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Competition policy - victory of economics over equity

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Senator Cheryl Kerriot

Leader of the Australian Democrats


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22 June 1995


Competition policy - victory of economics over equity

The Australian Democrats will vote against the Competition Policy Reform Bill and have criticised the non-Parliamentary process which saw the Bill formulated by business groups.

Democrat leader Senator Cheryl Kemot said in the Senate today that the benefits of the package had been over-rated, while the clown side - job losses, higher user-pays charges and challenges to important health, safety, professional and environmental regulations - had hardly been addressed.

"Nobody objects to a more efficient public sector but competition policy represents the victory of economics over equity, of competition over compassion and of accounting over accountability in the management of public services, Democrat leader Senator Cheryl Kemot said.

it is based on academic and political premises that have not delivered in other areas. It represents the politics of economic rationalism at its worse. And the same question remains: who wins and who loses?

"One should examine the evidence of the last decade compared with the promises of competition. Since 1983 the deregulation of financial markets and banks we have seen unlimited lines of credit open up for corporate customers. Yet today 100s of thousands of home loan borrowers and small businesses suffer much higher interest rates than 10 years ago.

"We need to make sure that the higher user-charges which will be a consequence of the Bill, and the end of cross-subsidisation, does not cull public services by those who need them most - especially those in regional Australia.

Associate Professor Dr John Quiggan of ANT.: refutes the Prime Minister's claim that competition policy will boost $22.5 billion to the economy. Dr Quiggan suggests that the net benefit to the economy could be as little as 0.5 percent of GDP or approximately $2 billion.

The Democrats are now considering using the power of Senate committees to closely monitor the impact of the implementation of competition policy refoims by state, Federal and local governments to ensure that consumers, the regions and the environment are not the big losers.

For more details contact Malcolm King on (06) 277 3203.