Business groups say Labor needs right balance under plans to give ACCC new powers

Business groups say the government risks hurting the economy if it gives the ACCC too much power under plans to reform Australia’s corporate merger rules.

Business groups are calling on the federal government to strike the right balance and avoid overzealous reform as it prepares to ­rewrite Australia’s corporate merger rules, including giving the Australian Competition and Consumer Commission greater power to block deals between companies.

Following the release of a consultation paper on major proposed changes to the way the competition watchdog regulates mergers and acquisitions, business groups are concerned that too much power would hurt the economy.

It comes after Treasurer Jim Chalmers wrote in The Australian on Monday that current regulations has left citizens paying higher prices for worse products and services over the past few decades.

“Right now, Australia needs innovative businesses more than ever to help drive the transition to net zero, to make the most of emerging data and digital innovations, and to seize the opportunities from the growth of the care economy,” he said.

Business Council of Australia chief executive Bran Black told The Australian that, while the ­industry body always backed ­efforts to make the Australian economy more competitive, he urged the government to ensure it got the balance right.

Federal Treasurer Jim Chalmers says that the current corporate merger rules are hurting consumers. Picture: NCA NewsWire / Martin Ollman

“The review presents an opportunity to evaluate the function of Australia’s merger law framework in that context,” he said.

“However, it’s critical that any reform in this space gets the balance right, as we’d be concerned about risks to the economy if merger activity is stifled by overzealous and potentially uncertain regulation at a time where Australian industry needs to compete globally.”

The ACCC has proposed that firms above a certain size would have to gain formal approval from the watchdog before pursuing any deals, along with a special “call-in” power to capture smaller mergers that raised specific competition concerns.

This would be different to the current rules where firms don’t need to notify or get clearance from the regulator before any takeover is finalised, which forces the ACCC to the make case in the Federal Court to unwind deals.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said improvements to corporate merger rules needed to benefit both business and consumers.

“ACCI is a firm believer in the benefits of vigorous competition in the business sector and supports the government’s review of Australia’s competition settings,” he said. “While improvements in the competition landscape have the potential to benefit both businesses and consumers, the government must tread cautiously and carefully weigh the consequences of any changes to its policy settings.”

The ACCC in August blocked ANZ’s $4.9bn acquisition of Suncorp, and more recently has raised concerns about Woolworths’ $586m deal to take a controlling stake in Petstock.