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House of Representatives HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON INDUSTRY, SCIENCE AND TECHNOLOGY Reference: Fair trading CANBERRA Monday, 4 November 1996 OFFICIAL HANSARD REPORT CANBERRA HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON INDUSTRY, SCIENCE AND TECHNOLOGY Members: Mr Richard Evans (Chair) Mrs Bailey Mrs Johnston Mr Baldwin Mr Allan Morris Mr Beddall Mr Nugent Mr Martyn Evans Mr O’Connor Mr Forrest Mr Reid Ms Gambaro Mr Zammit Mr Jenkins The committee will inquire into business conduct issues arising out of commercial dealings between firms, including claims by small business organisations that some firms are vulnerable to and are not adequately protected against ‘harsh or oppressive’ conduct in their dealings with larger firms. 1. The committee is asked to investigate and report on: the major business conduct issues arising out of commercial dealings between firms including, but not limited to, franchising and retail tenancy; the economic and social implications of the major business conduct issues particularly whether certain commercial practices might lead to sub-optimal economic outcomes. 2. The committee is asked to examine whether the impact of the business conduct issues it identifies is sufficient to justify Government action taking into account, but not limited to : existing State and Commonwealth legislative protections; existing common law protections; overseas developments in the regulation of business conduct. 3. The committee is asked to examine options and make recommendations on strategies to address business conduct issues arising out of dealings between firms in commercial relationships, taking into account, but not limited to: the potential application of voluntary codes of conduct, industry self-regulation and dispute resolution mechanisms, including alternatives to legislation and court-based remedies, and mechanisms to support these measures; legislative remedies. 4. In developing options, the committee will seek to ensure certainty in the market place, contract dealings and other commercial transactions, minimise the regulatory burden on business, and keep litigation and costs to a minimum. WITNESSES ASHER, Mr Allan, Deputy Chairman, Australian Competition and Consumer Commission, Chan Street, Belconnen, Australian Capital Territory 2616 ......................... 375 BARNETT, Mr Guy, Member, Micro Business Consultative Group, c/- Secretariat, Office of Small Business, Department of Industry, Science and Technology, Canberra, Australian Capital Territory 2600 .................................................... 300 BRIGGS, Mr Alan, Chairman, Australian Council of Shopping Centres, and Member, National Council, Property Council of Australia, Level 26, Australia Square, 264 George Street, Sydney, New South Wales 2000 ............................................. 345 DEAKIN, Mr Geoffrey, Manager, Retail Policy, Property Council of Australia, Level 26, Australia Square, 264 George Street, Sydney, New South Wales 2000 ................. 345 DEE, Mr William Gerard, Director, Liaison, Australian Competition and Consumer Commission, PO Box 19, Belconnen, Australian Capital Territory 2616 ............... 375 DELANEY, Mr Michael, Executive Director, Motor Trades Association of Australia, Level 3, 39 Brisbane Avenue, Barton, Australian Capital Territory 2600 ........................ 328 FAIRBAIRN, Mr Bob, Director, Motor Trades Association of Australia, Level 3, 39 Brisbane Avenue, Barton, Australian Capital Territory 2600 ............................... 328 GEORGE, Ms Soula, Member, Micro Business Consultative Group, c/- Secretariat, Office of Small Business, Department of Industry, Science and Technology, Canberra, Australian Capital Territory 2600 .................................................... 300 HENDERSON, Mr Grahame Beresford, NSW and National Chairman, Shell National Action Group, 2 Brunker Road, Broadmeadow, New South Wales 2292 ..................... 317 HOWARD, Mr Bruce Anthony, ACT Chairman and National Vice-Chairman, Shell National Action Group, PO Box 922, Dickson, Australian Capital Territory 2602 ............... 317 MACPHERSON, Mr Ewen Duncan, Manager, Government and Public Policy, Australian Institute of Petroleum, Level 23, 500 Collins Street, Melbourne, Victoria 3000 ........... 361 MARTIN, Ms Louise, Member, Property Council of Australia, Level 26, Australia Square, 264 George Street, Sydney, New South Wales 2000 .................................. 345 McDERMID, Mr Dale, Member, Australian Council of Shopping Centres, and Member, Education Committee, Property Council of Australia, Level 26, Australia Square, 264 George Street, Sydney, New South Wales 2000 .................................. 345 RICKUS, Mr John, Past President, Motor Trades Association of Australia, Level 3, 39 Brisbane Avenue, Barton, Australian Capital Territory 2600 .............................. 328 STARKEY, Mr James Christopher, Executive Director, Australian Institute of Petroleum Ltd, 500 Collins Street, Melbourne, Victoria 3000 .................................... 361 WATTS, Mr Gerald Allan, General Manager, Australian Petroleum Agents and Distributors Association, 15th Floor, 499 St Kilda Road, Melbourne, Victoria 3004 ................. 390 ZUMBO, Mr Frank, Consultant, Australian Petroleum Agents and Distributors Association, 15th floor, 499 St Kilda Road, Melbourne, Victoria 3004 ................................... 390 HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON INDUSTRY, SCIENCE AND TECHNOLOGY Fair trading CANBERRA Monday, 4 November 1996 Present Mr Richard Evans (Chair) Mrs Bailey Ms Gambaro Mr Beddall Mr Jenkins Mr Martyn Evans Mrs Johnston Mr Forrest Mr Zammit The committee met at 9.47 a.m. Mr Richard Evans took the chair. 297 IST 298 REPS—Standing Monday, 4 November 1996 CHAIR—I declare open this public hearing of the inquiry into fair trading. In line with the terms of reference for this inquiry, the committee has investigated claims by small businesses that some firms are not adequately protected against harsh or oppressive conduct in their dealings with larger firms at hearings in Melbourne, Sydney and Brisbane. Today the committee will continue its investigations by canvassing the views of a number of peak bodies here in Canberra. The committee is particularly concerned to determine the extent of the alleged problems and to examine the adequacy of the provisions of the Trade Practices Act and other legislative measures to deal with them. The committee is also seeking views on alternatives to legislative remedies, in particular, voluntary codes of conduct. INDUSTRY, SCIENCE AND TECHNOLOGY Monday, 4 November 1996 REPS—Standing IST 299 [9.48 a.m.] BARNETT, Mr Guy, Member, Micro Business Consultative Group, c/- Secretariat, Office of Small Business, Department of Industry, Science and Technology, Canberra, Australian Capital Territory 2600 GEORGE, Ms Soula, Member, Micro Business Consultative Group, c/- Secretariat, Office of Small Business, Department of Industry, Science and Technology, Canberra, Australian Capital Territory 2600 CHAIR—I welcome the representatives of the Micro Business Consultative Group. The committee proceedings are recognised as proceedings of the parliament and warrant the same respect that proceedings in the House of Representatives demand. Witnesses are protected by parliamentary privilege in respect of evidence they give before the committee. You will not be asked to take an oath or make an affirmation. You are reminded, however, that false evidence given to a parliamentary committee may be regarded as contempt of parliament. The committee prefers that all evidence be given in public but, should you at any stage wish to give evidence in private, you may ask to do so and the committee will give consideration to your request. The committee has received your written submission and authorised its publication. Would you like to make any additions or alterations to your submission? Ms George—No. CHAIR—Would you like to make an opening statement? Ms George—Certainly. I would like to give you some background information on where I am coming from so that you may assess the value of my evidence here today. I hasten to advise that I am a successful business woman so that what I say here today is not put under the category of sour grapes or my evidence brushed aside because I am put into the category of a loser or of being one of the bottom five per cent of small retailers who are doomed to lose because they have no business acumen, et cetera. That is what has been inferred in the past by Westfield and the like when giving evidence to the parliamentary select committee in South Australia. That committee was set up to look into retail shop lease issues such as harsh and unreasonable rental terms, rights and obligations of parties at the end of a lease, rights and obligations of parties on relocations and refits and unconscionable conduct. I have been in small business, mainly in the retailing of food, which is the fastest growing sector in the industry, for approximately 20 years. Seventeen of these years have been in a major regional shopping centre. Consequently, I have witnessed first-hand the changes within the industry. I have also seen the deterioration of business relations between landlords, managers and their tenants to such an extent that the malpractice has led to our industry being in crisis. I have also successfully set up a fashion business. I travelled to China and Hong Kong to set up my manufacturing contacts for my new enterprise. I operated this business from home obviously to
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