7 September 2015
Transcript - #2015102, 2015

Interview with Ross Greenwood, Money News, 2GB, Sydney

SUBJECTS: competition law

ROSS GREENWOOD:

Let’s go to the man who is responsible for all of this, he is inside the Federal Cabinet, that is important. That is the Small Business Minister Bruce Billson. Many thanks for your time Bruce.

MINISTER BILLSON:

Good to be with you and your listeners again Ross.

ROSS GREENWOOD:

I should say, happy anniversary. It is the second anniversary of the Abbott Government. The Government quite clearly in the polls is not as strong as it was when it came to power. Is there a sense that maybe opportunities have been missed by this Government?

MINISTER BILLSON:

Well, I will let others make that judgement Ross. I know what I have been doing is head down, bum up, working hard, backing small business to create jobs and opportunities and we have been very effective in rolling out all of our election commitments; and then even further initiatives such as the $5.5 billion small business budget package.

That was, that has been an enormous boost for small business and we are starting to see the signs of that work. More businesses formed in the last twelve months than in any time in our country’s history. Interestingly, more by women than men.

And we are seeing jobs growth in the small business sector after years of jobs decline under the previous government. So we are getting many things right but there is always more to do.

And you have touched on a key area that is a part of my work as the Minister responsible for competition policy and consumer affairs – getting the balance right so that where there are these commercial relationships; where there is an enormous imbalance in market power and commercial muscle, making sure we have got the safe guards in place so that people can contest opportunities to delight customers but that small businesses are not taken for a ride and rolled over the top by the big guys just because they can.

ROSS GREENWOOD:

Alright, let’s go to that very point because it has been written popularly that you have been rolled by your own Cabinet in regards to try and introduce what is called an ‘effects test’ so in other words, this is trying to beef up Section 46 of the Competition and Consumer Act.

This was recommended by Professor Ian Harper in his competition review and you also supported this change.

MINISTER BILLSON:

Yes.

ROSS GREENWOOD:

It seems now that the Cabinet has put this on the backburner. Have you been rolled or not?

MINISTER BILLSON:

No, not rolled. Some say I roll about because of my slightly cuddly winter coat, but not rolled.

What we are doing is working in a very thoughtful way through all 56 of the recommendations that Professor Harper and his panel put to government.

You might remember I took to the last election a commitment to have a root and branch review of the competition policy, the laws that are in place and the institutions. A thousand submissions later and a fantastic more than 500 page piece of work from Professor Harper encapsulates those 56 recommendations.

The one that is particularly contentious is the one you referred to; Section 46. It is known as the ‘misuse of market power’ provisions in the current law. Frankly, it is a dud. It does not work. It is like a hunting dog that won’t leave the porch.

It is possibly the weakest of its kind anywhere in the developed world. No other economy in the world has such a weak provision dealing with dominant businesses able to use their economic muscle – not to win the contest to delight customers, not to support economic growth, competitiveness in the economy and outcomes for consumers – but to take out businesses or to fortify their positions so that new entrants don’t get a chance to take on established players.

Now, if we want to energise enterprise and see innovation, job formation, be really a part of the new economy, where there is disruptors coming in all the time with new ideas, new products, new services, they should not run into this wall of a dominant business being able to block from even having a chance to compete in the economy.

The law currently doesn’t achieve that ambition. That is why there is a very strong case for change.

ROSS GREENWOOD:

So Bruce Billson, are you saying that you have not been rolled by your Cabinet and at some stage you would imagine inside that Competition and Consumer Act there will be some form of effects test that will make the imbalance between large business and small business a much more even proposition.

Is that what you are promising?

MINISTER BILLSON:

Yeah look, it could be one of a number of things Ross. I have not been rolled because the Cabinet has not concluded its deliberations on this. It is part heard, and given the very strong sentiments that have been expressed about the proposal for change, particularly by the Business Council and some of the larger conglomerates in our …

ROSS GREENWOOD:

Well, can I pick you up there, because you have got the Retail Council that represents all of the big retailers in Australia, they have come out today and said the foundation of any Federal Cabinet deliberations on the Government’s response to the Competition Policy Review should lie firmly with their responsibilities to the consumer and not any one segment of industry.

What they are effectively saying is, hey we are in this game as well, don’t suddenly tip the balance towards the small businesses trying to compete with us because frankly we like the shop the way it is.

MINISTER BILLSON:

Yes and that is not surprising because the provisions in the law are expressly designed- or are intended to be expressly designed to deal with dominant businesses and recognising that they are in a particularly unique position in our economy, that if they misuse that dominant position, it can not only harm consumers but harm the economy.

I understand the lines that are being run by some of the big retailers and of course they like the way the law is at the moment. But the consumer interest is served by healthy competition.

That means other businesses, not just the dominant, established players should be able to delight customers, to bring new offerings to the marketplace.

That is in the interest of consumers, so that they get choice and variety – a chance to decide what value is in their minds, where new offerings are able to delight them and not have all of that choice and potential frozen out by an established, dominant player…

ROSS GREENWOOD:

Alright, so you are promising me here, Bruce Billson, that within this review that the Government will undertake, that the imbalance between large businesses and small businesses, it is likely to be redressed?

MINISTER BILLSON:

I will keep making the case Ross. I will keep making the case because I think…

ROSS GREENWOOD:

Do you think your Cabinet colleagues are listening two years on?

MINISTER BILLSON:

They certainly are and they have taken on board a great deal of material that I have provided them. Some of this is quite subtle. I mean there are some legal cases that really have borne out the problem.

One where a particular producer of a particular product had about a 50% market share but wanted to soak up about 90% of the key input so that no one else could compete with them.

We have got other examples where the courts have found that the conduct of the dominant business was not only with the purpose and the effect of substantially lessening competition, but they were found not to have broken the law because the tactic that they used may have been used by a smaller business even if that smaller business had no effect from using that same tactic.

So there is quite a lot of detailed legal argument and jurist prudence that sits behind the need to renovate these provisions.

I respect the fact that dominant businesses like it the way it is now. It is a dud, it does not work and it is supposed to make sure that that dominant market position does not result in harm to the economy and to consumers. I just want the provision to work Ross.

ROSS GREENWOOD:

There you go. Bruce Billson is our Small Business Minister. Always good with his time on the program, and we appreciate it this evening Bruce.

MINISTER BILLSON:

Good to talk with you Ross and good to be with your listeners.