Effects Test, Politics

How the small business community came together and convinced the government iPhones would not be at risk if competition laws were strengthened

Broede Carmody /

It’s not often the small business community can say it’s happy with Canberra.

Whether it’s easing Sunday penalty rates or convincing the federal government to cut company tax, small businesses often have their policy wishlists thrown in the too-hard basket.

But today, the day after Malcolm Turnbull announced his government would be introducing an effects test into competition law, the mood among the small business community and politicians who have long argued for reform is palpable.

“I’m thrilled, delighted and absolutely tickled pink,” former small business minister Bruce Billson told ABC Radio this morning.

“Common sense and good public policy prevailed,” Jos de Bruin, the chief executive of the Master Grocers Association, told SmartCompany.

“[It’s] brilliant.”

So how did the small business community achieve such a major policy win when cabinet was previously bitterly divided over the issue?

Here’s a brief timeline of how the effects test went from being recommended by an independent review to becoming government policy:

March 2015

The Harper Review into competition law recommends inserting an effects test into section 46 of the Competition and Consumer Act despite concerns from big business. The Abbott government said the recommendation will be subject to an eight to 10 week consultation process, but it will take much longer for the proposal to be put to cabinet.

April 2015

Labor flags it is siding with big business over the effects test, with shadow treasurer Chris Bowen arguing the effects test will create a “lawyer’s picnic”.

September 2015

Small business minister Bruce Billson puts the effects test proposal to cabinet.

In the dying days of his government, Tony Abbott delays making a decision on the effects test indefinitely with cabinet still divided. SmartCompany launches a petition calling on the government to introduce an effects test.

Malcolm Turnbull secures the prime ministership.

On one hand, there are fears the effects test could be put on the backburner following Bruce Billson’s demotion and Kelly O’Dwyer stepping into the role of small business minister. However, the small business community’s hopes are kept alive because in order to secure the backing of the Nationals, Turnbull agrees to bring the effects test back before Cabinet.

A “secret” letter written by the Business Council of Australia and distributed to MPs reveals big business is worried innovations like the iPhone are at risk if Australia adopts an effects test.

This is despite countries such as the United States, where the iPhone was invented, already having an effects test in place.

The government shifts final responsibility for the effects test decision from the small business portfolio to Treasurer Scott Morrison.

October 2015

The Greens confirm they support an effects test and are ready to work with the Government to pass it through the Senate.

November 2015

The government announces it is delaying its final decision on the effects test until the new year. Morrison announces another round of consultations.

February 2016

Submissions to Treasury show the Business Council of Australia is still claiming innovations like the iPhone are at risk if an effects test is introduced.

A broad-based coalition of groups representing small businesses and farmers rallies together in order to lobby the Treasurer. IGA stores hang sings in their windows calling for an effects test and a petition is signed by thousands of people.

March 2016

Cabinet finally throws its support behind an effects test, but it remains unknown when the legislation will come before parliament.

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Broede Carmody

Broede Carmody is a former senior SmartCompany reporter. Before this, he was a co-editor of RMIT University's student magazine Catalyst.

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