John Durie: With its energy investigation, the ACCC is in danger of becoming a government lap dog

accc

source: private media.

Australian Competition and Consumer Commission (ACCC) boss Gina Cass-Gottlieb should be wary about raising expectations in the wake of the extraordinary focus on her utterly expected inquiry into electricity pricing.

Treasurer Jim Chalmers wrote to Cass-Gottlieb on June 6 asking her to investigate the industry, and lo and behold, she is.

There’s no mystery here; it was a classic political response in the wake of an energy crisis to which there is no easy answer.

The government referred the matter to the ACCC so it looks like the government is doing something, when it is not. 

In one sense, it is a credit to the ACCC that it can be used in this way because it underlines its credibility. But in another, it is dangerous.

If the ACCC does nothing then the exercise won’t look so clever, except the government has bought some time. The more this happens, the less useful it becomes.

The regulator can talk up its investigative powers all it wants, but if it doesn’t do anything, it starts to look toothless.

The ACCC does have investigative powers under its section 155 notices, which it can use when the commission has reason to believe there may be a breach.

So Cass-Gottlieb is raising expectations to what end?

The Australian Energy Regulator (AER), which is attached to the ACCC, has broader powers in electricity and Cass-Gottlieb may have been better off leaving it to the AER to do the big stick waving.

The danger for the ACCC in being a government lap dog is it becomes politicised, and that is perilous for an independent regulator.

Let the politicians play their own games, but don’t be their pawn.

When AEMO stepped into control the market last week that presumably was the end of any games in the industry.

So what is the ACCC investigating anyway?

Maybe it will uncover some alleged rorts and for Cass-Gottlieb’s sake lest hope so, otherwise her reign would have started partly as a political tool.   

The history of these games dates back decades when successive treasurers asked the ACCC to look into petrol prices. It was quickly discovered that, apart from adding some useful transparency, the ACCC has no real powers over how petrol prices are set.

The odds are the same with electricity, which is well established to be a victim of a decade or more of inaction by successive federal governments.

None of this inaction is something covered by the competition laws. 

Cass-Gottlieb was left in a tough position when she was asked by the Treasurer to have a look at the market. It gave her extra powers but she needs to be careful she is not unduly raising expectations.

Her terms as ACCC boss has just started, which means she has some time to learn the error of her ways.      

Equally punters should look at her involvement for what it is — at the direction of a politician who wanted to make it look like he was doing something.

Expectations should be adjusted accordingly. 

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Dylan Lindgren
Dylan Lindgren
8 days ago

Where was this concern John when the government did the exact same thing in April 2020 and wrote to the ACCC instructing them to develop what became the News Media Bargaining Code? If I remember correctly, you were supportive of their action? If this action is being a “government lap dog” then surely that action was too?

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