Pic source: australiansmallbusiness.com.au
MICHAEL BRISSENDEN: The Nationals say support for the so-called “effects test” was also secured from the new Prime Minister.
As we revealed on AM yesterday, the Council of Small Business Australia says it believes both Tony Abbott and now Malcolm Turnbull have succumbed to pressure from big business to shelve the reform.
Yesterday the issue prompted National Party senators to cross the floor.
So what is the effects test and why is it causing so much heartburn?
Nick Grimm reports.
NICK GRIMM: Yesterday Peter Strong from the Council of Small Business Australia told AM that he believed big business interests were bringing their considerable lobbying power to bear on the Liberal leadership, suggesting it had thrown its support behind Malcolm Turnbull in exchange for killing off plans to introduce the “effects test”.
PETER STRONG: I'm absolutely suggesting that they might have done that.
And if they've made a decision here on behalf of the rest of us that there should be a change of leadership then I think we need to know about that.
NICK GRIMM: The Nationals too were making their concerns apparent, with its senators crossing the floor to vote in support of a Greens motion calling on the Government to bring on legislation for the effects test.
Today it appears the new Prime Minister has given his Coalition colleagues an assurance he'll support the measure, which would give the Australian Competition and Consumer Commission greater power to take action against companies that abuse their market position.
But the former head of the competition regulator the ACCC, Professor Allan Fels, says big businesses will still put up a fierce fight against the reform.
ALLAN FELS: In 127 out of 129 countries – that is, except Australia and New Zealand – it's long been accepted that if a firm has a monopoly or strong market power, that there should be a law just stopping it from acting in a way that damages competition.
Small business and farmers are simply asking for economic rationality.
They don't always want that but this is a straightforward economics matter, that if a firm with market power damages competition there should be a law against it.
NICK GRIMM: And it appears that whether or not to proceed with the adoption of an effects test seems to be causing some uncertainty amongst members of the Coalition in Canberra. What do you make of that?
ALLAN FELS: Because there's been a massive, massive campaign, very misleading, led by big business – especially by Coles and Woollies – against bringing us into line with the rest of the world and against the recent Harper Committee recommendation that we should finally get this part of the law straightened out.
ALLAN FELS: The Australian Chamber of Commerce and Industry is also backing the effects test.
Here's the chamber's CEO, Kate Carnell.
KATE CARNELL: Big business don't want any change because they're the ones with significant market powers. They don't want any impediments to them using that significant market power.
But in Australia we have quite a number of companies in a range of different industries that have significant market power and if they use it they can get in the way of small to medium businesses being innovative, growing their businesses, and employing.
MICHAEL BRISSENDEN: Kate Carnell from the Australian Chamber of Commerce and Industry ending that report from Nick Grimm.
To listen, go to http://www.abc.net.au/am/content/2015/s4313219.htm