Peter Strong, 15 March 2016

Dear Prime Minister,

In light of the recent public debate about proposed changes to section 46 of the Competition and Consumer Act 2010, I am writing to set out the concerns of the Council of Small Business of Australia.

The impediment to this needed change has been the covert and indeed disgraceful behaviour of a few very dominant businesses to entrench their own vested positions.

Our concerns go well beyond the interests of our member associations, who represent between 450,000 and 500,000 small business people and their families.  We are deeply concerned about the risks to consumers, businesses of all sizes and the capacity of the economy to adapt in response to unprecedented global disruption.

It is our view that by not implementing the changes to section 46 about governing the misuse of market power, as proposed in the independent Harper Review, we risk:

– Increasing costs for consumers, by discouraging companies from offering lower prices or improving their range of products, due to lack of competition.

– Lowering investment and productivity growth, as companies will remain hesitant to innovate or grow because of uncertainty about the lack of access to local markets and the control of their inventory by major retailers.

– Reducing job creation, as the impact of the lack of change flows through the economy and stifles innovation.

– Decreasing future choice for consumers as the largest businesses dominate sectors including retail, aged care, human services, telecommunications and transport.

Indeed, we believe the proposed changes do not go far enough and to fail to implement even these watered-down provisions will send the wrong message.

The lack of change will enhance the dominance of a few companies and organisations, which will impact negatively across producers and manufacturers in particular.

In the end, it is the largest, most dominant companies that cannot change quickly to take advantage of disruption.  As you so rightly pointed out on appointment as the leader of the nation, we must give the more nimble businesses the space to move and do what they do best – innovate and convert risk to success.

The impediment to this needed change has been the covert and indeed disgraceful behaviour of a few very dominant businesses to entrench their own vested positions.

The secret threats from these businesses made to the previous administration were successful at the time and resulted in a reversal of a stated position to accept all of the Harper Review’s recommendations. The fact these covert threats were made is more indicative of Third World government practices than an adherence to the intent of democratic process. The Labor Party has already kowtowed to the needs of the retail union, which is connected closely to these big businesses.

The small business community has noted this behaviour. If the Harper recommendations are not approved as is, or preferably strengthened further, then the message to the business community is clear – that a few businesses and organisations with political muscle determine the direction of industry policy in Australia.  We believe this has been the case for decades, which is why productivity has struggled and why our standard of living is now under serious threat.

Prime Minister, we ask you to ignore these attacks on the democratic process where the wealthy and powerful have an unfair advantage and undue influence. Maintaining the status quo is not what is needed. We ask you do what is best for our country by implementing Professor Harper’s independent reviews proposals in full.

Peter Strong

Chief Executive

Council of Small Business of Australia

Extracted in full from the Sydney Morning Herald.