The Harper Competition Policy Review recommended competition law be extended to all government activity in trade and commerce, rather than its present more limited application in situations where government is carrying on a business. It was widely expected the federal government would accept that recommendation (24) given the Australian Competition and Consumer Commission’s support for it and the government’s renewed enthusiasm for the Harper recommendations as a whole.
The government’s response came on November 24, indicating it will implement the majority of the Harper Review’s 56 recommendations. But, in a move that will likely be welcomed by those involved in government supply, procurement and PPP activities, the government has determined not to implement recommendation 24 at this time.
While the government indicated it supports the recommendation “in principle”, it has said it will now consult further with the states and territories on the implications of extending competition laws to government activities in trade or commerce.“… state and territory governments will now have the opportunity to put their legitimate concerns directly to the government …”
One of the biggest concerns for governments regarding the application of competition law is that governments at all levels have to balance competing considerations, and that acting in ways which limit competition can sometimes be in the public interest. In such circumstances, governments having to comply with competition laws may cause a detriment, rather than a benefit, to the public.
While ACCC authorisation might be sought regarding such decisions on an individual basis, there was a question as to whether the ACCC would be the appropriate body to make such assessments.
Concerns of this type were raised in many submissions to the Harper Review. While the Harper Review did not regard these as sufficient reasons for continuing to exempt commercial activities of government from competition laws, the government appears to have recognised this is something that needs to be addressed.
In the proposed consultation process, state and territory governments will now have the opportunity to put their legitimate concerns directly to the government before any changes are made to this area of competition law.
This article was originally published at Maddock’s Reading Room