Competition Policy Review: Final Terms of Reference Announced

Monday 31 March 2014 @ 10.52 a.m. | Corporate & Regulatory | Trade & Commerce

On Thursday (27 March 2014) the Small Business Minister the Hon. Bruce Billson  (the Minister) released the final Terms of Reference for the "root and branch review" of Competition Policy promised by the federal government during the last federal election in 2013. The review is being promoted as the first major review of competition policy in 20 years, the last major review being the Hilmer Report released in 1993.

Background and Process

The Competition Policy Review was first officially announced on 4 December 2013 by the Prime Minister and the Minister. Last Thursday (27 March 2014) the Minister  then released the final Terms of Reference following on consultation with the States and Territories and announced the members Review Panel to undertake the review.

Generally, the Terms of Reference asked the Review Panel to proceed by releasing an Issues Paper and a Draft Report before finalising their Report to the Government. The time frame for the review is specified as  "within 12 months". The Issues Paper, when released, will also provide guidance on the scope of the review and how to make submissions to the review, and information on consultation sessions is to be available on the Consultation web page when the issues paper is released.

In announcing the final Terms of Reference the Minister for small business said:

"For the consumer, it [the review] will provide a pathway to ensure we all pay a fair price at the check-out in the longer term for the goods and service we purchase.

In business it [the review] means having competition based on merit, not on muscle, creating a more level playing field and supporting a competitive environment where efficient businesses – big and small - have the opportunity to thrive and prosper".

Objectives of the Review

The "Harper Review"  (named by the Minister after its Chairperson in his announcement) 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".

The key focus areas for the review in the Terms of Reference 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.

The Review Panel

The Review Panel is to comprise three members and a chairperson, they are:

  • Professor Ian Harper (Chair);
  • Ms Su McCluskey (Regional Australia Institute chief);
  • Mr Michael O’Bryan SC (a past chairman of the Competition and Consumer Law Committee of the Law Council of Australia); and
  • Mr Peter Anderson (former Australian Chamber of Commerce and Industry chief).

In announcing the panel the Minister for Small business said the panel members brought "a high degree of policy rigor and analytical capability from a variety of perspectives" to the tasks of the review.

Reaction to the Final Terms

The opposition spokesman on competition policy Andrew Leigh is reported as having welcomed the review but also as having noted that:

"while the panel members were distinguished Australians, there was an absence of any consumer voice . . . Labor will be judging the review by this simple yardstick: will it make life easier for everyday Australians?"

The Business Council of Australia chief executive Jennifer Westacott is reported to have called the review panel "an impressive panel with the right mix of skills and experience" - saying of the review that:

"At a time when Australia's competitiveness is under threat across a number of fronts, it will be important that the review takes up the opportunity to strip away impediments to competition, whether they are found at the commonwealth, state or local government level."

The Australian Industry Group chief executive Innes Willox is reported as saying that the terms of reference for the review:

"were extraordinarily broad . . . It has the potential to make a real difference in building a case for improving the way our economy works."

On its website consumer advocacy group Choice says of the review that it has: ". . .  welcomed the Federal Government’s announcement today of the final terms of reference and the panel for its Competition Review". It quotes its CEO Alan Kirkland who says:

“Our competition framework must focus on long-term benefits for Australians, rather than short-term interests of different competitors or types of businesses, and that’s why it’s pleasing to see consumers at the centre of the review . . .”

The ABC reports that farming groups hope the review "will examine dealings between produce suppliers and major supermarket chains".

Generally from all sides, business and consumer, the review appears to be accepted as something that will focus attention on and hopefully provide improvement to matters critical to Australia's economy.

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