16 March 2016
Transcript - #2016029, 2016

In the role of: Minister for Small Business and Assistant Treasurer [21 September 2015 - 18 July 2016]

Joint press conference, Parliament House, Canberra

Joint press conference with
The Hon Malcolm Turnbull MP
Prime Minister
and
The Hon Scott Morrison MP
Treasurer

PRIME MINISTER:

Well good day to you all. Now as you know our future prosperity depends on innovation, competition, productivity. That's how Australia is able to enjoy and seize the great opportunities of the 21st century.

Now right at the heart of innovation is competition. I mean, they're linked, competitive firms, the more competitive firms are the most innovative.

And as you know we've been looking very closely at the provisions of the Consumer and Competition Act, particularly Section 46 that relate to the misuse of market power.

And last night the Cabinet has agreed that we will move to amend Section 46 in line with the recommendations of the Harper Review.

What this will do is ensure that our competition law works better to enable competition, to enable smaller businesses, emerging businesses, to be better able to compete because we know that while larger firms are often very innovative and often very competitive, they are more innovative if the hot breath of competition is coming down their neck.

So we want to have a competitive Australia. We want an Australia where every business, small or large, believes that the competition laws are protecting them and above all protecting competition.

The key change and I'll just note this, the key changes are that we would have in a new Section 46, it would provide, Section 46 (1) "a corporation that has substantial degree of power in a market shall not engage in conduct if the conduct has the purpose or would have or be likely to have the effect, the effects test, of substantially lessening competition in that or any other market".

So the object of the Section is very different, or subtly different from the previous one, from the existing one because it seeks to protect competition and when you protect the competitive process, when you protect competition, you're not protecting one firm or another, you're protecting consumers overall. You're protecting the whole competitive process.

This is a vital economic reform. This is yet again a case of my government taking long overdue reforms out of the too hard basket and getting on with the job. This is reform, a long overdue reform, one that has been canvassed for many years, one that has been in the long grass for many years, like media reform. You might even say, like reform of the Senate voting system.

We've taken them, those issues out of the too hard basket and we're getting on with the job.

And on that note, I'd introduce the Treasurer to expand on these opening remarks.

TREASURER:

Well thank you Prime Minister and it's great to be joined also by the Assistant Treasurer and I want to commend the Assistant Treasurer on the work that she's done in recent times, particularly in working through the consultative process.

I want to thank all of those who've been part of what has been a very long consultative process through the Harper Report process itself and the extended consultations that we have undertaken since that time.

There have been a broad variety of views but it's for governments to make decisions and it's for governments to make decisions that we believe will do one of the most important things, if not the most important thing that we're faced with at the moment and that is to assist and support and enable the transition that is taking place in our economy.

And competition is at the heart of ensuring that our economy continues to succeed.

Last year real growth of 3 per cent, 300,000 jobs. For this to continue we must remain a competitive as well as an agile economy and an innovative economy. That competition does drive innovation.

Now the measures that we've announced today and the Prime Minister's gone through make some important changes but what it also does is it restores confidence in one of the key levers that exist institutionally to drive the competitive process.

This is about supporting the competitive process. The changes remove the provisions that talk about disadvantaging a competitor and talks about substantially lessening competition.

It's about competition. It's not about whether one is taking the view of larger businesses or smaller businesses or medium-sized businesses. It's about taking the view that competition benefits the consumer and that's what is at the heart of the changes that we have announced today.

These changes also bring us into line with international practice more fully in relation to these sorts of issues and that I think is an important change as well to bring us in step with those practices that are followed in other jurisdictions.

It's not the first time competition laws have been changed. It's not the first time that prior to competition laws being changed that there were all sorts of views about what the impacts of those might be.

And in all of these cases, the competition reforms that have been part of our evolving economy over decades have always meant better news for the consumer and have always spurred on the competition and the innovation and the growth that we seek.

So once again just to make the point about the three key changes, the first one is the removal of the take advantage position.

The second one is to introduce the substantially lessening competition test, which is consistent with the other provisions that elsewhere sit in the Act.

And the third one is to introduce the effects test.

In addition to that, there are the mandatory factors which would need to be taken into account by the courts to consider these matters that give further instruction to the courts about what the intent of these provisions are, which was recommended by Professor Harper in his final report.

So it's a clear decision. It's now for it to be implemented and to let competition run and the big benefit of competition will always go to the consumer and to jobs and to growth.

PRIME MINISTER:

Thank you, hang on. Kelly O'Dwyer.

MINISTER O'DWYER:

I might just say a couple of words as the Minister for Small Business and Assistant Treasurer.

Having an effective misuse of market power provision within the competition laws is absolutely critical to Australia's small business community. The more than 2 million small businesses that employ more than 4.7 million Australians and contribute around about $340 billion each and every year to our national economy.

The changes that have been announced today in response to the Harper recommendations are unashamedly about pro-competition.

And in being pro-competition, they're pro-business, they're giving all business the opportunity to have a go and that's what is at the heart of these changes. Giving all business the chance to have a go in a competitive environment.

We know, as a government, that small business is absolutely critical to the nation's economy, it is critical to our nation's growth and it's critical to job creation. So allowing small business the opportunity to grow, to innovate, to back themselves, to invest in their business.

This is the latest example of what the Government has done to support small business off the back of changes that were announced in last year's Budget.

The $5.5 billion jobs and growth package, giving a 1.5 per cent company tax cut to small business.

A discount, a 5 per cent discount for unincorporated entities.

A $20,000 instant asset write-off for eligible assets up to the value of $20,000 from you know the day of the Budget right through until 30 June 2017.

And most recently with the announcement made last year in the National Innovation and Science Agenda in expanding, expanding the opportunities for small and medium enterprises to gain access to finance through innovative platforms, like the crowdsource and equity funding platform that has been brought into the Parliament now, that's cleared the House and that's now in the Senate.

This is a Government that backs small business. This is a government that backs competition and this is a change that is unashamedly pro-competition.

JOURNALIST:

This is very similar to the proposal, if not the same, that Bruce Billson took to the Cabinet last year. You argued against that, can you ask us..

PRIME MINISTER:

I've always had an, speaking of my own position, as is quite appropriate, I've always taken a thoroughly open mind to this issue.

I've had quite a lot of experience with competition in a practical sense both, particularly with emerging businesses competing with larger businesses, so I'm not a theorist in this area but I've approached this issue of law reform in a very open-minded way as indeed has the Cabinet.

And it was a, as Scott and Kelly and indeed as Bruce Billson did before them, conducted a very thorough consultation and we had a very good and informed discussion in the Cabinet.

We run a traditional Cabinet government and it was very valuable and this is the decision we've come to.

JOURNALIST:

Last time it was discussed in Cabinet it was put by some of the lawyers in Cabinet that it would produce a lawyer's picnic.

Have the same arguments been presented this time around and what's convinced you that that still ain't the case?

PRIME MINISTER:

Well my Cabinet is, well you may speculate about what is said in our Cabinet but you won't get the same degree of transparency if you like as to Cabinet discussions, they are confidential.

Let me say that we do have lots of lawyers in the Cabinet and all I can tell you without breaching Cabinet secrecy is that the discussion was extreme erudite and I was very proud to be the leader of such a fine and thoughtful and well-schooled group of men and women.

JOURNALIST:

The concerns amongst small business is the cost of legal action. Is anything in this package helping them out in that regard particularly when it comes to costs in legal cases and so on?

MINISTER O'DWYER:

Well perhaps I might return to the other provisions within the Harper recommendations, provisions which are also unashamedly pro-competition. The Government has already accepted a number of the other recommendations within Harper that will directly benefit small business particularly in relation to access to remedies. The Government is supporting the ACCC to take steps to improve its communication with small business, to actively connect small business with alternative dispute resolution processes. We want to keep small business away from the court system. That's why the Government announced the Small Business and Family Enterprise Ombudsman. Kate Carnell took up her position on Friday of this week. Kate Carnell will play a very, very a key role in making sure that small business can be kept out of the court system and can instead go through the Family Enterprise and Small Business Ombudsman to get dispute resolution relief. The Small and Family Business Ombudsman will also have the power to conduct various inquiries as well so there are a number of measures that can give confidence to small business that they will be able to have the full impact of the law felt and, in changing the law as we have done today, the ACCC will obviously also be able to take a number of key cases in relation to Section 46.

JOURNALIST:

When will this legislation come into the Parliament - before or after the July election?

MINISTER O'DWYER:

That's a bit loaded.

PRIME MINISTER:

[Laughs] That's a bit loaded. There is actually quite an elaborate process for amendments to the Consumer and Competition Act. Would you like to address that?

TREASURER:

It will go through the normal draft legislative process. Which will be an exposure draft, there'll be the normal consultation that follows that and that will then, you know, find its way into the House in the normal manner.

PRIME MINISTER:

There is a formal process of consultation with the States and Territories on changes - I know you're all terribly keen to find out when the election is going to be, but you have to suppress your curiosity while we concentrate on competition law for a moment but there is a, because of the nature of the Act and its history, there is a process of consultation with, as I said, with the States and Territories and of generally, naturally, as there always is, with the community.

JOURNALIST:

Treasurer, companies often don't know what the effect of their actions will be in a competitive market, so one of the criticisms of the Harper recommendation is that it would actually chill competition because companies won't do things out of fear that they might wind in up to their necks in trouble in the courts. What's your response to that criticism?

TREASURER:

One of the recommendations of the Harper Review was there would be an ability for those companies to seek authorisation from the ACCC in relation to contact that may substantially lessen competition. They'd be using the typical net public benefit test around that. So there would be the opportunity for them to have guidance and for them to get those levels of clearance if they have those concerns.

MINISTER O'DWYER:

But also can I just make this point, there is absolutely nothing remarkable about competition laws focusing on anti-competitive conduct. There are a number of provisions already that exist within the competition law; Section 45, Section 47, Section 50, that all have a substantial lessening of competition test.

JOURNALIST:

Prime Minister Are you saying your position hasn't evolved or changed on these matters since the discussion in the Abbott Cabinet because it was fairly widely understood at that time you were at least sceptical about the Harper recommendation on the effects test?

PRIME MINISTER:

I have always been open-minded about this. Look I can tell you as I said, I have had quite a bit of experience in my business life with competition, both working for or leading emerging companies that are dealing with big monopolies and, indeed, working with big companies often in the sector in which many of you work, some of your employers I have worked for in different times in the past in my youth. So I'm not unfamiliar with the practicalities of it, and the way the market operates but as to this, I'm not a, I have never held myself out as an expert in competition law so I've approached this with a very open mind. I do want to commend the Treasurer and Assistant Treasurer with the way they've handled this and the very good, open consultation we've had. This has been a good model of the style of Cabinet Government that is to be found in my Government, in the Government I lead, where we go through issues carefully, we consult widely, we have a good discussion and then we make a decision and we don't put things - important decisions into the too hard basket. As you know we have been taking a lot of things out of the too hard basket lately, important issues of reform on which for which decisions were called for but no decisions had been taken for quite a long time.

JOURNALIST:

I know you are saying we should suppress our curiosity - good luck with that - but I think Australian voters might be a bit confused at the moment. They are hearing there is going to be a double dissolution, there is not going to be a double dissolution, there's going to be an early budget, there's not going to be an early budget, there are going to be tax cuts, there won't be tax cuts. What's going on?

PRIME MINISTER:

Well the first thing Mark as you know, there is always speculation about what will be in the budget. It is an annual fever. The budget speculation starts about this time of year and comes to an end when the Budget is delivered. So that's an annual event. There is a triennial event which is speculation about the election date. Again that follows a familiar pattern. All I can say to you that this is election speculation, budget speculation, these are traditional parts of our political process and they will all be resolved, in one case, when the Budget is delivered, in the other case, when the election is called.

JOURNALIST:

On competition are you concerned about Labor Government giving the power of veto to unions on tenders, particularly the CFMEU?

PRIME MINISTER:

We certainly are. Can I just say to you that the way in which Labor is in denial about the conduct of the CFMEU and the problems in the construction sector, the lawlessness in the construction sector, this is a profound problem for Labor - for Mr Shorten and his team. This is not a contentious issue. Last night we saw on television Mr Shorten defending the CFMEU, in denial of all of the breaches of law, the catalogue of court cases.

Look, you didn't need the Heydon Royal Commission to remind us of how deep those problems of lawlessness in the construction sector are but just in case people had overlooked the reality, there it was, laid out - facts. These were not the Commissioner's opinions as he said, these were based on facts generally admissions or documented facts. They are there. They are there to be found in the courts. Now there is a way forward, of course. In fact we know what works.

The Australian Building and Construction Commission worked. Since it was removed by the Labor Party, on the direction of the unions, disputation has rapidly increased. Lawlessness has increased. Again, all set out in the Royal Commission. Mr Shorten may think he can turn a blind eye to lawlessness in the construction sector but the Australian people won't. Certainly the Government won't and you know we must not forget the construction sector employs over a million people. It is a vital part of our economy. It's efficiency, which is tied up with it being operated in accordance with law, with people being able to contract and deal and enter into agreements and undertake projects free of intimidation, confident that the law is being complied with, that is a fundamental pillar of our economy.

It is a vitally important part of our economy. Regrettably Mr Shorten is in complete denial about it. I don't suspect his attitude will change. But if he were serious about doing something about it and if he were serious about the interests of the unions' members as opposed to officials, then he would support the Registered Organisations bill and support the bill to restore the Australian Building and Construction Commission. Because, you know, I just close on this observation - when there are problems, inadequacies in the corporate sector, when companies collapse, there is fraud or negligence, typically regulations will be improved, legal provisions will be re-drafted and that serves to build confidence back with investors.

The corporate sector welcomes that. Here you have a massive loss of confidence in the union movement. Talked about the CFMEU, Kathy Jackson, Craig Thomson, it is a long list, it is a melancholy chronicle. What would build confidence in the union? What would make it more likely that people would be confident in joining a union? What would make it more likely that union memberships would stop their continued decline would be greater confidence in the way the unions were managed, in the way the members' funds were administered, in the way that the unions represented their members. Confidence is absolutely critical there. Our legislation, which has been held up in the Senate as you know, would help to restore that confidence. It is in the interests of all Australians, certainly in the interests of the members of unions. Mr Shorten, however, sees his interest in protecting the officials that put him in his job. On that note, thank you very much.