Harper makes case to split the ACCC into two bodies
Ian Harper used yesterday’s IBA conference address to press his controversial case to split the role of the ACCC and increase the reach of the old NCC to a more powerful policy role.
This, plus splitting the infrastructure regulatory roles from the ACCC, remain the most controversial parts of the Harper committee’s report.
Harper spoke at yesterday’s World Bank-IBA conference which served as a forerunner to today’s International Competition Network conference, which is being attended more than 450 delegates from around the world.
The 11th annual ICN conference features all the top competition regulators from around the world and accompanying lawyers and economists.
Harper told the IBA conference his brief from the government was to do a “Hilmer mark two” and said he expected Small Business Minister Bruce Billson to outline his response to the report on July 1.
Billson is due to address a CEDA conference then and has told The Australian he is keen to lay down his response to get the ball rolling before next year’s election disrupted its implementation.
Harper said his report had taken the competition agenda right into government services including health, education and welfare where his aim was to give consumers choice.
“My mandate was to continue the Harper process right into government to boost the productivity program,” he said.
This process had the full backing of the practitioners at yesterday’s conference but it’s where he talks about splitting the ACCC that some lawyers objected, and ACCC chief Rod Sims has made his concerns widely known.
Harper wants to create an Australian council for competition to comprise state and federal representatives to drive policy reform.
This is a role the ACCC does now and Harper also wants to split off the Australian energy regulator and control for water, energy and telecommunications into a separate agency.
This was supported in a submission by former ACCC chief executive Hank Spier but is strongly opposed by Sims and others.
Clifford Chance partner Dave Poddar yesterday expressed concerns the inclusion of the states on the new competition commission would threaten its role as a policy advocate.
The Harper plans are to incorporate the state agencies into the new body which will be subject to negotiation with the states.
Australian Competition Tribunal chief Justice John Mansfield yesterday said he wanted to keep the power to interview witnesses in his role as a house of review for ACCC decisions.
The Harper report has suggested the tribunal be restricted to reviewing cases by way of written submissions.
Justice Mansfield stressed yesterday the tribunal was able to meet its three-month deadlines in part because the ACCC has done the lead-in work but stressed the advantage of also interviewing parties involved.
In his paper Harper stressed the changes to the Australian economy since Hilmer 20 years ago, with the digital revolution now under way, globalisation and the ageing population being key themes.
The federal government will have to negotiate with the states on the institutional changes being pushed by Harper along with proposed legislative changes.
Harper made clear while the government had commenced the consultation process his report had received more than 1000 submissions, and the final report included draft legislation and the steps to achieving the reforms, which meant his reforms were ready to go. Billson is keen to advance his work.
It’s a just a question of whether he has the support of the rest of the government, starting with Treasurer Joe Hockey who will be concentrating on his Murray review in July.
Cartel soap opera
The ACCC cartel case against Woolworths and laundry detergent producers Colgate and Cussons in a $500 million market is now due to be heard in June 2016.
This works out at some eight years after the events in question actually occurred and some 4½ years after Unilever knocked on the commission’s door in December 2011 to detail the case.
Unilever was granted immunity on the grounds of being the first in the door to give the ACCC the case against the other two producers and Woolies.
The case was first taken to court by the ACCC two years later in December 2013 and several mentions later will now be heard in the middle of next year.
The wheels of justice take their sweet time to work through the system and whether it is worth the effort is another question.
6000 reasons to smile
As some local punters tick the days until the S & P 200 hits 6000 it should be noted next week is a bumper one on the local bourse with about 70 per cent of the local market providing some news and the RBA tipped to cut rates next Tuesday.
The big four banks plus Macquarie will report half-year earnings, or in the case of CBA a quarterly trading update, and that lot counts for around 35 index points.
BHP will be in next with some iron ore shipping data out, and that is another 7.5 points, with Woolworths due out next Wednesday with its strategy day and quarterly sales figures.
The annual Macquarie conference will conclude the week and that includes some big names including Chris Rex from Ramsay, Mike Kane from Boral, Stockland’s Mark Steinert, Tabcorp’s David Attenborough, Santos’s David Knox, Healthscope’s Robert Cooke and many more.
If you work on the theory that news drives stock price performance then next week will be overflowing with hopefully good news to drive the market above the elusive 6000 point mark.
That level it should be noted is still 13 per cent below the all-time high in November 2007 but works out at more than double the near time low of 2700 in March 2009 and will be a data point to drive prices higher.
iiNet to weigh M2 bid
The iiNet board is due to meet this morning to consider the potential competing bid for the company from M2, which is now worth $9.37 a share.
M2 heard from the corporate plod yesterday and issued a clarifying statement just so shareholders would understand the value they were getting — being the scrip offer, which is now worth $9.37 not the stated $10 price talked up on Monday.
As noted yesterday, M2 was a little aggressive in its promised synergy benefits, which had the potential to confuse iiNet shareholders exactly what the offer from M2 was actually worth as opposed to their inflated synergy benefits.
The fall is due to the falling M2 stock price, which is down 7 per cent from the Friday close at $11.52 a share.
Importantly, iiNet is still continuing to climb and at $10.02 a share yesterday is telling you the market thinks TPG will have to lift its price to match the M2 offer.
The iiNet board didn’t meet yesterday and instead received some more details, which will be considered at this morning’s meeting.
All aboard for Bryan
The highly regarded Elizabeth Bryan is starting to look too busy, with the Virgin chair added to a similar role at Caltex and board seats at IAG and Westpac.
She has indicated she intends to stand again for the Caltex job but two company chairs and seats on the highly numerate Westpac and IAG boards are a full hand on any count.
Just whether she plans on reducing her load was not known yesterday but, schedule aside, she is clearly a good catch for the Virgin board.
Extracted in full from the Australian.