This is through the mandatory notification of all mergers.
UK Chancellor Rachel Reeve banged the red tape drum earlier this year about overlapping regulation, but just as mandatory merger notification with absurdly low thresholds is about to be tested in Australia, the UK is working out how to cut the number of mergers its regulator, the CMA, examines.
US President Trump and his one-time sidekick, Elon Musk, and their Department of Government Efficiency is another to spruik “growth” oriented red-tape-slashing policies.
But on mergers the UK reforms “aim to narrow the scope of merger tests, limiting the conditions under which the CMA can intervene”.
The UK and Chalmers can’t both be right but of course a more competitive economy through less industry concentration is the aim in Australia.
Then again, the ACCC didn’t reject any mergers in the 2025 financial year and has publicly rejected just six merger deals in chief Gina Cass-Gottlieb’s three years at the helm. A further seven were withdrawn after concerns were raised, and 16 were accepted after undertakings and other modifications.
The ACCC has now doubled mergers staff to about 140 to handle the expected deluge in merger notifications under the new regime.
It now looks at about 300 deals a year but expects this number to jump to around 450 cases in the new regime, which requires notification of deals with combined turnover of over $200m, or combined market share of 25 per cent.
In a statement, the ACCC said its “aim is to promote competition and consumer welfare through proportionate, well-designed regulation that is targeted to harms and is appropriately enforced”.
It said 80 per cent of deals would be cleared in under 20 business days “providing a faster and more predictable path to clearance”.
As noted earlier this month, for the first time the government is not only making notification compulsory, it is charging $56,800 for every filing and $952,000 for the about 10 deals a year which would be the subject of an in-depth, or stage-two, review.
The ACCC’s reviews to date were funded by the taxpayer.
Every regulator publicly welcomes a request to cut red tape and ASIC chief Joe Longo last year was ahead of his boss, Chalmers, in establishing a simplification consultative group which is preparing a report that’s due in August.
The committee met this week and includes representatives from the AICD, COSBOA, BCA, Governance Institute, Super Consumers and Australian Chamber of Commerce.
In a recent speech, Longo said that in the year of Federation parliament passed 17 laws, whereas today it’s more like 150 to 200 a year.
“Almost all Commonwealth Acts refer to another Act, and several refer to dozens or even hundreds of Acts. Over 49,000 definitions appear across Commonwealth Acts – and around 13 per cent of all words in these Acts are affected by one of those definitions,” he said.
APRA’s John Lonsdale is another taking steps in the right direction; from July, smaller institutions will have more time to meet new requirements, a tiering process will be established to govern who must perform what and when, and a process is now ongoing to simplify bank licensing arrangements.
All of which is not underestimate the importance of political will to back the moves, which is a credit to Treasurer Chalmers.
Every monopolist’s dream
All of APA boss Adam Watson’s dreams came through this week when the Australian Energy Regulator agreed to regulate his Basslink cable between Tasmania and Victoria.
Watson’s win means electricity consumers lose and, even worse, it’s the company not the relevant governments which will decide when to use the link.
The whole idea of the cable was a way to flatten prices when demand spiked but APA is incentivised to maximise its profits, not to keep consumer prices low.
In reversing its December draft decision to reject the APA request, AER chair Clare Savage and her team have clearly lost the plot under the guise of energy security.
All that has happened since the draft is the economics of the proposed replacement cable, Marinus Link, have deteriorated, and now Watson gets to have his cake and eat it.
Marinus was initially planned as a two-cable project which threatened to strand the Basslink asset.
Delays in Marinus and a downgrading to one cable have given some life to the asset and now the AER has underwritten its future by agreeing to provide it with guaranteed returns.
This is every monopolist’s dream.
APA acquired the asset three years ago for $773m and immediately moved to secure its investment by seeking regulation, which was rightly opposed by the Victorian government on behalf of its consumers.
When companies get guaranteed rates of return on monopoly assets consumers, almost by definition, lose.
The 370km Basslink cable running from George Town in Tasmania to the Loy Yang power station supplied Victoria with power for the first time in 2005 and is a two-way venture supplying power to Tasmania when hydro isn’t available.
The Marinus Link owned by the federal, Victorian and Tasmanian governments was formally established in concept earlier this year to upgrade the link, but the two cables are now proposed as just one and the costs have blown out from $3bn to $3.8bn.
Basslink was commissioned in 2006 but the contract between it and Hydro Tasmania, under which Tasmania pays $75m a year, just in case it needs transmission.
The same economics play in ensuring there is peaking gas to offset any loss in alternative renewables power; all the trump cards are in the gas station’s hand.
The only safeguard is someone else has a say in when the power is turned on.
Watson was aware of the loophole, noting in his statement: “Basslink supports energy security in both Victoria and Tasmania.
“A regulated Basslink will also provide greater certainty for consumers, ensuring prices will remain stable and not subject to daily movements in the electricity spot market.”
APA makes its money as a monopoly gas supplier.
Carbon Plus partners
Further to last week’s note on Accounting for Nature’s Carbon Plus initiative, the initial partners on the project will include RegenCo, CO2 Australia, Qantas, Clima, GreenCollar, Climate Friendly and Tasman Environmental Markets.
The Carbon Plus tag pilot will be based on Accounting for Nature-verified accreditation of the state of the land in question, which attached to a carbon credit unit should attract higher prices.
Spending energy on social value
Further to a recent note on the cost benefit analysis of artificial intelligence, Microsoft’s Satya Nadella reportedly told a university group this week: “I think that’s why we all have to keep in mind that if there’s one lesson history has taught us it’s that if you’re going to use energy, you better have social permission to use energy.
“So that means you’ve got to make sure that the output of this AI is socially useful.”
AI is a huge user of energy and as noted published by The Information, the message that AI cuts jobs and doubles energy output isn’t exactly a winner.
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Treasurer Jim Chalmers is following a well trodden path spruiking cutting red tape but, ironically, his well intentioned copycat campaign comes just as the ACCC is about to embark on his sanctioned biggest increase in merger red tape in history.