National Competition Policy and the Retail Sector

By Margetts, Dee | Journal of Australian Political Economy, Winter 2011 | Go to article overview

National Competition Policy and the Retail Sector


Margetts, Dee, Journal of Australian Political Economy


The time has come to proclaim that the great neo-liberal experiment of the past 30 years has failed, that the emperor has no clothes ... Labor, in the international tradition of social democracy, consistently argues for a central role for government in the regulation of markets and the provision of public goods ... The Liberals, embracing the neo-liberal tradition of anti-regulation, seek to reduce the agency of the state in private markets as much as possible ... As President Sarkozy put it: "Le laissez-faire, c 'est fini". (Rudd, 2009: 25, 28, 29)

National Competition Policy (NCP), one of Australia's major socio-economic policy changes, was introduced in 1995, providing significant powers to senior officials of the Council of Australian Governments and a range of other senior State and Federal bureaucrats to enforce deregulation and facilitate other forms of 'free' market restructuring of Australia's domestic economy.

By 2009, Prime Minister Kevin Rudd was endeavouring to link neo-liberalism specifically with the Liberal Party in Australia and to claim that Labor has consistently promoted social democratic policy. Rudd did not acknowledge that the push to implement economic globalisation and NCP was greatest during the Hawke-Keating era and, although the subsequent Liberal Coalition Government became involved, the initiation and implementation of such a widely impacting policy change has played a major role in Australia's current 'neo-liberalism'. (1) In his essay in The Monthly magazine, Rudd tended to link the Hawke/Keating era with only positive changes to Australia's political economy:

Examples of such a (social-democratic) government are the Australian Labor governments of Bob Hawke and Paul Keating during the 1980s and early '90s program of economic modernisation. Their reforms internationalised the Australian economy, removed protectionist barriers and opened it up to greater competition (ibid: 25).

Rudd then claimed that the Hawke/Keating Labor Governments were able to dramatically improve the productivity of the Australian private economy at the same time as expanding the role of the state in providing health and educational services (ibid: 25).

A more careful assessment of NCP, as a central feature of policies supported by both major parties in the last two decades, is needed. Research into the impacts of deregulation of important parts of Australia's grocery supply sector, such as Australia's dairy industry, has already put forward serious challenges to a range of NCP outcome assumptions (Margetts, 2007a) of the public 'benefits' of NCP such as 'lower prices and improved choice for consumers' (Hilmer et al, 1993: 1). Therefore the assumptions that new retail stores and new manufacturers resulting from NCP would be the main source of new jobs in Australia (Hilmer et al, 1993: xv) should also have been assessed by the Federal Government.

Rudd claimed that, while the Coalition was in government, it set about deregulating the labour market on the basis that human labour was no different from other commodities (Rudd, 2009: 28). This article will argue that the combination of labour market deregulation (which began under Labor) with forced deregulation of trading hours, and the combined impacts of NCP on Australia's retail and retail supply sectors such as the removal of Statutory Marketing Authorities and the Prices Discrimination Provisions of the Trade Practices Act 1974, have yet to be properly assessed by the Federal Government.

Prior to the 2007 Federal election, the ALP campaigned against rising grocery prices and in September of that year, as Opposition Leader, Rudd promised to engage the Australian Competition and Consumer Commission (ACCC) to conduct an inquiry into the prices charged by the major supermarket chains (ABC News, 2007). Soon after gaining government, Labor announced that it would follow through on this promise by commissioning a full inquiry into Australian grocery prices. …

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