02.CHOICE CEO Message - February
One of the great things about Australia is our commitment to making the most of summer, which means the country pretty much shuts down for the month of January. February, however, signals a return to the grindstone – and this is as true for our system of government as it is for the rest of the community.
CHOICE expects to see the new federal government’s agenda really take shape in the next few months. And from the early signs, big changes are on the horizon for consumers.
Some of these changes will flow from a major review of competition laws – the successor to the landmark review completed by Fred Hilmer in 1993. This process is important because the changes should mean consumers are less likely to be ripped off in competitive markets. The Hilmer review, which was largely adopted by the federal and state and territory governments, changed Australia for the better, with the establishment of the ACCC and the Trade Practices Act being extended to cover all commercial practices.
The new review will look at whether our competition laws have kept pace with massive changes in technology and global markets in the past 20 years. It will examine whether these laws are still up to the task of ensuring that markets for essential goods and services, such as groceries, fuel and utilities, are genuinely competitive.
The government has also made clear it wants the competition inquiry to look beyond traditional competition issues. It will, for example, examine what needs to change in order to allow Australian consumers to buy goods and services at internationally competitive prices. This will allow us to highlight our work on what we call the “Australia tax” – the price discrimination that means we pay significantly more for many goods and services than people in other countries.
The inquiry will also consider whether more markets should be opened up to parallel imports, allowing importers to get around the inflated prices that multinationals set for goods shipped to Australia.
Along with the competition review, another major inquiry will examine the Australian financial system, which will allow us to highlight the difficulties many consumers face when trying to choose the best mortgage or credit card.
The issue that’s likely to dominate national debate for the next six months, however, is the government’s commitment to abolish the carbon tax. When the tax was introduced, there was no shortage of business groups lining up to use it as an excuse for increased prices. But now it looks set to be abolished, they’re falling over each other to warn that we should not expect prices to drop.
We’ll be watching this very carefully, ready to refer any shonky claims to the ACCC.
Alan Kirkland, CEO