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Costello's missed opportunity to boost competition.



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Media Release

BOB McMULLAN MP SHADOW TREASURER SHADOW MINISTER FOR THE ARTS

MEMBER FOR FRASER

16 April 2003

COSTELLO’S MISSED OPPORTUNITY TO BOOST COMPETITION

Treasurer Peter Costello has missed a big opportunity to strike a blow for small business to protect them against the abuse of market power by big business.

Tougher competition laws are critical in creating a more competitive Australian economy. This means taking competition policy to the top end of town.

The Dawson Review of the Trade Practices Act gives Mr Costello an ideal opportunity to take a big leap forward for competition policy, and he has squibbed it.

The modest changes he supports are welcome, particularly allowing collective bargaining for small business, and his in-principle support for criminal sanctions against hard core cartels.

But although Mr Costello has dealt with the easy options, he has failed to grasp the hard one. He has missed the main game.

There are four main legs of competition policy in Australia: regulation of cartels to prevent collusion; anti-merger laws to prevent excessive concentration of economic power; the prohibition of misleading conduct; and measures to prevent abuse of market power.

The first three of these work well, but the fourth needs serious attention.

Recent High Court decisions, including the Boral case and the CG Berbatis Holdings case, show there are glaring weaknesses in the Trade Practices Act.

Those decisions reinforce concerns the TPA does not adequately protect small business from abuse of market power by big business, and does not provide them with adequate protection against unfair practices.

I am unconvinced by the proposal for a consultative committee to advise the ACCC. This will create another layer of bureaucracy, and runs the risk of restricting the ACCC’s capacity aggressively to pursue anti-competitive behaviour. We will put any specific propositions to limit the ACCC in this way under very intensive scrutiny.

Further information: Robert Garran (02) 6277 4803, 0419 692 504

TELEPHONE: (02) 6277 4803 ã FACSIMILE: (02) 6277 8496