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Mounting dismay over delays to decision on ‘Effects Test’

Business competition

In a move that could be regarded as inconsistent with previous rhetoric showing support for small business, the Government has resolved to defer reforms that would strengthen section 46 of the Competition Act with the implementation of an ’Effects Test’.

The reforms proposed by Small Business Minister, the Hon Bruce Billson were designed to stop big businesses from abusing their market power at the expense of small businesses.

A group called ‘The Independent Business Alliance for Competition’ which represents 2 million small retailers employing 5 million Australians, has expressed dismay at the Government’s decision.

The Alliance claim the back down on competition laws entrenches a business status quo which strangles business innovation, entrepreneurship and productivity and is contrary to the long term policy interests of Australia. An Effects Test would stop companies with market power acting to harm competition, the Alliance says.

CEO of COSBOA, Peter Strong, said, “many large businesses, particularly in retail, strangle small business as they compete for market share. Australia needs to ensure there are safeguards in place to ensure that market power is not abused and small businesses are given equal opportunity to compete,”

“We are not asking for a hand up, we just want to be able to compete on a level playing field,” he said.

Reiterating calls to reform the Competition Act, Australian Retailers Association Executive Director, Russell Zimmerman said “the ARA supports the introduction of an Effects Test to ensure all Australian businesses have the ability to be competitive. An Effects Test would ensure the landscape remains viable for small and medium business, as well as the major corporations.”

Jos de Bruin, CEO of MGA Independent Retailers said, “it is disappointing to see the Federal cabinet overthrow the recommendations of an impartial expert committee because of a spurious scare campaign mounted by the elite of Australian big business.”