Jo Lindgren (Queensland, Liberal Party) Share this | Hansard source

Those opposite are not talking about policy, they are talking about politics. I have to agree with my colleague Senator Smith—those opposite should not believe everything they read in the media. How hypocritical they are, when they were in power for six years and did not take competition policy seriously. If those opposite were serious about it, they certainly would have grappled with the issues and taken this review on, as we have. The Harper Competition Policy Review is the first comprehensive review of Australia's competition policy framework in more than 20 years. The proposed amendment to the misuse of market power test is one of more than 50 recommendations contained in the Harper report. The government is continuing to consider recommendations of the Harper review of competition policy, and the government will respond appropriately to those recommendations from the review in due course.

Healthy competition is one of the surest ways to lift long-term productivity growth, incomes, economic prospects and performance. It drives enterprises to excel and to find new ways to delight customers—new offerings, new entrants, better value and choice. A key responsibility of any government is to ensure that the right settings are in place to enable efficient businesses, big and small, to thrive and prosper, and that the contest to win customers is determined on merits, not pure financial muscle. Our government is serious about getting it right. That is why the Abbott government commissioned Professor Ian Harper and his panel to conduct a root and branch review of the competition policy, laws and institutions—the first comprehensive examination in a generation. The Harper report's 56 recommendations seek to lay the groundwork for a more competitive and flexible economy and to make markets work better for the benefit of all Australians. Despite Harper's broad remit, a single recommendation aimed at making the important misuse of market power—section 46—provisions more workable, effective and procompetitive seems to attract nearly all of the media attention and interest group advocacy. Our competition laws must be effective and enforceable in preventing dominant companies misusing their market power to fortify the position or protect their market share by restricting competition and/or drawing new entrants.

The reframing of section 46, as recommended by the Harper review, attempts to align the provision to its core economic objectives, bring the misuse of market power provision somewhat closer towards a principle-based approach, balance the pro-competitive and anticompetitive impacts of conduct both in the short and long term and, in theory, reduce the risk of unintended consequences.

Some argue that the Harper reframing of section 46 will reduce productivity, chill investment and lead to higher prices. The reverse is true.

The application of the SLC test captures anticompetitive conduct but also allows firms to gain market share by being more innovative and efficient than their rivals, since this benefits consumers and raises productivity. Innovation is at the heart of competitive conduct. Even where innovation and strategic investments lead to market dominance, the courts and ACCC would not regard that as a lessening of competition.

Misuse of market power cases are rare and, even with the proposed changes to section 46, will continue to be so. Since the turn of the century, neither the full Federal Court nor the High Court have heard scarcely more than a case every two years.

Harper's recommendations focus on the public interest, since healthy competition is what is best for the vitality of our economy and delivers durable benefits for consumers. Is there any alternative superior proposal—one that will deliver durable benefits for consumers, raise our productivity and economic performance, while giving adequate consideration to the concerns of some parties about uncertainty? I do not think so—not at this stage, anyway, from those opposite. If there is, one thing the government would welcome is suggestions from the Labor Party, particularly if they start getting serious about this and start considering the need to implement the Harper review recommendations.