...As the House is aware, I have been engaged for some time in considering the need for legislation to control monopoly and restrictive practices in the business community of Australia and in devising a scheme of legislation which would protect free enterprise against such of these practices as were harmful to it. As part of this undertaking, I have been in consultation with the Attorneys-General of the States in an endeavour to induce their concurrence in that scheme of legislation and their willingness to propose to their governments legislation to complement that of the Commonwealth, so as to make the desired control effective over the whole range of Australian business activity.
...The Government, having been furnished with the results of my efforts in this connection, has concluded, and I think few, if any, will deny, that there are practices current in the community which by reason of their restrictive nature are harmful to the public interest - that interest being in the maintenance of free enterprise under which citizens are at liberty to participate in the production and distribution of the nation's wealth, thus ensuring competitive conditions, which tend to initiative, resourcefulness, productive efficiency, high output and fair and reasonable prices to the consumer.
Accordingly, the Government has decided that legislation should be introduced to enable such harmful practices to be prevented.
...Before outlining the scheme of legislation which the Government has in contemplation, I ought to indicate broadly the philosophy which underlies it. In opening the second session of the twenty-third Parliament, the Governor-General indicated that the Government desired to protect and strengthen free enterprise against tendencies to monopoly and restrictive practices in commerce and industry. I have already referred to the place competition has in the maintenance of free enterprise. The Government believes that practices which reduce competition may endanger those benefits which we properly expect and mostly enjoy from a free-enterprise society. But the government is also conscious of the fact that the lessening of competition may, in some aspects of the economy, be unavoidable, and, indeed, may be not only consistent with, but a proper ingredient of, a truly free enterprise system. This is more likely to be so in such a state of growth as we are experiencing and particularly when we are gearing ourselves more and more for the export of secondary goods. In short, the Government does not subscribe to the view that there are no circumstances in which public interest car justify a reduction in competition, but on the contrary believes that there may well be some practices restrictive in nature, which are in the public interest.
Consistently with these views, it is scarcely possible to specify legislatively the precise practices which are unacceptable and directly and unconditionally k proscribe them. All that the legislation can do is to define certain classes of practices that may be unacceptable and to provide for their examination in the light of a criterion or test designed to determine whether, in the circumstances of a particular case, t practice is acceptable or unacceptable and to be prevented. The criterion or test would be expressed in as clear language as the subject will permit, and would be applied to particular practices by an independent umpire with fairness and an overall knowledge of business and of the economy.
The criterion or test which accords with the Government's philosophy and its understanding of the needs of the economy as a whole is that a practice which in its operation substantially restricts competition, either in a particular area or areas of business activity or generally, and which cannot be shown to be justified as either conferring a public benefit or as having no public detriment, is harmful Expressed in legislative form, the justification may b!' said to be that the practice is not contrary to the public k interest. No doubt expressions such as "against the public interest" or "contrary to the public interest", lack complete precision and inevitably leave some room for policy-making in the individual or body which has to apply them to particular facts. But they are words which have much tradition behind them, and I think they are as precisely expressive of what is presently in mind as any words which could be found.
...I ought, also, to say in passing that many seem to see in the mere size of a business undertaking an Occasion for censure and a challenge to dismemberment Indeed, one suspects that behind the c)original American legislation was the fear that industry} if it obtained sufficient dimension, would be a threat to government and likely to overawe and control the legislature. Whilst any such tendency cannot be ignored, nor its possibility excluded from mind, the Government has not to any extent based its approach to the proposed legislation upon any such view. The emphasis is placed by the Government on what an organisation or business undertaking does in harming free enterprise, rather than upon its dimension. But, of course, the dimension of a business undertaking does give scope for action which is not available to undertakings or organisations of lesser size. Consequently, the Government has not confined itself to the British approach to the problem of restrictive practices. The British legislation places the major emphasis on combination, on agreement between two or more. The scheme I will outline covers bilateral and multilateral arrangements for restrictive action, which are probably the most common source of restrictive practices, but the scheme goes further and covers unilateral action of a restrictive kind taken by the individual. In this way, harmful actions by business undertakings or organisations which are large and powerful, or enjoy positions of advantage in the market, will be prevented.
...The primary prerequisite of such a scheme is machinery that can be effectively used to halt practices which deprive, or tend to deprive, the community of the benefits of free enterprise and the individual trader of business opportunities that ought fairly to be open to him. Secondly, there must be certainty for businessmen as to what they may or may not do. This, to my mind, is important in relation to any economy, but it is imperative in our case. We are in a stage of development which calls for courage and initiative on the part of our businessmen. Our growth and the prosperity of all of us cannot suffer and suffer grievously, from uncertainty and resultant timidity on their part. Thirdly, there should be a minimum use of the criminal law. Whilst I have said that the ultimate touchstone of invalidity of a practice is its antipathy to the public interest, I do not think every breach of legislation in this field should brand the businessman a criminal. No doubt there are some events in which there must be a criminal penalty for breach of the law, but this should not be the general consequence.
Fourthly, the application of the criterion or test by which the separation of the harmful from the justifiable practice is made should be by a tribunal which has a minimum of legalism, both in its attitude and approach and in its procedures, and a maximum of business an( economic knowledge and understanding. But its independence both of business and of government should be complete. Fifthly, there should be finality in the application of the criterion to particular cases and therefore a minimum of opportunity for review of, and appeal from, the decision of the tribunal which applies the criterion. Sixthly, any scheme must take account of two particular circumstances. One of these is our limited resources of personnel for the investigation at large of business practices: the other is the undesirability of business being deflected from its task by the need to accommodate itself to, or to avoid constant suspicion, investigation and inquiry. A law which is beyond our capacity to police and enforce invites disregard and tends to bring the law and its administration into disrepute. There should be no exposure of business to needless harassment and vexatious action, whether by officials or by members of the public, particularly by those who may have mixed(1 motives for their conduct.
...Discussion or representation, which I hope my statement will excite, will no doubt have much influence upon the final form that expression takes. But the goal of the Government will remain, namely, to enact legislation to safeguard our system of free enterprise by maintaining its competitive basis, whilst ensuring that our economy as a whole expands and develops for the good of all Australians.
Speech delivered by Mr. Freeth 6 December 1962 in Mr Barwick's absence. Commonwealth Parliamentary Debate - House of Representatives
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