Bugger off bullies: the effects test will be good for business

Last week the Prime Minister announced that any decision on whether an effects test will be included in competition regulations has been delayed until a date yet to be confirmed. This is disappointing and concerning. It seems that big business representatives have been stalking and trolling cabinet members spouting tales of horror and woe if an effects test is introduced.

Indeed according to the Business Council of Australia and the biggest union in the land – the bedfellow of the duopoly, the Shop, Distributive and Allied Employees’ Association – if an effects test comes in, we will all be ruined. They forget that nearly every other country in the developed world has an effects test and sections 46 and 48 of our own Competition and Consumer Act have effects tests already included.

Or perhaps they don’t actually forget they just choose to ignore those facts.

One statement often spouted by the BCA and the also the ALP is that the effects test proposal recommended by the Harper review will be damaging to small business. To quote a spokesperson for the BCA “small business needs to understand they will not be quarantined from the impact of this change which will apply equally to all business, for example, in regional towns or markets where a small business’s product or service is dominant.  In these circumstances, small businesses could be the instigator of actions against other small businesses, who would bear the unintended consequences of additional cost and uncertainty.”

According to big business representatives, small business people all over Australia are talking about nothing else but section 46 of the Competition and Consumer Act as amended. According to big business the introduction of an effects test will see small businesses tearing each other to shreds.

It seems small business people have saved hundreds of thousands of dollars just to take each other on in the competition court using the effects test as their base for argument.

According to the big end of town it will be newsagent versus newsagent; IGA versus IGA; owner drivers throughout the land taking other owner drivers to court claiming that the effect of their driving is driving them out of business.

There will be hundreds of hairdressers doing all they can to get all the other salons closed down, using the effects test. Bookshops will be fighting bookshops and all of them will be fighting each other, using the effects test. The battle between coffee shops and restaurants will be nothing but a free for all riot of effects test claims.

All of these businesses will be accusing each other of impeding competition through … what? Will they accuse each other of land banking to stop a small shop opening up?

The fact is that of the 2.1 million small businesses in Australia there wouldn’t be 100 of them that even know what an effects test is, hardly any would even want to read section 46 of the Competition and Consumer Act and probably none of them would want to waste their money and time on such a complaint. That is the realm of big business and competition policy junkies.

This is the level of argument presented by the BCA and the Labor Party.

The real message to big business should be loud and clear – big business reps please bugger off and leave the cabinet ministers to focus on important things beyond your petty fears.

The effects test will be good for Australia if for no other reason than the few dominant bullying inefficient businesses don’t want it.

Anyway I have to go to the ACCC now and dob in that consultant down the road who is affecting competition in my industry by, well, something. Look I’ll pay a competition lawyer to find something, anything, but I MUST use that effects test.

Peter Strong is the chief executive of the Council of Small Business of Australia.

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