4 August 2015

Interview with Alan Jones, 2GB, Sydney


SUBJECTS: Changes to the Competition and Consumer Act


I spoke yesterday to Bruce Billson, and we are not making a feast of all of this, I have to say, but I just wanted to speak to him very briefly again today about what I think is a very serious issue.

Bruce Billson has introduced legislation to change - correct - legislation, to change Section 46 of the Competition and Consumer Act. Now you have heard me on this program, over and over again, talk about predatory pricing. That is a little shop, corner store down there and they are selling apples and vegies and whatever, and Woolworths move around and they employ people.

What price are they charging for their tomatoes? What price are they charging for their lettuce? What price are they charging for their bread? And then Woolworths will charge a lot less until such time as this poor little bugger goes broke.

Predatory pricing; and it runs them out of business. So we said right-o, well why shouldn't here on this program, and I spoke to Bruce Billson, the Small Business Minister, many times, and we said well hang on, why aren't you doing something about it?

Bruce Billson well I am sorry, under their legislation I cannot, because under Section 46 of the Competition Consumer Act, you have got to prove that the purpose of Woolworths' behaviour, or Coles' behaviour - and this applies to petrol, and the independent service stations - the purpose was to run them out of business. He is changing the legislation to effect.

In other words, it does not matter whether the purpose was to eliminate competition, so long as that was the effect, or the likely effect of the use of market power. Who are opposing it? The Labor Party. Who are opposing it? Big businesses - silly woman Catherine Livingston from the Business Council of Australia - oh yes, big business.

Because you see, the one rule of big business is to knock small business out of the ring. So the legislation is being introduced, I thought we would have a quick word. Bruce Billson, Small Business Minister, good morning again.


Good morning to you Alan, and to your listeners.


Thank you very much, I should point out to you and you would expect me to say it, that the petrol price is still about 147 cents a litre on the Pacific Highway. But that is for another day.

Coming to this legislation, you are wanting to change it to remove the notion of purpose from the notion of effect. If the effect is that this predatory behaviour is driving the little bloke out of business, then you are going to ask some questions.


That is right. I mean, we have not introduced the legislation as yet; this is a matter that we are through as a government.

The recommendations from an independent panel that the Government established was to conclude - as we have discussed before, Alan - that Section 46, this misuse of market power provision does not quite live up to its billing, or as I have said, is a hunting dog that won't leave the porch.

You've touched on a couple of points, the requirement to prove purpose, and there is provision in the law to infer purpose, but that is still quite a challenge. But the other part of the current law that is difficult, Alan, is the concept of take advantage.

The courts have basically said if a big business is doing something that a little business might be a position to do, then the law doesn't apply. But you and I and your listeners would know that if a little business on its own in Chatswood is doing something on the corner store, it is hardly going to change the whole competitive nature of the economy.

Whereas if a big business is doing something that is protecting its position, it is fortifying its interest, it is excluding competitors, and therefore harming not only the economy but consumers from getting best value, then that can have a very profound impact, and consequences matter.

So we are saying consequences are important, so is the tactic to try and exclude others …


…The Labor Party are opposing you?


Yeah, I cannot possibly imagine why, other than they have drunk the Kool-Aid that the Business Council of Australia are putting around. I have no issue with the Business Council of Australia representing 100 of the biggest businesses in the economy, running their agenda.

There is nothing wrong with that, they are perfectly entitled to run their own case in the interests of their own members. But what is best for the economy, and for your listeners, and for consumers, and our future prosperity, is to enable efficient businesses, big and small, to have a chance to thrive and prosper in our economy.

I do not know what the Labor Party is about, misunderstood the importance of this work. It is pro-consumer, it is pro-competitiveness, it is pro-efficient businesses, big and small, and I would have thought everybody would be on board for that kind of …


…and who will be responsible under the legislation for mounting the case? Or will we have some competition police?


No, what we will have is; once the Government settles on a position, and there is still some work going through because there is 56 separate recommendations from the Harper panel, ranging from not only the one that we are talking about, how cartels are managed, concerted practice - we talked about that yesterday, Alan, where you see this miraculous crab-walk in some parts of the economy, where prices all seem to go up at the same time.

These sorts of things are part of a broader package. This will empower the ACCC to do its work, as you know we have given the ACCC more resources but they can only use the toolkit that the Parliament gives them. My thesis is the toolkit's deficient and it's time to bring it up to date to deal with the modern economy.


Good on you. Well when you get to that point we will talk again. I thank you for your time.


Thanks Alan.


That was the Small Business Minister Bruce Billson.