BCA Welcomes Dawson

The Business Council of Australia today welcomed the announcement by the federal government that legislation giving effect to the recommendations of the Dawson Inquiry into the Trade Practices Act will be introduced into Parliament tomorrow.

The President of the Business Council, Mr Hugh Morgan, said the BCA remains committed to seeing the implementation of the Dawson reforms. While the BCA did not get all of the changes it wanted from the Dawson Inquiry, it still believes that the package of reforms recommended by the Dawson Committee is essential to ensure Australia’s competition laws remain in step with the competitive pressures faced by the Australian economy and businesses.

“The Dawson Inquiry was the first comprehensive, independent review of the Trade Practices Act for many years,” Mr Morgan said.

“These reforms remain critical to ensuring Australia has strong domestic competition, while also recognising the pressures of international competition faced by Australian companies.”

The BCA particularly welcomes the introduction of a formal merger clearance process. The new process will ensure complex mergers are subject to a more transparent and accountable process of approval.

An important achievement of the Dawson reforms is that they draw a clear line between a strong Trade Practices Act that protects competition, and an Act that is changed to protect some competitors from competition. This distinction has been lost in some of the recent debate about the Trade Practices Act.

“Australia’s current economic prosperity is the result of a firm commitment from successive governments to competition reform. We must not now jeopardise that prosperity by changing the focus of competition law from protecting the competitive process to protecting some sectors of the economy,” Mr Morgan said.

The Business Council expressed its disappointment that the government has flagged changes to section 46 of the Trade Practices Act, which prohibits the misuse of market power. The Business Council believes such changes are unnecessary.

“There is often a fine line between strong, legitimate competition and anti competitive conduct.

“The BCA will continue to oppose any changes to the Act that result in legitimate competitive conduct by larger businesses being prohibited to save some small businesses from facing fair competition.

“While we are disappointed that section 46 is to be changed, we understand that the Government’s changes are designed to protect competition, not particular competitors. Those in small business that have argued that the Trade Practices Act should protect them from legitimate competition will no doubt criticise today’s announcement,” Mr Morgan said.

The Business Council called on all parties to accept the independent findings of the Dawson Inquiry and pass the legislation as soon as possible.