The Rigging of the ACCC

By Johns, Gary | Review - Institute of Public Affairs, December 2002 | Go to article overview
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The Rigging of the ACCC


Johns, Gary, Review - Institute of Public Affairs


THE Australian Competition and Consumer Commission's (ACCC) prime role is to ensure that competition prevails within the rule of law. That's the best way of ensuring the consumer gets the best possible value for money. It is the retailer who is the agent that looks after the interests of the consumer. The retailer seeks out the best supply sources, gets the product or service to a place where it can be conveniently accessed and does so at the best possible price. The retailer does this because, in a competitive system, if she doesn't, the customer will find better value elsewhere and the retailer will go out of business.

The ACCC's formation, however, reflected another stream of thought: that the market had to be managed because it was a producers' mechanism and therefore inimical to the interests of consumers. The Commission's mandate reflected a lack of commitment to the view that competition, through the rigorous enforcement of trade practices law, would be good for consumers. It also saw prices surveillance as an end in itself rather than as a tool for observing the conditions of competition. This lack of faith reflected the lobbying by consumerist organizations that had become highly politicized and anti-business. It also opened the way for this consumerist lobby to have increased influence. The deputy head of the ACCC and its predecessor (the Trade Practices Commission) was Allan Asher, who cut his teeth in politics by taking over the rather somnolent Australian Consumers Association and providing political assistance to the ALP. Some have now elevated the deputy position into one `traditionally' reserved for a consumerist warlord. The appointment of Louise Sylvan of the Australian Consumers Association, which is currently being mooted, would cement this idea. It would also confirm the Commission's lack of faith in competition as the key means of safeguarding the interests of consumers, and further inject politics into the administration of competition law.

There are few simple consumer-- versus-producer issues that the Commission considers. Each involves some measure of trade-off between consumers. For example, in product liability issues, a too strict interpretation of liability may deny some consumers products they may desire, or at least raise the price or availability of the good or service. The question is one of assigning, as well as minimizing, risk. Invariably, the impact will vary between consumers, not just between consumers and producers. Take another example, if petrol were to be taxed so as to incorporate the cost of air pollution, or indeed if cars were taxed on the distance travelled-which is not to suggest that the level of tax is not already sufficient to compensate for externalities-the impact on consumers would be different than at present. Those who needed to travel further would pay more. The impact would be felt more by those on low incomes. There is a distribution of costs between consumers to consider. How could a consumer representative hope to represent the many sides to this issue? In a democratic society such as ours, it is Parliament that should decide issues of the distribution of costs and benefits between consumers, if indeed equity issues are to be considered. Having considered its laws, the Parliament should expect the law to be administered without fear or favour, without further lobbying, especially by a deputy-commissioner.

The flaw in the structure of the Commission is that it explicitly privileges a consumer lobby, and demonstrates that it does not trust its own laws designed to make the market work for competition. Worse, the appointment of an ACA representative will privilege a certain kind of consumer. In reality, the ACA represents a very small proportion of the consuming public'-less than 400 people and fewer consumers than Woolworths services every minute of every day of the year.

There is, however, no single consumer voice. People's interests are as varied on consumer matters as they are on almost any other issue.

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