A federal Labor government would try to make it easier for small business to prosecute big companies for anti-competitive behaviour.
Labor on Monday announced plans to allow opposition court costs to be waived for small businesses if they bring a private prosecution, saying it would allow cases to proceed without the potential of millions of dollars being claimed.
‘In some of these situations, you do have David and Goliath battles and Goliath has very deep pockets,’ small business spokeswoman Michelle Rowland told reporters in Canberra on Monday.
It’s Labor’s answer to the so-called ‘effects test’ – a key element of the Harper review into competition policy.
Under existing laws, a small firm has to prove that a bigger rival is deliberately trying to force it out of business, but under the proposed test it would only have to prove it had been affected by its presence.
The government has been considering its position on the test since November.
Shadow Treasurer Chris Bowen believes Labor’s plan would help small business get before the courts and speed up court processes.
‘An effects test would be a lawyer’s picnic, it would see cases drag out… it would take years,’ he told Sky News on Monday.
‘An effects test is bad economic policy, it would chill enterprise, it would chill investment.’
Under Labor’s plan, the court would assess if the case had merit before waiving the opposition court cost liability.
It comes with a $1 billion allocation to the small-business ombudsman over two years.