BUDGET TINKERS WITH COMPETITION PENALTIES, WON’T GO ALL THE WAY

TIM HAMMOND MP
SHADOW MINISTER FOR CONSUMER AFFAIRS
SHADOW MINISTER ASSISTING FOR RESOURCES
FEDERAL MEMBER FOR PERTH 

ANDREW LEIGH MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR COMPETITION AND PRODUCTIVITY
SHADOW MINISTER FOR CHARITIES AND NOT-FOR-PROFITS
SHADOW MINISTER FOR TRADE IN SERVICES
MEMBER FOR FENNER

BUDGET TINKERS WITH COMPETITION PENALTIES, WON’T GO ALL THE WAY

Labor welcomes the Government’s adoption of Labor’s plan to increase the penalties for anti-consumer conduct under the Australian Consumer Law from $1.1 million to $10 million. Labor took this policy to the 2016 election. On dozens of occasions since, we have invited the Coalition to adopt it. Finally, they have done so.

But the Turnbull Government has failed to increase penalties for anti-competitive conduct and to double the Australian Competition and Consumer Commission’s litigation budget so that it can take more enforcement action.

Labor’s plan allows courts to raise maximum penalties to 30 per cent of the annual sales of the relevant product or service, multiplied by the number of years the infringement took place, capped at 10 per cent of annual turnover or $10 million. This guides courts to a higher base penalty, acting both as a deterrent and punishment to harmful anti-competitive conduct.

Labor’s reforms also includes doubling the Australian Competition and Consumer Commission’s litigation budget so the watchdog can bring more cases against shonks and cartels.

Last week the Chairman of the consumer watchdog, Rod Sims, pointed out that the penalties imposed in Australia for anti-competitive conduct are “stunningly lower than those in other comparable jurisdictions”.

Mr Sims noted that “an important difference between our approach and that of other overseas jurisdictions is that our Courts do not start the exercise of determining penalties by calculating a base figure calculated by reference to turnover of the firm”. “If the base penalty approach was applied in Australia,” he said, “firms with substantially larger turnovers would generally end up with much higher penalties”.

Allegations of anti-competitive conduct have recently been made in several industries, including petrol, laundry detergent and banking.

Why won’t the Turnbull Government act to protect Australians against anti-competitive conduct? Why are they standing up for big firms rather than for Australian families?

WEDNESDAY, 10 MAY 2017