MATTERS OF PUBLIC IMPORTANCE
Dr LEIGH (Fenner—Assistant Minister for Productivity, Competition, Charities and Treasury) (15:24): Nine years of the former coalition government left Australia with too much market power and too little consumer power. I could not be happier than to be debating the shadow treasurer on this MPI about which side of this House stands up for consumers against the power of oversized corporations.
I will take the House back to what the situation was in 2022. When we came to office, competition and consumer penalties were too low. They were being treated by firms as a cost of doing business.
The maximum dollar penalty was $10 million, a 10th of what that figure is today. When we came to office, the former government had left payday lending reforms on the shelf. They'd accepted recommendations from a review back in 2016 and released exposure draft legislation the next year, but by 2022 they hadn't done a thing on payday lending reforms.
The former government fought the banking royal commission for ages. Throughout 2016 and most of 2017 they were fighting the banking royal commission, and they only agreed to have the banking royal commission when the banks themselves called for it. It was the four major banks that called for a banking royal commission before the then coalition government.
Of course, that banking royal commission found widespread misconduct across banking, insurance and financial advice, making 76 recommendations. Under the former government we saw buy now, pay later explode outside credit regulations. Providers didn't need a credit licence or to comply with responsible banking obligations.
Under the coalition it was buy now, regulate later. They didn't stand up for consumers. Under the former government, when we came to office, unfair contract terms were legal.
Courts could declare them invalid, but there was no offence on a firm that put an unfair contract term in a standard form contract, and that meant small business was getting hurt. Under the former government, they failed to revive national competition policy. They commissioned the Harper review, and in 2015 it called for a revitalisation of national competition policy, but those opposite—big on reviews, small on reform—did nothing to work with the states and territories on competition reform.
Under the former government, they failed to tackle growing market concentration. We know now that market concentration and mark-ups rose steadily during their time in office, with competitive pressures decreasing in sectors like supermarkets, banking, aviation and digital platforms. The coalition failed to tackle the issue of growing market concentration.
While those opposite, particularly those in the National Party, say that they stand up for farmers, they failed to do so in their dealings with the big supermarkets. They put in place a toothless voluntary code of conduct in the food and grocery code, and then they reviewed it, with the member for Maranoa as their agriculture minister, and they decided to keep it—a toothless voluntary code.
And it remained toothless throughout the coalition's time in office, despite repeated calls from the farmers, from growers to get a fair deal in their dealings with the major supermarkets. By the time we came to office, those opposite had rejected merger reform. Rod Sims's major speech in August 2021 called for merger reform, and it took just a matter of hours for then treasurer Frydenberg to rule it out.
The ACCC sounded the alarm; the Liberals pressed the snooze button. They didn't believe that we needed to do merger reform. They didn't believe in the kind of merger reform that would speed up approvals for the low-risk mergers and focus more scrutiny on the high-risk mergers.
And those opposite failed to ban unfair trading practices, including subscription traps. We had a report from the ACCC back in 2019. The ACCC had been warning about subscription traps since at least 2016.
But, despite repeated ACCC advocacy, the coalition left office without doing a thing on unfair trading practices, subscription traps and drip pricing. Since Labor took office in 2022, we have put in place the biggest suite of competition and consumer reforms that Australia has seen. We've overhauled our merger laws—merger reform had been necessary for half a century—getting rid of that largely voluntary system and replacing it with mandatory notification and an ACCC led administrative regime.
That sees greater focus on the areas where the ACCC needs it, and it was supported by business because it allows those low-risk mergers to go through more rapidly. Previously, the ACCC wasn't even seeing three out of four mergers. Now it's seeing the mergers it needs to see and stopping the mergers it needs to stop.
Under us we've revitalised national competition policy, working with states and territories, whether they be Labor run or coalition run, on a new reform agenda, including regulatory reform and measures to strengthen the single national market. That's good for workers that need to work across state borders. It's important for getting planning and zoning reform.
It's vital that the states and territories work together on the kinds of competition reforms that turbocharged productivity in the 1990s and have been foreshadowed to boost household incomes by up to $5,000 a household if we get them right. We're banning non-compete clauses for most workers. From January next year, workers who are below the high-income threshold—currently $190,000—will no longer be able to see non-compete clauses in their employment agreements.
That means workers will have the freedom to move to a better job. Those opposite claim they stand for freedom, but it takes a Labor government to give workers the freedom to take up an offer for a better job as well as to crack down on wage fixing and no-poach agreements. Getting rid of non-compete clauses puts money back in the pockets of workers.
Those workers who are subject to a non-compete clause earn less, are less likely to innovate and are less likely to encourage new firm creation. You need workers to move if you're going to start up a new firm in a full employment economy. Under Labor, we're putting in place supermarket competition reforms.
We not only made the Food and Grocery Code of Conduct mandatory so farmers get a fair deal but also raised the penalties to $100 million for competition and consumer misconduct in the supermarket sector and across the economy. We've banned price gouging, we're strengthening unit pricing and we're tackling shrinkflation. Putting in place that ban on price gouging is something that those opposite didn't have the gumption to do.
It takes a Labor government to make clear with large supermarkets that they can't charge prices that are excessive relative to supply costs plus a reasonable margin. We have overseen the introduction of right to repair in the automotive sector, supporting independent mechanics, and we're now building on the motor vehicle information sharing scheme to make sure we've got independent repairers able to fix agricultural machinery.
It's another reform strongly supported by the National Farmers' Federation but which it takes a Labor government, not a National-Liberal government, to deliver. In the area of consumer protections, we've made unfair contract terms illegal, not simply allowing courts to void them but putting in place substantial penalties for businesses that are using them. We are regulating buy now, pay later as credit, bringing buy-now pay-later providers into the consumer credit framework, including the licensing and the responsible lending requirements.
That massive increase to penalties doesn't just apply to firms that are breaching competition laws but also applies to firms that are doing the wrong thing by consumers. We've banned unfair trading practices, including taking specific action against subscription traps and drip pricing, which will take effect from the middle of next year. It passed in the last sittings of parliament.
We've got a scams protection framework that imposes stronger obligations on banks, telcos and digital platforms. We've created stronger aviation consumer protections, including the new Aviation Consumer Protection Authority. We're strengthening consumer guarantees and product safety, including stronger supplier accountability and reforms dealing with product safety risks such as e-mobility devices.
Only Labor is the party of competition. Only Labor is the party of consumers. Only Labor will stand up for the kinds of reforms that boost dynamism, put downward pressure on prices and help Australian households.