The Australian federal government under new Prime Minister Malcolm Turnbull has announced plans of overhauling the country’s competition laws. Apparently, the Turnbull government has decided to rise to the challenge of tackling the problems besetting Australia’s current economic conditions, marked by receding productivity growth and ebbing of the once significant Australian resources boom. The announcement conveyed that the government will be adopting 44 of the 56 recommendations put forward by the Harper Review team, via the Competition Policy Review report submitted last March 2015.
Independent MP Andrew Wilkie was quick to express his take on the matter, since one of the recommendations agreed to by PM Turnbull’s federal government, will give the Australian Competition and Consumer Commission (ACCC) the authority to investigate trade agreements entered into by the governments of Australian states and territories. As it is, the ACCC has the authority to look into all Australian businesses, but is restricted from prying into deals contracted by state and territory government administrations.
MP Wilkie is hopeful that once the Harper Review recommendation of giving the ACCC complete authority over all business deals including those struck by governments becomes official, the enduring monopoly enjoyed by the Federal Group in Tasmania will finally be scrutinised. He said that once the Competition Act has been accordingly amended, he would be quick to ask the ACCC to look into the Federal Group’s gambling monopoly in Tasmania.
Mr. Wilkie is quite confident that the ACCC will find grave faults with the Tasmanian government’s arrangement with the Federal Group, which owns the Federal Hotel Chains and other businesses in the island state of Tasmania. Owned and operated by the Farell Family, the Federal Group lays claim to being the oldest hotel chain in Australia. According to Mr. Wilkie, the Federal Group secured a gambling monopoly licence via a secret deal struck with the Tasmanian government in 2003.
The ACCC’s inability to examine government deals came into light, when local reports revealed that the monopoly licence held by the Federal Group stood in the way of the redevelopment of the Museum of Old and New Art (MONA) into becoming a gambling venue. Peter Gutwein, the Treasurer of the Tasmanian government admitted to The Parliament that they tried to negotiate with the Federal Group to cut short its monopoly, as the licence is set to expire in 2023.
The Tasmanian Greens had asked the ACCC to intervene, but the latter explained that they have no authority to act on the matter as the competition provision of the Act exempts the Tasmanian government’s deal with the Federal Group.
In a separate interview, former head of the ACCC Allan Fels, commented that if the federal government wants to impose stricter laws against non-competitive deals, Australia’s current laws must be amended to give the ACCC authority to look into anti-competitive deals brokered by state and territory governments.
Professor Ian Harper, an economist and lead author of the Competition Policy Review, or the Harper Review had recommended an all-encompassing reform. He suggested that the government should also be subject to competition laws when engaging in trade or business, and must be held accountable In accordance with the same standards required from private businesses.