Review of Competition and Consumer Laws Draft Terms of Reference
Monday 16 December 2013 @ 1.57 p.m. | Trade & Commerce
The Government will undertake a comprehensive review of competition laws and policy, the first in more than 20 years.
As stated in the Prime Minister's press release:
"The ‘root and branch’ review delivers on a key election commitment and will help identify ways to build the economy and promote investment, growth and job creation.
The competition review will examine not only the current laws but 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 last comprehensive review of competition policy – the Hilmer Review – was carried out in 1993 and much has changed in Australia’s economy since then."
Draft Terms of Reference
The Federal Government has provided the states and territories with draft terms of reference for a competition review and the review report is expected to be released within 12 months.
The terms of the review, as outlined in the draft terms of reference, will cover the following four main areas:
- The Review Panel is to inquire into and make recommendations on appropriate reforms to improve the Australian economy and the welfare of Australians, not limited to the legislation governing Australia’s competition policy, in regard to achieving competitive and productive markets throughout the economy, by identifying and removing impediments to competition that are not in the long-term interest of consumers or the public interest (a number of principles are then outlined which the panel must have regard to).
- The Review Panel should also consider and make recommendations where appropriate, aimed at ensuring Australia’s competition regulation, policy and regulatory agencies are effective in protecting and facilitating competition, provide incentives for innovation and creativity in business and meet world’s best practice.
- The Review Panel should also consider whether the Competition and Consumer Act 2010 and regulatory agencies are operating effectively, having regard to the regulatory balance between the Commonwealth and the states and territories, increasing globalisation, changing market and social structures, technological change and the need to minimise business compliance costs (a number or examples are then set out).
- The Review Panel should inquire into and advise on appropriate changes to legislation, institutional arrangements and other measures in relation to the matters below, having regard to the impact on long-term consumer benefits in relation to value, innovation, choice and access to goods and services, and the capacity of Australian business to compete both domestically and internationally (a number of principles are then outlined which the panel must have regard to).
Public Reaction
Reaction has been mixed from the public with the Australian warning that "the Coalition [is siding] with small firms against big business."
This is largely a reaction against the extension of unfair contract terms to small business in order to spur economic growth. The move will target the misuse of market power to sharpen competition in groceries, petrol and electricity, amid fears that unfair tactics will push up prices if left unchecked.
Finally, the "root and branch" review will also target the policing of the removal of the carbon tax, with the plan being to make surcharges attributable to the Carbon Tax a punishable offence under the Competition and Consumer Law.
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