Australia's Noah's Ark economy
If the Coalition can genuinely make a difference to Australia's intensely oligopolistic industry structures — which is among the worst in the developed world — there will be a lot of votes in it. Large numbers of small business people, especially those unfortunate enough to supply the big supermarkets, know only too well how far they are from anything resembling a level playing field. That they do not make this better known is only because they would lose their livelihoods entirely if they spoke out.
Conversely, the Coalition tends to subscribe to the idea that government intervention is ipso facto bad, and any meaningful change will require some serious intervention. There is also, to say the least, powerful political influence exerted on both major political parties by the big corporations. The political parties, which are comparatively small entities, might be said not to have a chance when the big money comes looking for influence.
The most likely outcome is business as usual. But the noises being made by the Coalition are sounding surprisingly pertinent. The Minister for Small Business, Bruce Billson, described the relationship between the big, dominant players and smaller business as akin to 'serfdom'. Quite right. He says the Government wants to examine 'whether the current competition law is the toolkit that supports that to deliver economic prosperity and growth and durable benefits for consumers'.
The answer is easy. It does not. Not even close. Neither is the issue the amount of resources available to the Australian Competition and Consumer Commission (ACCC) as its head, Rod Sims predictably claimed, eager to put his hand out. It is the law that the ACCC administers, which only permits the regulator to act if there is a 'substantial lessening of competition'. The test is easy to get around by making incremental acquisitions.
Even when there are big acquisitions, the ACCC's use of this provision can be extremely weak, an example being Westpac's acquisition of St George in 2008, both of which were heavily concentrated on the New South Wales market. But it is not individual instances that matter as much as the overall shape of the market. Australia lacks anti-trust provisions, such as those that apply in the United States, whereby the total market share can be deemed as a problem and companies required to divest.
Consequently, we have exceptionally powerful oligopolies. A glance at the Fortune top 500 global companies, which compares revenues (not profits)