Government must introduce effects test

7 SEPTEMBER, 2015: The future of Australian small business has been thrown into jeopardy, following the Federal Government’s back down on competition reforms.

A group calling itself ‘The Independent Business Alliance for Competition’, representing 2 million small retailers, has expressed dismay at the Government’s decision to defer reforms proposed by Small Business Minister, the Hon Bruce Billson.

The Alliance has thrown its full support behind Minister Billson’s proposals to strengthen section 46 of the Competition Act, which would see an ’Effects Test’ put in place to stop big businesses from abusing their market power. This would apply particularly to the retail chains who dominate most market sectors.

The Independent Business Alliance for Competition is the result of leading small business groups coming together to work towards fair competition across all business sectors.

The Council of Small Business Australia (COSBOA), the Australian Retailers Association (ARA), Fresh Markets Australia, Australian Newsagents Federation (ANF), Australasian Convenience & Petroleum Marketers Association (ACPMA), and Master Grocers Association (MGA).

The Federal government’s back down on competition laws entrenches a business status quo which strangles business innovation, entrepreneurship and productivity and is contrary to the long term policy interests of Australia, the Alliance says.

It believes an Effects Test is crucial for the future of small business in Australia, as recommended by the Harper Report in September 2014. An Effects Test would stop companies with market power acting to harm competition.

CEO of COSBOA, Peter Strong, said in delaying a decision on the inclusion of an Effects Test, the Government seems to be indicating its resolve to ensure small business can compete on an equal footing with big business is waning.

“Many large businesses, particularly in retail, strangle small business as they compete for market share. Australia needs to ensure there are safeguards in place to ensure that market power is not abused and small businesses are given equal opportunity to compete,” Mr Strong said.

“We are not asking for a hand up, we just want to be able to compete on a level playing field,” he said.

ARA Executive Director, Russell Zimmerman, reiterated the calls for reform of the Competition Act.

“The ARA supports the introduction of an Effects Test to ensure all Australian businesses have the ability to be competitive. An Effects Test would ensure the landscape remains viable for small and medium business, as well as the major corporations,” Mr Zimmerman said.

Jos de Bruin, CEO of MGA Independent Retailers said: “It is disappointing to see the Federal cabinet overthrow the recommendations of an impartial expert committee because of a spurious scare campaign mounted by the elite of Australian big business.”

Together, the Independent Business Alliance for Competition represents more than 2 million small businesses employing 5 million Australians.

 

For further information please contact:

COSBOA – Peter Strong, CEO, 0433 644 097

Australian Retailers Association – Russell Zimmerman, Executive Director, 0439 612 556

Fresh Markets Australia – John Roach, CEO, 0415 767 737

Australian Newsagents Federation (ANF) – Ben Kearney, National Policy Manager, 0417 144 994

Master Grocers Association (MGA) – Jos de Bruin, CEO, 0418 312 723

Central Markets Association of Australia – Andrew Young, Brisbane Markets CEO, (07) 3915 4200

Australasian Convenience & Petroleum Marketers Association (ACPMA) – Mark McKenzie, CEO, 0447 444 011

 

 

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