterprise sector of the economy. I share the doubts of all the doubters that the excellent relationships that now exist between private enterprise and the Government will be benefited by this form of legislation. I say again that trade practices legislation in other countries has produced a profound and not always wholesome effect on company behaviour and the behaviour of company executives. I object to the legislation because of its high costs to the community, because of its high cost to the little man, and because it will inflict high costs on the Australian worker.
– The honorable member for Balaclava (Mr. Whittorn) has just described the people who support this legislation as being descendants of Rip Van Winkle. The honorable gentleman himself reminds me of a Rip Van Winkle who does not know he is still asleep. I remind the honorable member that we are now living in 1965. If he had been living in America in 1890 - 75 years ago - he would have been subject to legislation that went very rauch further than this Bill proposes to go. Clause 1 of the Bill reads -
This Act may be cited as the Trade Practices Act 1965.
In the short title, it is referred to as -
A Bill for an Act to preserve competition in Australian trade and commerce to the extent required by public interest.
I should like to give the Attorney-General (Mr. Snedden) some consolation. He has not had very much consolation from the last three or four honorable members on his own side who have spoken. I should like to give him the consolation of reading again the amendment proposed by the Deputy Leader of the Opposition (Mr. Whitlam) to the motion that the Bill be now read a second time -
That all words after “that” be omitted with a view to inserting the following words in place thereof: - “ this House notes with approval that, in response to public pressure, the Government has introduced this limited Bill …”
The amendment goes on to note what we regard as some of the deficiencies of the Bill, the principal one being that it does not go as far as was suggested by the Constitutional Review Committee which stated in its report that certain alterations to the Constitution were desirable. We also suggest that the Bill removes from the scope of its operations certain things that the former AttorneyGeneral (Sir Garfield Barwick) had regarded as coming within the scope of restrictive trade practices and monopolies. I should also like to assure the honorable member for Balaclava (Mr. Whittorn) that the trade union movement and the Labour movement know that this legislation, like legislation in other enlightened parts of the world - I refer to the United States of America and Great Britain - specifically excludes from its operation the question of wage fixing. I think he is deliberately misleading the House or trying to terrify people by suggesting that wages could be brought within the ambit of this legislation. I should like to suggest some other matters that are not within its ambit, as I see it, so that we can judge what cover the Bill proposes to give and whether it is quite as heinous as some of the Government supporters seem to suggest.
Agriculture will not come within the scope of this legislation. Organised labour and its search for increased wages does not come within the ambit. Transport, insofar as it is State operated or Government regulated, does not come within it. There is some doubt as to how far retail prices come within it, and there is certainly considerable doubt as to whether what are called services are covered at all. Export trade is outside the scope of the legislation unless amendments are made. Of course, there is some doubt yet as to whether intrastate commerce will come within its scope. I hope that it will. In my view the real value of this legislation is that there may be some hope that clause 7 will be sustainable. If it is I think it will strike a very effective blow for the better operation of the Australian economy. I am one who believes that irrespective of what government there is in Australia within the next 10 years, either by direct constitutional amendment or by alteration in interpretation by the High Court, greater powers must be given to the Federal Government to regulate the economy. There are deficiencies in our economy, which is much more vulnerable than some people seem to suggest, to forces outside this country. No government will be able to govern adequately in the next 10 years unless changes take place and unless the backwoods idea that has been expressed here this morning and last night is forgotten.
Just to remind the House that there are some other governments of a Conservative kind which think much in the same way as the Attorney-General does on this matter, I refer the House to a statement contained in the document “ Monopolies, Mergers and Restrictive Practices “, a White Paper prepared by the Secretary of State for Industry, Trade and Regional Development in Great Britain in March 1964 when there was a Conservative Government - or Tory Government as we sometimes call it - in Great Britain. Referring to the Restrictive Trade Practices Act 1956, which has been in operation for nine years and prior to which there was a modern Act from 1948 dealing with monopolies and restrictive practices, the document states -
The Restrictive Trade Practices Act 19S6 is based on the principle that restrictive trading agreements are in general adverse to the public interest because they impede the free play of competition.
That was the view of the Conservative Government of Great Britain as late as 1964, and it merely reaffirmed the philosphy that it adopted when this Act was passed in 1956 by a previous Conservative Government.
Circumstances may exist which justify such practices, but this must be demonstrated in each case. The main features of the Act -
That is, the British Act - are thus: (i) the compulsory registration of agreements embodying restrictive practices as defined in the Act and their automatic reference to the Restrictive Practices Court;
Actually, the British Conservative Government went further than does this Government. In essence it said that prima facie or per se - whatever term the legal profession! uses - a restrictive practice was bad unless in certain circumstances it could be shown that it was good.
In many respects the Bill seems to be the reverse of that. Other than one or two things that are particularly outlawed, namely, collusive tendering and collusive bidding, practices here are only examinable. We have to prove they are wrong rather than it has to be proved that they are right.
The Government believe that as an instrument for dealing with restrictive practices the Act-
That is the 1956 Act, which has much wider powers than our legislation will have - does not require any fundamental change. It has secured the termination of many restrictive agreements, and thus promoted more competitive trading conditions.
The honorable member for Balaclava challenged us to show him anywhere in the world where this kind of legislation has been effective. Mr. Heath, who is now the Leader of the Conservative Party in Great Britain, in this document, under his seal, stated that the English Act had secured the termination of many restrictive agreements and thus promoted more competitive trading conditions.
However, experience has shown that in the course of time ways of circumventing the Act have been found. It is now intended to amend the Act to deal with these cases.
The United Kingdom Government, a few months later, brought in the amendment of 1964 dealing with resale price maintenance, and latterly - in August of this year I think - the present Labour Government went further and brought in the Monopolies and Mergers Act 1965 which goes far wider than our Bill and which, as far as I can judge from reading the debates, was not opposed very strenuously by the British Conservative Party. Who is right and who is wrong? I believe that restrictive practices do exist in the community and I think they are deleterious to the public interest. They may serve the cause of particular individuals and it seems to me that some of the high apostles of private enterprise in this Parliament think that private enterprise - and who is private enterprise when all is said and done but often just a small coterie exercising great economic power over assets and people - should have the unfettered right to determine what is good and what is bad for the public.
That is not my interpretation of fair competition. I believe there are distinct limits to competition, and in a moment I want to try to find out what sort of competition it is that the Attorney-General hopes to preserve. The very necessity for a Bill of this kind is an indictment on the existing working of what is called a competitive free enterprise system. I believe that competition is being stifled and restrained. If we want to preserve it we have to take measures of this kind. We support the measure, although it does not do all we would like it to do or think should be done. Had we been in office, we might have approached the problem somewhat differently. I still believe that what was called in 1948 the pragmatic approach to the British problem is the correct one. First, a survey should have been made through an extensive inquiry in which people could have given examples of restrictive practices as they have injured them. Others could have defended the practices. I think it would have been found that some practices are more severe than others and that, some need quicker remedial action than others.
One of the faults I find in this approach is that the machinery will become terribly cluttered to begin with. The honorable member for Parkes (Mr. Hughes) is shaking his head. I hope he is right. It is all very well for the honorable member to say that control of restrictive practices is costing so much in America, but he has no means of assessing the value derived from that control. After all, what is £5 million in terms of the Australian economy? Nobody heard a boo in this House when it was suggested that to change from one form of currency to another form would cost between £30 million and £40 million, yet the honorable member seems to be appalled at the prospect of the administration of this legislation costing between £4 million and £5 million a year. In any event, I suggest that it will be many years before that amount of expenditure will be incurred in Australia.
– The honorable member forgets that both political parties in America have supported the Sherman Act for 75 years.
– That is right. Although it has been found necessary to modify the Sherman Act and change interpretations of it in the light of changing circumstances. The legislation we are debating raises the difficult problem of expressing in legal form many economic concepts, some of them rather abstract.
One criticism I make of the presentation of this measure is that an attempt should have been made to provide the Parliament with an explanatory memorandum along the lines of those provided in respect of taxation legislation. This Bill contains many clauses, and the Labour Party committee formed to deal with it has been examining it for a good number of hours and days in the last month or two. We have found great difficulty - I say this with all respect - in understanding the meaning of certain sections. In some instances, we doubt that the words used cover the intention of the legislation. That is a reasonable enough doubt to have about this type of measure.
I commend to those honorable members who have not seen it an admirable report on restrictive trade practices presented in
Tasmania. It is entitled: “Report of the Royal Commissioner on Prices and Restrictive Trade Practices in Tasmania “. I find the report valuable because it defines, in easily understandable language, some of the terms relating to restrictive trade practices. Many of them are not mentioned in so many words in this Bill. Nevertheless, they are terms of art for the practising economist.
– In what year was that report prepared?
– In 1965. It is a recent document. It contains a chapter on horizontal multilateral arrangements. The meaning of that term may not be clear to some people. It is a shorthand term to describe certain practices. They are very well described in the report. I suggest that the Attorney-General might obtain sufficient copies of the report to make it available to every member of this House. When we come to deal with the details of this legislation, it could save us a lot of time. Quite a number of other current practices are defined in the report. I refer, for example, to bilateral agreements, collusive tendering, vertical unilateral practices and so on. Many of them may be understood by those who work in the economic field. Sometimes I am mystified by legal terms and I am sure that some people are mystified by what might be called economists’ jargon. But what happens when legal terms and economists’ jargon meet? Surely that is already happening in hearings before the Commonwealth Conciliation and Arbitration Commission. I suggest that it is happening in this Parliament. Certainly it will happen when cases come before the proposed tribunal.
These matters are of great public significance. The present Attorney-General’s predecessor laid down a scheme of what he intended to be in the measure. Then the present Attorney-General, as long ago as last May, brought down this legislation. Therefore, there has been time for a climate of opinion to develop. Financial scandals occurring in the community are now reported by the Press on the front pages, rather than being hidden away on the financial pages, so that obviously the newspapers regard these happenings as newsworthy. I think that the public at large does not have a great love of powerful economic interests operating unchecked. Mostly we do not like monopolies, but in the Australian context I believe that a certain amount of monopoly operation is inevitable. However, that is no reason why monopolies should be allowed to operate unchecked.
I would have liked to see a different approach to the monopoly question. While monopoly may be intertwined with restrictive practices, they are entirely different sorts of animals. I believe that something in the nature of a monopoly commission should be established, separate from the restrictive practices commission. I do not think it would be sensible to outlaw monopoly in the Australian context. After all, what is monopoly? In the course of my economic studies I once had to study a book called “ The Theory of Monopolistic Competition “. Apparently, in some minds monopoly and competition can exist together. Professor Chamberlain’s thesis from the United States of America, as long as 30 years ago, colours much of the current approach to this problem. It is recognised that along with large economic units a certain amount of competition can still exist. As Professor Chamberlain saw it, anybody who tried to make out that his particular brand of cigarettes was somehow so much better than everybody else’s brands was endeavouring to create a kind of monopoly for his product. *
– The honorable member is an expert on that aspect.
– I referred to that subject the other evening but I will not raise it again now. I do not have the time or the inclination. It is not my thesis on this occasion.
The Bill does not define competition. I think that is a very sensible omission. Nevertheless, it is supposed to deal with competition in Australian trade and industry and the public interest. Neither is defined in the legislation. Perhaps later on the Attorney-General might outline his approach to the idea of competition. I have an article taken from the “Australian Accountant” of June 1963, written by C. P. Harris, Master of Economics, senior lecturer in economics at the University of Queensland, and A. L. Lougheed, Bachelor of Arts, tutor in economics at the University of Queensland. The article is entitled “ Competition and Anti-Monopolies Legislation “ and the authors say that in practice the term “ competition “ may refer to such things as pure competition, monopolistic competition, price competition, non-price competition, unfair competition, cut-throat competition, workable or effective competition, and so on. The authors say that which concepts are relevant depends on the problem being investigated. I suggest that possibly the concept which the AttorneyGeneral has in mind is the one rather vaguely described as workable or effective competition. I am sure he does not intend to regulate prices directly. In my view that is not within the ambit of this legislation. If his tribunal or commission is to work to preserve ultimate compensation, it surely must first have some concept of what competition is in the realities of Australian trade and commerce and, secondly, it must make its adjudication in the light of that rather amorphous thing called the public interest.
Some people criticise this legislation because it lays down no guide lines for the commission or tribunal as to what its concepts should be - presumably about competition and public interest when those things call for a definition. Perhaps the AttorneyGeneral will illuminate these matters better in the Committee stages, because if ever there was a Committee bill, this is it. The Attorney-General has already foreshadowed a number of amendments to the Bill. We could make great play of the fact that there will be about 45 Government amendments. There may be half a dozen or so moved from this side of the House. With all respect to the honorable gentleman I say that anybody who has studied his foreshadowed amendments will have realized that many of them are of a consequential or drafting kind rather than being of such moment as to make the honorable member for Balaclava (Mr. Whittorn) like this legislation any better with the amendments than he likes it now. This backwoods approach to the problem is incomprehensible to me. As I see the honorable member for Balaclava, he is a Rip Van Winkle still asleep in these modern times. I understand that there will be other amendments moved by Government supporters. At least we on this side of the House are praising the legislation with faint damns. I do not know what the
Government supporters are doing. Their final attitude to the legislation remains to be seen. We regard it as a tentative move in the right direction.
The problems associated with controlling restrictive practices are far more complex than any of us realize. In an answer supplied yesterday by the Attorney-General to a question placed on notice by the Deputy Leader of the Opposition (Mr. Whitlam) the Attorney-General listed a number of restrictive practices reported by various official bodies. These practices are additional to those revealed by the former AttorneyGeneral in a document published in 1962. I am glad to see that the Attorney-General believes that many of the additional practices referred to in the answer to the question come within the scope of this legislation. In my opinion the honorable gentleman has been rather unfairly criticised in certain quarters by people who say that this legislation is a pretence and a facade. Those people may be wrong. I particularly hope that they are wrong about the interpretation that some day will have to be given to clause 7 of the Bill. I still have some doubts about the wisdom of repealing the Australian Industries Preservation Act because I think that that legislation represents a foundation upon which to build a firm structure. The provisions of that Act relating to shipping will be preserved for the time being, but apparently it is the AttorneyGeneral’s view that the Australian Industries Preservation Act in its present form could not run side by side with his new code. Whether or not it could, remains to be seen.
I hope that this legislation becomes operative as quickly as possible. Much of its effectiveness will depend on the calibre of the gentleman chosen as commissioner, on the nature of the staff with which he is equipped and on the co-operation that he receives from the Attorney-General’s Department and from State departments. There still seems to be some doubt as to the extent to which the States will participate in this legislation. Victoria’s attitude has been a little ambivalent to say the least. It has introduced its own legislation and coincidentally, or deliberately, many of the terms of Victoria’s legislation are precisely the same as those appearing in this legislation as far as collusive tendering and collusive bidding are concerned. Spokesmen who have deigned to comment have said that they do not think that otherwise the Victorian legislation will impede the operation of this legislation. They have not come out directly and said that if necessary Victoria will hand over its powers to the Commonwealth. Most of the other States have been silent on the matter. I think they are silent because discussions have already taken place through the machinery of the meeting of Commonwealth and State Attorneys-General. 1 hope that some day the Attorney-General will adopt a realistic approach to these meetings and publish some of their findings. It seems odd to me that when you have a uniform company law that can exist only by cooperation between the States and the Commonwealth, we in this House never have anything to do with it. The AttorneysGeneral are brought together for the purpose of getting uniformity in the Commonwealth, but this Commonwealth Parliament has nothing to do with the matter. This seems strange. This Parliament has no opportunity, except through our AttorneyGeneral, to make suggestions about the form of the uniform legislation. I suggest to the Attorney-General that he look into this matter.
We support the Bill, with reservations. We regret that it does not go further but we hope that it will be passed and will be allowed to operate reasonably effectively in combating what in our view are real evils in the economic life of Australia.
.- It is obvious to anyone who has listened to the speeches made last night and this morning, particularly the speech of the honorable member for Balaclava (Mr. Whittorn), that any objection to the introduction of restrictive practices legislation comes from this side of the House. I am aware that quite a number of my colleagues hold the view that legislation of this nature is in conflict with the principles for which the Government parties stand. I do not support this view and I propose to say why I do not support it.
I am not a legal man so I do not intend to become involved in legal argument with lawyers on either side of the House. The Bill will be analysed fully in the Committee stage. The general principles of the Bill have been explained on numerous occasions by the Attorney-General (Mr. Snedden).
I believe that those principles have been analysed and commented upon at length over a considerable period of time in newspapers and magazines.
I wish to give my views, as a layman, of the reasons for the introduction of the Bill. I wish to give also my views on whether the Bill is in conflict with Liberal principles and whether certain sections of the business community are justified in opposing its introduction. The long title of the Bill states that its purpose is: “To preserve Competition in Australian Trade and Commerce to the extent required by the Public Interest.”
Does that purpose conflict with the principles for which the Liberal Party of Australia stands and on which it has been consistently returned to office over the past 16 years? This was referred to by the honorable member for Balaclava, who said that the Liberal Party was returned to office on the principle of setting the sails for private enterprise. The official platform of the Liberal Party includes the following planks -
Those principles have been embodied in the platform of the Liberal Party since its foundation just over 21 years ago, and for the last 16 of those 21 years the Liberal Party has been elected to office on those very principles.
The Prime Minister (Sir Robert Menzies), in the policy speech that he delivered prior to the last general election, said -
It is of the essence of competitive enterprise that there should be real competition, and that the road to advancement in any business should be open to all. This system we wish to protect.
Privately imposed restraints which are against the public interest or submit the small trader to oppressive limitations should be eliminated.
On that policy speech, this Government was returned to office with a greatly increased majority.
Why should circumstances today be any different from what they were when that policy speech was delivered approximately two years ago? Why should circumstances today be any different from what they were 21 years ago when the platform of the Liberal Party was drawn up? Why should circumstances today be any different from what they have been over the past 16 years during which the Liberal Party has been in government? If the business community objects to those planks in the platform of the Liberal Party, why has it consistently voted for that Party? The first objective of the Liberal Party, as set out in its Federal Constitution, is that it is dedicated to the political liberty, freedom and dignity of man. Nothing in this Bill conflicts with those principles. Why some sections of the business community object to this Bill, I do not know.
Let us see what has to be done by businesses from the time they are established. First, whether a business is a firm or a company, it has to be registered. Secondly, a company has to register its articles of association. Thirdly, it has to file its profit and loss account and balance sheet with the Registrars-General in the States in which it operates. Fourthly, it has to file annually a list and summary of shareholders. All of these documents are open to public inspection on the payment of a very small fee to the Registrar-General of the State concerned.
A company has to conform to the provisions of the Companies Act of the State of its registration. A business is compelled to observe the trading hours laid down by the various State Governments. It has to pay award wages. Each of its buildings has to comply with uniform building regulations. If it is handling food, it has to comply with the health regulations laid down by the various State Governments. It must take out third party insurance with respect to any vehicle that it operates. It must register the vehicles that it operates. Finally, the drivers of those vehicles and all the directors, employees, shareholders and customers of that business, if they drive cars, are compelled to observe the traffic laws. All of those things must be observed in the public interest. Why then should some sections of the business community object to having to conform to a code of business ethics in the public interest? That is all that this Bill is - a code of business ethics.
The fact that the Government has introduced this Bill does not mean, as one member of the Government parties suggested, that the Government regards Australian businessmen as rogues. But, if these laws did not exist, many businessmen would not do many of the things that the various State and Federal laws compel them to do - not because they are rogues, but because of laxity and thoughtlessness. Only the firm or company that does not act in the public interest has anything to fear from this legislation.
Just what is the public interest? I realise that it is not easy to define, but it affects a great many groups of people. It affects - not necessarily in the order in which I now name them - consumers, employees, producers, distributors, importers, exporters, proprietors, investors and, no doubt, many other people. The trouble is that each section of the community is self-centred and selfish in its outlook. The Institute of Public Affairs, which opposes this Bill, has stated -
It is quite unreal to expect private interests to invest huge sums of money without some reasonable security in disposal of products.
The fact of the matter is that two types of business interests are involved. First, there are the businesses that are already established and well protected, by the terms of many agreements, against the ambitions of newcomers. Secondly, there is the business which has not yet become established and which finds it very difficult to get a go. Agreements that operate against these businesses, in effect, protect inefficiency and promote a lazy attitude to business. Thus the country as a whole loses the benefits and advantages of competition.
This Bill is not an attack on orderly marketing, as suggested by another member of the Government parties. My colleagues boast that the Liberal Party stands for private enterprise. That is true. But as far as I am concerned, “ private enterprise “ means the shopkeeper or the factory with only five or six employees just as much as it means the industry employing hundreds or thousands of workers and making profits of the order of millions of pounds. I have heard opponents of the Bill say: “ Why give all of the protection to the consumers? What about the manufacturers? “ I point out that many manufacturers are consumers of the components or processes of other manufacturers. It is a well known fact in industry that many retail prices have been forced up unnecessarily by the operation of agreements that react to the detriment of some manufacturers who have to use components that they do not manufacture themselves.
I have heard many people say that this Bill will retard the flow of overseas capital which is very badly needed for the development of Australia. In answer to that, I say that most of the major Western countries have similar legislation which is much tougher than the provisions of this Bill. A substantial proportion of our capital inflow comes from the United States of America, where businessmen have been living with the Sherman anti-trust legislation for a long time. They accept the particularly tough provisions of that legislation as part of their way of life. In my opinion, they are not likely to be deterred by the comparatively tame provisions of this Bill. In spite of the tough provisions of the Sherman anti-trust legislation, the United States is regarded as exemplifying the spirit of private enterprise. Far from being forced out of business, trade associations flourish in that atmosphere in the United States.
The honorable member for Balaclava quoted figures which were produced by the Institute of Public Affairs and which showed the number of hours that a person has to work today in order to acquire certain assets compared with the relevant figures for 1949. Of course the present figures are better; and they will be better next year and better still the year after that. Even under the severe restrictions of the Sherman anti-trust legislation, in the United States wages are higher and consumer prices are effectively lower than they are in Australia. The honorable member for Balaclava referred to the cost of restrictive trade practices legislation to the oppressed people of the United States. I say to him that, far from being oppressed, the people of the United States have a higher standard of living than have the people of any other country.
– Did the honorable member have a haircut in the United States?
– No, I did not.
– Could not the honorable member afford one?
– I could have afforded one in Britain where the cost is only 3s. 6d. sterling even though anti-trust laws are in operation.
Some people ask why we need this Bill. I hope that people will not delude themselves with the thought that restrictive trade practices are not carried on in Australia. As the honorable member for Melbourne Ports (Mr. Crean) has said, a royal commission was appointed recently in Tasmania to inquire into the activities of 70 trade associations. It found that in fact 59 of them were operating restrictive trade agreements. I believe that another royal commission appointed by the Government of Western Australia arrived at a similar conclusion.
Some people who would not approve of a businessman getting rid of a competitor by burning down his premises apparently regard it as legitimate for him to put that competitor out of business by withholding his supplies or boycotting him or selling goods at prices less than the competitor’s cost price or by any one of the many other restrictive devices that are being used by unscrupulous people and organisations at the present time. We have no effective legislation to deal with restrictive trade practices. The Australian Industries Preservation Act can be invoked only after a restrictive trade practice has been in operation, and in many cases this is too late. Why should we always have to wait for something to happen before taking action to prevent it happening again?
By making certain types of agreements registrable this Bill seeks to prevent the use of restrictive trade practices. Why should anyone object to that? Some people object to the registering of agreements and to them I would like to point out that only about 50 per cent, of the prosecutions which take place in the United States of America under the Sherman anti-trust laws are the result of complaints. The other 50 per cent, of prosecutions are the result of fossicking or investigation by the Administration. This Bill is much more lenient than the Sherman act which automatically outlaws many agreements. Under this Bill each registered agreement is examined on its merits and only in the light of all the circumstances will the tribunal approve or reject an agreement.
I believe there should be freedom of opportunity for newcomers to a particular type of business. I believe that competition breeds initiative, self-reliance and flexibility of mind. Competition leads to freedom of choice and surely all Government supporters stand for this. The honorable member for Balaclava referred to the election of 1949. I say that this Government was returned in 1949 because the Opposition sought to deny to the people freedom of choice in banking. I believe there is a real need for the kind of legislation which will foster effective competition in the Australian economy and for this reason and the others I have given I support the Bill.
– I find myself in complete agreement with what was said by my colleague, the honorable member for Henty (Mr. Fox), a few minutes ago. In a developing country and an economy which is gradually beginning to feel its strength it is necessary that there should be some controls lest in the first blush of young adulthood there should by an excessive straining at the helm. With the legislation that the Parliament is now considering the development of the Australian nation is advancing to another stage. To my mind this country virtually is past the first blush of youth, but it is certainly not at the advanced, mature level that many of the older countries of the Western civilisation have attained. For that reason it seems to me that legislation of this kind must endeavour to do two things. It must endeavour, first, to place some rest.traint on unnecessary concentration of financial and commercial power in the hands of a few individuals. Secondly, it must permit the continuation of individual initiative, individual enterprise. It must enable the individual, as an individual, to foster his particular source of production. It must enable him to develop so that with him the country can develop.
Those of us in primary industry know that for many years primary producers have had the feeling that they are subject to pressures over which they have no control. It is still true that about 75 per cent, of our export income is derived from the sale of primary products. To a considerable extent these products are sold on a free world market. Much has been said since the return to Australia of the Minister for Trade and Industry (Mr. McEwen) of the negotiations he conducted while overseas in an effort to secure greater access to overseas markets for our primary products. Basically, however, a large proportion of our primary products is sold on a free world market where it is not possible to pass on to purchasers the costs of production. It is not possible to pass on many of the factors which influence the economics of the primary producer’s way of life. The primary producer in an expanding economy finds his costs continually increasing and in order to offset this he looks for new means of increasing production. He is trying all the time to maintain production at a level sufficient to afford him a return slightly greater than his costs of production. Unfortunately, however, because he is forced to sell so many of his commodities on a free world market he finds it very difficult to determine for himself the return that he will obtain.
In this situation the commodity agreements that have been entered into and the arrangements for joint marketing of primary products have provided a more forceful means of disposal of those products. But the fact remains that when the primary producer comes to purchase the machinery, the drencher, the weedicides and the very many other things that are essential to his operation he finds himself in a position over which he has no control. It is because of this that primary producers for many years have felt that it was essential that some legislative means be devised to restrain unduly restrictive trade practices.
The preamble to the terms of reference of the Vernon Committee stated the objectives of the Government. It said that the Government’s economic policy was primarily to achieve a high rate of economic and population growth, with full employment, increasing productivity, rising standards of living, external viability and stability of costs and prices. It is with this basic objective in mind that the Government is introducing this legislation. It is endeavouring to walk the tight rope, as it were, or to strike a balance or arrive at a compromise between, on the one hand, reducing an unduly high level of costs and the concentration of industrial power in a few hands, resulting in a high level of costs of commodities necessary for production, and, on the other hand, maintaining financial growth. The Government realises the need for the continual development of our economy, for more industries, more production and more Australian prosperity. Therefore the legislation that is being considered today has for its purpose, as is stated in the preamble to the Bill, the preservation of competition in Australian trade and commerce to the extent required by the public interest. Indeed, Mr. Deputy Speaker, I think the leading article in one of our newspapers this morning gave point to the objects of this legislation when it said -
The effectiveness of the legislation must not be judged on whether it stimulates competition; it must be evaluated rather, by the extent to which it contributes to industrial and commercial efficiency; and keeps prices to the consumer as low as is consistent with a reasonable level of industrial efficiency.
To me, this is the problem, as far as introducing legislation in Australia today is concerned.
It is all very well to compare the legislation with the Sherman anti trust law of the United States of America, or with various restrictive trade practices, whatever their name might be, in other more mature countries of the western world. But those countries are at a different stage of development compared with Australia. Their needs are different and their economies are different. Consequently, this legislation is in the position of trying to strike a harmonious equilibrium between the conflicting forces in our economy. It is because of this situation, I believe, that the legislation, which we have before us today, will achieve the best of both possible worlds with, perhaps, some limitations for each.
I do not think that any honorable member claims the Bill will do all that one might like it to do in restricting some trade practices. At the same time I think that it will not act as too great an inhibiting force to the commercial and industrial forces of this country, which we so much need in order to continue to grow and develop. It is with this background in mind that I think a critical appreciation of the legislation must bear out this necessity to permit growth and yet to maintain, as far as possible, the advantages of restricting excessive concentration of this growth within a few hands.
The legislation itself is divided basically into, shall we say, three categories. The first relates to the legal procedures. The legal procedures of the legislation envisage, first of all, the appointment of a Commissioner. The Commissioner, in the terms of his appointment under Part III of the legislation, will be an individual to whom will be given the actual responsibility in each instance of initiating action under the Act. In Australia we have been extremely fortunate in the high standard of public servants that we have been able to obtain. Their service to the community has, I believe, been of an exceptionally high order. For that reason, while there is no doubt that the individual appointee to this office will have tremendous responsibility, I believe that we can expect him to perform this duty with a fairness and a responsibility which will enable the legislation to achieve those factors for which it has been designed.
The Commissioner, having examined a practice - whether it be on submission from the Attorney-General or in some other way - and having made his determination, will then have to enter into consultation with those parties against whom the complaint has been lodged. To me, this is a valuable aspect of the legislation. So frequently the attitude of an individual is prejudiced by those factors within his immediate knowledge. Consequently, at the time of a complaint being lodged, it may well be that an individual is of the opinion that a particular type of practice or agreement is contrary to his interests and yet it may not be contrary to the public interest.
Because of this, the opportunity for consultation that is provided for in clause 48 of the Bill will give an opportunity to the Commissioner to make his own assessment of the situation; to make for himself a preliminary estimate as to whether or not he believes the practice is such that it should go to the further stage of determination by the Tribunal. I believe that the protection that is contained in clause 48 is one of the notable instances where this position of balance between the interests of all sections of the Australian community is being preserved. I think it is through this necessity to consult with the parties to proceedings that those matters that are taken to the Tribunal are more certain to be taken there in an impartial manner than might otherwise be the case.
The Commissioner, having considered at the preliminary stage the agreement or practice, will then submit it for consideration to the Tribunal itself. The constitution of the Tribunal has been changed since the original legislation was suggested some four years ago. To me the advantage of having not only a judicial or presidential member of the Tribunal but also representatives of commerce and industry is that once again an opportunity will be afforded to industry to appreciate the facts of whatever the particular practice might be from a position of knowledge. The fact of having a judicial president will give to the presiding officer of this Tribunal a greater ability to provide an impartial assessment of the situation, the practice or the agreement.
I believe that in this way the matter might be more fairly determined than, perhaps, it would be if it were determined only within a professional or judicial court. The presence of members of industry and persons who are in constant contact with the stresses and strains of industry will be one way in which the Tribunal will be able to assess fairly the needs for concentration of power and the needs for greater economic size. The people who are on the Tribunal will be able in this way to contribute from their own knowledge and experience an impartial determination as to whether or not the practice is contrary to the public interest.
The next phase, as far as the contents of the Bill are concerned, are the practices. A suggestion has been made that individual resale price maintenance and exclusive dealing, whether it be by way of sole agencies or in some other form, should have been included in this Bill. I believe that these particular types of agreements are entered into by individual traders knowing the situation themselves. They go into them in the same way as a purchaser goes into a shop. Just as in a circumstance a trader is given the opportunity individually to assess the pros and cons of a situation, so to me an individual trader who enters into agreements in this form should not be inhibited in any way. For that reason I believe it is well that such a provision should have been excluded.
The actual examinable agreements and practices that are included in clauses 35 and 36 have been confined to those practices which at this stage are, or would appear to be, contrary to public interest. To my mind, the extension of clause 37, in the amendment that my colleague, the AttorneyGeneral (Mr. Snedden), will be introducing, will certainly be some improvement to the Bill as originally framed. But monopolisation is something which, like public interest, is extremely difficult to define in words alone. It is for that reason that I believe it preferable to see whether or not, by defining it to this degree and then leaving it “ quasi-judicial “ interpretation of the Tribunal, the extent and implications of monopolistic practices will be definitely determined. The actual implications of monopolisation in some circumstances can, of course, be in the public interest. It is because of this that the exemptions are included in clause 38 of the Bill. There are in many circumstances advantages for the consumer or the purchaser as well as for the manufacturer in some forms of monopolisation. For various reasons monopolisation need not be harmful to the Australian community and it is because of this that it is essential that the procedure that has been laid down be followed in this instance. It is essential that monopolisation be not regarded as being completely illegal as are collusive tendering and collusive bidding. Monopolisation in some circumstances can be to the advantage of the Australian community. Objection certainly can be taken, in terms of future growth, to the continual concentration of production or distribution in the hands of one or a few individuals; but monopolisation extends beyond just this and it is because it extends beyond this that it can, in some instances, be in the public interest.
One matter that has been mentioned privately to me is the extent to which civil remedies are provided in the Bill. Some people are concerned that whereas under the Australian Industries Preservation Act there was an opportunity for an individual to secure not only the actual amount of damage he felt he had suffered because of the operation of a particular practice, but in some instances, up to triple damages. The suggestion is that the omission of this provision from this Bill is a disadvantage. First of all I point out that in proposed new clause 4, sub-clause (2.) there is a preservation of rights of action under the Australian Industries Preservation Act in respect of any cause that might have occurred up to the date when this Bill becomes an Act. There are, of course, other reservations about the carriage of goods by sea after the commencement of this Act. The AttorneyGeneral has announced that legislation in this regard will be introduced, possibly in the next session. However, proposed new clause 4 preserves to the ordinary person in commerce or industry the remedies that have been available up to this point of time under the Australian Industries Preservation Act.
As far as civil remedies are concerned, Part X of the proposed legislation provides further opportunities for action to be taken. In fact, Part X covers the rights of an individual to civil remedies. This is in addition to the statutory restrictions or prohibitions that may be invoked by the Trade Practices Tribunal. I believe, Mr. Deputy Speaker, that there is no cause for concern on the part of those people who have been worried about the repeal of the Australian Industries Preservation Act. Individuals who have been protected in the past will still have the same rights of action and the same opportunity for civil remedies. For those offences that occur after the introduction of the Bill, I personally believe that the extension of rights for civil remedies under Part X will suffice.
The other matter to which I want to refer is the extent of the operation of the Bill. Some suggestion has been made that the constitutional limitations of the Commonwealth are such that the Bill might not be able to achieve all that is desired. It is suggested that, within a State, individuals - whether they be individual companies, individual industries or trade associations - will be able to continue certain practices because the new Act will not cover the things that they are doing. As to the extent of the constitutional power of the Commonwealth, there is no doubt that there would be advantages if complementary State legislation were passed and it is towards this end that within clause 8 of the Bill there is provision for inclusion within the Act of measures which are referred to as complementary laws of the States. Therefore, it is possible for individual State Governments to look at the Commonwealth legislation and say in effect: “ We feel that the passing of a complementary law will truly close the loopholes and consequently we intend to do that”. There is no doubt that if this is done there will be a greater opportunity for the implementation of restraints on trade practices than would be the case if no such complementary legislation existed. However, even if no such complementary legislation is introduced the teeth will not be drawn from this measure.
There are many practices being carried on in the Australian community which this legislation, when it becomes law, will cover. I believe that it is because of the overriding Commonwealth extent of so many of these practices that they are, in fact, harmful. In other words, where practices are concentrated in a relatively isolated area they do not tend so much to be to the disadvantage of the community. It is rather where practices are on a national scale, where they cover a number of States or a number of major centres, that they can be most harmful and injurious. It is those wider practices that this legislation is primarily designed to cover and they will certainly come within the ambit of the constitutional power of the Commonwealth.
Representing as we do country electorates, we of the Australian Country Party believe that this legislation will certainly ensure a greater degree of protection to primary producers from the inflationary spiral of costs that can occur as a result of an undue concentration of power in the hands of a few manufacturers whose products are so necessary to production by the man on the land. However, at the same time we appreciate the necessity for individual members of industry, manufacturers and distributors, to endeavour to ensure that they, too, keep their costs down. It is in ensuring a balance between these two sections of our economic society - these two units of economic production - that this Bill will achieve the most effect. It is just as essential for producers as for manufacturers and distributors for costs to be stabilised. I believe, Mr. Deputy Speaker, that this Bill will most effectively strike that balance. I believe that from the point of view of the producer of primary products, it will provide a restraint on the unnecessary concentration of power that was not present before. For that reason I completely support the measure.
.- The Minister for Social Services (Mr. Sinclair), like most members on the Government side, spoke with no degree of vigour or enthusiasm about this legislation which will not attain the results that the overwhelming majority of the Australian people would like to see it attain. I appreciate his use of the word “racket” because if ever there was a need for strong legislation to bust rackets in this country it is today. But this legislation will not achieve that purpose. This Government is afraid to introduce measures to curb restrictive trade practices because it does not want to offend, or to take money out of the pockets of the wealthy monopolists who support it. That is the reason why the Opposition vigorously protests at the inadequate provisions of the Bill.
The Opposition is strongly opposed to the legislation, which has been described outside the House as a rubber toothed lion; it may bite - but for sure it will never hurt - the monopolists who have become a law unto themselves in this country. We know that Australia imposes no legal restraint on restrictive agreements. These agreements are effective because if there is a relevant statute to deal with them - as in New South Wales - no action is taken to enforce its conditions, and there is no de facto limitation. The prevailing commercial and social climate of opinion favours restrictive arrangements, although the views of many businessmen may now be undergoing a change in this respect. Consequently although publicity is not looked for, there is no strong effort to conceal the operation of agreements. Indeed, it is a common experience on approaching the appropriate trade association officer to have the character of an agreement discussed openly and justified from the point of view of the industry concerned.
Let me refer to some existing arrangements in the retailing of pharmaceutical products. The various pharmaceutical guilds in the States negotiate with the manufacturers, singly or in groups, the prices and retail margins of all pharmaceutical goods. A retail price is then fixed and it is made known to members through the distribution of price lists. There is practically a 100 per cent, membership in each State and examples of price cutting are almost unknown. Every member of the House will, if he is honest, concede me this point. Also, the prices of some of the “ chemist only “ lines which are covered by what is referred to as exclusive dealing in branded goods, are negotiated with manufacturers of toilet preparations, patent medicines, tooth paste and so on.
In chocolate and confectionery, the 10 main manufacturers have agreements on the prices of most proprietary lines, which cover about 95 per cent, of chocolate products and 55 per cent, of sugar products sold in Australia. Price lists are distributed for each make. The manufacturers, in addition, give, assistance to the various State associations in their efforts to eliminate price cutting at the retail level, to the extent of providing occasionally a boycott of supplies. In the tobacco and cigarette trade, State retail associations set retail prices, presumably after consulting the manufacturers. They also succeed in persuading the manufacturers to withhold supplies from price cutters - mainly selfservice stores and supermarkets, which are the expanding sector of the food and tobacco trade. This factor is well known to honorable members and to most intelligent people in Australia.
I should like to comment now on automotive parts, having been myself a victim shortly before entering the Parliament. The detail I might refer to later on in my speech. Automotive parts, other than electrical equipment or parts produced by car manufacturers themselves as original equipment are the subject of agreement - manufacturers and wholesalers fixing the wholesale prices, discounts and retail prices of most components. This code of understanding - if I may so put it - or collusion, is enforced by boycotts of supplies and the possibility of legal proceedings based on invoiced conditions of sale.
The sale of tyres and tubes is evidently governed by an agreement. There is no formal manufacturers’ association, but, as we read frequently in the Press, a “ spokesman “ for the industry - that is a good phrase when it is designed to hide the identity of the person making the statement - announces price arrangements from time to time. If one cares to look at the Melbourne “Age” of 20th April 1960, he will see that the retailers’ price lists for the various makes of tyres are identical within a penny or two. The tyre traders and reconditioners associations assist the manufacturers to arrange retail margins. Further, there is an agreement on the price of reconditioning tyres, although in some States - New South Wales for example - price cutters are presenting somewhat of a problem.
In relation to petroleum products, there is apparently no formal association at the refinery wholesale level, but there is clearly some understanding amounting to an agreement amongst the six main companies on various minor restrictions. For example, the Petroleum Information Bureau, or a “ spokesman “ for the industry, has made announcements on such matters as “ giveaways “ with petrol sales and the acquisition of petrol station sites, irrespective of cost. There is evidently some collusive tendering on the supply of petroleum products to local councils and government departments. The report of the Western Australian royal commission in relation to petrol prices, at, I believe, page 15, mentions that the South Australian Prices Commissioner sets the wholesale price in that State. The Queensland Government appears to accept this finding, and the industry makes this price, with adjustments for transport, . the base price for Australia. This price control saves the refiners and wholesalers the necessity to make a formal price fix. However, the retail margins in each State - except where there is control - and therefore the retail prices are the subject of an agreement by the various State associations of service station operators. As is well known, a large proportion of service stations - probably about 40 per cent. - are either owned by the refining and wholesale companies or controlled by long term contracts. Other products for which there are evidently price arrangements throughout Australia include various paper products, rope cordage, batteries, cement, footwear, fluorescent tubes, radio valves, electric lamps and electric cables.
Each State has its local trade association arrangements, and numerically at least these are more important than Commonwealth based associations. A typical list can be seen at pages 8 and 9 of the Western Australian Royal Commission Report. In Victoria, for example, the building industry is controlled as to prices by the respective trade associations for bricks, roofing tiles, quarried materials, fibrous plaster, electrical equipment, electrical contracting, glass, masonite and other equipment. A recently announced timber stabilisation scheme established the price of timber at the sawmill, wholesale merchant and retail levels. This reorganisation was promoted as an aid to orderly marketing and seems designed to exclude building companies from undertaking their own merchant wholesaler activities as well as to control price cutting among distributors. But if this legislation rectifies the savage tie up of essential goods in Australia it will be beneficial to the great majority of Australian people who hunger for legislation that will be effective. The Opposition claims that this Bill will not be effective.
Again, in Victoria, bread, flour, milk; plumbers’ goods, fencing and netting, toys, glass and pottery, tools, floor and wall tiles and a wide range of hardware goods are fixed in price by the respective associations and their distribution is controlled in most cases through recognised outlets. The trade associations for hairdressing, newspaper distribution, driving schools, dry cleaning, insurance and assurance appear to have a firm hold over prices in these service industries. Tied contracts occur in certain industries where manufacture is highly concentrated. In the supply of fine papers one firm is predominant in Australia. In anticipation of the removal of import restrictions in 1960 it circularised its customers with a request to undertake to purchase in future at least 90 per cent, of their total requirements from this one Australian manufacturer. Firms which did not agree could not be guaranteed supplies. This is the sort of wicked thing that has been going on in this country and which will continue to go on, I believe, despite this legislation which, to use the Chinese term, is virtually a paper tiger.
In certain sections of the steel industry, to qualify as a merchant distributor earning predetermined rates of discount a firm must be prepared to accept certain minimum tonnages per month, confine its rates to assigned territories, carry a full and representative stock of products and offer adequate storage, competent staff and an efficient delivery service. Finally, it may sell only at the named metropolitan price plus transport cost. Whether or not a firm is qualified to meet these conditions is a matter entirely for the discretion of the manufacturer. Disqualification entails forfeiture of the right to purchase at merchant discount rates. Some of these conditions are clearly legitimate elements of a requirement contract to ensure efficient distribution; but, equally, some go beyond this concept and encourage, indeed enforce, a regulative, non-competing pattern on the distribution of steel. The petroleum industry operates a variant of the tied contract through its rapidly developing system of single brand outlets. The companies lease or have an interest in a large number of petrol stations. A further large proportion are controlled also by long term supply contracts offering special discounts. A condition imposed on these retail outlets is that they sell not one brand of petrol, diesel oil and kerosene but also one associated brand of lubricants, tyres and tubes, batteries and certain accessories. Thus, the ability of independent companies specialising in lubricants, batteries, accessory equipment, reconditioned tyres, etc., to reach the consuming public with independently priced goods is restricted severely. Other industries in which the tied contract arrangement conceivably operates in Australia are glass and glass products and semi-manufactures of copper and other non-ferrous metals such as wire, rod and tubing.
Finally, as an indication of the spirit in which restrictive practices are operated in Australia it is interesting to quote an official report of negotiations. I refer, Sir, to the “Federated Hardware News No. 30” of December 1959, a bulletin of the Federated Hardware Association of Australia. The report reads -
On 7th December, the Federal Executive for Galvanised Iron met in Sydney, when the chairmen of the State Merchant Associations attended from all States except W.A. The Executive reviewed the proposed changes in the price structure for galvanised iron, details of which were submitted by John Lysaght (Aust.) Pty. Ltd. for comment. The various proposals were subsequently discussed in conference with the following representatives from Lysaght . . . The most pleasing features of the new structure provide for the introduction of the ‘ nominal ton ‘ basis of invoicing, elimination of certain extras and improved margins for distributors. Interstate delegates were entertained by Lysaght to lunch at the Hotel Australia, and appreciation was expressed for the manufacturers’ hospitality, for their co-operation, and support in the orderly and efficient marketing of galvanised iron. The success of the conference provides further evidence of the cordiality and goodwill that exists between the manufacturers and their Australian distributors and the growing understanding of each other’s problems by a closer merchant manufacturer relationship.
Thus do our businessmen apparently with a high degree of unanimity and in an atmosphere of good cheer formulate the prices and competitive conditions which they consider best suited for the Australian consuming public. So the Australian public, the housebuilder and the common wage earner have been the victims of restrictive trade practices for many years now. They were longing for the day when they would have a sincere government and a Minister of courage and forthrightness who would be strong and fearless enough to introduce legislation which would counteract the great evils to which I have referred. But they are dismayed. In the opinion of honorable members on this side of the House, this legislation will not rectify the grievous situation that exists and the legalised stealing in which the monopolists of this country have been engaging for some time.
I remember not so long ago that the Press brought to the notice of the people of Australia the treatment that Carlton and United Breweries Ltd. in Melbourne was meting out to a small hotelkeeper in a place called Jindera which is on the New South Wales and Victoria border. I suppose it would be fair to say that this small hotel gave just a reasonable living to the hotelkeeper and his wife. They were obligated to take Carlton and United beer and when they decided to sell other things in their hotel such as soft drinks and cigarettes they were told that they were obliged to purchase these things through the Carlton and United Breweries. When they refused to do so and said they wanted to buy these goods through other channels they were told immediately by this powerful monopoly which dictates to governments that they would have to buy them through the source nominated by the brewery otherwise the brewery would cut off their liquor supplies. Despite the fact that members of Parliament and the Press, to my surprise, expressed some indignation at the action of the Carlton and United Breweries, this married couple was forced eventually to leave their hotel at Jindera.
Before that happened, this hotelkeeper and his wife, displaying that Australian manhood which we claim has made us a great nation throughout the years and which we claim is the predominant feature in the make-up of our fighting forces - that great attribute referred to in the vernacular as a “ ton of Australian guts “ - decided that they would purchase their liquor from another source so they approached Tooth’s and Toohey’s breweries in Sydney. Honorable members will recall what happened then. Tooth’s and Toohey’s said: “ No, we cannot supply you with beer. We have an agreement with Carlton and United Breweries in Victoria. If they refuse to serve a customer, our agreement is that we will not supply that customer either “.
Displaying further Australian courage and manhood and womanhood, the hotelkeeper and his wife approached Millers Brewery Pty. Ltd. in Sydney. For some time Millers supplied them with beer but for some reason or other, whether the liquor was too costly in the first place or whether they could not get the rail transport concessions that other bulk producers get, the price of the commodity when it reached Jindera was so high that it drove the customers away from the little hotel and the hotelkeeper and his wife had to leave.
When this matter was revealed I took the opportunity at question time in this Parliament to ask the Attorney-General, who is now sitting at the table, whether his proposed trade practices legislation would meet a case such as the case of the hotelkeeper at Jindera. My recollection is that the Attorney-General would not answer my question, obviously because he was between the devil and the deep sea as to whether the legislation would correct the sadistic treatment that a powerful monopoly meted out to a publican in a small country town. Of course, the Attorney-General has wilted under pressure. He is like a leaking boat; he is taking in water. He has introduced into this Parliament legislation which is a waste of time.
– Order! I suggest the honorable member restrain himself a little. Some of his remarks, if carried too far, could reflect on the Attorney-General.
– I thought I had restrained myself and had been rather mild. However, I will be milder. I represent the Hunter electorate where traditionally my people have been exploited through the centuries by the coal owners, and it is in my blood that I should protest against unjust treatment of the weaker section of the community. I am trying to do that with all the dignity I can muster. This legislation will not achieve the objectives that the Labour Party hoped that it would achieve. There is, in our free society, a certain section of the community whose only goal in life is to accumulate wealth. These people wreck their lives over it. They get themselves into no end of social, and sometimes criminal, trouble. The more they get the more they want. If I may use the vernacular again, the hardest person to ever reef a quid off is the bloke who has plenty of them. If one were to ask the secretary of the Joint House Department who have the largest outstanding accounts for meals and so on which are provided in this place one would find that they are the richest members of Parliament.
I say that off the cuff, but I say it because it supports my submission that the hardest person to get a quid off is the bloke who has plenty of them. He has been so obsessed with accumulating wealth that he has no aim in life other than to build a fortune and leave it for his dependants to fight and squabble over. In the end, the legal eagles take the lot, as the ring keeper in a two-up school does. The ring keeper finishes up with the lot if the game goes on long enough. That is the way these vultures act. They are responsible for the Government introducing legislation in an attempt to curb their activities, but in my opinion and in the opinion of the Opposition generally the legislation will be a dismal failure.
.- Liberalism has been defined as the right of the individual to do as he likes so long as he does not interfere with the freedom of others. Free enterprise has been defined as the right of enterprise to conduct its affairs as it thinks fit so long as it does not interfere with the freedom of other enterprises. Liberalism has never meant licence to harm others. Free enterprise has never meant freedom to conduct an enterprise in such a way that it harms other enterprises. Acting in accordance with the philosophy of liberalism and freedom, this Government after its election to office in 1949, set about removing the shackles from industry; it abolished rationing and controls and revived freedom. Since 1949, this country has made most remarkable progress. Today, Australia is one of the most prosperous countries in the world. More people wish to migrate to Australia than to any other country. More capital is coming to Australia than to any other country. We can virtually say that today Australia is the envy of the world. Australia has made this remarkable progress without any trade practices legislation other than the Australian Industries Preservation Act. That, however, does not mean that we should simply sit by and do nothing when we see certain practices carried on that are harmful to the community. At the sams time, we must be exceedingly careful that in our attempts to prevent harmful practices we do not put controls and restrictions upon industry that will retard progress and growth.
– The medicine is worse than the cure.
– As my friend said, it may be that the medicine is . worse than the cure. The Government of the day has the responsibility of seeing that any action taken to stop harmful practices does not harm individuals and undertakings that are carrying on their business to the benefit of the community as a whole.
I want to examine this legislation within the scope of those principles. Can we stop harmful practices without imposing unnecessary controls and restrictions that will retard the progress of industries that are not engaging in harmful practices? When the former Attorney-General delivered a statement in this House on the proposed legislation dealing with restrictive trade practices, as they were then called, I had to inform him that I could not support the legislation because it was too comprehensive. It put out a net that would have interfered with every trade and business in this country. It was completely overall and comprehensive. It would have affected everybody down to the small greengrocer and the newspaper boy standing on the corner. It would have retarded progress and growth and would have introduced harassing controls and restrictions on the management of business. At that time I wrote to the Attorney-General - 1 have the letter before me, but it is rather too long to read - and set out the reasons why I was opposed to the legislation. I said that the legislation made the Government a busybody, that it interfered with industry and that in an endeavour to catch the guilty it placed onerous restrictions on the innocent.
I am delighted to see that, in the Bill now before the House, much of that interference with normal trade and industry is removed. The previous legislation required all agreements and practices to be registered. That would have meant that people who were carrying on practices that were not contrary to the public interest would have had to register those practices and people who had entered into agreements that were not contrary to the public interest would have had to register those agreements. The result would have been that, there being so many practices, the register would have been completely cluttered. Every business in the community would have been interfered with and the growth and development of the country would have been affected. I am glad that some note has been, taken either of my representations or of representations made by somebody else, because . now we find that practices do not have to be registered. However, I regret that agreements still have to be registered.
I cannot see the logic behind forcing an individual, company or firm to go to the expense and trouble of registering an agreement that is not harmful to the community. I hope that even at this late stage the Attorney-General (Mr. Snedden) will see fit to remove the provision requiring the compulsory of agreements. I cannot see that that would weaken the Bill in any way. The authorities would still have power to call for the production or registration of an agreement if such agreement were thought to be harmful to the community. My whole basis of approach to the Bill has been on the principle I enunciated at the beginning of my speech. Does a practice interfere with the liberty and freedom of other businesses? If we examine the legislation from that point of view, we do not see any necessity to register agreements. However, the Bill has gone a long way towards removing the objectionable features of the previous proposal and now only agreements and not practices have to be registered.
Another feature of the Bill that I can wholeheartedly support is the provision that nobody commits an offence until it is proved that his agreement or practice is contrary to the public interest. This is different from the very objectionable legislation in the United States of America and the United Kingdom. There a person can go to a lawyer -the best lawyer in the land - and say to him: “ This is an agreement or practice that 1 want to enter into. I believe it to be in the interests of my industry.” The lawyer can go into it and say: “ In my opinion, that is perfectly lawful”. If the company then undertakes that practice and if a court later decides that the legal advice originally given was wrong, the company will find itself subject to a heavy fine and the directors sometimes find themselves in goal. They have committed an offence purely because the law is uncertain. There should be no uncertainty in the law. Therefore, in determining whether an agreement or a trade practice is contrary to the public interest, the Bill very properly provides that an offence has not been committed until the Tribunal has held the agreement or practice to be contrary to the public interest. In other words, if the authorities think a certain practice is contrary to the public interest they will notify the person or the company concerned that the practice is considered to be contrary to the public interest.
Certain negotiations will then go on. The Attorney-General has introduced a very wise procedure of conciliation. The authorities and the company will get together. The authorities will say: “ We think this practice is contrary to the public interest and we urge you to stop it “. The company might then say that, in its opinion, the practice is not harmful to the community. The two sides will confer and discuss the matter and in most cases they will be able to reach a mutual agreement. But if they cannot come to a mutual agreement, the matter will then go to the Trade Practices Tribunal. If the Tribunal, after hearing both cases and all the relevant evidence, considers the practice is contrary to the public interest, the company will then be told that it must cease carrying on the practice. Even up to that stage, no offence will have been committed. If the company continues to carry on the practice after the Tribunal has said that the practice is illegal because it is contrary to the public interest, then for the first time an offence will have been committed. The good features of this Bill are that the law will be made certain by the means I have indicated, lt will not be as it is in the United States of America and the United Kingdom where no-one knows with certainty what the law is. When the law is declared and made certain, the person concerned has already committed an offence.
This Bill has many good features and for that reason I propose to support it. Subject to what 1 have said about compulsory registration, I consider that there are very few objectionable features in the Bill. I am hopeful that between now and the final passage of the Bill, the Attorney-General will see the light of day and remove the completely unnecessary proposal for the compulsory registration of agreements. The result of that provision will be that thousands and probably hundreds of thousands of agreements with companies will have to be registered. In many cases they will be agreements of such a type that it would not matter whether they were registered or not but those concerned will have to go to a lot of unnecessary and endless trouble. The registries will be cluttered up with all sorts of agreements that have no reference to harmful practices at ail. What is the advantage to the community in building up a huge bureaucracy to deal with something that is not a harmful practice? Surely if it is alleged that an agreement is a harmful practice, a simple provision giving the Commissioner the right to call for the production and, if you like, registration of the agreements he considers harmful would be much more preferable to a complete dragnet direction that all agreements have to be registered if there is a possibility that they relate to restrictive trade practices.
– Just to ascertain whether they are good or bad agreements.
– Yes, to see whether they are good agreements or bad agreements. I wish to refer now to a few remarks which were made by the Attorney-General and which I support wholeheartedly because they express principles in which I strongly believe. In opening his second reading speech the Attorney-General said -
The purpose of this Bill is to preserve competition in Australian trade and commerce to the extent required by the public interest.
Sitting suspended from 12.45 to 2.15 p.m.
– Mr. Speaker, before the suspension of the sitting I had pointed out that it was the duty of the Government to govern and of the trader to trade. The Government should be free to govern and the trader should be free to trade untrammelled by government interference so long as he does not interfere with other traders or act contrary to the public interest. This Bill aims at dealing with agreements and practices that are found to be contrary to the public interest. I emphasise the words “ that are found to be “, because no offence will occur until a practice or an agreement has been thoroughly investigated by a proper tribunal and held to be contrary to the public interest. Even then, there will be no offence unless the trader continues to carry on that practice contrary to the order of the Tribunal. I pointed out earlier that under the terms of this measure practices will not have to be registered. But, for some reason that I cannot understand, agreements will have to be registered. This, as I pointed out, is my objection to the Bill. I cannot see why a perfectly innocent agreement between two traders which no-one suggests is contrary to the public interest should have to be registered. That seems to me to be an unwarranted interference with normal trade and commerce. I cannot see that this provision will serve any good purpose.
If a person considers that he is adversely affected by an agreement all that he will have to do will be to go to the proposed Trade Practices Tribunal or the Commissioner of Trade Practices and say: “ So and So has entered into an agreement that is acting adversely to my interests.” The Commissioner or the appropriate authority will then have the right to call on the trader concerned to produce all agreements in relation to the particular matter. They could be examined and the very fair and sensible procedure set out in this measure could then be followed. Why should all agreements be registered when only agreements that are contrary to the public interest are in question? Therefore, Sir, as I stated earlier, 1 hope that the Attorney-General will have another look at this aspect of the Bill.
I congratulate and commend the Minister on the splendid machinery provided in this measure for the examination of prac tices and agreements that may or may not be contrary to the public interest. He does not propose to do as has been done in other countries. He does not propose to drag people into court and put them in the position of having to prove, often at great cost to themselves, that they are not carrying on a practice or participating in an agreement that is contrary to the public interest. As I see the machinery provided in this measure, it means that the appropriate authority will say to the trader concerned: “I consider that there is a possibility that your agreement or practice is contrary to the public interest.” The authority and the trader will then have a conference and talk the matter over. Conciliation may even be considered. But the trader will be given every possible opportunity, without the intervention of any court and without any formal procedure, to satisfy the authority that his practice or agreement is not contrary to the public interest. Only after the resources of all that friendly machinery, if I may so describe it, are exhausted and only if the authority still believes that the practice is contrary to the public interest and the trader still maintains that it is not, will there be a hearing by the Tribunal. At that hearing each side will have the right to put all its evidence and to state its case fully. The independent Tribunal will then come to a decision. But even when it has made its decision, there will still be no offence. An offence will occur only if a trader, in defiance of the decision of the Tribunal, continues to carry on the practice or participate in the agreement.
I believe that a splendid procedure has been thought out by the Attorney-General. It will provide what is lacking in other countries - certainly. The trouble in other countries is that a trader never knows for certain whether his practice is legal or illegal. He will certainly know in this country because a practice will become illegal only after the Tribunal has said: “Your practice is illegal. You are not to continue it any longer”. If the trader continues it after that, he deserves all the punishment he gets.
I now want to state the reasons why I support this Bill. The Minister, in his second reading speech, said -
The purpose of this Bill is to preserve competition in Australian trade and commerce to the extent required by the public Interest. Competition is an essential ingredient of any free enterprise economy.
I believe in freedom. I believe in a free enterprise economy. I believe that competition is essential to maintain a free enterprise economy. The Minister later quoted a statement made by somebody else which described the Government’s philosophy in these terms - . . a free enterprise society was desirable, in that it provides for its citizens to be at liberty to participate in the production and distribution of the nation’s wealth, thus ensuring competitive conditions which tend to initiative, resourcefulness, productive efficiency, high output and fair and reasonable prices to the consumer … the Government believed that practices which reduce competition may endanger those benefits which we properly expect and mostly enjoy from a free enterprise society.
I wholeheartedly support those views which were quoted by the Attorney-General in his second reading speech. He went on to say -
With that, I entirely agree. That being the case, Sir, I ask the Minister: Why must agreements that are in the public interest be registered? He went on to say -
The Government’s purpose has, at all times, been to produce legislation that will be effective without constituting any unnecessary interference to business.
I believe that, with one exception, the Minister has given effect to that purpose. The one exception is that he proposes to compel the registration of innocent agreements. Further, the Attorney-General said -
The Government has recognised that the effectiveness of the legislation will depend upon the ability of the administrative machinery set up under the Act to handle the work load imposed on it . . .
There would be no difficulty in implementing the Bill effectively if there were no need to register innocent agreements as well as guilty ones. The Attorney-General proceeded -
The Bill will cover five types of agreement which have certain common characteristics. For example, they must be between persons who are carrying on businesses for the supply of goods or services and those businesses must be competitive with each other. … By the agreements one or more of the parties must accept a restriction on bis freedom to compete . . .
This is a tremendous improvement on the legislation that was announced at an earlier date. It limits the agreements that have to be registered to what are called horizontal agreements - to agreements between persons carrying on the types of business that normally would be competitive - whereas under the previous suggestion everything was to be covered, whether it was described as a horizontal agreement, a vertical agreement or any other type of agreement. This is a very good and sensible limitation because it will enable the authorities to get at the real evils without interfering or meddling too much with trade and commerce. The Attorney-General also said -
Except for collusive tendering and collusive bidding-
I do not think any honorable member would attempt to justify collusive tendering or collusive bidding as being lawful and therefore I have no objection to those two devices being declared illegal - the principle which is maintained throughout the Bill is that no agreement or practice is made illegal until it has been examined and a determination has been made that it is contrary to the public interest. 1 think that that is the most important feature of the Bill because it provides the certainty which was lacking in the previous legislation, the certainty which is lacking in England and the certainty which is lacking in America. I believe that the AttorneyGeneral, very cleverly and skilfully, has found a way past the difficulty by providing for proper examination of unlawful types of agreement at proper hearings and for declarations to be made that practices must be stopped when they are found to be illegal.
Therefore, I support the Bill, but I urge the Attorney-General to give consideration to what I believe is its great weakness - the compulsory registration of all agreements whether or not they are contrary to the public interest.
.- Mr. Speaker, this legislation has been talked about and written about for a long time, and there have been many stops and starts in its progress, but now that’ it is with us it comes as an anti-climax. I am sure that many honorable members feel that way about it. The legislation has taken from three to four years to produce. It started off as a roaring lion, but today it is a tame and almost toothless lion. It has been to the dentist and quite a lot of its teeth have been pulled out deliberately. However, it is a miracle that under such a government as this we have the kind of legislation now before us. The arch-supporters of capitalism and of so-called private enterprise have brought down a Bill which will restrict the activities of private enterprise and of capitalism to a certain extent. To me, that is a miracle. “ We of the Opposition support this legislation but we would rather have had the legislation of three or four years ago as envisaged by Sir Garfield Barwick. The main difference between this side of the House and the Government side at the moment is that we on this side want the legislation to be strengthened and those on the Government side want it to be weakened. But at least we have something- before lis which I hope will be passed by both Houses of the Parliament and which, in later years, can be amended and strengthened if necessary. I think that will be necessary.
Sections of big business. look upon this legislation as gross interference with what they regard as their right to carry on illegitimate business practices. They claim that the legislation is striking at the citadel of capitalism itself. Already in this House we have heard four speeches from Government members who have been vitriolic in their attacks on the legislation. I refer to the honorable members for Isaacs (Mr. Haworth), McMillan (Mr. Buchanan), Balaclaca (Mr. Whittorn) and Sturt (Mr. Wilson). In most of his speech the honorable member for Sturt was grossly critical of Part V of the Bill. This debate has already revealed grave differences of opinion on the Government benches about the legislation. It is no wonder that the Attorney-General (Mr. Snedden) has been so long in getting this Bill into legislative form and in having it approved and brought into the Parliament for debate. One wonders how some of the honorable members opposite who have spoken already could possibly support the legislation when the vote on it takes place at about 6 p.m. on Tuesday next.
Why is this legislation necessary? It is recorded that of 1,250 trade associations in Australia, at least two-thirds, or about 810, had organised restrictive agreements. That is the first reason. Restrictive practices are in existence and have to be checked. The second reason, in my opinion, why the legislation is necessary is the massive immorality of big business, as shown by the recent activities of H. G. Palmer Pty. Ltd., the Reid Murray group and other huge enterprises in Australia. They have broken down under the weight of dishonesty and cheating. Those are the two reasons why we have this legislation before us, even in this tame form.
Who are the people who are being hit by these practices? First, there are the small investors. 1 think we should protect the small investor if we protect anybody. The pensioners, the workers and the farmers are also being hit by restrictive and monopolistic trade practices. It seems, Mr. Speaker! that we are passing through the sunset of oldfashioned free enterprise. I smile when I hear Government members like the honorable “member for Sturt talk lovingly and tearfully about free enterprise. We used to have free enterprise, but now we must regard it as almost an event in the history of Australia. Free competition at the honest grass root level of past times is rapidly dsappearing under the ruthless onslaught of monopolisation and takeovers. Large scale takeovers have reduced true private enterprise and true independent trading to puny proportions. If this tendency continues, by the turn of this century there will hardly be one example of truly free enterprise, truly private enterprise or truly independent enterprise left in Australia. I see a tombstone in the cemetery of capitalism and on it is written: “ Here lieth free enterprise: Died a slow death at the hands of monopolies, financial moguls, dishonest dealers, takeover merchants and restrictive trade practices.” The letters “ R.I.P.” do not appear on the tombstone because there is not peace for free enterprise, although apparently it has been buried in the way that I have mentioned.
The most amazing phenomenon of recent years under this Liberal and Country Party coalition Government has been the process of nationalisation by monopolisation. Here we have had the arch opponents of government nationalisation sweeping all adherents of government nationalisation out the front door while permitting private nationalisation groups to come in the back door under the guise of monopoly. If in the eyes of Liberalism one form of nationalisation is wrong so also must the other form be wrong in fact. Herein lies the Government’s hypocrisy. Until now, after about 16 years in office, the Government’s hypocrisy has been seen in this phenomenon. The Government condemns a suggestion of government nationalisation of activities like banking or production but it has allowed monopolies and restrictive trade to kill the business of the little man and to kill true competition between business enterprises throughout Australia. In other words, within its policy it has encouraged the creeping paralysis of nationalisation by monopolisation to go on unchecked. That is another reason why this Bill is before us at the moment. Monopoly enterprise is rapidly replacing private enterprise; restrictive enterprise is replacing free enterprise; and combination is replacing competition. Anyone who does not think so is either moving about with his eyes shut or just does not want to see.
Some very interesting comments have been made in the course of this debate, especially by some honorable members on this side of the chamber. Last night the Deputy Leader of the Opposition (Mr. Whitlam) in what was in my opinion one of his best speeches, said -
Prices are determined, not by competition in the market place, but by management in the board rooms.
Truer words could not have been spoken. I come now to the efficacy of this Bill. Will it work? That is the 64 dollar question. We are putting tremendous power in the hands of one man by passing this measure. That is amazing from a government like the present Government. It is proposed that the Commissioner of Trade Practices will have tremendous responsibilities. He will be assaulted from all sides by business people, and his will not be an enviable job. One of the weaknesses that I see in the legislation is that the Commissioner will not be answerable to Parliament for his decisions. In this respect the Bill is unlike the British Act, a copy of which I have before me at the moment. In a booklet “Industry in Britain: Organisation and Production “ prepared for the British Information Services, an article on monopolies and restrictive practices states at page 17 that no order can be made by the British Monopolies
Commission under the Restrictive Trade Practices Act 1956 without the approval of Parliament. In Australia the Government is bypassing the voice of the people, which is the Parliament in a democracy. I believe that some day, if this Government does not do so, a Labour government will bring the actions and the orders of the Commissioner to the Parliament for scrutiny and ultimate approval or otherwise.
Mr. Goss, secretary of the Wholesale Wine and Spirits Merchants Association of Tasmania, said in a letter that he sent to all members of the Parliament that the Tribunal is apparently intended to be an autonomous body and not answerable to Federal Parliament like other instrumentalities such as the Tariff Board. He said that he believed it was highly desirable that the Tribunal should be answerable to Parliament. Of course it is desirable. That is one of the main criticisms that I have of the Bill, in a broad sense. My next criticism is that the Bill repeals the. famous Australian Industries Preservation Act, 1906-1930. The Australian Industries Preservation Act is a piece of legislation that Liberal governments have never used; it has been allowed to gather dust on the shelves. That Act provides an excellent weapon for any government that wishes to help to preserve what may be called truly free enterprise in Australia, but it is now to go by the board as a result of this new legislation. That is a great pity. There has been little consultation between the Attorney-General ( Mr. Snedden) and the States on this very important legislation. The Deputy Leader of the Opposition mentioned this last night and quoted the exact words of the Victorian Minister who introduced that State’s Collusive Practices Bill. That Minister said that there had been no consultation with him about the legislation. That is a great pity, because the legislation will affect everybody in every State. Even if the States do not bring in complementary legislation this measure will apply at the Federal level in all States. The AttorneyGeneral has assured us of this. At the moment Western Australia has legislation similar to this. Tasmania has done a magnificent job in bringing down in May of this year a report of a royal commission. I shall quote part of that report a little later. Apart from Victoria, all States either have or are contemplating not exactly the same legislation, but similar legislation. Actually the States are condemnatory of this Bill. Apart from the legislation to which I have referred, there is no evidence of other restrictive trade practices legislation in any State. That makes it more important that there should have been consultation between the Attorney-General and the States on every aspect of this important and pioneering legislation.
Why has there been a delay of four years in producing this legislation? We know what has been going on behind the scenes. There has been tremendous pressure on the Government to pull out the teeth of the Barwick proposals, and there has been pressure on the Government backbenchers from big business in their electorates. All this has been going on for nearly four years and that is the main reason for the delay. Honorable members on this side of the chamber did not believe that the Bill would ever hit the deck. However, finally the Prime Minister (Sir Robert Menzies) stood everybody up and decided that the Bill was to be introduced and would go through. We are now in the process of putting it through. This legislation does a lot of things but, interestingly enough, some of the important things are left out. I just want to mention one comment made by the honorable member for Cunningham (Mr. Connor) last night. He said of the Bill-
It claims to be comprehensive in covering re strictive agreements and practices, yet it contains no proposals for the control of mergers and takeovers or for the control of individual as distinct from collective resale price maintenance.
The degree of market concentration which prevails throughout the Australian economy is unusually high and particularly so in comparison with the American, British and Canadian economies.
There are other factors not covered by the legislation. When honorable members compare this Bill with the legislation of Great Britain and the United States - the United States legislation came into operation in about 1910 when the Sherman anti trust laws were introduced - they will be amazed at how much has been left out of this legislation. Why should unfair, unjust and illegitimate business practices receive better treatment here than in any other country. Perhaps it is because this is the first time that Australian legislation of this type has been brought in. Perhaps by the time our act has been in existence as long as the British and American acts we may provide for more stringent penalties, but at the moment our legislation is not to be compared with the acts of those two countries.
We have had much evidence of collusive tendering. This is a new feature and one of the evils of big business. I should like to quote from the “Advocate”, a newspaper which circulates within my electorate. It is published in Burnie, which is within the electorate of the honorable member for Braddon (Mr. Davies), but like the “ Mercury “ which is published in Hobart and the “ Examiner “ which is published in Launceston it circulates throughout the electorate of Wilmot, which covers half the island of Tasmania. I have to read three daily newspapers to keep in touch with what is happening in my electorate. On 27th July of this year the following report appeared in the “ Advocate “ under the heading “Oil firms’ identical tenders ‘restrictive practice ‘ - Councillors claim “ -
The council decided-
That is, the Ulverstone Council - to take up with the Commonwealth Government the question of whether the identical tendering was, in fact, a restrictive practice.
Further on the report continued -
The Warden (Cr. Little) said Government departments and city councils were being supplied with petrol at 7)d. a gallon less than councils.
He asked why there should be a difference between country councils and city councils and Government departments. In his opinion, the identical tendering by the oil companies amounted to a restrictive trade practice.
Several private organisations in the Ulverstone Municipality were buying their petrol at a lower price than the council paid. “As the Council can buy through the Supply and Tender Department practically all other items it requires, I feel that petrol should be handled on the same basis,” Cr. Little added.
The Council Clerk, Mr. Gane, is reported as saying -
As far as practicable, all other items supplied by the Supply and Tender Department are available to the Council at the same price as that paid by Government departments.
That day the Council had a very interesting discussion about collusive tendering by the oil companies for council petrol supplies and the way in which it kept prices up higher than the prices at which the Council could get petrol from other sources.
– Where was this?
– It was in Ulverstone on the north-west coast of my State. In the marvellous report of the Tasmanian royal commission, which has been the only royal commission into this type of practice yet held in the history of Australia-
– There was one in Western Australia.
– Not a royal commission?
– Yes, there was.
– I apologise. I am very solicitous where Tasmania is concerned, but I would not like to undo anything that Western Australia has done. Good luck to that State. I propose to quote from the report of Mr. John McBain Grant, who was the Tasmanian royal commissioner. In that document, which consists of 84 pages, are many evidences of collusive tendering in our island State. At page 18 of the report, the commissioner states -
Mr. L. G. Morgan, Secretary of the Housing Department, testified that when his Department called for tenders on August 24, 1964 for the supply of 100 automatic electric storage water heaters of 40 gallons capacity, there was no difference in the prices submitted, whereas previously quotations had not been identical. From the evidence relating to the Hot Water Systems Manufacturers’ Association of Tasmania it can be seen that this collusive tendering was the result of the horizontal price .agreement reached by members at their inaugural meeting on July 11, 1964. . . .
Those members deliberately planned collusive tendering for these items. Then the report continues -
Mr. Poulson, manager of the Supply and Tender Department, stated that until the middle of 1964 the prices quoted for the supply of petroleum products were the same for all the oil companies and the contract used to be allotted equally among the tendering companies.
However, later last year they decided not to put in collusive tenders. Probably they became scared about this kind of legislation being introduced. Evidently they have abandoned the practice as it affects the Supply and Tender Department. The commissioner also quoted this example -
Mr. S. Harris, Deputy Stores Superintendent at the Hydro-Electric Commission gave evidence of identical quotations being received from four Australian manufacturers from whom the H.E.C. called for tenders for the supply of multi-core control cable, while for the supply of electric light meters the Australian manufacturers-
Listen to this - and the representatives of oversea manufacturers quoted identical prices. The agreements and arrangements which are responsible for level or collusive tendering in these cases were beyond the power of the Commission to obtain.
So we see that not only the four Australian companies that were supplying multi-core control cable but also overseas companies were submitting identical tenders to the Hydro-Electric Commission. At page 19 the Commissioner reported -
Mr. E. Poulson gave evidence of identical tenders being received for sports goods, picks, mattocks, axes, shovels, cement, nails, galvanised water pipe and fittings, steel of various classifications, plywood, plain and barbed wire, mesh wire, spanners, vices, screwdrivers, automotive parts and accessories, air compressors, tyres, rubber belting and books. For all of these products the nature of the restrictive trade practice producing level tendering is described in Appendix C under the heading of the appropriate trade association.
That is a fantastic gathering in of a variety of items in relation to which there was collusive tendering. I now quote the final paragraph on page 19 of the report -
In all the examples given above collusive tendering either forced a buyer to obtain goods from abroad or has had the effect of raising Australian prices in which case the possibility that, in the absence of these practices, the goods might have been obtained from local sources, cannot be ignored.
What the Commissioner was trying to say was that, because of collusive tendering and the keeping up of prices by agreement between the suppliers, with one level of prices and one profit margin, many people in Tasmania have had a look overseas for the items concerned and have got them from overseas at a price lower than the price which was submitted as a result of collusive tendering. This has forced us to import goods unnecessarily, thus eating up valuable reserves overseas. I have drawn attention to a very important example of what is happening under the system of collusive tendering. We have proof beyond doubt in the commissioner’s report. I should now like to refer to two or three paragraphs on the same subject which appear at page 31 of the report. The key to the report of any royal commission is to be found in its conclusions and recommendations. This is what the commissioner said -
Examination of the activities of about 70 Tasmanian trade associations, the majority of which covered firms engaged in wholesale and retail trade, reveals that approximately two-thirds of the associations were involved in restrictive trade practices as defined above.
– Are they all crooks down there?
– No, only two-thirds of them. The Commissioner said further -
The effect of most restrictive trade practices is to cause prices to be higher than they would be otherwise.
– -“Where did this happen?
– In Tasmania. I am sorry that we have these short-cut merchants in our State who want to take it out of the hides of the poor old consumers through this massive collusive tendering system. The report continues -
In brief, restrictive trade practices may have two effects on prices; some cause prices to be higher ‘because profits are higher than they would be in a competitive situation and others cause prices to be higher, because costs would have been lower if inefficiency were not protected by the trade arrangements and agreements. ‘ -
That is well stated. Then the Commissioner said-
Restrictive trade practices also have an impact on the balance of payments. Evidence was adduced of trade practices which caused buyers to seek supplies from overseas. The elimination of these restrictive trade practices would not only tend to reduce imports, but in so far as it moderated the rate of price increase it would assist exporters, particularly the primary producers, whose products are sold on competitive world markets.
That is an outstanding report. The findings are there in black and white. The Tasmanian Government will do its best to implement those that it can. The Tasmanian royal commission has gone a long way to show us in this Parliament just what is going on at the grass roots level of business in Australia as a result of collusive tendering and the use of horizontal and vertical agreements, as they are called, and of unilateral practices.
Finally I should like to mention another matter which is not covered by the Bill. It is the Government’s failure to meet the serious difficulties threatening Australia’s exports, and in particular its failure to counter the licence arrangements and agreements entered into by Australian manufacturers associated with overseas companies which prevent or restrict exports. This is a serious omission from the Act. There are two types of Australian manu facturers in this category. The first is the Australian company which, by reason of an agreement to pay royalties or licence fees, obtains from an overseas manufacturer or company the right to manufacture in Australia a product of a design which carries a well known brand name. One of the conditions of such an agreement is that the Australian company cannot export that article which in fact is an Australian made article.
The second type is the company which is a wholly owned or partly owned subsidiary of an overseas company and which, as a matter of company policy, cannot export, or, if it is permitted to export, is able to do so only to a restricted area. I have evidence from the Department of Trade and Industry which indicates that there are 650 Australian firms which are subsidiaries of or have manufacturing agreements with United States companies. Only 275 of these recorded an interest in export. The evidence which I have discloses that many of the companies had agreements which restricted the export of the goods they manufacture here under licence from their American counterparts. The evidence I have states -
Of the 650 Australian companies with which tha Department of Trade corresponded-
This was in 1960-61 - 71 with British connections reported that they had signed agreements to limit or to restrict exports. As was the case with the companies having United States connections, most companies did not report any interest in exports for the obvious reason that they did not want to disclose the fact that they had signed agreements restricting their right to export.
That is, to export goods made here. I have evidence relating to an amazing number of manufacturers of stoves, grillers, boilers, washing machines, and refrigerators who have signed agreements restricting the export of their products to Australian controlled territories. The Commonwealth Statistician has revealed that in the 12 months ended 30th June 1963, Australia exported 1,326 mechanical type refrigerators. Of that number, 515 went to New Guinea. Others were exported to Papua, New Zealand, Fiji and Borneo. Of the 1,326 refrigerators exported, 1,071 went to Australian controlled Territories. Only 20 per cent, of them were allowed to be exported overseas. Their export was restricted by agreements made with overseas manufacturing companies. As to non-mechanical refrigerators exported, only 23 per cent, were exported to areas outside Australiancontrolled Territories. The Minister for Trade and Industry has stated that 700 Australian companies were parties to 1,100 agreements which restricted the export of their goods and that with 40 per cent, of our manufacturing industries under foreign control, these restrictions were becoming serious. Unfortunately, a way to prevent or restrict this sort of operation is not provided in the Bill.
I hope that when we become the Government we will put in the Act a section to limit this type of agreement which restricts our exports of vital products to overseas countries. I support the amendment moved by the Deputy Leader of the Opposition and hope that the Bill is agreed to by the House.
– The honorable member for Wilmot (Mr Duthie) spent a good deal of his time trying to convince the House of the evils of collusive tendering. I do not think this is something that is in dispute. At the same time, he took the Government to task for failing to make the proposed tribunal directly responsible to the Parliament, or to the Government, or to the Minister. I take it that he believes that either the Government or the Minister or the Parliament should say what should be done if, subsequent to an inquiry, it was found by the tribunal that certain agreements or practices were contrary to the public interest.
The honorable member should understand that the Government has been at some pains - and with some cause - to keep the enquiries and decisions in particular cases in this field out of direct political influence and out of direct political control. That is why the tribunal should be, within the limits of the Bill, master of its own proceedings. That is why it should make its own decisions and why I believe cases that may be contrary to the public interest should not be referred to a Minister of this Government or any subsequent government for actual decision.
– How will we know what is going on?
– I should think that, in his report to Parliament, the Commissioner would devote no little space to reference to the proceedings of the tribunal which, in any case, will be public. The proceedings of the tribunal will therefore be known; surely the action taken as a result of those proceedings will also be known. I should think that these would be matters that the Commissioner would include in his annual report to the Parliament. I certainly hope they will be included.
The Opposition has shown very little enthusiasm for this measure ever since it was surprised by mention of the measure in the Governor-General’s Speech some considerable time ago. Apart from an odd question from the Opposition, there has been no real pressure on its part to hasten the Government’s deliberations with relation to this particularly difficult and pioneering field. I believe there is a specific reason for this lack of interest on the part of the Opposition, a lack of interest that has been demonstrated not only over the past few years but also by lack of participation in this debate. Only one or two honorable members opposite have taken part in the debate so far.
The lack of enthusiasm of honorable members opposite is explained, I believe, because their solution to the problems the Government is trying to tackle would be diametrically opposed to the kind of solution the Government would hope to achieve. I believe it would be their intention to let abuses develop until they had an opportunity to build up a case for either nationalisation, if that were permitted by the Constitution, or a Socialist cure of one kind or another which would bring industries much more directly within government control. That is something that we certainly do not want to see and something which I believe industry should not want to see. Industry should understand and appreciate the Government’s motives from this point of view. I believe that the Government’s solution is to control restrictive practices that are demonstrated to be contrary to the public interest and which tend to destroy free competition. There are, of course, difficulties associated with the definition of these very general terms, and I shall devote some moments to that aspect a little later.
One of the first tasks which I think the honorable member for Parramatta (Mr. Bowen) mentioned earlier in this debate was to demonstrate the need for this particular legislation. I think it can be shown that the degree of monopoly, or of limited competition - the economists’ term is “ oligopoly “ - is much greater in Australia than in many other countries. This might, in part, be a symptom of a younger, smaller and less developed economy. In any case, it is interesting to note with relation to the degree of concentration, that in 19S7-58 the industries in which the first eight firms accounted for SO per cent, of national sales employed 60 per cent, of the manufacturing work force in Australia. In the United States of America, the comparable figure is 30 per cent. This example can be pushed even further. In the same year, the industries in which the first four firms accounted for 75 per cent, of the sales of those industries, employed 25 per cent, of the work force. I have one other example. There are about 12 monopolies which account for about 9 per cent, of the value added to the gross national product in each year. These include such monopolies as steel, sugar and many others. In addition, there is concentration in Australian industry on a different basis. It is what has been termed the symmetrical basis of market formation, in which many small firms are dependent upon a large customer of a large supplier and therefore are largely dependent on the behaviour of this large customer or large supplier. Some of the conclusions of the royal commission in Tasmania have been quoted at length. A royal commission in Western Australia found that there were, I think, 111 trade associations, many of which have had restrictive practices. In 1961 Professor Alec Hunter showed that there were 119 practices or agreements in Victoria, and probably about 600 in Australia, including many different types of restrictive practice - agreed price fixing, retailers being advised not to stock a rival’s goods because if they did they would be subjected to collective boycott, collective re-sale price maintenance, destructive price-cutting, collusive tendering or collusive bidding. Those, of course, are just a few of the types of restrictive practices or agreements that can be present in an economy. The examinations that have taken place have, I think, demonstrated the marked concentration and the remarkable number of trade associations in Australia. I do not want to give the view that these are necessarily of themselves evil, but I believe this concentration and this presence of trade associations do establish a case for an examination to see whether or not they behave or act in the public interest, or whether they act in the specifically narrow sectional interest of a small group of people.
This view in my own case - and I admit this without prejudice - has been reinforced by personal experience of a restrictive practice or restrictive agreement. Without wearying the House with the details of the matter, I mention that it was a situation in which a particular wool broking company had a wool store filled with wool and it advertised the sale in accordance with proper procedures. However, the Australian Council of Wool Buyers told its members that they should not buy at this sale because it did not want a new buying centre opened in this particular area at Portland. Some buyers turned up at the sale, but because there were so few they admitted quite frankly that they were not prepared to go in and bid at the sale. They said that if they did their livelihoods would be destroyed - they would be so subject to competition and practices from other buyers that they would not be able to remain in the wool buying industry. They said that the ring was complete and if they bought wool they would not be able to ship it because nobody would handle it and nobody would dump it. This particular practice prevented the establishment of wool sales at Portland for a considerable time. It was a practice broken only by the threat of legislation in the State of Victoria. Once a development in an area has been restricted by a practice or an agreement of this kind, and once a person has had experience of this kind of thing, which can and does restrict development, a person then comes down fairly firmly with the view that this thing should be subject to supervision and control. I am, therefore, more than glad that the Government is acting as it has acted in this particular matter.
The result of the first few years of the United Kingdom legislation underlined again the nature of restrictive practices in the United Kingdom and the need for legislation there. In 1961 two-thirds of the agreements that had been registered concerned selling prices. Of 970 nationwide agreements,- 790 contained selling price provisions, 300 contained exclusive dealing provisions, 300 had market sharing arrangements and 200 concerned product limitations. In the first three years 85 agreements were examined and 730 agreements were abandoned even though only 250 had received up to that time notice that they were to be subjected to examination. Quite obviously many of the parties to the agreement felt or knew that they had no chance of justifying the agreements in terms of the provisions of the United Kingdom Act and, therefore, they did not even try to argue their cases. It has been said that since the effect of the United Kingdom Act has been felt, competition has greatly increased in certain specific fields, notably groceries, tyres and tobacco, to mention three particular industries.
If an examination of the United Kingdom experience, and what we know of our own case, leads us to believe that action is required to cover the Australian scene, our purpose must be clearly understood so that there can be no misunderstanding by any person, group or industry in the community. Our purpose can be easily expressed in general terms; but it is difficult of precise definition. This is why clause 50 is expressed in the terms in which it is expressed. As I said, our purpose is difficult of precise definition, first, because of the conflict of interest that often arises. There may be a conflict of interest between consumers and competitors in an industry. Consumers may be better served by one large firm in the industry that may be quite capable of producing goods at a cheaper price than many smaller firms, but there may be an advantage in having many smaller firms in the industry to maintain more active competition. These are things that have to be weighed. Also, the objectives are difficult of precise definition because few restrictions or practices are wrong and evil in all circumstances. In one sense our purpose may be defined as an attempt to prevent undue economic power held singly or in association being used unfairly in a narrow sectional interest as opposed to being used reasonably in the general interest.
In clause 50 we find one definite statement - that the preservation and encouragement of competition are desirable in the public interest. There is an assumption, as I under stand it, that a detriment occurs from restriction of competition or a tendency to restrict competition. Against this detriment must be weighed the specific interests of many different groups - consumers, employers, importers, exporters, investors, small businesses and new enterprises, to name some that are mentioned in this provision. It is clear that there may be a conflict of interest not only between people within these groups whose interests must be weighed against the detriment resulting from reduced competition, but also between groups that are so named, and the reduction of competition, or alleged reduction of competition itself. These are matters that will have to be judged or weighed by the tribunal. The tribunal will have to come out with some balance that will be in the public interest. It may be regrettable, but I see no alternative, that it is not possible to be more precise in the definition in clause 50, but I think the imprecision is due to the difficulties of the circumstances, because circumstances are rarely precisely the same. We will, therefore, in many instances, be subject to judgemade law in this respect, the only legal requirement, as I understand it, being to show that these relevant interests have been taken properly into account in making any broad decision.
Clause 50 equates in many senses competition with public interest, but in many instances it is possible to show that unrestrained competition of certain kinds is not necessarily equal to the public interest. For example, unrestrained competition may drive out small firms and may lead to a reduction in standards and, therefore, competition needs to be restrained. The Bill takes regard of these particular matters. There is also the possibility that competition, which in one sense is a desirable objective, between small firms may lead to higher prices than would obtain with a smaller number of firms in the same industry. Thus we are forced to the kind of arrangement in which it will be up to the Trade Practices Tribunal to balance all these different interests. I think we would be forced to the same kind of conclusion even if public interest were defined in any other terms. If it were defined as in the interests of the consumer, or equated with the interests of the consumer, we would find the same difficulties and the same inherent contradictions, so I do not see any alternative to clause SO as it is or something very much like clause 50.
Perhaps before discussing this aspect of the Bill I should give some thought to how we should approach the general problem of bringing the necessary degree of supervision, control or restraint into the field of restricted practice of one kind or another. There is, of course, the United States approach, which should be well understood. It is an approach that certain practices or certain kinds of behaviour are without the law and that there can be no possible justification for them. There is also the approach that has been adopted in the United Kingdom; that is, of registration and possible examination. That, of course, is largely the approach we have adopted. I have heard some people say that there is a third approach of proscription of the practice or agreement, and of subsequent appeal; but I can see no real difference between this and the approach of registration and examination, because if there were a proscription of a practice or agreement, and a subsequent appeal, the same kind of examination would be necessary as will be necessary under present circumstances. I can see no substantial difference.
I think it is generally agreed that the American approach has been shown to be too much of a sledgehammer for our circumstances, which are quite different from the American circumstances. Few practices or agreements are unreasonable in all circumstances, although it may be that this kind of approach would lead to a stricter control by Parliament because we would not be subject to the difficulties and contradictions of clause 50 which is included because we are trying to preserve a greater degree of justice in our approach than does the United States in its approach. In any case, we are forced back to registration and examination.
I have strong general support for the Bill as it is, but it is possible that more than one point of view can be put on certain of its aspects. These different points of view are respectable, and I hope they will be taken into account, not in the sense that further amendments are required at the Committee stage, but in the sense that if experience of the legislation in practice shows that it might be more advantageous to bring down amendments in the future after we have seen how the legislation works, then the points on which it is possible to put an alternative view to that which has been accepted by the Government may be borne in mind.
The scope of the Bill has been criticised by some members of the Opposition, but again we emphasise that we do not want to interfere unduly with industry. We want merely to touch upon agreements and practices that in themselves unfairly penalise people who are not parties to those agreements or practices. I think it is worth noting that the original United Kingdom legislation really covered no wider field than does this legislation. Sir Garfield Barwick made a note of this in a speech he made in January 1963. I mink it is important to go carefully and steadily in this matter. We do not want to cover the whole field with one wide dramatic sweep, because it is necessary to see how the legislation acts and reacts upon industry. It is better to go cautiously in a matter as important as this, than to attempt to achieve everything at one step.
Industry has said that it is opposed to registration. It has been said that there will be too many agreements - a flood of agreements - to be registered. I think it should be noted that in the United Kingdom, which has a wider economy than ours, only 2,700 agreements have been registered. Presumably we can expect fewer. Only two alternatives exist to registration. One is the American approach, which I believe we all reject. The other alternative is investigation and prosecution. If it is decided not to have registration, which provides evidence of an agreement, a much larger investigation staff will be required than should be necessary in the present circumstances. If industry really thought the matter through, it would not want the Commissioner to be served by a vast staff seeking out agreements and practices in every corner of industry; asking questions everywhere to find out what is taking place. I believe that if industry experienced that practice, it would wish that it had supported the approach of registration that has been adopted by the Government.
The Government has decided that the register should be a secret one. As I understand it, the decision was made for three or four reasons. I readily concede that a public register presents administrative problems. In any case, some parts of some agreements would have to be secret. In the United Kingdom, where the register is public, it is therefore necessary to have two registers. It has been said that industry will be more willing to co-operate in registering agreements if the register is secret. The purpose of the register is to provide evidence, and a secret register does that just as well as does a public register.
I accept these arguments, but I think there are points of view on the other side that should be noted. The Commissioner will bc a person of some power. I believe it important that a check should be placed on that power and that there should be knowledge, especially in this Parliament, of what he is doing. Knowledge of his actions, will come from the proceedings before the Tribunal, which will be public, and from reports to Parliament. However, the reports to Parliament cannot be complete, in many respects, because they cannot provide details of the register. They might bs able to cover the broad scope of the kinds pf agreement that come forward, but clearly a report cannot give intimate details of the register, because it is a secret register. I believe that the Commissioner’s reports may be more likely to develop in detail some arguments or information relating to proceedings before the Tribunal. Therefore, even though the AttorneyGeneral can see the register and Ministers of participating States can see documents from the register, I believe that the Attorney-General will not have time to go through the whole of the register. He could not be expected to do so. It seems that there is to be no check over the Commissioner’s selection of cases to take before the Tribunal. I am not sure that this procedure is altogether right. The check 1 would like to see can be provided only by a public register. I hope that this matter will bc watched so that we can see how it works out in practice.
I believe the decision of the Government and the Minister that presidential members of the Tribunal shall be people of judicial status is a wise one. However, I am still concerned about the position of lay members of the Tribunal. I believe that full time lay members would not be of the quality desired. I think this argument was conceded. It may be possible to obtain people of higher calibre and quality from part time lay members, but a problem still arises, because such part time members possibly will have two interests. They may have an interest in an industry. They may still be active in an industry which could, on the fringe, touch upon an agreement under examination. It may be thought that this is unlikely, but the possibility should be noted that on the fringe a part time member’s interest could lie in an industry that touches upon an inquiry being undertaken, even though it was thought at the outset that that would not occur. Part time members of the Tribunal could have an interest in an industry that is quite unrelated to an inquiry but which engages in similar practices to that under inquiry. It is possible that this kind of interest would not be revealed until the inquiry was well under way.
All pecuniary interests of the Commissioner must be made known to the AttorneyGeneral. I believe this kind of solution would be quite inappropriate for the lay members and that this is a matter which will have to be solved by good sense. It will be interesting to see how many cases before the Tribunal are decided, by choice of the parties, by judicial members alone. I would not be at all surprised if the parties chose to have the inquiries conducted in this manner. The criticism has been made that the Tribunal may not be kept active. It has been said that not as much work will be done as we should like to see done because the Tribunal will be composed of part time members. I think we need to know the reality of what has happened in the United Kingdom. In Australian terms, the Commissioner would conduct an inquiry. It may take a considerable time to prepare evidence to be taken before the Tribunal. A case may be scheduled to be heard by the Tribunal, but it is settled before going to the Tribunal. It may have been thought that a considerable amount of work would have to be done, and then settlement may be reached by agreement before the case proceeds to the Tribunal. This has happened in the United Kingdom and is likely to happen here. The inclusion of the Tribunal of part time members should not be taken to indicate a lack of enthusiasm in the prosecution of these measures.
The honorable member for Wilmot (Mr. Duthie), who preceded me in the debate, referred to export franchises. I wish to make one or two points in relation to this matter. The Bill does not specifically exclude export franchises. But exports are limited at times by reason of three factors - because of patent rights from an overseas firm, because of an agreement that may not be subject to a patent right, and because of policies of overseas owners of Australian subsidiaries. Patent rights are exempt from many of the provisions of the legislation, as 1 believe they should be. Agreements not subject to patent rights could be caught by the legislation, but this would be an extremely limited field and, maybe, one we would not want to catch because the Australian firm would not get permission to produce whatever it was producing unless it formed this kind of agreement. Subsidiaries of overseas firms probably form the largest category. These also in many cases would not be caught because of the provision of related companies in which these are treated as one person.
Questions of high and difficult policy are involved in these matters, lt might well be that the problems could be overcome by persuasion or tax policies more specifically then they could be overcome by legislation of a restrictive practices nature. But I think we should note that the United States approach has tended to try to bring within the ambit of that country’s laws any practice or agreement that reduces or tends to reduce United States exports. There was a case in which the United States Timken organisation, owning a fair part of the United Kingdom Timken organisation, struck down an agreement under which there had been market sharing between the two concerns, although the ownership and control of the two concerns were similar. This matter needs to be kept under review. It is a matter of the greatest importance, but I do not have time properly to deal with it now.
Our purpose in this measure is, I think, clear. It is not to force any change in the structure of the economy but to take advantage of changing circumstances and our rate of growth to encourage a vigorous, vital and competitive economy. We hope to remove restrictions that unduly hamper the economic liberties of other people. We are pioneering in this field and as a consequence we need to keep an open mind. I hope that the Government will do this in relation to amendments that may prove to be necessary as a result of our experience of the legislation in practice. It would be remarkable if such amendments did not prove to be necessary.
I fully support the legislation, as I have made plain, but it is idle not to recognise the authority that has been given to the tribunal and perhaps particularly to the Commissioner. We must see that the intention of the Parliament and the Government is administered not only with firmness but, where necessary, also with moderation. We should hold ourselves ready to correct any defects in the law that may reveal themselves.
.- After expecting this legislation for five years and nine months, the Opposition at last welcomes its appearance in the Parliament. AttorneysGeneral and many other people have laboured on the legislation for that length of time, but I think it is legitimate to say that it is labour that has brought forth only a mouse. The Opposition does not oppose the legislation and does not propose to amend it in the many places where we think it should be amended. We think that the legislation is altogether too intricate - too bureaucratic in many ways - to make a constructive programme of amendment possible. However, we propose one simple general amendment to the motion for the second reading. I support that amendment, which reads -
That all words after “That” be omitted with a view to inserting the following words in place thereof: - “ this House notes with approval that, in response to public pressure, the Government has introduced this limited Bill but deplores: -
the Government’s failure to hold a referen dum, as unanimously recommended by the Joint Committee on Constitutional Review in its reports presented to the House on 1st October 1958 and 26th November 1959, to give the Parliament power to make comprehensive national laws with respect to restrictive trade practices; and
its abandonment of a substantial part of the proposals of the former AttorneyGeneral, for legislation on restrictive trade practices and monopolies, as outlined to the House on 6th December 1962 particularly with respect to resale price maintenance, persistent price cutting, monopolisation and mergers.”
The amendment points out a number of the significant things in relation to this Bill. This Bill is before us today because of public pressure. The Government of big business the Executive of private enterprise, would not be seeking to regulate, even to the extent that it is now, the activities of private enterprise, were it not for public pressure and a belief that, having committed itself as long ago as March 1960 to the provision of legislation of this kind, it could no longer postpone the introduction of the legislation, as it has postponed it for almost five years and nine months.
The amendment moved by the Opposition also points out that the Government is unwilling to seek adequate power to deal with restrictive trade practices because it does not really want effective power to deal with them or with what it calls private enterprise. If it did, it would know that, with the support of every political party in Australia, it would have an excellent chance of having carried a referendum proposal to remove all the constitutional difficulties and the legal loopholes that exist in this legislation. This is the test of the sincerity of the Government in respect of this legislation: If it were true that the Government wanted to legislate effectively in respect of restrictive trade practices, the first thing that it would have done would have been to put a proposal in a referendum, as unanimously recommended by the Joint Committee on Constitutional Review, which Committee included members of the Government parties. The Government would have had the support of every political party in Australia in this respect. The proof of its insincerity is that it does not want effective power to interfere with its own managers, the people who control it and the kind of organisations to which this relatively ineffective legislation is expected to apply.
I believe that it is necessary for the House at this stage to compare the attitude of the Government on this matter with its attitude on other matters. There has been delay and prevarication on this matter. It is almost six years since the Government first announced that it would consider legislation of this kind. The Government recog nised the need for legislation of this kind in March 1960 when, through the medium of the Governor-General’s Speech, it said -
The development of tendencies to monopoly and restrictive practices in commerce and industry has engaged the attention of the Government which will give consideration to legislation to protect and strengthen free enterprise against such a development.
So the Government had already given attention to the matter; it had been thinking of the matter before March 1960. Now, after a period of about five years and nine months, we have before us a Bill which has been weakened considerably in that intervening time.
One is entitled to compare the Government’s attitude to the introduction of this piece of weakened legislation to deal with free enterprise with its attitude to the workers and trade unions. Recently we debated a bill to amend the Stevedoring Industry Act. It did not take the Government five years and nine months to bring in that amending bill. It was introduced in this House one day and we were told that we had to debate it the next day and that it had to be passed before the end of that week. We had to sit on a Friday in order to do that. The Government does not take five years and nine months to introduce legislation to deal with the workers and trade unions.
The honorable member for Wannon (Mr. Malcolm Fraser) has told us that this is a pioneering field. It is a field in which the Government has been pioneering for more than five years and nine months. It is a field in which the Sherman Act was passed in the United States of America in 1890 - 75 years ago. This, we are told, is a pioneering field. Does the honorable member for Wannon know these things? Does he think that a field in which there has been activity for 75 years is a fair example of a pioneering field? The honorable member for Cunningham (Mr. Connor) pointed out yesterday that legislation against such restrictive practices has been enacted in Denmark, France, Holland, Japan, Norway, Sweden, West Germany and the United Kingdom. Is this a pioneering field? It is a field in which there has been legislation for 75 years, and every country comparable to Australia has had legislation of this kind for a great many years. I notice that the honorable member for Wannon read his speech. So his statement that this is a pioneering field was a considered one; it was not just a slip of the tongue.
When one compares this legislation with, say, the Stevedoring Industry Act, one finds a very great difference. As far as it goes as a piece of legislation to combat restrictive practices this Bill, in my opinion, confers considerable powers. It can be effective. It can be just as effective as it is made to be, and I wonder whether the Government intends that it be made effective. As a piece of legislation to combat restrictive practices this measure would pass the test. But when one has a careful look at it one sees just how weak it is. Consider, for instance, clause 43, which provides for a failure to furnish particulars to be deemed an offence. It provides for a penalty of £1,000. But sub-clause (4.) says - * (4.) It is a defence to a prosecution for an offence against this section if the person charged satisfies the Court that -
– Can a prosecution then be brought against the person who did not do it - the agent?
– Yes. A prosecution can be brought against the person who did not do it. Then we come to clause 48 which provides that the Commissioner has to consult the parties with a view to avoiding proceedings. A restrictive agreement is arrived at and the Commissioner is required to consult the parties, not to prosecute them. The clause reads, in part -
Compare that with the Stevedoring Industry Bill. Was there any provision in that Bill that anyone on behalf of the Government should consult the Waterside Workers Federation, or even the Australian Council of Trade Unions? Any consultation in that direction would have to come as a result of a good deal of public pressure. On the other hand, in that Stevedoring Industry Bill, which was produced one day and required to be debated the next and passed before the end of the week - not a matter that was stretched out over five years and nine months - there was provision to take out of existence the Waterside Workers Federation and substitute another organisation designed by the Government in its place. Is there any provision in this Bill for the Government to take such a drastic step with regard to an organisation that enters into a restrictive agreement? What a contrast there is between the attitude of the Government-
– The honorable member is not seriously suggesting that this legislation is similar?
– I am not seriously suggesting to the honorable member for Parramatta that the Government would be serious in doing anything about what it calls free enterprise in this respect, except to create a smoke screen behind which it thinks it might be able to win votes at the next election. I am suggesting that if the honorable member has the kind of judicious capacity that a Queen’s Counsel is presumed to have, he would see some merit in the contrast which I am making between the attitude of the Government in relation to this legislation and its attitude in relation to the Stevedoring Industry Bill. One also is entitled to consider the attitude of the Minister for Trade and Industry (Mr. McEwen). In answer to a question by the honorable member for Lalor (Mr. Pollard) in this House recently, the Minister for Trade and Industry said -
I shall be very glad to give the honorable member, who was Minister for Commerce and Agriculture in the Labour Government, the benefit of the attitude of my Party and myself. My attitude is that neither the Australian Country Party nor its parliamentary members should decide what is the correct policy for a primary industry. It has always been the policy of my Party that those who produce, own and sell a product are the best judges of the way in which their own property should be treated. It is the function of my Party to see that the will of those who produce and own the product is carried into legislative and administrative effect.
Let us consider the attitude of the Minister for Trade and Industry. He will not interfere with anyone who produces or sells a product, except in the way that the person who produces and sells the product wants him to do. That is what he does in respect of a primary product such as wool. He will not come away from this assumed attitude of neutrality on the wool referendum because it is a product, as he defines it, of the country. What is his attitude to this legislation? The Minister for Trade and Industry knows that there is a great deal of objection from free enterprise, as the Government calls it, to the legislation that is before the House today. He knows that the Government is imposing things upon the so-called free enterprise in this legislation. He is prepared to accept that position. Presumably, he is prepared to vote for it.
Let us contrast his attitude in that regard with his attitude when the product is labour that somebody is selling. Did the Minister hesitate to support the Stevedoring Industry Bill because the Government had not consulted with the Waterside Workers Federation? Did he require prior consultation on that occasion? Did he ask for a referendum of the Waterside Workers Federation before the Government introduced the Stevedoring Industry Bill? One has only to consider the so-called principles of honorable members opposite to see how one sided the principles are.
– The honorable member ignores the fact that there is a long history to the stevedoring industry legislation. It dates back to the Chifley Government.
– Of course there is, and it is about time that we had a long history of legislation to regulate the people for whom the Minister for Shipping and Transport stands - the monopolies and the big businesses for which the Minister is the agent in this House. I refer to the shipping companies which dominate the export trade.
They have been his responsibility for some considerable time. It is about time we had a long history in this regard. Of course, we have a long history of legislation to regulate labour, and it is a very one-sided history. The monopolies have grown in power and the Minister has applauded this. No doubt he has received his compensations from what has been going on, because he has been associated with business in his time. This is the attitude that honorable members opposite normally adopt. They want to regulate labour, and they are doing so. They claim that there is a long history of such regulation.
It is clear as I think almost every honorable member who has participated in this debate has recognised that restrictive practices exist which are, in fact, most harmful. Almost everybody who has spoken in the debate has given extensive evidence of the nature and extent of restrictive practices. The Deputy Leader of the Opposition (Mr. Whitlam), in his speech, referred to an inquiry which had shown that about 32 industries in Australia were identified as highly concentrated. Among those industries in which only one company was producing the total Australian production were refined zinc, pig iron, ball and rubber bearings, linoleum, industrial gases, sheet glass and writing paper. Those industries in which there were only two companies producing the whole output were steel making and rolling, steel sheeting and sugar refining. Industries in which there were three companies producing the total output were matches, alkalis and chlorine, electric lamps, radio valves and television tubes and glass containers.
The extent of concentration and centralisation of industry in Australia is probably greater than in any other country. The extent of concentration comes as a surprise to most people when they hear of it. It comes as a surprise to know, for instance, that in 1961 there were 57,782 factories in the whole of Australia but that of those factories only 1,813, or 3.1 per cent, of them, employed over 51 per cent, of the people employed in all factories. It is fair enough to say that if they had over 51 per cent, of the employees they also had over 50 per cent, of the income and output of all of the factories in Australia. That is to say, 3.1 per cent, of the factories had over 50 per cent, of the output, income and employees of all factories. Turning to companies we find that 1.7 per cent, of the tax paying companies possess 61.7 per cent, of the taxable income of all companies, and they probably also possess over 60 per cent, of the output and the staff of all companies as well. It is fair to say that probably fewer than 3 per cent, of all the economic units in Australia, fewer than 3 out of 100 - probably some 2,000 or 3,000 of them - possess over 60 per cent, of the income, output, staff, machinery and power to make decisions in the Australian economy. That degree of concentration is probably as great as that which exists in any country.
In these circumstances there are bound to be restrictive practices. The honorable member for Wilmot (Mr. Duthie), who spoke a little while ago in this debate, quoted from the report of an inquiry that had been made in Tasmania. That inquiry revealed the extent to which there were restrictive practices in that State, and these practices are probably greater in some of the mainland States than they are in Tasmania. These restrictive practices should be outlawed. I think this Bill goes some of the way, and if it is used effectively it could achieve results that will be beneficial to the Australian economy. But the Bill does not go very far. It creates an intricate and costly bureaucracy and I think the criticisms that have been made in respect of this have considerable validity in them. One only has to refer to clause 35 and clauses 23 to 34 in Part III of the Bill to see how extensive this bureaucracy might be.
It might well be better to create specific, described conditions as clear as possible and to allow those conditions to create offences for which the offenders could be taken to a court and tried like anyone else who breaks the law. If one cannot be sure of what the nature of the offence has to be, then, of course, some kind of an inquiry is justified. An example of this was the Tasmanian inquiry that the honorable member for Wilmot mentioned. I think that we have to ask ourselves the question: What particular condition is it that we are endeavouring to get at and to stop in respect of restrictive practices? It is not that thi practice itself is something that can be objected to. There is very often no reason why people should not combine and act together. Sometimes such a combination produces a beneficial result. What is complained about - and this, I think, is of the essence of the matter - is that restrictive practices can lead to excessive prices. They can lead to exploitation. It is the excessive price aspect, the exploitation of the restrictive practices, that makes them objectionable. Once we direct our attention to the fact that we are concerned with the higher prices than otherwise should be charged - with the exploitation - then, I think, we see the total significance of the problem that we are endeavouring to meet by legislation of this kind. I have previously cited in this Mouse the opinions of leading economists, such as Dr. H. C. Coombs, Governor of the Reserve Bank, who said -
The tendency for prices to “ creep “ upwards in periods when total demand is not excessive, and even when it is mildly deficient, derives in part from . . . those who make decisions in business. . . .
Consider the pricing policies of industrialists and traders. No doubt some degree of competition prevails . . . but there are degrees of monopoly and tacitly accepted practices which mean that prices are determined by management rather than by the market for a wide range of goods and that within significant margins producers can decide at what prices their goods will be sold.
This tendency for prices to be higher than they should be, this tendency for exploitation that exists significantly in a concentrated monopolistic type of economy, is a natural and indigenous condition of an economy of that kind. There is nothing, I think, that restrictive practices legislation of this kind can do to deal with that problem. In the United States we have an economist as distinguished as Dr. Coombs is in Australia, namely, Gardner Ackerly, the Chairman of the President’s Committee of Economic Advisers, who says -
In the above analysis I have, in effect, argued that the inflationary process is essentially an administrative one. . . . Whether aggregate demand is excessive or deficient, the problem of inflation needs to be analysed in administrative, that is, essentially political terms, and on the price as well as the wage side.
The result of this kind of examination is that the overwhelming part of the price problem - the problem where prices are higher than they should be; where there is a degree of exploitation in prices - does not come from restrictive practices at all. It comes from the natural state of a centralised, concentrated form of industrial structure.
Recently in our own country the Vernon report dealt also with this problem in respect of tariffs, and pointed out that in the Australian economy tariffs have contributed to the creation of this kind of centralisation or monopolisation of industries. It pointed out that it would be unreasonable to go on forever giving tariff protection without some undertaking about price policy. It stated -
A request for an undertaking about price policy if high protection is given would not be unreasonable, especially where the product concerned is an essential raw material.
I think it is apparent that while some good can come from restrictive practices legislation of this kind, it is only a very marginal matter in relation to the main problems of the economy in respect of the improper price increases with which we have to deal.
In conclusion, I think that we have reached the stage in this country where there is a significant division in the governing parties. This has emerged in a number of respects in the last couple of weeks. There is a relatively progressive or liberal wing of the Government parties, those who are prepared to go as far as they are going in supporting restrictive practices legislation of the kind produced by the AttorneyGeneral, but sitting behind the Ministers who are responsible for this is a very considerable opposition. The honorable member for Balaclava (Mr. Whittorn) said that he was totally against this legislation. It will be interesting to notice how he votes. The honorable member for Sturt (Mr. Wilson) said, in effect, that he was prepared to support this legislation only because it had been weakened in such a way that it would probably not be effective. The honorable member would not have supported the legislation that was proposed in the first place by the former Attorney-General, Sir Garfield Barwick. This opposition to the relatively progressive section of the Government parties is a matter of considerable significance. Those who oppose the members of their parties who would be prepared to go as far as this Bill goes are a good deal more backward than anyone in the British Tory Party. This legislation would be accepted by almost every member of that Party. The division in the ranks of the Government parties showed up a week ago in respect of economic sanctions on Southern Rhodesia. The Prime Minister (Sir Robert Menzies) took a stand in favour of economic sanctions. Almost every other member of the Government parties who spoke in that debate was against sanctions. It is of significance to the House and to the nation that the coming retirement of the Prime Minister will increase and strengthen the reactionary section of the Liberal Party. This will become a problem of no little significance in Australian politics in the relatively near future.
One can notice the inadequate examination that has been made of this legislation by, for instance, the honorable member for Wannon (Mr. Malcolm Fraser), who supports it. He spoke of the wool sales at Portland, where wool buyers got together and refused to buy wool that was to be sold there. The wool buyers did not want another wool selling centre to be established. What the honorable member for Wannon forgot to tell us - this is an indication of the inadequacy of his analysis of the Bill - was whether he thought the legislation would have any relevance to the Portland case. He told us that it was necessary to have legislation of this kind. He told us that the events at Portland had been dealt with because the Victorian Government had threatened to introduce legislation if the wool buyers continued with their boycott. But the Victorian Government has not yet introduced that legislation. So the honorable member for Wannon left us in doubt whether he thought this Bill would have any relevance to a case such as the refusal of wool buyers to buy wool at Portland. Presumably that is an intrastate matter in respect of which this legislation would not be effective.
– The Australian Council of Wool Buyers is a national association of wool buyers and-
– Is it the honorable member’s view that this legislation will apply to the Portland case?
– Yes, certainly.
– The honorable member forgot to mention that when he was speaking. I would have thought that he would have mentioned it. If honorable members opposite who are interjecting will look at “ Hansard “ they will find that the honorable member for Wannon did not say whether he thought this legislation would be relevant to the Portland case.
The final point I want to make concerns export franchises and agreements. The Department of Trade and Industry has announced that over 700 companies are. involved in 1,100 agreements which are restricting exports from this country. What is the answer of Government supporters to this? The answer was given to us by the honorable member, for Wannon. He said that he did not think these were the kind of agreements we wanted to catch by legislation of this kind. Agreements to restrict exports are becoming more and more significant ever day. They have to be caught in some way.
– Order! The honorable member’s time has -expired.
– Mr. Speaker, let me congratulate the -honorable member for Yarra (Dr. J. F. Cairns) on an excellent exercise in Agitprop. He has learnt his lesson well. He did not put a foot wrong. His comrades will be proud of him. Having said that, may I say that although the honorable member for Yarra may be acid, he is not always corrosive. He does not always take. But he did his best.
Apparently the honorable member did not read clause 38(c) of the Bill. He expatiated on the woes of the trade unions, without realising that under this legislation as proposed the trade unions are singled out for special favourable mention. The trade unions are still allowed to maintain their monopoly in the field of labour. This is specifically provided in clause 38 (c) of the Bill. Far from trade unions being done wrong, exactly the opposite is the case. The trade unions get special benefits because they are not caught by any of the monopoly provisions.
Let me leave the honorable member for Yarra with some regret and say that although I support this legislation I have grave disquiet about it. I realise, as does the Government, that something is required to be done about incipient restrictions or monopolisation in Australia. I think the objective of the legislation is good and, in fact, that the introduction of some legislation is necessary, but I am not prepared to say that I have no doubts. I am not happy about the framework or the details of the Bill, but I am afraid that I am not sufficiently informed to put forward a constructive alternative. I think the House will concede that I very seldom criticise without putting forward something constructive to replace the subject of my criticism.
In this case I find myself at some loss. - I do not feel that I know the subject sufficiently well to put forward definite alternatives to what is proposed, although I think I can see some defects in certain of the proposals. This puts me in a dilemma. I know something has to be done. The Government has done something. As I have said, I am not altogether happy about it, but I am not in a position to put forward constructive alternatives to the things that 1 criticise. I think the House will agree that I. do not usually find myself in this position.
I hope that when the Bill reaches the Committee stage the Government will be reasonable about accepting the constructive amendments which will be advanced, not by myself but by. some of my legal friends who have been considering the matter. They perhaps suffer less than I do from the lack of the services of a parliamentary draftsman. Such an officer - not under the control of the Attorney-General but of the House - should be available to us, particularly when we are dealing with a Bill of this nature, to draft technical amendments.
Having made those generalised remarks, may I come to the Bill? There are some differences between the Australian position and the overseas position which have often been called into argument during the course of this debate. The first and most important difference, as I see it, is that we have in Australia a Constitution which divides the relevant powers between the Commonwealth and the States, so that it is not possible in Australia to legislate in the same way as it would be in Great Britain or even in the United States. It is particularly unfortunate for this legislation that there is a division of power and that a nebulous area lies between State and Federal power. This touches most intimately the kind of questions with which this Bill must be concerned. That is the first point which I think distinguishes our situation from the overseas situation.
The second is that we are in a stage of rapid emergent development. Ours is a growing economy; we must put a forced draught on our growth if we are to survive. In this respect, we are perhaps under greater pressure than are most other countries. This is occurring at a time when capital plays an increasingly important part in costs because of the more sophisticated nature of industrial production. Things were easier decades ago than they are today. These capital intensive situations, as we are inclined to refer to them, are very relevant to the kind of thing we are now considering. We are also endeavouring, I think, to move in on a big field much more quickly than has been done overseas.
Having said that, let me elaborate these points. I will deal first with the division of power as between the Commonwealth and the States. I shall be most interested to hear from the Attorney-General (Mr. Snedden) later on the detailed history of the course of his negotiations with the State Governments. The provisions in respect of complementary legislation - they are set out in clause 8 of the Bill - are quite unsatisfactory. It would be very wrong, in my opinion, to implement this Bill unless there were complementary legislation in most, perhaps all, of the States. May I explain this viewpoint? The Commonwealth has power to legislate for the kind of activity that is dealt with in this Bill. It can provide penalties and provide for policing. But its power is confined to a very limited field which touches mainly interstate trade. In order to make the Bill effective intrastate, the Commonwealth is compelled to rely upon the complementary legislation that is referred to in clause 8.
What will happen if one State passes complementary legislation and another does not? Let us suppose, for the sake of the argument, that New South Wales passes complementary legislation and Victoria does not. The inevitable consequence will be the drift of large scale industry from New South Wales to Victoria. Industrialists will say: “ We will go to Victoria where we will not be harassed by this kind of legislation.” This may be a reprehensible decision on their part, but it is the kind of decision they will make. If they are manufacturing intrastate in Victoria, they will be able to trade with their products interstate quite free of the impact of this legislation. I see that the
Attorney-General is shaking bis head, but I am clear that this can be done by way of a holding company and in other ways, lt will be possible for industry to concentrate its major operations in those States that do not pass complementary legislation. This will be very bad. It will result in a distortion of Australian industry. Already Victoria, for example, is openly saying that it does not intend to pass complementary legislation. Obviously, it will profit from this if New South Wales is foolish enough to pass complementary legislation without ensuring that Victoria has something along the same lines.
I think it is very sloppy to have clause 8 in its present form. We should have had negotiations with the States for bills that are uniform in substance in the various States, and they should have been in a schedule to the Bill before we dealt with it. The measure should not go into operation until all States have passed complementary legislation. I add that if we have the position where both New South Wales and Victoria do not pass complementary legislation, manufacturing industry will tend to concentrate intrastate, using holding companies to carry out the interstate operations. We talk about decentralisation, but here we have legislation that will lead to this kind of centralisation. Perhaps this, has not been sufficiently considered by the Government. I should like to see something done about clause 8. At least, I would hope that the Attorney-General will be able to give us an historical summary of his negotiations with the States and lay on the line a commitment from the States to pass the necessary complementary legislation to make this measure work. As I have said, this situation is peculiar to Australia. We have this division of powers in this particular field. This is not the kind of problem that the United Kingdom, for example, would have had to face under its legislation.
– What happened in the United States of America?
– So far as I know, in the United States the division of powers is not critical in this particular field. I say “so far as I know” because I am not sufficiently a constitutional authority to answer that question completely.
– They have nothing in the U.S.A. comparable to our section 92.
– I believe that to be the case. The second point relates to clause 50 of the Bill. Clause 50 is a guide line clause which sets out the principles in regard to public interest. I ask honorable members to read this clause carefully because they will find that it sets up, in effect, no principles because it invokes all principles. It is a kind of omnium gatherum which means absolutely nothing when you read it. This allows the tribunal to have virtually free ranging power. If honorable members look at clause 52(7.) they will see this single sentence -
Orders of the Tribunal have the force of law.
Through the Bill we are giving away from this Parliament the power to make laws and we are giving it to an outside body. We are not even laying down any specific principle on which these laws should be made. I know as well as any lawyer here that the common law on which we rely has largely been compiled not from statutes but from precedents. The common law was an accretion, bit by bit and century by century. It is quite a different thing to open up a new field in which no guide lines are given of any significance and to say to a tribunal outside: “ You will make the laws “. This is a wrong principle and I would hope that the Government would have some kind of constructive alternative to it. Some lawyers have said to me: “The public interest is a phrase well known in law. Judges know something about it.” With all due respect, they know nothing about it in relation to the matters we are discussing.
– The tribunal is not a court.
– No, it is not a court; it is a tribunal but it will have lawyers on it and their decisions will have the force of law. If we were to say definitely: “You shall have regard to this or that “ that would be fine, but we do not say that. We have this nebulous clause 50 which, by trying to mean everything, actually means nothing. We give to the members of the tribunal no directions. We move them into a new field where there is no legal precedent at all, and we say: “ You make laws in what you think is the public interest “. I am not altogether happy about the composition of this tribunal. I think the honorable member for Wannon (Mr. Malcolm Fraser) raised some doubts in this respect.
– What about business men? .
– Should we get elder statesmen and retired business men? I am not by any means certain that we could ask part time people, not even those with a judicial background, to make laws for their business competitors. I think it is wrong for this Parliament to divest itself of the law-making responsibility. This is fobbing it off. It is in some kind of sense almost a confidence trick. We pretend to make the law but we actually, in this instance, propose to give the law making power into the hands of another body without any real guide to it as to how it shall exercise that power.
I agree with my friend, the honorable member for Wannon, that the provisions for the secrecy of the Register of Trade Agreements are unfortunate. I believe that here we will set up a bureaucracy that will have immense powers of patronage. I am not altogether happy about the provision that the secrecy on which these powers of patronage depend should be maintained as proposed. No doubt the complexity of this measure will frighten many people as it frightens me. I shall say no more. I do not pretend to be an expert in these matters. Unhappily, I am not in a position to suggest constructive alternatives to this Bill. I recognise that the Government has been faced with a problem that it must tackle. Something should be done. I sympathise with the Government in its difficulties without being altogether happy about the solution that it has placed before us.
Debate (on motion by Mr. Bryant) adjourned.
Assent to the following Bills reported -
Export Payments Insurance Corporation Bill 1965.
Meat Research Bill 1965.
Live-stock Slaughter Levy Bill 1965.
Meat Industry Bill 1965.
Public Works Committee Bill 1965.
Public Accounts Committee Bill 1965.
Copper Bounty Bill 1965.
House adjourned at 4.17 p.m.
The following answers to questions upon notice were circulated -
n asked the Minister for External Affairs, upon notice -
– The answer to the honorable member’s questions is as follows -
The Government seeks in Vietnam a guaranteed just and lasting peace which would enable the Vietnamese people to decide, in conditions of genuine freedom, their own future, their own form of government, and their relationships with neighbouring territories. The Government would like to see the observance of the “fundamental freedoms”, envisaged in the Final Declaration of the 19S4 Geneva Conference on Indo-China, so that the Vietnamese people may exercise their will concerning the unification of Vietnam.
n asked the Minister for External Affairs, upon notice - ls he able to say whether the North Vietnamese National Assembly on 10th April 1965, set down the basis which it considered proper for a political settlement of the Vietnam war; if so, what were the provisions of that resolution?
– The answer to the honorable member’s question is as follows -
The North Vietnamese authorities have since 7th April 1965 frequently reiterated that a settlement in Vietnam can only be reached on the basis of a four point demand that they put forward at that time. These four . points are printed at page 45-46 of Select Documents on International Affairs No. 1 of External Affairs, copies of which are available in the Parliamentary Library.
n asked the Minister for External Affairs, upon notice -
– The answers to the honorable member’s questions are as follows -
Vietnam: Military Assistance from Australia. (Question No. 1274.)
son asked the Minister for External Affairs, upon notice -
– The answers to the honorable member’s questions are as follows - 1 to 4. In the course of late 1961 and 1962 there were a series of consultations between the Australian, Vietnamese and United States authorities on possible Australian military assistance to the Republic of Vietnam. In the course of these consultations it became apparent that Army instructors would be the most worthwhile contribution which Australia could make at that time. The circumstances of the Australian Government’s decision to send to the Republic of Vietnam, at the invitation of the Government of that country, such a group of Australian military instructors were set forth in the statement made on 24th May 1962, by the then Minister for Defence, the honorable Athol Townley (see Select Documents on International Affairs, No. 1 of 1964, “Vietnam since the 1954 Geneva Agreements “, p. 36). It is not, however, appropriate at present to divulge the contents of this diplomatic exchange with another Government.
s asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows -
n asked the Minister for External Affairs, upon notice -
– The answers to the honorable member’s questions are as follows - 1 and 2. The North Vietnamese authorities have frequently stated that they favoured free general elections for the unification of Vietnam. In contrast to their words, their actions, and particularly their repression of opposition in their own territory, clearly made the holding of genuinely free elections impossible. See the section on the “issue of elections” at pages 1-3 of the booklet “ Studies on Vietnam “ prepared by the Department of External Affairs, copies of which are in the Parliamentary Library.
n asked the Minister for External Affairs, upon notice -
– The answers to the honorable member’s questions are as follows -
Paul Martin, said on 5th April 196S, in commenting on Canada’s work as a member of the Commission - “The work of the Commission has been hindered by North Vietnam. For years the Northern teams have not been allowed to conduct meaningful controls.”
He went on: “ In all cases, because the North Vietnamese authorities had been intent on the teams being as ineffective as possible, the team headquarters had been located in such a way as to ensure that Commission personnel would be as remote as possible from any installations which would be legitimate objects of Commission observations,”
m asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows -
Cite as: Australia, House of Representatives, Debates, 26 November 1965, viewed 22 October 2017, <http://historichansard.net/hofreps/1965/19651126_reps_25_hor49/>.