Interview with Louise Yaxley

ABC AM

Wednesday, 2 February 2005
8.05 am

SUBJECTS: Cartels

TREASURER:

Well the Government will be making a statement today announcing that we will

be amending the law so that hard-core cartel conduct will become a crime. And

it will become a crime which can lead to imprisonment of up to five years and

a fine of $10 million or three times the benefit of the cartel. Now, the object

of this is that where businesses agree to dishonestly fix prices in such a way

as to rip off consumers, this is a crime, this is an economic crime which is

designed to steal money from people through sophisticated conduct. It is harmful

for the economy and the law will be amended to recognise that.

YAXLEY:

Does this tell us that there is a big problem of consumers being left out of

pocket? Is this a wide spread problem?

TREASURER:

Well, we don’t know if it is a widespread problem. At the moment if there

is any cartel conduct it can be prosecuted in a civil sense. But making this

a crime will send a very clear message to any senior executives that if they

engage in this conduct, they just won’t be liable to lose the benefit,

the financial benefit, they will be liable to go to jail. And that indicates

how seriously we take this conduct and how seriously we are determined to try

and stamp it out.

YAXLEY:

It is aimed at, you used the term ‘hard-core’ and it is aimed at

executives, are there exemptions for small business?

TREASURER:

Well, the important thing here I think is that the enforcement authorities

go after the major cases and it is our intention that major cases be the focus

of investigation. We will be making an announcement in relation to how that

will be done. But the important message to send out here is that if there are

people who believe that they can secretly engage in this conduct, they should

be aware that they are risking imprisonment. And as importantly as that, we

are going to announce that those that are prepared to come forward and give

evidence will get the leniency policy. The thing about cartel conduct is that

by nature it is secret so it is very hard to prove. So as part of these proposals

there is going to be a leniency policy which says to anybody who has done it,

if you are the first person to report it, you will be the person who gets the

leniency, and the person who you have agreed with who hasn’t come forward,

will be the one that will be exposed.

YAXLEY:

So is this aimed at deterring the decision from being made in the first place

or do you expect to actually see executives sitting in the nation’s gaols?

TREASURER:

Well this is aimed at making sure that this conduct never occurs and if it

is occurring it is designed to give an incentive to anybody who has been part

of it to stop it and to come forward and to give the evidence because they will

be the person who gets the leniency.

YAXLEY:

Although you say, as you say, it is secret and hard to catch, do you believe

that this will, to what extent will this make that any easier?

TREASURER:

Oh look, we would be happy if there were no cartels – that is the object –

so that consumers are not ripped off, so that money is not taken from them unfairly.

The object is to make sure that the conduct never occurs and what I say to people

who may have done it or may be thinking of doing it, don’t try it because

now you are risking gaol.