The Australian Competition and Consumer Commission’s advocacy efforts have been recognised by the World Bank and International Competition Network for its role in elevating competition policy to the national economic agenda.
The ACCC will be awarded the ICN’s top prize in in Portugal this May for the regulator’s efforts to include pro-competition measures in governments’ privatisation of ports in Melbourne, Darwin and Port Hedland — “even in the absence of a formal mandate.”
According to the judges from NYU and the World Bank Group, “these measures strengthen pricing regimes as well as more transparent and competitive privatization procedures. The advocacy initiative of ACCC reduces the likelihood of monopoly pricing post privatization and ensures continued access to the ports.”
The ACCC has been advocating that when privatising infrastructure assets, governments should not restrict future competition to these assets, and that infrastructure monopolies need appropriate up front regulation.
“…to be successful, privatisations should seek to maximise competition and ensure adequate regulatory safeguards are in place,” ACCC chair Rod Sims said in a statement. “Without this, the sale of public assets could lead to higher prices or reduced services for businesses, and ultimately, consumers.”
Advocacy is new territory for the regulator, but it is a common mandate for counterpart agencies around the world. Sims says the ACCC has moved to operating in the same way.
Monopoly deals are ‘increasing sale prices — lets call it out’
Sims made his concern about lax regulation of privatised public assets very public when he gave a speech at the Melbourne Economic Forum in July last year.
Despite having been an advocate of privatisation for the past three decades, the competition regulator is now “almost at the point of opposing privatisation” due the frequency of governments promising monopolies to new owners of privatised public assets:
“It’s been done to boost proceeds, it’s been done to boost asset sales, and I think it’s severely damaging our economy,” Sims told the forum. He cited the ports as a key example.
“Governments are more explicitly now privatising for maximising proceeds, including the Commonwealth. Absolutely including the Commonwealth. They’re explicitly saying the reason they don’t want to do this or this is it will damage the proceeds they’re getting.
“It is increasing prices, let’s call it out.”