Revival of effects test debate ?>

Revival of effects test debate

BoxingThe effects test for misuse of market power (recommended in the Harper Report and accepted by the Government in March this year) has had a bit of a run in the media over the last week.

This was prompted the release of the Productivity Commission’s draft report on the regulation of agriculture last Thursday, which suggested the effects test would do nothing to shield farmers from competition in the retail grocery market and that, even if it did, this would not be in the interest of consumers.

This generated a quick response from Treasurer Scott Morrison, reinforcing the Government’s commitment to implementing the Harper Panel’s proposed effects test.

In response to big business criticism of the test and suggestions that it was in any way ‘protectionist’, ACCC Chairman, Rod Sims, came out swinging, labelling any such suggestions ‘bullshit’. Opposition Competition Spokesman, Andrew Leigh, was quick to respond, suggesting that Sims’ critique of the critique was simply ‘wrong’ and would represent the end of the world (ok, he didn’t go that far, but he did label it ‘wrong’, pointed to previous reviews rejecting an effects test and suggested it would somehow lead to higher grocery bills for regional consumers).

Locking hornsIn response to to the response to the response, the Review’s Chair, Prof Ian Harper, rejected Leigh’s criticism of the reform and claimed those suggesting that the test was protectionist in any way were turning ‘reality on its head’ and ‘almost’ wilfully misinterpreting the proposal: see Michael Roddan, ‘Ian Harper slams ‘effects test’ reform critics for distortion’ (The Australian, 26 July 2016).

Abuse of power legislation and reform is controversial everywhere, but it’s leading to some positively bizarre claims and commentary in Australia at the moment; let’s just hope that Government introduces exposure draft legislation so that we can move on …

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