Origins
In 1992, an independent committee of inquiry, the National Competition Policy Review Committee, was established by Prime Minister Keating to inquire into and advise on appropriate changes to legislation and other measures in relation to the scope of the Trade Practices Act 1974 and the application of the principles of competition policy. The Committee was chaired by Professor Fred Hilmer and also comprised Mr Geoffrey Tapperall and Mr Mark Rayner.
Paul John Keating is an Australian politician who served as the 24th Prime Minister of Australia and the Leader of the Labor Party from 1991 to 1996. He had previously served as Treasurer in the Hawke Government from 1983 to 1991.
Professor Frederick George Hilmer AO is an Australian academic and business figure. He was the President and eighth Vice-Chancellor of the University of New South Wales, an appointment he held from June 2006 till January 2015. He has also served as a director and Deputy-Chairman of the Westfield Group since 1991.
The report was commissioned against a backdrop of major microeconomic reforms led by the Keating Government, but slow progress on areas of the economy sheltered from competition as a result of constitutional limits on the application of the Federal Trade Practices Act or of other actions by Federal or state governments. The report thus had important implications for state-owned enterprises, many of which had begun entering into commercial activities; the professions, which were excluded from the application of Federal law; certain agricultural marketing entities granted monopoly rights; and certain infrastructure entities.
The report was prepared through a consultation process that included public solicitation of submissions, public meetings, and extensive discussions with State governments. The Committee presented its report, commonly referred to as the 'Hilmer Report', in 1993. The principal recommendations were:
- to bring all commercial activity in Australia within the purview of the Trade Practices Act, regardless of legal form or ownership of the enterprise, thus putting to an end anomalies arising from the division of constitutional authority between Federal and State governments.
- to establish a new regulatory regime to prevent enterprises that controlled an "essential facility" with natural monopoly characteristics from abusing their market power. The new "access regime" was to be part of an expanded Trade Practices Act.
- to establish a set of principles which all Australian Governments should adopt, the most important of which were:
- legislative or regulatory impediments to competition should be subject to review to ensure the costs associated with reduced competition were exceeded by public benefits
- before engaging in commercial activity, state-owned entities should be subject to "competitive neutrality" requirements to address distortions to competition arising from their various policy privileges.
- to reform the organisational arrangements competition policy in Australia, by expanding the role of the Trade Practices Commission (to be renamed Australian Competition and Consumer Commission) establish a Competition Policy Council to advise on issues arising the inter-governmental arrangements.
The Australian Competition and Consumer Commission (ACCC) is an independent authority of the Australian government. It was established in 1995 with the amalgamation of the Australian Trade Practices Commission (TPC) and the Prices Surveillance Authority to administer the Trade Practices Act 1974 (TPA) (Cth). Its mandate is to protect consumer rights, business rights and obligations, perform industry regulation and price monitoring and prevent illegal anti-competitive behaviour.
The report's recommendations were endorsed in their entirety by Federal and State governments but opposed by a range of other parties such as the Greens and the Democrats and independents. The recommended changes to the Trade Practice Act were implemented quickly, and the report was also used as the basis of the Competition Principles Agreement reached at the 1995 meeting of the Council of Australian Governments (COAG). The term 'Hilmer reforms' is now used to refer to processes arising from the intergovernmental Competition Principles Agreement and the associated Competition Policy Reform Act 1995 (Cwlth).
The Australian Greens, commonly known as The Greens, are a green political party in Australia.
The Australian Democrats is a centrist political party in Australia. Founded in 1977 from a merger of the Australia Party and the New Liberal Movement, both of which were descended from Liberal Party splinter group, it was Australia's largest minor party from its formation in 1977 through to 2004 and frequently held the balance of power in the Senate during that time.
The Council of Australian Governments (COAG) is the "peak intergovernmental forum in Australia". Comprising the federal government, the governments of the six states and two mainland territories and the Australian Local Government Association, it manages governmental relations within Australia's federal system.
Key provisions
The stated objective of National Competition Policy, as it applies to the public sector, is to achieve the most efficient provision of publicly provided goods and services through reforms designed to minimise restrictions on competition and promote competitive neutrality. The principal reform required under the policy is the application of a public benefit test to justify the maintenance of any public policy that prima facie restricts competition. Policies for which a public benefit cannot be demonstrated must be repealed or modified so that they do not reduce competition.
The objective of competitive neutrality policy is the elimination of resource allocation distortions arising out of the public ownership of entities engaged in significant business activities: Government businesses should not enjoy any net competitive advantage simply as a result of their public sector ownership. Such principles apply only to the business activities of publicly owned entities, not to the non-business non-profit activities of such entities.
Other areas of National Competition Policy require structural reform of public monopolies and require owners of monopoly facilities to negotiate third-party access agreements with other users.
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity. This contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service, and with oligopoly which consists of a few sellers dominating a market. Monopolies are thus characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the possibility of a high monopoly price well above the seller's marginal cost that leads to a high monopoly profit. The verb monopolise or monopolize refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power to charge overly high prices. Although monopolies may be big businesses, size is not a characteristic of a monopoly. A small business may still have the power to raise prices in a small industry.
Third party access policies require owners of natural monopoly infrastructure facilities to grant access to those facilities to parties other than their own customers, usually competitors in the provision of the relevant services, on commercial terms comparable to those that would apply in a competitive market.
Microeconomics is a branch of economics that studies the behaviour of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.
Privatization can mean different things including moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when a heavily regulated private company or industry becomes less regulated. Government functions and services may also be privatized; in this case, private entities are tasked with the implementation of government programs or performance of government services that had previously been the purview of state-run agencies. Some examples include revenue collection, law enforcement, and prison management.
The Federal Communications Commission (FCC) is an independent agency of the United States government created by statute to regulate interstate communications by radio, television, wire, satellite, and cable. The FCC serves the public in the areas of broadband access, fair competition, radio frequency use, media responsibility, public safety, and homeland security.
In the United States, antitrust law is a collection of federal and state government laws that regulates the conduct and organization of business corporations, generally to promote fair competition for the benefit of consumers. The main statutes are the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. These Acts, first, restrict the formation of cartels and prohibit other collusive practices regarded as being in restraint of trade. Second, they restrict the mergers and acquisitions of organizations that could substantially lessen competition. Third, they prohibit the creation of a monopoly and the abuse of monopoly power.
Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental regulation of the economy. It became common in advanced industrial economies in the 1970s and 1980s, as a result of new trends in economic thinking about the inefficiencies of government regulation, and the risk that regulatory agencies would be controlled by the regulated industry to its benefit, and thereby hurt consumers and the wider economy.
Liberalization is any process whereby a state lifts restrictions on some private individual activities. Liberalization occurs when something which used to be banned is no longer banned, or when government regulations are relaxed. Economic liberalization is the reduction of state involvement in the economy.
The Treasurer of Australia is the minister in the Government of Australia responsible for government expenditure and revenue raising. The Treasurer plays a key role in the economic policy of the government. The current holder of the position is Josh Frydenberg, whose term began on 24 August 2018.
Competition law is a law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. Competition law is known as "antitrust law" in the United States for historical reasons, and as "anti-monopoly law" in China and Russia. In previous years it has been known as trade practices law in the United Kingdom and Australia. In the European Union, it is referred to as both antitrust and competition law.
The Competition and Consumer Act 2010 (CCA) is an Act of the Parliament of Australia. Prior to 1 January 2011, it was known as the Trade Practices Act 1974 (TPA). The Act is the legislative vehicle for competition law in Australia, and seeks to promote competition, fair trading as well as providing protection for consumers. It is administered by the Australian Competition and Consumer Commission (ACCC) and also gives some rights for private action. Schedule 2 of the CCA sets out the Australian Consumer Law (ACL). The Australian Federal Court has the jurisdiction to determine private and public complaints made in regard to contraventions of the Act.
In economics, competition is a condition where different economic firms seek to obtain a share of a limited good by varying the elements of the marketing mix: price, product, promotion and place. In classical economic thought, competition causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. The greater selection typically causes lower prices for the products, compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly).
Government procurement or public procurement is the procurement of goods, services and construction on behalf of a public authority, such as a government agency. With 10 to 20% of GDP, government procurement accounts for a substantial part of the global economy.
The United States National Academy of Sciences' Board on Science, Technology, and Economic Policy (STEP) is a board of the United States National Academy of Sciences.
Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd, (Baxter) was a decision of the High Court of Australia, which ruled on 29 August 2007 that Baxter Healthcare Proprietary Limited, a tenderer for various government contracts, was bound by the Trade Practices Act 1974 in its trade and commerce in tendering for government contracts. More generally, the case concerned the principles of derivative governmental immunity: whether the immunity of a government from a statute extends to third parties that conduct business with the government.
Antitrust issues in Russia are regulated by one law: Federal Law No. 135-FZ, “On the Protection of Competition", which entered into force on 26 October 2006.
The Competition Act, 2002 was enacted by the Parliament of India and governs Indian competition law. It replaced the archaic The Monopolies and Restrictive Trade Practices Act, 1969. Under this legislation, the Competition Commission of India was established to prevent the activities that have an adverse effect on competition in India. This act extends to whole of India except the State of Jammu and Kashmir.
The Queensland Competition Authority (QCA), an independent statutory authority that was established by the Queensland Government in 1997, promotes competition as the basis for enhancing efficiency and growth in the Queensland economy.
The Wheat Industry of Australia has been organised by government regulation, by both the Commonwealth Government and state governments.
The history of fair-use proposals in Australia is a series of Australian government enquiries into the introduction of a "flexible and open" fair use system into Australian copyright law. Between 1998 and 2016, eight enquiries examined, and in most cases recommended, the introduction of fair use in place of the current "fair dealing" system which allows copyrighted material to be used only if it meets one of four specific purposes as set out in the Act.
