ACCC Failings: What Have They Been Doing?
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The ACCC stands for Australian Competition and Consumer Commission. Did you note that term ‘Competition’? This body is supposed to ensure that healthy levels of competition exist in markets. Yet, we in Australia have the highest levels of market concentration ever seen in our history. ACCC failings: What have they been doing? Down under in Oz we pay lip service to things to avoid actually doing anything about scams and fudges in the business world. Toothless tigers are our speciality when we establish the various commissions and overseeing bodies. Governments make sure that regulators like the ACCC don’t have the funding or the necessary connections to really achieve what their remit states.
“The market power of Australia’s largest firms has grown in the last two decades, and price mark-ups have increased. “Over recent decades, there have been a number of significant changes in the Australian economy,” he says in a forward copy of his address. “The job-switching rate has fallen. The business start-up rate has declined. The largest firms have increased their market share. Mark-ups have increased. “All this suggests that the Australian economy has become less competitive.”
Andrew Leigh, the federal Assistant Minister for Competition, Charities, and Treasury”
A couple of decades of neoliberalism permeating through our governments has seen a laisse faire approach to monitoring markets and corporations. The mantra ‘the market will look after itself,’ has been the excuse vigorously proffered by ministers sweetened by corporate largesse in the form of campaign donations and kickbacks. Personally, I am amazed that no one is pointing the finger at the champions of neoliberalism who ushered in many of the moves that see us in the mess where we find ourselves. The smug, leering face of Tony Abbott and his cronies for instance.
Australian Competition & Consumer Commission Missing In Action
The ACCC are an obvious scapegoat, as their job was to be the gatekeeper to prevent market concentration in the Australian economy.
“New research by the e61 Institute assesses a change in the 2008 Australian merger guidelines, finding:
The change resulted in the number of deals reviewed decreasing by 75%.
A significant portion of this decrease came from deals that were not publicly notified. The average time spent reviewing a deal also doubled after this change, suggesting greater resources were spent on larger transactions. With Australia’s voluntary disclosure regime, smaller transactions are potentially leaving blind spots in our understanding of the competitive landscape in Australia. An important starting point for merger reform in Australia will be obtaining a clearer picture of merger activity.”
Role Of The ACCC
“The Australian Competition and Consumer Commission is an independent Commonwealth statutory authority. We are Australia’s competition and consumer regulator. We promote competition and fair trading and regulate national infrastructure to make markets work for everyone.
We make markets work by:
protecting consumers and ensuring fair markets by enforcing the Competition and Consumer Act 2010 and the Australian Consumer Law
collecting information from consumers and businesses to help us understand what issues cause the most harm to Australian businesses and consumers and where best to use our resources
reviewing and assessing company mergers and asset acquisitions, authorisation and notification applications in Australia
promoting competition in the communication, bulk water, postal, and transport industries.”
Australians Hoodwinked By Big Business
Market concentration means price setting and higher prices for consumers and other businesses. It, also, means falling productivity and low wage growth. Lack of competition denudes capitalism and free market economies from functioning as they should. Control of the market and rent seeking takes wealth from us and delivers it to an ever smaller percentage of our population. Over the last 10 years, in particular, we have seen the rich grow much richer and the rest of us lose out becoming less well off. Very low wage growth and now a cost of living crisis is stripping money out of our hands as we speak.
The housing crisis and the disappearance of social housing over the last 20 years – who do you think is responsible for this? Neoliberal champions! Market forces manipulated by powerful corporations and rampant neglect by the monitoring bodies. The ACCC has overseen this economic shift and done next to nothing about it.
How much do the biggest firms control?
| Three stark examples: the US vs Australia | ||
| Industry | Market share of top four AU firms | Market share of top four US firms |
| Commercial banking | 94% | 26% |
| Supermarkets | 91% | 31% |
| Liquor retailing | 78% | 10% |
This graphic was taken from a 2016 article In Choice Magazine. It compares us with what is happening in America at that time.
https://www.choice.com.au/shopping/everyday-shopping/supermarkets/articles/market-concentration
Think of all those sectors where market concentration means an oligopoly controls it. The big 4 banks, Coles & Woolies, big 4 consultancy/auditors, Qantas & Virgin, cinemas, real estate, Telstra & Optus, petrol stations, liquor retailers, News Corp & Nine Fairfax control the media via newspapers, TV & radio networks with the exception of the ABC, health insurance, general insurance, internet providers, chemists, mining, car companies, department stores, and all these dominating corporations have tentacles reaching into other industries and sectors. Many of these companies spend vast sums on advertising to implant positive messages in our psyches. Think of Qantas and their emotive spirit of Australia ads, banking ads are full of feel good stories about home ownership and growing together, insurance ads likewise tell a helping hand narrative in times of dire need, and so on.
Meanwhile, we the consumers are being ripped off via the absence of any real competition. Indeed, quite a few of the other players in the market are actually owned by the dominant corporations in the oligopoly. ACCC Failings: What have they been doing?
The ACCC has completely failed us in the Australian economy and there should be an enquiry into this. Governments are complicit, so this will not happen without real push from the wider public.
Robert Sudha Hamilton is the author of Money Matters; Navigating Credit, Debt, and Financial Freedom.
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