Unequal market power and increased market concentration have contributed to increasing income and wealth inequality in Australia. Competition policy reform is a cost effective approach to addressing inequality and preventing unconscionable conduct.
There have been a number of deplorable contraventions of consumer rights targeting the most vulnerable members of our community in recent years, including predatory consumer leasing agreements, breaches of product safety standards, scams and misleading advertising.
In criminal law, conduct targeting or disproportionately impacted disadvantaged Australians is considered an “aggravating factor” in determining penalties. This is not currently the case in competition law, although authorities can prioritise their investigations to address particularly egregious cases of unconscionable conduct.
What is Labor’s proposal? How will it drive growth or improve fairness?
Labor’s policy is focussed on competition reforms that explicitly address inequality and disadvantage and reinforce our commitment to a more equal society.
Labor is proposing to:
- Amend section 76 of the Competition and Consumer Act to allow a court to apply higher penalties for conduct that targets or disproportionately impacts disadvantaged Australians, or apply lower penalties when firms have provided adequate compensation to those affected.
- Include a requirement in the Competition and Consumer Act that the ACCC prioritise investigation of conduct that targets or disproportionately impacts disadvantaged Australians.
- Investigate the negative impact of increased market concentration on income inequality in Australia.
- Encourage the States and Territories to include competition principles in planning and zoning legislation, as recommended by the Harper Review, with a specific focus on shortfalls of appropriately zoned land for key services in disadvantaged communities.
How will it work?
Amending the Competition and Consumer Act (CCA) will allow courts to hand down harsher penalties to businesses that exploit vulnerable groups in our community, and will explicitly direct the ACCC to investigate breaches of competition and consumer law that target disadvantaged Australians.
Labor proposes amending section 76 of the CCA to require a court to consider whether the contravening conduct targets or disproportionately impacts disadvantaged groups when determining financial penalties. A court would also be required to consider whether the company concerned has sought to compensate those affected by the conduct, providing an incentive for companies to be proactive in providing compensation to affected consumers.
As a complementary reform, we are proposing a new provision be added to Part VII of the CCA requiring the ACCC to prioritise investigations of alleged conduct that targets or disproportionately impacts disadvantaged Australians.
The combination of the two amendments would see the number of cases with inequality implications – and the magnitude of fines – increase. This would also have a deterrent effect beyond the specific cases that are taken to court.
A Shorten Labor Government would investigate the impacts of increased market concentration on income inequality in Australia and produce policy recommendations on how these effects could be mitigated.
As recommended by the Harper Review, state and territory governments should be encouraged to amend planning and zoning regulations to ensure they promote competition and do not act to limit entry into a market. There should be a particular focus on shortfalls of appropriately zoned land for key services in disadvantaged communities.
Labor believes in tackling inequality. Australians can trust Labor to get it right when it comes to competition and consumer protection. They can trust us to make sure markets and competition are fair and equitable.
Labor is the party of the Trade Practices Act, National Competition Policy, the Australian Consumer Law and the criminalisation of cartels. Labor’s proud history of promoting social and economic equality includes needs-based school funding, Medicare, HECS, the Sex Discrimination Act, the Racial Discrimination Act and the National Disability Insurance Scheme.