Effects test to be ruled in or out prior to May’s budget as business groups ramp up lobbying efforts

Treasurer Scott Morrison

Small businesses will know whether or not Australia’s competition laws will be strengthened before the Turnbull government hands down its first budget.

Treasurer Scott Morrison assured a group of representatives from more than 20 business associations last night they would know whether or not an effects test will be inserted into the Competition and Consumer Act within the next few weeks.

However, the Treasurer did not give any indication of which way he is leaning in regards to the controversial issue.

An alliance of small business associations including the Council of Small Business of Australia, the Australian Chamber of Commerce and Industry, the National Farmers Federation, Master Grocers Australia, the Australian Hotels Association and the Pharmacy Guild of Australia have ramped up their lobbying efforts in recent weeks in a bid to get the effects test proposal adopted.

At the same time, the federal government has also been lobbied by large corporates and the Business Council of Australia, which say the current policy environment is working well and there is no need to introduce an effects test.

The effects test would mean small businesses would no longer have to prove a big company intended to snuff out competition.

Instead, aggrieved businesses would have to prove there was a lessening of competition as a result of a larger firm’s actions.

Jos de Bruin, chief executive of Master Grocers Australia, told SmartCompany last night’s meeting gave him and others “great confidence” that the concerns of small business had been heard loud and clear.

“Barnaby Joyce joined us as well,” de Bruin says.

“He was extremely encouraging of us as an extremely large sector of the community coming together in the way we did. He is all about everyday people having a red hot go and not being stifled by big business.”

Business groups prepared to campaign in marginal seats if effects test not introduced

Peter Strong, chief executive of COSBOA, told SmartCompany small businesses have been “done over” by competition laws for too long, with big businesses having the upper hand.

“He [Morrison] said he won’t bend to anyone,” Strong says.

“But for 20 years we’ve heard a lot of people say that. The reason Wesfarmers [and others] are so dominant is they have effectively written competition policy in this country.”

Strong says last night was not a last-ditch effort to convince the Treasurer but rather a show of force.

“Among the group that was there last night, we would have had 500,000 employers represented, which reaches out to 4 million employees,” Strong says.

“We know Wesfarmers are saying because they’re so big they’ve got to be listened to. But what we’re saying is because you’re big doesn’t mean you’re right.”

Strong says COSBOA has plans to do a mail-out in marginal Liberal seats come the election, should the government not introduce an effects test.

The small business group also has its eyes on marginal Labor seats, given Labor has indicated it also does not support an effects test.

“We know the Greens support the effects test and Labor doesn’t, so there will be every chance we target a seat where Labor and the Greens are marginal,” Strong says.

“We would never tell people how to vote… what we’d do is highlight the policies we think are good.”


Broede Carmody is a former senior reporter at SmartCompany. Previously, he was a co-editor of RMIT University’s student magazine Catalyst.

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