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Professor Ian Harper released the
final Report of the Competition Policy Review (‘the Harper Review’) on
31 March 2015, making 56 recommendations to government. On 24
November 2015, the Turnbull Government released
its response to the Harper Review, supporting 39 of the recommendations either
in full or in principle, and a further five recommendations in part. The
Government ‘remains open’ to considering implementing the remaining 12
Recommendations affecting all levels of government
The Harper Review recommended that the competition
principles be updated (recommendation 1). They build on the principles
recorded in the 1995 agreement between the Commonwealth and the states and
territories that underpinned the National Competition Policy reforms of the
1990s following the Hilmer
Review. The Government supported the recommendation and will work with the states
and territories to ensure implementation at all levels of government.
The Harper Review recommended that all regulations should
be reviewed to ensure that unnecessary restrictions on competition are removed
(recommendation 8). The Government has supported the recommendation and
encouraged the states and territories to review their regulations.
The Harper Review recommended expanding the application of
the Competition and
Consumer Act 2010 (‘the CCA’) to all levels of government
insofar as they undertake activity in trade or commerce (recommendation 24).
The Government supported the recommendation in principle.
Recommendations affecting the federal, state and territory
The Harper Review recommended adopting choice and
competition principles in human services (recommendation 2). The Government
supported the recommendation and announced that it will commission a
Productivity Commission (PC) review into human services, ‘which will include
research on past or ongoing reforms in different jurisdictions that incorporate
principles of choice, competition and contestability’. The inquiry commenced on
29 April 2016.
The Harper Review made a series of recommendations on
competitive neutrality (recommendations 15–17). Competitive neutrality
aims to ensure that government business activities do not enjoy net competitive
advantages over private sector competitors simply by virtue of public sector
ownership. The first, which the Government supported, was that competitive
neutrality policies should be reviewed, noting that it will encourage the
states and territories to undertake similar reviews. Recommendation 16 was
aimed at improving the transparency and effectiveness of competitive neutrality
processes. The Government supported the recommendation and encouraged other
governments to improve their competitive neutrality processes. Recommendation
17 concerned improving transparency and accountability in competitive
neutrality reporting, requiring all government agencies to provide a compliance
statement in their annual reports. The Government stated that it remained open
to the recommendation and will consult on competitive neutrality in 2016.
Recommendation 19 provides that states and territories
should finalise the energy reform agenda, and that the Australian Government
should undertake a detailed review of competition in the gas sector. The
Government supported the recommendation and noted its commitment to promoting
the application of the national energy legislation and rules across all
A series of the Harper Review’s recommendations (43–47)
related to the establishment, roles, and functions of a new body, the
Australian Council for Competition Policy (ACCP). The Government supported the
establishment of the ACCP and its role, and that the ACCP has to examine areas
of the economy where competition issues may arise, and provide recommendations
to government (a ‘market studies’ power). The Government remained open to the
ACCP having the power to receive market studies requests from any government.
The final roles and functions of the ACCP will be discussed with the states and
The Harper Review recommended establishing a national
Access and Pricing Regulator, taking a range of roles away from the Australian
Competition and Consumer Commission (ACCC) and the National Competition Council
(recommendation 50). The Government remained open to the recommendation and would
continue discussions with the states and territories as to ‘the most appropriate
institutional architecture to support reform’.
The Harper Review recommended improving small business
access to remedies and improving the ACCC’s communication with small business
(recommendation 53). The Government provided in-principle support for the
recommendation and ‘has asked the ACCC to consider introducing changes to
improve transparency and clarity for small businesses on why it is unable to
pursue certain complaints’. In terms of improving communication, the response
noted that the ‘Government will explore options for facilitating greater
collaboration and cooperation across tiers of government to have a national
complaint handling and dispute resolution network’.
The Harper Review recommended that the report be discussed
with the states and territories as soon as practicable after its receipt, and
that the PC undertake modelling of the recommendations (recommendations 55 and
56). The Government supported recommendation 55 and noted recommendation
Introduced as part of the implementation of the Hilmer
Review, competition payments were payments made by the Commonwealth to the states
and territories that implemented pro-competition reforms. Over three tranches
between 1999 and 2001, the National Competition Council assessed whether the states
and territories had met the conditions for receipt of competition payments. The
Harper Review recommended that the PC should undertake a review of reforms
agreed by the Australian Government and the states and territories, to estimate
their effect on revenue in each jurisdiction. Payments should be made available
to states and territories ‘based on actual implementation of reform measures,
not on undertaking reviews’ (recommendation 48). The Government supported the
recommendation, and noted that it would discuss the possibility of a PC review
with the states and territories.
Competition payments could be made available to states and
territories in the following areas:
implementation of reforms to road transport (recommendation 3)—the
Government supported the recommendation that cost-reflective road pricing be
introduced, and noted that it is a ‘long term reform option’.
implementation of reforms to the pharmacy sector (recommendation
14)—the Government ‘noted’ the recommendation that the current restrictions on
ownership and location of pharmacies be removed, and stated that an independent
review of pharmacy remuneration and regulation would be conducted.
- implementation of the principles of the National Water
Initiative, with a view to national consistency (recommendation 20)—the
Government supported the recommendation.
- planning and zoning, priority reform areas, and removing retail
trading hour restrictions (see below).
Recommendations affecting state and territory
The Harper Review recommended that states and territories
subject planning and zoning laws to both competition and public interest tests
(recommendation 9). The Government supported the recommendation.
The Harper Review considered that priority areas for
regulation review were taxis and ride-sharing, and mandatory product standards
(recommendation 10). The Government supported the recommendation.
The Harper Review recommended removing remaining retail
trading hour restrictions, noting that existing restrictions should be strictly
limited to Christmas Day, Good Friday and the morning of Anzac Day
(recommendation 12). The Government supported the recommendation.
In all of these areas, the Government stated that it was
willing to consider making competition payments to the states and territories
‘for reforms that improve productivity and lead to economic growth’.
Recommendations affecting the federal government
The Harper Review’s recommendations that affected the Australian
Government can be grouped under two broad headings: recommendations affecting
the CCA, and other recommendations.
Recommendations affecting the CCA
The Harper Review recommended that Part X of the CCA which
deals with liner shipping be repealed (recommendation 4), and that a block
exemption power be granted to the ACCC to better regulate the industry
(recommendation 39). The Government stated that it ‘remains open’ to
repealing Part X of the CCA, and supported the introduction of a block exemption
The Harper Review recommended that subsection 51(3)
(excepting intellectual property from most restrictive trade practices
provisions) should be repealed. The Government noted the recommendation and is
awaiting the PC inquiry into intellectual property before making a final
decision (see below).
The Harper Review recommended no changes to the ‘central
concepts, prohibitions and structure enshrined in the current competition law’
(recommendation 22), and the Government supported the recommendation.
The Harper Review recommended that the CCA be simplified
in a process involving public consultation, but at a minimum, subsection 45(1)
concerning contracts made before 1977 and sections 45B and 45C concerning
covenants should be removed (recommendation 23). The Government supported the
recommendation and ‘will develop a proposal to further simplify the remaining
provisions of the CCA’.
The Harper Review recommended that the definition of
‘competition’ in section 4 be amended to ensure that competition in Australian
markets includes competition from goods or services imported or capable of
being imported (recommendation 25). The Government supported the
The Harper Review recommended amending section 5 of the
CCA, which provides that some parts of the CCA apply to conduct outside of
Australia. Specifically, it recommended that contravening firms should not be
required to have a connection with Australia, and that parties should not need
to seek ministerial approval before commencing competition law actions
(recommendation 26). The Government did not support the recommendation
that no connection with Australia be required, although it did agree with the
latter recommendation, and in this regard noted that legislation before the
last parliament achieved the purpose. However, the Bill
lapsed with the prorogation of the Parliament.
A number of the Harper Review recommendations related to
improving Part IV of the CCA which deals with restrictive trade practices:
- cartel conduct (recommendation 27)
- exclusionary provisions (recommendation 28)
- price signalling (recommendation 29)
- misuse of market power (recommendation 30)
- price discrimination (recommendation 31)
- third-line forcing (recommendation 32)
exclusive dealing coverage (recommendation 33)
- resale price maintenance (recommendation 34)
- mergers (recommendation 35)
secondary boycotts (recommendation 36) and
- trading restrictions in industrial agreements (recommendation
The Government supported all recommendations apart from
recommendations 30, 33, and 37. The Government announced that recommendation 30
relating to the misuse of market power (which, among other things, recommended
introducing an ‘effects test’) would be subject to further consultation. The
Government noted recommendation 33 on exclusive dealing and is awaiting the
outcome of further consultation as part of its response to recommendation 30
before making a decision. The Government noted recommendation 37 on trading
restrictions in industrial agreements as it was awaiting the PC report into
workplace relations. The PC
report was provided to the Australian Government on 18 December 2015.
The Harper Review recommended changes to the national
access regime in Part IIIA of the CCA (recommendation 42). The Government
supported the recommendation in part, preferring to amend Part IIIA in line
with the PC
inquiry into the national access regime.
The Harper Review recommended:
- simplifying the authorisation and notification provisions
- extending the coverage of section 155 investigation notices
- extending the reach of section 83 to include admissions of fact
- introducing greater flexibility into the collective bargaining
processes for small businesses (recommendation 54)
- that the ACCC continue to be responsible for both competition and
consumer protection matters (recommendation 49) and
- that the ACCC establish, publish, and report against a media code
of conduct (recommendation 52).
The Government supported all of these recommendations.
The Harper Review recommended changes to the ACCC’s
governance structure (recommendation 51), which the Government supported in
part. The Government did not accept appointing the ACCC Commissioners on a part‑time
basis, or that the small business and agricultural sectors both needed specific
The Harper Review recommended that cabotage restrictions
on coastal shipping be removed and that similar restrictions be removed in the
aviation industry (recommendation 5). The Government has noted the recommendation,
given that the Government has announced changes relating to coastal shipping,
and that as part of the White Paper on
Developing Northern Australia, a business stakeholder group has been
established to assist ‘in preparing a plan for improving aviation and surface
transport connections to northern Australia’.
The Harper Review recommended a PC inquiry into
intellectual property, and also that a separate review should be undertaken to
‘assess the Australian Government processes for establishing negotiating
mandates to incorporate intellectual property provisions in international trade
agreements’ (recommendation 6). The Government supported the recommendation in
part, noting that it had already charged the PC to undertake an inquiry into
intellectual property (the PC issued a draft
report on 29 April 2016). The Government however did not agree to a
separate review of intellectual property provisions in international trade
The Harper Review recommended that Standards Australia
periodically review its standards (recommendation 11), which the
Government supported. It also recommended that parallel import restrictions be
removed on books and second-hand cars (recommendation 13). The Government
supported the removal of parallel import restrictions on books, but the
Government has decided not to proceed with reducing parallel import restrictions
on second-hand cars.
The Harper Review recommended that government procurement
and other commercial arrangements are reviewed (recommendation 18). The
Government provided support in principle for the recommendation and noted that
through the Efficiency
through Contestability Programme, ‘government functions are
systematically assessed, including for improved efficiency through competitive
arrangements, where appropriate’.
The Harper Review recommended that the Government ‘should
work with industry, consumer groups and privacy experts to allow consumers to
access information in an efficient format to improve informed consumer choice’
(recommendation 21). The Government supported the recommendation and stated
that it will task the PC with ‘reviewing options to improve accessibility to
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