Tim Wilson (Goldstein, Liberal Party) Share this | Hansard source

On behalf of the Standing Committee on Economics I present the following reports: Review of the Reserve Bank of Australia Annual Report 2017 (Second Report), and Review of the Australian Competition and Consumer Commission Annual Report 2017, together with the minutes of proceedings.

Reports made parliamentary papers in accordance with standing order 39(e).

by leave—On 29 June 2018 the Australian Competition and Consumer Commission appeared before the committee and discussed its activities in relation to enforcing the Competition and Consumer Act 2010 and related legislation. The ACCC has an important role to play in monitoring and holding individuals and groups to account for anticompetitive behaviour in breach of Australia's Consumer Law. In the last year the government has extended the ACCC's roles and responsibilities to include regular inquiries into competition in the financial sector, inquiry powers to increase transparency in the gas markets, examining the electricity markets and inquiring into the supply of residential insurance products in northern Australia. The committee notes the ACCC's assurance that it is taking a more proactive approach to issues in the financial sector in response to the committee's recommendation in its November 2016 report on its review of the four major banks.

The government established a new financial services unit. Through the FSU, the ACCC now has a permanent role in monitoring the banks on competition matters, enabling the regulator to play a competition champion role. The FSU will undertake regular inquiries into specific financial competition issues, facilitating greater and more consistent scrutiny of competition matters in the sector. The committee shares the Productivity Commission's concern that the financial sector has been without a competition champion, and it will continue to monitor the ACCC's work in this area. It looks forward to the ACCC further developing its role of competition champion.

While strong competition laws and corresponding penalties have been in place since 2007, until recently this has not been reflected in the pecuniary penalties imposed in competition cases. There is still much work to be done by the ACCC and in the legal system to clearly demonstrate to companies that for serious competition breaches there will be serious consequences. In particular, penalties for competition law breaches must take into account company size and turnover for them to be an effective deterrent to anticompetitive behaviour.

While the ACCC appears well placed for its new enhanced competition role, the committee notes the regulator's advice that it has been a different story when it comes to Australian Consumer Law. However, the recently passed Treasury Laws Amendment (2018 Measures No. 3) Bill 2018 will correct the disparity between competition and consumer law penalties. The maximum penalties under the Australian Consumer Law will now align with the maximum penalties under the competition provisions.

The ACCC is also doing important work in energy markets on electricity and gas supply and affordability. In particular, the committee notes that the ACCC will now be monitoring and reporting to the government on electricity prices at least every six months until 2025. The ACCC will be empowered to require energy providers to support relevant information, and the regulator may make recommendations to government on how to improve electricity outcomes for consumers.

The government has also directed the ACCC and the Australian Energy Regulator to set a default price for electricity, which is expected to apply, at the latest, from July 2019. The committee will continue to monitor the ACCC's work on energy with a particular focus on and interest in making sure that we do what we can to reduce prices.

On behalf of the committee, I thank the chairman of the ACCC, Mr Rod Sims, and other ACCC representatives for appearing at the hearing. I would also like to thank the former chair of the committee, Ms Sarah Henderson MP, for her contribution. With that, I commend the report to the House.

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