Nick Xenophon while not a socialist is one of those politicians who are perplexed that competition can bring benefits rather than costs in terms of jobs. He has previously unloaded against discount milk in supermarkets and now wants to stop supermarkets selling cheap bread, claiming that if they do the independent outlets will go out of business.
Bread regulation has some history. Until Victoria’s radical free market government led by Joan Kirner sought to repeal the legislation in 1991, bread needed the Minister’s permission if it was to be carted more than 48.3 kilometers. There were increasing grumbles that the Minister was exercising that discretion all too readily.
The provision’s repeal was opposed by the coalition Opposition which claimed that it would damage rural bakeries, which “directly employ about 600 people and the latest move will effectively lead to the loss of hundreds of jobs”. (Hansard, May 1991, p.1902). The repeal bill did not actually pass but this is not the only archaic regulation that has fallen into disuse.
More significantly the Ian Harper Chaired Competition Policy Review has issued a 330 page horse-choker seeking to push deregulation along. The Harper report does not share Xenophon’s aspirations for competition controls to boost consumer prices.
Among its recommendations are:
• a final elimination of shop trading hours (the Victoria ALP actually wants to increase the number of public holiday closures in a sop to Shop, Distributive and Allied Employee’s Union which is financing their election campaign – restricting trading hours means more triple time working hours)
• legalisation of the Uber private tax service, a move bitterly opposed by the Victorian Taxi Services Commission under that paragon of deregulation Graeme Samuel, former head of the ACCC
• removal of taxi plate numbers, the existence of which boosts fare costs (and provides a fruitful environment for Uber to exploit); a difficulty here is that though the restraint should never have been introduced, it has created a property right the Victorian Government is following a course whereby this is gradually eroded in value;
• a considerable relaxation of planning and zoning restraints
• deregulation of prices in gas and electricity.
The report ventures into the tortured world of “essential facilities” where the National Competition Council has championed attempts by firms to coat-tail on the Pilbara rail lines of BHPB and Rio. During a decade of litigation the NCC has failed in this vain attempt to socialise private assets in pursuit of its version of the common good. Harper wisely recommends the NCC be disbanded and replaced by an advisory body.
Not for the first time, detailed proposals for reforming the Trade Practices Act are offered. Unfortunately the abolition of the ACCC is not canvassed.
Some less persuasive proposals are:
• Repeal Part X of the CCA which gives exemption to shipping conferences. These conferences can never engage in monopolistic gouging as the number of competing lines and the existence of non-conference lines means that predatory competitors are constantly circling outside of the conferences looking to see if they can exploit any such attempts (and within the conferences, the independent firms will also cheat on their partners by offering discounts should the rates be set too high). Harper was obviously mindful of Adam Smith’s stricture, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” Had they read the next sentences they would have discovered the correct policy approach Smith counselled against intervention by the authorities saying, “In a free trade an effectual combination cannot be established but by the unanimous consent of every single trader, and it cannot last longer than every single trader continues of the same mind.”
• Bans on parallel import restrictions. Harper likens these to import tariffs rather than an attempt by IP owners to exploit as much as possible the value of their property by engaging in discriminatory pricing; this characterisation however provokes ferocious arguments from within the camp of the good and righteous.