NO.013

JOINT MEDIA STATEMENT

Hon Peter Costello Treasurer

Hon Fran Bailey MP Minister for Small Business and Tourism

GOVERNMENT PROGRESSING TRADE PRACTICES ACT REFORMS

The Treasurer and Minister for Small Business and Tourism today announced the

forthcoming program for a number of reforms to the Trade Practice Act1974

(the Act) which will benefit Australian consumers and business, particularly

small business.

These reforms have been announced in response to the 2003Review of the

Competition Provisions of the Trade Practices Act (the Dawson Review), the

2003Senate inquiry into The effectiveness of the Trade Practices Act1974

in protecting small business (the Senate Report), the 2001Productivity

Commission inquiry into the National Access Regime, an Australian Government

review of serious cartel conduct, and development of a mandatory horticulture

code of conduct to improve business relationships between fruit and vegetable

growers and wholesalers.

Trade Practices Legislation Amendment Bill (No.1)2005

The Government’s bill, announced in response to the Dawson Review, was

introduced into Parliament last year prior to the Federal Election, but lapsed

when the Parliament was prorogued. It has now been reintroduced, debated and

passed in the House of Representatives.

The Trade Practices Legislation Amendment Bill (No.1)2005 is the product

of the extensive review and consultation process undertaken by the Dawson Committee.

The Dawson Committee recommended changes to the Act aimed at improving the administration,

timeliness and accountability of competition regulation.

To clarify and enhance its operation, minor amendments have been made to the

Bill before its introduction. The broad policy of the Bill remains unchanged

by these amendments which include the collective bargaining notification provisions.

“The new collective bargaining notification process is a win for small

business making it easier for small businesses to negotiate fairer contract

terms with larger businesses”, said the Minister for Small Business and

Tourism.

Trade Practices Legislation Amendment (Small Business Protection) Bill2005

Last year the Treasurer announced the Government’s response to the Senate

Report. The Government expects to be in a position to introduce the Trade Practices

Legislation Amendment (Small Business Protection) Bill2005, to give effect

to the Government’s response to the report, after approval of the draft

legislation by the states and territories, which have a 35 day voting period

as required by the Conduct Code Agreement.

The Bill will include changes, as announced on 23 June 2004 in respect of the

prohibition on the misuse of market power under section46, to clarify the operation

of the Trade Practices Act in the wake of recent High Court decisions.

It will also extend existing provisions dealing with unconscionable conduct

in business transactions under section51AC. This will include extending the

operation of the section to cover a greater range of transactions by increasing

its threshold from $3million to $10million, making it more available to a

large number of small business. “The changes seek to accommodate the legitimate

aspirations of small business, without compromising competition objectives”,

said the Minister for Small Business and Tourism.

The Bill will also contain provisions to implement the Prime Minister’s

6July2004 announcement that the Government will amend the Trade Practices

Act to establish an additional ACCC Deputy Chairperson position. The states

and territories will be consulted on the Government’s nominee for the

position, MrJohn Martin, an existing ACCC Commissioner. MrMartin is a person

with considerable knowledge about the challenges facing small business.

Trade Practices Amendment (National Access Regime) Bill2005

A Bill is also being prepared to implement the recommendations of the 2001Productivity

Commission inquiry into the National Access Regime.

The Bill provides the Government’s broad policy and legislative approach

to access regulation in PartIIIA. The Government has already consulted with

state and territory governments in developing the final Government response

to the Productivity Commission’s report.

Trade Practices Amendment (Cartel Conduct) Bill2005

On 2February2005, the Treasurer announced that the Government would take

action to amend the Trade Practices Act to introduce criminal penalties for

serious cartel conduct. Under the proposed changes, a new offence will prohibit

agreements between competitors to fix prices, restrict output, divide markets

or rig bids, where the agreement is made with the intention of dishonestly obtaining

a gain from customers who fall victim to the cartel.

Breaches of the new offence will attract substantial penalties, up to five

years imprisonment and a fine of $220,000 for individuals, and for corporations

a fine that is the greater of $10million or threetimes the value of the benefit

from the cartel, or where the value cannot be determined 10percent of annual

turnover.

The Trade Practices Amendment (Cartel Conduct) Bill2005 is currently being

prepared to give effect to this announcement. The Government is consulting the

states and territories for a three month period commencing 2February2005 in

relation to the proposals, in accordance with the Conduct Code Agreement.

Once a Bill has been drafted, approval of the draft legislation will be sought

from the states and territories over a 35day voting period, as required by

the Agreement. Provided the necessary approvals are met, the Government will

move to introduce the Bill as soon as possible.

“The package of reforms shows this Government’s serious and ongoing

commitment to competition reform”, said the Treasurer. “In its recent

Economic Survey of Australia, 2004 the OECD has highlighted the contribution

that vigorous competition law enforcement makes towards Australia’s strong

economic performance.”

Horticulture code of conduct

In accordance with its 2004 election commitment, the

Australian Government is developing a mandatory horticulture code of conduct

that will be prescribed under the Trade Practices Act 1974. The horticulture

code should help improve the day-to-day business relationships between fruit

and vegetable growers and wholesalersby providing greater certainty and transparency

for transactions.

Contact: David Alexander Treasurer’s Office 02 6277 7340

Kevin Lowe Minister for Small Business 02 6277 7450

& Tourism’s Office