ACCC submission to Harper Review on Competition Policy in Australia
Monday 14 July 2014 @ 1.30 p.m. | Trade & Commerce
As previously discussed by TimeBase, The Harper Review is intended to "help identify ways to build the economy and promote investment, growth, job creation and durable benefits for consumers".
The review is to examine current laws (by looking at consumer protections, anti-competitive conduct and business regulation across state and federal governments) but it is also to look at the broader competition framework, "to increase productivity and efficiency in markets, drive benefits to ease cost of living pressures and raise living standards for all Australians".
Focus Areas for Review
The key focus areas for the review are to:
- identify regulations and other impediments across the economy that restrict competition and reduce productivity, which are not in the broader public interest;
- examine the competition provisions of the Competition and Consumer Act 2010 (Cth) (the CCA) to ensure that they are driving efficient, competitive and durable outcomes, particularly in light of changes to the Australian economy in recent decades and its increased integration into global markets;
- examine the competition provisions and the special protections for small business in the CCA to ensure that efficient businesses, both big and small, can compete effectively and have incentives to invest and innovate for the future;
- consider whether the structure and powers of the competition institutions remain appropriate, in light of ongoing changes in the economy and the desire to reduce the regulatory impost on business; and
- review government involvement in markets through government business enterprises, direct ownership of assets and the competitive neutrality policy, with a view to reducing government involvement where there is no longer a clear public interest need.
ACCC Submission Announced
The Australian Competition and Consumer Commission's (ACCC) submission builds upon comments made by Chairman Rod Sims that the Harper Review provides an "ideal opportunity to reinvigorate Australia's competition culture."
The ACCC submission focuses on three main areas:
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Firstly, it is about microeconomic reforms that open up as many sectors as possible to competition, and allows price mechanisms to play their crucial role in signalling to businesses how to meet consumers’ needs at the lowest cost.
“The ACCC’s submission identifies a number of priority areas for potential reform, including privatisation, roads, congestion pricing, shipping, energy, water, intellectual property and land use.”
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Secondly, effective competition laws are critical. While the ACCC recognises competition laws must strike a careful balance, and not inhibit healthy competitive behaviour, if competition laws are too weak there are large efficiency and welfare losses from systemically poor conduct. Key recommendations relate to the misuse of market power provisions and so-called “price signalling” provisions in the Competition and Consumer Act 2010.
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Thirdly, the submission notes that effective competition policy is about governments establishing the processes and institutions that continually foster competition and sustain the commitment to reform. In particular, to reinvigorate Australia’s commitment to competition, the submission calls for consideration of the role of a market study function for the ACCC. Market studies could be used to assess whether, in particular sectors, competition problems exist or not, and to support better targeted action by the ACCC or others in response.
The ACCC submission was in response to the Government Issues paper released on 14 April 2014.
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