The last major review of competition policy in Australia, chaired by Professor Fred Hilmer, was over 20 years ago. The current review, chaired by economist Professor Ian Harper, reflects the contemporary marketplace, addressing concerns about competition restrictions in the digital sphere – online shopping, app-based services such as Uber, intellectual property and consumer access to consumption data, for example.
Key reforms for consumers recommended in the review include:
- Prioritising the review of taxi industry regulations with a view to removal and increased competition.
- Addressing the 'Australia Tax' by reviewing intellectual property laws, allowing parallel imports of cheaper overseas goods, and enabling consumers to get around so-called online 'geoblocks'.
- Enhanced competition in the pharmacy sector by removing restrictions on pharmacy ownership and locations, allowing them to operate in supermarkets.
- Development of a framework that provides consumers with access to the data that they create in everyday transactions, with appropriate tools to ensure that consumers can be empowered to make decisions based on what suits their situation best.
Removing retailer trading hours restrictions, revisiting restrictions on alcohol sales in supermarkets and the abolition of price regulation of health insurance premiums are also among the recommendations.
CHOICE welcomes reforms that benefit consumers
CHOICE strongly supports the Final Report's recommendations relating to intellectual property, competition in the taxi industry, and consumer access to data.
"These reforms are about delivering Australian consumers better prices and services, especially where some domestic industries have long been shielded from competition," says CHOICE CEO Alan Kirkland.
This includes the ability to get around so-called online 'geoblocks' and access a wider range of products from overseas, removing barriers to parallel imports of cheaper goods, increased price competition in the pharmacy industry and removing regulatory barriers that prevent competition in the taxi sector.
"We also welcome moves to give Australians access to their own consumption data, an approach that could help cut through the confusion and complexity in services like energy, banking and insurance," Mr Kirkland says.
In our submission to the review, CHOICE argued that changes to the laws that restrict anti-competitive behaviour by large corporations should be reframed in the long-term interests of consumers. There are some positives in the recommendations, whereby a corporation that has a substantial degree of power in a market is prohibited from engaging in conduct that has the purpose, or would have or be likely to have the effect, of substantially lessening competition in that or any other market. But while this does have the intention of protecting small businesses to some extent, the long-term interests of consumers weren't addressed.
Caution on human services reforms
CHOICE also has concerns about reforms in the area of human services. In areas like health, aged care and other essential human services, consistent quality and access for Australians should be the priority, and pursuing competition as an end in itself can actually do more harm than good.
"As we debate Professor Harper's many recommendations, our message to the federal government is to stay focused on the end-game for competition law, which is making life better for Australians," says Kirkland.