Individuals to be target of productivity reforms

Treasurer Scott Morrison is due to unveil a productivity package next week. Pic: AAP

Over two years after the Harper report was handed to the government the amendments recommended were formally passed by parliament today, finally clearing the way for implementation of an “effects test” in abuse of market power laws.

The key industry reforms recommended by Harper to health, roads and other government services are still stuck somewhere in the COAG process, with the Labor states failing to support the changes.

Treasurer Scott Morrison is promising a revamped effort on productivity reform based on the latest report from the Productivity Commission on its five-year review.

Morrison is due to unveil the government package at a CEDA event on October 24.

The selling point will be the individual benefits from reform as opposed to past productivity reforms which have gone to companies first and then trickled down to the person on the street.

This time around Morrison will be selling the reforms based on individual benefits from education, social services delivery and road funding reforms.

The message is akin to yesterday’s power package, which plucked out a figure of $110 a year as the potential saving to come from the energy guarantee.

The Productivity Commission recommendations are likely to have better modelling on any such benefits.

The package will encompass much of what Professor Ian Harper laid out in his paper two years ago, so at least the ideas will get some political weight behind them, with the Treasurer hitting the podium in Canberra.

The amendments which passed today will mean changes passed earlier to section 46 will be formally introduced.

The key changes include removing the words “take advantage” from the section, which means it will be easier to prove company X was guilty of abuse of market power if the effect of the conduct was to substantially reduce competition, even if a smaller company could have behaved the same way.

Another key reform is to introduce the concept of concerted practices, which captures conduct by companies where they might share information without actually agreeing to raise prices but the end game was to reduce competition.

The changes also mean the Australian Competition and Consumer Commission is the only avenue to the Competition Tribunal and in considering a formal authorisation request the ACCC will look at both the public benefit and impact on competition.

The Tabcorp-Tatts deal was the last merger which went straight to the Competition Tribunal and it is still running the gauntlet, defeating the intent of getting the deal done quickly.

There are other changes in the package, which essentially completes the Harper reforms.

Just the big ticket items remain, which require concerted political pressure from Morrison to achieve the huge national reforms on the table.