Government responds to Harper Review

The Federal Government has responded to the Competition Policy Review, throwing its support behind the majority of the recommendations, but is still yet to make a decision on a possible ‘effects test’.

The Harper Review made 56 recommendations, with the government supporting 44 in total – 39 “in full or in principle” and a further five “in part”. In its submission, the government also noted that it remains open to 12 additional recommendations, including the implementation of an ‘effects test’.

Deregulation of trading hours receives support
The government has backed the Harper Review’s recommendation that trading hours should be removed; limited only to Christmas Day, Good Friday and the morning of ANZAC Day.

“The government encourages state and territory governments with remaining restrictions on retail trading hours to consider whether these restrictions are impeding competition and the ability of retailers to meet customer demand for flexibility and choice, and whether they can be removed without imposing undue pressure on retailers to remain open when it is uneconomical to do so,” the report stated.

“The government recognises that states and territories are at different stages of reform, and that some states have fewer restrictions than others, nonetheless there is scope for further deregulation in all states.”

Effects test still up in the air
An ‘effects test’ was proposed by the Harper Review, referred to as Section 46, in an effort to protect small businesses from large corporations who abuse their market power.

Treasurer Scott Morrison said the government will be embarking on a further and final round of consultation on the issue, which will include the release of a discussion paper, with a final decision to be announced in March 2016.

“Reforming competition is one of the best options we have to boost growth and productivity in the years ahead, and this is why it’s at the heart of the government’s economic plan,” Morrison said.

The government’s responses have been welcomed by the Australian Competition and Consumer Commission (ACCC).

“These reforms are the most significant of their kind in over 20 years and once implemented should boost economic growth significantly,” ACCC chairman, Rod Sims, said.

Peter Strong, CEO of the Council of Small Business Australia (COSBOA), said he was pleased to see the major recommendations from the Harper Review back in the limelight, however, added it was disappointing changes to Section 46 had been delayed.

“The fact is that the biggest companies Australia has ever seen and their union, the Shop Distributive and Allied Employees’ Association (SDA), use their influence and resources to control competition policy to the detriment of productivity, retail diversity and innovation,” said Strong.

“COSBOA and its members have said for decades that the current state of competition is unfair and the dominant businesses are killing innovation. Ignored for years, we were finally proven right in 2014 when the ACCC successfully prosecuted Coles for unconscionable conduct towards its suppliers. This is why we need to be heard – to ensure the same thing does not ever happen again. Our innovators need space to do their stuff.

“On the day Bruce Billson, the previous Minister for Small Business, has announced his retirement from politics, it is heartening to see one of his ground-breaking initiatives taken forward.”

Australian Chamber CEO, Kate Carnell, said further consultation on Section 46 was a pragmatic decision that was supported by the Australian Chamber.

“An effects test is supported by the mainstream of Australian business and it should not become a David and Goliath battle between big and small businesses, rather it should be about ensuring stronger competition for everyone in the market place,” Carnell said.

“We believe that regulatory reform and red-tape reduction are vital to reduce the costs of doing business, for all businesses in general and small to medium sized businesses in particular,” Carnell said.

The government has rejected the recommendation by the Harper Review to abolish the role of the ACCC Small Business Commission, a move which has also been welcomed by the Australian Chamber.

“The role of the Small Business Commissioner is vital to maintaining the existing momentum of the ACCC’s small business activities,” Carnell said.

Waiting game for AACS 
Jeff Rogut, CEO of the Australasian Association of Convenience Stores (AACS) told C&I Week the association will wait for government consultation before announcing its stance on an ‘effects test’, stating it is in favour of less regulation.

“We’re about less regulation not more regulation. In terms of the effects test we will discuss it with government when we get the opportunity.”

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