Restrictive Trade Practices Act 1971 (Cth)

Long title

An Act to preserve Competition in Trade and Commerce to the extent required by the Public Interest.

Hansard

Introduced in the Senate

Second reading in the Senate on 14 October 1971 by then Attorney General, Senator Greenwood:

SENATE HANSARD from page 1378, Thursday 14 October 1971

I move:

That the Bill be now read a second time.

This Bill, which is for an Act to replace the Trade Practices Act 1965-1971, was foreshadowed in a statement I made to the Senate on 7th September 1971 following the decision of the High Court of Australia in the case of Strickland v. Rocla Concrete Pipes Limited and others, commonly referred to as the concrete pipes case. The purpose of the Bill is to overcome the constitutional defects that were found to exist in the Trade Practices Act in that case. In my statement of 7th September I pointed out that the High Court had held that, due to the way in which the Trade Practices Act sought to use all the constitutional powers believed to be available to sustain the legislation, it was open to legal objection. I also pointed out that the High Court had made it clear that the corporations power in section 51(xx) of the Constitution could be used to support legislation dealing with the restrictive trade practices of corporations and that the Government had accordingly decided that the immediate remedial legislation should be founded on that power alone.

Although certain provisions of the Trade Practices Act dealing with resale price maintenance were subsequently declared to be valid by the Commonwealth Industrial Court there are substantial parts of the Act which have been rendered wholly inoperative by the High Court's decision. Proceedings which were on foot with respect to pharmaceutical wholesalers have not been able to be continued. The legislative requirements and powers of the Commissioner of Trade Practices with respect to examinable agreements and examinable practices and the provisions relating to collusive bidding and collusive tendering have not been able to be enforced or excercised. It is clear from the High Court's decision that there are large gaps in the effective operation of the Act. In these circumstances the present Bill has been introduced as a matter of immediate need in order to remedy the defects in the legislation. It is an interim or holding measure, pending the introduction at the earliest possible opportunity of strengthening legislation. I shall have more to say about this strengthening legislation later.

The task of remedying the defects in the Trade Practices Act by way of amendment of the existing provisions would have been a complex and unsatisfactory one. The Bill accordingly provides for the repeal of the existing Act and for re-enactment of provisions that are similar except that, apart from the shipping provisions, they are founded on the corporations powers alone. The shipping provisions remain founded on the overseas and interstate trade and commerce power but the other provisions of the Bill do not draw upon that power or upon other powers such as the power with respect to the Commonwealth's Territories. This has been done in order to avoid problems of the kind disclosed by the High Court and, by facilitating the drafting, to avoid undersirable delay in the introduction of the Bill. The relationship of the Bill to the corporations power is provided for in a number of the operative provisions of the Bill such as those defining the agreements and practices that it covers. As I indicated in my statement on 7th September 1971, the Government is satisfied that legislation thus based entirely on the corporations power will cover the vast majority of significant restrictive practices that could be covered by Commonwealth legislation if reliance were placed on all available powers.

The Bill does not make provision for complementary State legislation, nor does it draw upon the reference of power from Tasmania. The task of including provisions with respect to these matters would have been a complex and time-consuming one and it would have delayed the introduction of the Bill. Such provisions have accordingly been deferred for consideration in connection wilh the subsequent strengthening legislation.

I turn now to the provisions of the Bill. Apart from minor drafting changes, and the inclusion of some transitional provisions, the provisions of the Bill differ from the existing Act only to the extent that is necessary to remedy the constitutional defects. I shall refer to some of the more important of the differences. Further details are set out in the explanatory memorandum I have circulated to honourable senators.

The examinable agreements and the practices covered by the Bill have been redefined so as to relate them in each case to the corporations power. 1 shall not take the time of the Senate to explain the details of these changes, which are indicated in the explanatory memorandum. The general approach, however, is to confine examinable agreements to agreements under which restrictions are accepted by corporations and to confine the practices to those practices which are either engaged in by or affect corporations. Similarly the provisions relating to the offences of collusive tendering and collusive bidding have been confined so that they apply only to tendering and bidding by corporations.

Part XIV contains a number of transitional provisions, which will give continuing effect to certain steps that have been taken under the existing Trade Practices Act. It would be pointless to require that these steps be taken again under the new provisions. It is provided, for example, that the persons presently holding offices under the Trade Practices Act should continue in the corresponding offices under the new provisions. This will apply to the members of the Trade Practices Tribunal, the Com missioner of Trade Practices, the Registrar of the Tribunal and the Clerk of Shipping Agreements.

As a great number of agreements registered under the existing Act will be subject to registration under the new provisions, it is provided that the parties to these agreements need not again furnish particulars that they have furnished for the purposes of the existing Act. The agreements in question are deemed to have been registered under the new provisions, and they are to be incorporated with and to form part of the Register kept under the new provisions.

The Commissioner of Trade Practices has of course received from persons and is currently holding much information which it is plainly desirable that he should be able to retain. The Bill accordingly authorises the Commissioner to retain documents he has obtained from other persons so long as the documents can be related to a relevant head of constitutional power. The Bil! also ensures that the new secrecy provisions apply to documents and information that the Commissioner has obtained under the existing Trade Practices Act. This means that, the Commissioner and his staff will be forbidden from disclosing documents and information of this kind except in the narrow circumstances in which the secrecy provisions permit disclosure.

Another group of transitional provisions deal with the various proceedings that have been conducted or are presently on foot in the Trade Practices Tribunal. The first of these proceedings was between the Commissioner of Trade Practices and Tasmania Breweries Pty Limited. These proceedings were ended when the company gave to the Tribunal an undertaking to cease engaging in certain conduct. In the second proceedings - relating to frozen vegetables - the Tribunal recently determined, after a lengthy hearing, that certain agreements were contrary to the public interest, and it made a consequential restraining order. The Bill will ensure that the undertaking, the determination and the order have continuing effect.

Two other proceedings are at present pending in the Trade Practices Tribunal. The first of these was instituted by the Commissioner of Trade Practices in May this year against certain wholesalers of pharmaceutical products. It concerns an alleged examinable agreement. The other proceedings concern an application that has been made by a publishing company for the exemption of books under the resale price maintenance provisions. In both cases preliminary conferences have been held before the Tribunal and steps have been taken towards a full hearing. In order to avoid the need for these cases to be instituted anew, and for the preliminary steps to be taken again, the Bill provides for these cases to be regarded as if they had been instituted under the new provisions.

The Bill contains somewhat similar provisions in relation to overseas cargo shipping. .Under the existing Act notices have been served by the Minister for Trade and Industry on a number of shipowners requiring them to appoint agents resident in Australia, and to have an address for service in Australia. The Bill provides for these notices and the agents appointed and addresses notified to the Minister in response to them to be deemed to have been served, appointed and notified under the new provisions. There is a similar provision with respect to notices served by the Minister on shipowners requiring them to undertake to negotiate with shipper bodies in certain circumstances, and to undertakings given to the Minister in response to these notices.

Conference agreements that have been furnished for filing under the existing Act will not need to be filed again. The secrecy provisions governing the Clerk of Shipping Agreements and his staff will apply to documents and information obtained by them under the existing Act. The agreements and practices of certain primary produce marketing bodies are exempt from the operation of> the present Act by virtue of regulations made under section 106. These exemptions are continued by the present Bill but they may be varied by further regulations.

Mr Deputy President, as I have made clear, the present Bill is a holding measure to deal as a matter of urgency with the immediate effects of the High Court's decision in the concrete pipes case. Apart from changes made necessary by that decision the provisions of the Bill are substantially the same as those of the existing Act. At this stage the Bill does not provide for the extension or strengthening of the existing provisions. The Government has, however, made it clear that it places great importance on the need for effective restrictive trade practices legislation to help bring about a more competitive atmosphere in the economy. I remind honourable senators that in January of this year the former Prime Minister expressed the view of the Government that increased internal competition would help the economy. In April the Government introduced legislation to outlaw resale price maintenance. On 17th August the Prime Minister informed the Parliament that the Government was reviewing the Trade Practices Act in order to strengthen it and to encourage much more vigorous competition.

In my statement on 7th September 1971 I said that the Government was committed to strengthening the legislation and that it proposed to follow the present holding Bill with a further Bill the purpose of which will be to strengthen the legislation. 1 referred to the considerable amount of work and attention that was being given to this objective and, in particular, to the consideration being given to the matter by an interdepartmental committee. I take the opportunity now to inform honourable senators that the Government has in the last few days received a report from that committee. The report covers a number of important and complex matters which deserve close consideration. The Government is proceeding to give these matters full and proper consideration. Honourable senators may be assured that the Government will proceed with this task as expeditiously as possible. The preparation of a Bill on such a complex and important matter may take some time, but the Government proposes that, as soon as it is in a position to do so, it will inform the Parliament of the nature of the changes that it has decided to make to the legislation. The immediate and pressing need, however, is to restore to the statute book restrictive trade practices legislation that is constitutionally sound. That is the purpose of this Bill. I commend the Bill to the Senate.

Debate (on motion by Senator Poke) adjourned.

Second reading took place in the House on 1 December 1971, having originated in the Senate