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TRADE PRACTICES AMENDMENT REGULATIONS 2007 (NO. 1) (SLI NO 45 OF 2007)
Issued by the Authority of the Parliamentary Secretary to the Treasurer
Trade Practices Act 1974
Trade Practices Amendment Regulations 2007 (No. 1)
The Trade Practices Act 1974 (the Act) provides under section 93AB that a corporation may give a collective bargaining notice to the Australian Competition and Consumer Commissions (the ACCC) in respect of particular contracts or proposed contracts. Under section 95AT of the Act the Australian Competition Tribunal (the Tribunal) may grant an authorisation to a person in respect of an acquisition of shares or other assets.
Section 172 of the Act provides that the Governor‑General may make regulations, not inconsistent with the Act, prescribing all matters that are required or permitted by the Act to be prescribed or are necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Section 95AV of the Act provides that for an authorisation application to be valid it must be accompanied by the fee (if any) prescribed by the regulations. Section 93AB of the Act provides that the regulations may prescribe different amounts for different industries in respect of the price of contracts with a target of a collective bargain.
The Regulations amend the Trade Practices Regulations 1974 (the Principal Regulations) to prescribe collective bargaining thresholds for specific industries; to extend the period of time in which additional collective bargain notices may be lodged and receive a concessional fee; to prescribe that the Tribunal may impose fees; and to correct minor errors and omissions which are contained in the Principal Regulations.
The Regulations were developed in consultation with stakeholders. Letters in relation to the proposed thresholds were sent to various small and large business groups, attaching a discussion paper issued jointly by Treasury and the Office of Small Business and containing proposed thresholds for specific industries. Submissions were received from the National Farmers’ Federation, the Motor Trades Association of Australia, the Housing Industry Association (HIA), and the Law Council of Australia. In addition, both the Australian Competition and Consumer Commission and the Australian Competition Tribunal were consulted in relation to the proposed Regulations.
Details of the Regulations are set out in the Attachment. They commence on the day after they are registered.
Details of the Trade Practices Amendment Regulations 2007 (No. 1)
Regulation 1 specifies the name of the Regulations as the Trade Practices Amendment Regulations 2007 (No. 1).
Regulation 2 provides that the Regulations commence on the day after they are registered.
Regulation 3 provides that Schedule 1 amends the Trade Practices Regulations 1974 (the Principal Regulations).
Prior to the commencement of Schedule 1 of the Trade Practices Legislation Amendment Act (No 1) 2006 (the TPLA Act) on 1 January 2007 there was no need for any fees to be payable to the Tribunal under the Principal Regulations in respect of applications or notices. All such fees were payable only to the ACCC. However, the TPLA Act amended the Act to provide that applications related to merger authorisations are to be made to the Tribunal.
Item [1] amends subregulation 28(4) of the Principal Regulations to provide that no fee is payable to the Tribunal for an application or notice specified in Schedule 1A to the Principal Regulations. This item takes account of the fact that some fees are payable to the Tribunal under the Act.
Item [2] amends subregulation 28(5) of the Principal Regulations to provide that if Schedule 1A of the Principal Regulations does not apply to a matter specified in Column 2 of an item in Schedule 1B of the Principal Regulations then the fee payable to the Tribunal for the matter is the fee specified in Column 3 of the item or, if applicable, the concessional fee specified in Column 4 of the item. This item has the effect of prescribing the fee payable to the Tribunal for applications related to merger authorisations and any other relevant applications or notices which are specified in Schedule 1B of the Principal Regulations.
Item [30] amends the heading of Schedule 1B to include reference to the Tribunal, to which fees are also payable under the Act.
Items [3] and [4] — Subregulation 28(6) and new subregulation 28(6A)
New subregulation 28(6A) provides for the application of a concessional lodgement fee for an additional collective bargaining notice in circumstances where the additional notice is lodged prior to the end of 2007, where there are reasonable grounds for the ACCC to believe that the first notice and the additional notice relate to conduct in the same market (or closely related markets), and where the additional related notification is lodged within 28 days of the first notification.
This subregulation extends the period of time in which additional related collective bargaining notices may be lodged and be eligible for a concessional fee, from 14 days to 28 days for the first year of the new collective bargaining notification regime. After 31 December 2007, the period of time in which collective bargaining notices may be lodged and receive a concessional fee reverts to the 14‑day period prescribed by subregulation 28(6) of the Principal Regulations.
Item [3] amends subregulation 28(6) to make it clear that the concessional fee regime prescribed in that subsection is subject to the concessional fee regime in new subregulation 28(6A).
One of the key amendments made to the Act by the TPLA Act is the implementation of a new simplified process for collective bargaining. The amendments to the Act giving effect to this new process are contained in Schedule 3 of the TPLA Act which commenced on 1 January 2006.
To ensure that the new collective bargaining process benefits small business dealing with large business, section 93AB of the Act provides for a transaction limit of $3 million between an individual member of a collective bargain and the target of the collective bargain. Section 93AB also provides that regulations may prescribe different amounts for the transaction limit in relation to different industries.
While the $3 million transaction threshold is considered appropriate for the majority of small businesses, it is recognised that there are some small businesses that require a higher transaction limit due to the specific circumstances of the industries they operate in. For example, some industries have high turnover but small profit margins. Consequently, on 17 October 2006 the Treasurer and the Minister for Small Business and Tourism announced that the Office of Small Business and the Treasury would issue a thresholds paper for consultation once the TPLA Act had been passed.
The thresholds paper was distributed to peak industries bodies, the ACCC and the Tribunal on 14 November 2006 and the consultation period closed on 8 December 2006. Submissions were then considered and where appropriate, adapted in the proposed regulations. Several meetings were also held with stakeholders to provide them with a further opportunity to comment on the proposed regulations.
New subregulation 71A(1) prescribes for subsection 93AB(4) of the Act the amount of $15,000,000 for a collective bargain for the purchase of motor vehicle fuel for the purpose of sale to the public. The increased threshold only applies to petrol retailers in so far as they are negotiating the purchase of motor vehicle fuel products for on‑sale to the public. New subregulation 71A(2) confirms, for the avoidance of doubt, that the increased threshold does not extend to convenience stores, repair shops, or other business activities that are associated with, or form part of the business of, a motor vehicle fuel retailer.
New regulation 71B prescribes for subsection 93AB(4) of the Act the amount of $20,000,000 for a collective bargain for the purchase of new motor vehicles for the purpose of sale to the public. The increased threshold is, therefore, confined to retailers of new motor vehicles in so far as such retailers enter into a collective bargain for the purchase of new vehicles for on‑sale to the public.
New regulation 71C prescribes for subsection 93AB(4) of the Act the amount of $10,000,000 for a collective bargain for the purchase of farm machinery for the purpose of sale to the public. As for proposed regulation 71B , the increased threshold is confined to retailers of farm machinery in so far as the collective bargain relates to those retailers purchasing farm machinery for on‑sale to the public.
New regulation 71D prescribes for subsection 93AB(4) of the Act the amount of $5,000,000 for a collective bargain for the sale of primary products, or for the purchase of inputs used in the production of primary products, by primary producers. Subregulation 71D(2) specifies what is meant by “primary products” for the purposes of regulations 71D.
The changes in items [6] to [29] and [36] of the Regulations make a number of minor amendments and additions to the forms in Schedule 1 to the Principal Regulations. The changes correct cross‑references to sections of the Act and directions within the forms themselves, ensure the consistency of questions asked across the forms, and omit unnecessary material from some forms.
Item [31] corrects the reference to the fee for a collective bargaining notice to remove reference to an application for such a notice.
Items [32], [33], [34] and [35] correct cross references the Schedule 1B table.