Turnbull government to implement ‘effect test’ in competition policy in response to Harper Review

THE conduct of big business will come in for greater scrutiny under a new competition policy to be adopted by the Federal Government.

Australian Prime Minister Malcolm Turnbull speaks to the media during a press conference at Parliament House in Canberra, Wednesday, March 16, 2016. (AAP Image/Lukas Coch) NO ARCHIVING

MALCOLM Turnbull has confirmed the government will bring in an “effects test” to help small businesses be more competitive, but denies he’s backflipped on the issue since becoming Prime Minister.

Contrary to reports he’s previously spoken out against introducing an effects test, which would limit the control big businesses have on markets, Mr Turnbull said today he’d always had an open mind about such reforms.

“I have had quite a lot of experience with competition in a practical sense, particularly with emerging businesses competing with larger businesses so I’m not a theorist in this area but I’ve approached this issue of law reform in a very open-minded way as, indeed, has the Cabinet,” he said.

At a joint press conference with Treasurer Scott Morrison and Small Business Minister Kelly O’Dwyer, Mr Turnbull said the government would implement changes to competition laws in line with the recommendations of the Harper Review.

The reforms will strengthen competition laws, subjecting big businesses to an ‘effects test’ — which means instead of proving they intended to reduce competition, the burden of proof would be that their conduct had the effect of reducing competition.

“What this will do is ensure that our competition law works better to enable competition, to enable smaller businesses, emerging businesses, to be better able to compete because we know that while larger firms are often very innovative and very often very competitive, they are more innovative if the hot breath of competition is coming down their neck. So we want to have a competitive Australia,” Mr Turnbull said.

Mr Morrison said the government would also make two other changes to competition law, including the “removal of the take advantage position.”