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Competition Policy Reform (Queensland)
COMPETITION POLICY REFORM
(QUEENSLAND) BILL 1995
EXPLANATORY NOTES
GENERAL OUTLINE
Object of the Legislation
The object of the Bill is to enact legislation that will apply the Schedule
version of part IV of the Trade Practices Act 1974 ("TPA") of the
Commonwealth as the law of Queensland.
Reasons for the Bill
The Bill enacts legislation that will give effect in Queensland to the
reform of competition policy, as endorsed by the Council of Australian
Governments and as recommended by the Hilmer Report.
The Competition Policy Reform Act of the Commonwealth ("the
Commonwealth Act") is complemented by legislation to be enacted by the
States and Territories. The package of competition law applying throughout
Australia will be found in the TPA (as amended by the Commonwealth
Act) and the proposed legislation of the States and Territories.
This Bill deals principally with the application of the Competition Code.
It does so in concert with the Commonwealth Act, which effectively creates
the Competition Code but which does not itself apply the Code. The
principal purpose of this scheme is to apply part IV of the TPA to those
persons and things that do not or may not fall within the constitutional
competence of the Commonwealth (especially individuals and
partnerships). It does so by applying the provisions of part IV to all
persons (including corporations as well as individuals and partnerships).
The Competition Code consists of:
· The text set out in the Schedule to the TPA (this repeats most, but
not all, of part IV, but generalised so as to apply to "persons"
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Competition Policy Reform (Queensland)
instead of "corporations"). The result will be an overlap, mainly
in the area of corporations (the question of double jeopardy is
dealt with in the legislation, as mentioned below).
· The remaining provisions of the TPA (with certain exceptions),
so far as they would relate to the Schedule version of part IV if
the Schedule version were substituted for the actual part IV.
· Relevant regulations under the TPA.
Alternatives Ways to Achieve Policy Objectives
The policy objective of the Bill could also be achieved by a referral of
power to the Commonwealth of that activity over which it currently does
not have the constitutional power to regulate under the TPA. After the
application of the TPA to the Crown in right of the States and Territories by
the Commonwealth, this remaining area is not great.
The view taken by the States was that they could have a greater influence
in the application of part IV of the TPA through the application method
rather than through a referral of power to the Commonwealth.
Some of the benefits which arise from the adopted procedure are that all
States and Territories have an opportunity to be consulted on and to vote on
amendments made by the Commonwealth to part IV of the TPA. The
States and Territories also have the ability to be consulted on appointments
to be made to the Commonwealth's Australian Competition and Consumer
Commission and the National Competition Council.
Estimated Cost of Government Implementation
The costs to the Government for implementing the measures set out in
the Bill are not significant.
Consistency with Fundamental Legislative Principles
The Bill raises two areas of conflict with fundamental legislative
principles. Firstly, it provides for regulations to be made to exempt
behaviour which would otherwise be in breach of the TPA. These
regulations however are intended to be used in emergency situations when it
is not possible to have an exemption inserted in an Act of Parliament. Such
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Competition Policy Reform (Queensland)
regulations are only valid for two years and cannot be remade. The
exemption can however be made again in an Act of Parliament. The
Commonwealth has the power to override any State exemption from the
TPA by regulation as is currently the situation.
Secondly, as the Bill applies a Commonwealth law, amendments made
to the TPA by the Commonwealth will apply to the Queensland
Competition Code. This is directed at ensuring that there is one consistent
set of competition laws and policy applying Australia-wide. There is
however an ability for the State not to apply an amendment. Clause 6 of the
Bill provides an ability for a State to pass a regulation declaring that the
amendment does not apply in the State. The use of a regulation for this
purpose takes account of the differing sitting schedules of the Parliaments.
The regulations are subject to disallowance by Parliament.
The modification procedure is subject to section 150K of the TPA. This
section enables the Commonwealth Minister to declare by notice published
in the Commonwealth of Australia Gazette that a State's modifications are
excessive. If a notice is published in result of a State, this has the effect of
that State not being able to make an exemption, by Act or regulation, from
the TPA.
Consultation
Extensive consultation with affected groups as part of the negotiations on
the National Competition Policy (NCP) reform package. There was general
support for the reforms. The concerns of some affected groups are mainly
in the other areas of the NCP reforms. These are being addressed
separately and do not directly impact on the Bill.
OUTLINE OF PROVISIONS
Part 1--PRELIMINARY
Clause 1 sets out the short title of the Bill.
Clause 2 provides for the commencement of the Bill. Sections 1 and 2
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Competition Policy Reform (Queensland)
will commence on the date of assent in accordance with the provisions of
the Acts Interpretation Act. Sections 3 and 39 and parts 7 and 8 will also
commence on the date of assent. Section 3 and parts 7 and 8 are
supplementary to the substantive provisions of the Bill. Section 39
provides for exempting regulations to be made for the purposes of the Bill
and the TPA. As the TPA provisions currently operate, section 39 is to
commence on assent to enable exempting regulations to be made for the
purposes of section 51 of the TPA prior to the commencement of the
remainder of the Bill.
The remaining provisions are intended to commence on 21 July 1996.
Although the Commonwealth Act contains a number of different dates,
virtually all of the Commonwealth Act will have commenced by this date.
The result therefore is that the Commonwealth Act will be in force when
this Bill commences.
There is provision for the postponement of the commencement of those
remaining provisions, to deal with any unforeseen circumstances that might
arise.
Clause 3 contains interpretative provisions for the Bill. Clause 3(1)
contains a list of definitions. An explanation of their origin or purpose is as
follows:
application law--the same as in part XIA inserted into the TPA by the
Commonwealth Act.
Commission--the same as in section 4 of the TPA, as amended by the
Commonwealth Act.
Competition Code--the same as in part XIA.
Competition Code Text--the text of the law to be applied as the
Competition Code.
Conduct Code Agreement--the same as in section 4 of the TPA, as
amended by the Commonwealth Act.
Council--the same as in section 4 of the TPA, as amended by the
Commonwealth Act.
instrument--the same as the definition used in corporations legislation.
jurisdiction--to mean a State which in turn is defined to include a
Territory.
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Competition Policy Reform (Queensland)
law--the same as the definition used in corporations legislation.
modifications-- the same as in part XIA.
month--the same as in the Acts Interpretation Act 1901 of the
Commonwealth.
officer--picks up the definition in part XIA.
participating jurisdiction--a jurisdiction that applies the Competition
Code.
Schedule version of Part IV--the same as in part XIA.
State--is defined as including a Territory.
Territory--the same as in part XIA.
Tribunal--the same as in section 4 of the TPA as amended by the
Commonwealth Act.
Clause 3(2) provides for expressions used in the Bill to have the same
meanings as in the TPA.
Clause 3(3) provides that references to the Commonwealth Acts include
amendments and replacements.
Part 2--THE COMPETITION CODE
Clause 4 defines the Competition Code text that will be applied to
become the Competition Code. As mentioned above, this is primarily the
provisions of part IV of the TPA.
Clause 5 is the operative clause of the Bill. It applies the Competition
Code text as the law of Queensland.
Clause 6 provides a scheme to deal with future modifications of the
Competition Code text by Commonwealth legislation. In essence, the
scheme provides that there is to be at least a two month gap between the
enactment or making of Commonwealth modifications and their application
under clause 5. That period can be shortened by regulation. Alternatively, a
regulation can provide that a modification is not to apply at all in
Queensland.
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Competition Policy Reform (Queensland)
Clause 7 provides, for the purposes of uniformity, that the Acts
Interpretation Act 1901 of the Commonwealth applies to the interpretation
of the Competition Code instead of the Queensland Acts Interpretation Act
1954.
Clause 8 makes it clear that the Competition Code is not to be construed
as merely applying in the territorial area of Queensland, and that the
extraterritorial competence of the Queensland legislature is being used.
However provisions contained in section 5 of the TPA are repeated in the
clause to require consent of the Commonwealth Minister for proceedings
involving conduct outside Australia.
Clause 9 provides for the interpretation of the expression "the
commencement of this section" in the Schedule version of part IV. This
expression will, in effect, be read as a reference to the commencement of
the substantive provisions of the Bill.
Part 3--CITING THE COMPETITION CODES
Clauses 10-12. This part provides a system for referring to the
Competition Codes.
Part 4--APPLICATION OF COMPETITION CODES
TO CROWN
Clause 13 provides that the Bill and the Competition Code of
Queensland will bind the States (to the full extent of its constitutional
capacity to do this). In line with section 2A (1) and section 2B (when
commenced) of the TPA, this will apply to a State only when carrying on a
business.
Clause 14 is the counterpart of clause 13, and provides that the Bill and
Competition Code of another State or Territory will bind Queensland.
Again this will apply to the State only when carrying on a business.
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Competition Policy Reform (Queensland)
Clause 15 makes it clear that certain activities carried on by governments
or government authorities do not amount to carrying on a business (for the
purposes of clauses 13 and 14). The clause corresponds to section 2C of
the TPA.
Clause 16 provides that the State is not liable to pecuniary penalties or
prosecutions. This is in line with sections 2A(3) and 2B(2) of the TPA.
Clause 17 makes it clear that, where the law of another jurisdiction binds
the State by virtue of this part, the Code overrides any prerogative right or
privilege of the State (e.g. in relation to the payment of debts). Similar
provisions are included in the corporations legislation.
Part 5--NATIONAL ADMINISTRATION AND
ENFORCEMENT OF COMPETITION CODES
Clauses 18-33--The provisions of this part are intended to promote the
uniform administration of the Competition Codes, as if they were a single
Commonwealth Act. The provisions are similar to those included in
corporations legislation.
Part 6--MISCELLANEOUS
Clause 34 recognises that the same conduct is capable of being punished
under more than one law (the Competition Code of Queensland, the
Competition Code of another jurisdiction, or the TPA), and removes this
double jeopardy. The clause has its counterpart in section 150H of the
TPA.
Clause 35 makes it clear that documentation and other things are not
invalid because they also serve other Competition Codes or the TPA.
Clause 36 is intended to deal with the technical point that a reference in
an applied law to another Commonwealth law is to be treated as if the other
law were itself an applied law. There is a similar provision in the
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Competition Policy Reform (Queensland)
corporations legislation.
Clause 37 provides that fees, taxes, penalties, fines and other money paid
under the Competition Code of Queensland are to be paid to the
Commonwealth. This will not apply to amounts recovered in actions for
damages. Clause 37(3) is a technical provision that imposes fees (including
fees that are taxes) prescribed by the applied regulations.
Clause 38 allows regulations to be made for the purposes of the Bill.
Clause 39 provides a specific power to make regulations under the Bill
for the purposes of prescribing exceptions under section 51 of the TPA or
section 51 of the Competition Code. Under these sections any regulations
are valid for two years only and cannot be remade.
Part 7--TRANSITIONAL RULES
Clause 40 contains definitions used in part 7.
Clause 41 gives effect to the policy that existing contracts made before
19 August 1994 (the date the legislative scheme was announced) are not
caught by the Competition Code. However, if such a contract is varied on
or after that date, the Competition Code will apply to future conduct in
relation to the varied contract, except as regards matters that were previously
protected. The Code applies to future conduct in relation to contracts made
after that date.
Although a contract is "grandfathered" under clause 41 in relation to the
Competition Code, it may still be caught by part IV of the TPA.
Although clause 41 corresponds generally to sections 34 and 89 of the
Commonwealth Act, those sections do not contain provisions that
correspond to Clause 41(1)(c) and (3). That paragraph and that subclause
are inserted in this Bill for the purposes of clarifying the way the
Competition Code applies in relation to existing contracts made on or after
19 August 1994, and are not intended to imply that clause 41 operates
differently from those sections of the Commonwealth Act in this respect.
Clause 42 complements section 33 of the Commonwealth Act. Section
33 is intended to provide a three year continuation of current exceptions
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Competition Policy Reform (Queensland)
(under section 51 of the TPA) that do not comply with the requirements of
new section 51(1) and (1B) of the TPA. Clause 42 provides that the same
exceptions will be treated as exceptions from part IV of the Competition
Code for that three year period.
Clause 43 gives effect to the policy that pecuniary penalties will not apply
in respect of conduct that is being subjected to the competition law for the
first time, until two years have passed after the assent of the
Commonwealth Act (that is, two years after 20 July 1995). Since this Bill
is intended to commence 21 July 1996, this effectively means that there will
be one year during which pecuniary penalties will not be available under the
Competition Code. Other remedies will be available during that period of
one year.
The period of one year will be extended if the commencement of the
substantive provisions of this Bill is postponed under clause 2.
Clause 44 permits persons to apply to the Commission for authorisation
of conduct and to notify conduct to the Commission before the Competition
Code applies to the conduct.
Clause 45 enables regulations to be made for savings and transitional
purposes.
Clause 46 provides for the Schedule version of part IV of the TPA to be
set out as an Attachment to the Bill. The clause makes it clear that the
Attachment does not form part of the Bill. It also provides for the
Attachment being updated in any reprint of the Bill.
Attachment. This is the Scheduled version of part IV of the TPA.
© The State of Queensland 1995