Competition reform post-election ?>

Competition reform post-election

Now that we finally have an election outcome (even if Herbert does still remain in doubt), it’s worth considering what this means for the proposed Harper reforms.

We know that the Turnbull Government, in September last year, accepted most of the recommendations made in the Harper Report.  Following a further consultation, the Government announced (in March 2016) it would also adopt the controversial ‘effects test’ recommended by the Harper Panel in relation to misuse of market power.  We also know that Labor opposes the effects test, although broadly appears to accept most other recommendations in relation to the competition law reforms.

The only reforms that appear to have attracted any attention post-election relate to the introduction of an effects test for misuse of market power and the broader policy issue involving increasing competition (with a focus on improving consumer choice and information provision) in health and human services.

On the effects test the Government has indicated it will power ahead with the implementation of the Harper recommendation, notwithstanding a recent Productivity Commission draft report on agriculture which concluded that introduction of an effects test would be unlikely to ‘shield farm businesses from intense competition in retail grocery markets’ and, even if it did, that would not be in the interest of consumers.  Treasurer, Scott Morrison, was quick to respond, stating:

… the government remains absolutely committed to pursuing our reforms in relation to Section 46 and the effects test, and the related measures that we announced earlier this year. There is no change whatsoever to the government’s position on that matter.

The effects test also has the support of the ACCC (with ACCC Chairman, Rod Sims, recently labelling criticism of the proposed test ‘bullshit’) but continues to be opposed by the ALP:

Chair of the Report, Prof Ian Harper, has responded to Andrew Leigh’s response, claiming that the proposed effects test has been misinterpreted to an ‘almost wilful’ degree and, in particular, suggested that characterising the reform as protectionism was ‘to turn reality on its head’.

Chances are we will have the effects test introduced by the Government; it should pass through the House and, despite the Government lacking a majority and facing ALP opposition in the Senate, the reform has a good chance of passing with the support of the Greens as well as the Xenophon party and other independents.

Still no word, however, on when we might expect exposure draft legislation incorporating this and other proposed changes.

On broader policy issues around competition in health and human services the Government is likely to tread carefully given the spotlight on health services during the election campaign.  Nevertheless, an issues paper was released by the Productivity Commission  prior to the election entitled ‘Human Services: Identifying Sectors for Reform‘.  This is a direct follow-up to the Harper recommendations on human services.  The Terms of Reference state (in part) that the Productivity Commission has been requested to:

‘undertake an inquiry into Australia’s human services, including health, education, and community services, with a focus on innovative ways to improve outcomes through introducing the principles of competition and informed user choice whilst maintaining or improving quality of service.’

The Inquiry is being conducted in two stages, with the first stage to be completed within 6 months and the final report is to be provided within 18 months of receipt of the terms of reference (dated 29 April 2016).  So slowly, slowly on this front and it’s anyone’s guess what will happen in 18 months.

Leave a Reply

Your email address will not be published. Required fields are marked *