Recently a group of business representatives met in Tamworth to discuss competition policy. The meeting was convened by Kelly O’Dwyer to get warring parties together to discuss issues. Do a small number of big businesses (particularly Wesfarmers) and the BCA control the government or will the government develop and implement good policy? Below is our opening statement from that meeting. Us little Davids know a big bully when we see one (or two). We have our slings ready.
Statement for Tamworth Round Table on Section 46
Thank you Minister and congratulations on bringing this group together.
COSBOA’s view on this issue hasn’t changed since 1977. We need good and fair competition for retail diversity and productivity and for the well-being of the business community. There should be reward for effort and for good business practices that benefits the consumer and Australia. Currently there isn’t.
This also is not a big business versus small business process. This is a few of the biggest businesses Australia has ever seen versus the rest of the business community. That is reflected in the make-up of this meeting.
So as we discuss the way forward is this a waste of time and just a show trial where the decision has already been made by a few big companies who feel all they need do is threaten the government to get their way? Time will see.
We do want the development of policy to be professional, open and without threats. So far not so good as the threats have won out, otherwise we wouldn’t be here. Secret letters and threatening phone calls should not be the Australian way.
Harper is an independent report on competition most of which has been accepted by the government and the business community. Except of course for section 46 changes where the big oligopolies are in panic mode.
The Harper recommendations for section 46 are a very watered down version of an effects test. It is the minimum change that COSBOA will accept, anything less is no change at all. We are actually disappointed with the current Harper proposal as we believe they do not go far enough but we accepted the process. We are here to negotiate strengthening the Harper recommendations.
We have already gone through a public process of policy development by people seen as independent. Their decision was seen as unacceptable to a powerful few and was rejected after covert interventions. That is not good public policy development.
The current regulator, the ACCC, believes it needs more ability to regulate competition. They are independent but have also been sidelined by the few.
The use of similar regulations in the Telecoms’ Act has not created a lawyers picnic and indeed these powers have only been used 5 times since they were introduced in 1997, to the betterment of competition in that sector.
We are also concerned that there may be a delay in approving the Harper changes due to shenanigans rather than a real need. Any delay is a win for the few who do not want change and we will see it as stalling and negative. We need the changes now.
This issue is a bellwether for small business, the decision will show whether the government is one that responds to transparent public policy development or the needs of a wealthy powerful few. If changes are not made it will be seen as such no matter what is said. The minimum change is what Harper has proposed. The arguments have already been had.
Our fear is that in appearing to be conciliatory and willing to consider all options we just surrender to the current situation. That has dangers for the future of choice for consumers and the future of productivity.
What happens if a few companies get their way? What about the future?
If any new oligopoly is created by market forces and consumer demands then fine. If it is created by regulation that fetters the regulator than that is not fine. We could end up with one or two corporations owning and controlling aged care, road transport and many other sectors.
This is also about productivity. As seen frequently in the media the suppliers to the big retailers are under constant attack, they struggle to grow and the forcing of generic labeling of their products inhibits any chance to grow, provides no reward for innovation. The biggest companies can act like bullies due to their size, they have become this big due to a lack of an effects test.
What is at risk are innovations such as the iphone, without an effects test, similar to the one they have in the USA where the iphone was developed, we will inhibit innovation and our productivity will languish.
Let’s agree on the current proposals from Harper and then agree to meet and consider what else can be done, let’s be honest and transparent.