Competition policy and Labor

1 September 2014

The Labor Party's tradition of competition reform has strengthened markets, fostered innovation and benefited Australian consumers. I spoke of this tradition in the Parliament today to remind the House which party truly believes in the benefits of competition.

I am pleased to rise to speak on the important issue of competition as Labor's shadow minister for competition. We, on this side of the House, have a proud tradition of reforms in the competition space. Through the long salad years of the Menzies government, little was done on competition policy. The Restrictive Trade Practices Act was regarded as relatively weak and it was not until the Whitlam government that Australia, for the first time, had a Trade Practices Act. As Kep Enderby said in introducing that bill to the House for the first time, 'The effect of empowering consumers themselves to take private action to enforce their rights.' And it was a Labor government, under Paul Keating, which put in place national competition policy. 

As Mr Keating said in 1992:

It is no accident that Australia’s most efficient and commercially successful producers have been those which have been subject to strong competition. And the most stringent competitive standards are those in world markets….

That was a Labor government, like the Hawke and Whitlam governments before it, that recognised that bringing down the tariff walls was a necessary part of competition reform in a nation like Australia. The Hilmer competition reforms eventually resulted in putting in place a National Competition Council and an Australian Competition Commission, now the Australian Competition and Consumer Commission. Those reforms were absolutely vital for ensuring that Australian consumers were better off, and they were of a piece with Labor's tariff reforms, which put thousands of dollars back into the pockets of ordinary households. That should always be the test of competition reform. The question is not, 'Does it assist competitors?' the question is, 'Does it assist consumers?'

The government has been all things to all people, promising a competition review which will simultaneously lower prices and assist suppliers. These are Liberal and National parties with no great track record on the issue of competition policy. While we on this side of the House can claim the Trade Practices Act, the Competition and Consumer Commission and the National Competition Policy as our legacy, those on that side of the House can claim the Birdsville amendment—an amendment apparently conceived in the Birdsville pub.

As Craig Emerson, a great Labor competition reformer, put it:

… Labor's guiding philosophy of economic reform has been a commitment to markets and competition—a commitment reaffirmed by Julia Gillard as Prime Minister. Of course there can be a role for government intervention to correct for market failure, including anti-competitive behaviour and inadequate private incentives for research and development. But the presumption must be that competition is good, more competition is better and markets are better than governments in allocating scarce resources among competing commercial uses.

This philosophy has guided past Labor governments, and that philosophy is why Labor opened up Australia, bringing down the tariff walls. It has been done with the assistance of members of my former profession. Great Australian economists such as John Crawford, Heinz Arndt, Max Corden, Richard Snape, Ross Garnaut and many others have worked to open up the Australian economy.

We can have reasonable discussions on competition policy. There are a variety of approaches internationally on competition policy and we should be open to improvements in the act. But our test must always be: what will assist the vast bulk of Australian families? We must always take the approach that we are for the many rather than for the few. Certainly as a Labor member of this House, I am happy to stand firmly on the side of consumers. Lower grocery prices are a great boon to Australian households. I remember as a little kid my parents needing to save up to buy a pair of school shoes, an item whose price was then doubled or tripled by tariffs but which can now be purchased for $10 or $20 from a department store. The benefits of lower prices flowing to consumers are one of the things that we in this House should defend.


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8/1 Torrens Street, Braddon ACT 2612 | 02 6247 4396 | Andrew.Leigh.MP@aph.gov.au