On 30 March 2015 the Australian Government released the Final Report of the Competition Policy Review (‘Harper Review’). The Harper Review is available from the Competition Policy Review website.

The Harper Review is the first comprehensive review of Australia’s competition laws and policy in over 20 years.

The Liberal Party had promised a ‘root and branch’ review of competition policy as part of its 2013 election strategy. Following its success in the 2013 election it released terms of reference and appointed Panel Members, Mr Peter Anderson, Ms Su McCluskey and Mr Michael O’Bryan QC and Professor Ian Harper as Chair, in March 2014.  The Panel released a draft report in September 2014 for consultation and the Final Report has now issued.

The closing date for feedback and submissions on the Final Report is Tuesday 26 May 2015 – see the Treasury website for further information at. 

Terms of Reference

The Harper Review’s Terms of Reference require an assessment of Australia’s competition policy, laws and instructions to determine whether they remain fit for purpose, especially in light of opportunities and challenges facing into the foreseeable future.

Contents of Final Report

Chapter 1 makes the case for reform and spells out the context for the review, including the main challenges and opportunities facing Australia.

Chapter 2 brings together the panel’s analysis into a set of recommendations to reform competition policy, laws and institutions.

Chapter 3 outlines the Panel’s recommendations for changes in the Competition and Consumer Act 2010 (CCA).

Chapter 4 outlines the Panel’s recommendations on the institutional structures most likely to sustain enduring reform.

Chapter 5 outlines the Panel’s recommendations relating to concerns raised by small business.

Chapter 6 highlights recommendations made in other parts of the Final Report addressing issues raised that relate to retail markets, particularly supermarkets.

Chapter 7 presents the Panel’s views on the best method to implement a national competition reform agenda.

Some Key Recommendations

Human Services Area

User choice should be placed at the heart of service delivery. A diversity of providers should be encouraged, while taking care not to crowd out community and volunteer services.

Infrastructure Area

Reform road transport by introducing cost-reflective road pricing in a revenue neutral way and linked to road construction, maintenance and safety so that road investment decisions are more responsive to the needs and preferences of road users.

Existing Anti-competitive Regulations

Remove regulations governing retail trading hours and parallel imports, and removing pharmacy location and ownership rules. Repeal Part X of the CCA exempting liner shipping from the competition laws, and reduce restrictions on sea and air cabotage. Other regulations restricting competition to be reviewed, with particular priority given to regulations covering planning and zoning, taxis and ride sharing and product standards.

The Panel especially recommends that restrictions on parallel imports should be removed unless it can be shown that:

  • the benefits of the restrictions to the community as a whole outweigh the costs, and
  • the objectives of the restrictions can only be achieved by restricting competition.

Consistent with the recommendations of recent Productivity Commission reviews, parallel import restrictions on books and second hand cars should be removed, subject to transitional arrangements as recommended by the Productivity Commission.

The Panel also recommends removing the remaining restrictions on retail hours.

Intellectual Property Regime

Given the influence of Australia’s IP rights on facilitating (or inhibiting) innovation, competition and trade, the Panel believes the IP system should be designed to operate in the best interests of Australians and is a priority for review. 

The Panel recommends that the current exception to competition law for conditions of intellectual property licences in the CCA be repealed.

Government Procurement Guidelines and Decisions

The Panel recommends that promoting competition should be a central feature of government procurement and privatisation framework and processes. 

Competition Law  

The central concepts, prohibitions and structures enshrined in the competition law should be retained since they are appropriate to serve the current and projected needs of the Australian economy but the Panel considers that the competition law provisions of the CCA, including the provisions regulating the granting of exemptions, are unnecessarily complex. It suggests the competition law provisions of the CCA would benefit from simplification, while retaining their underlying policy intent.

Ambitious Reform Agenda

It remains to be seen whether the Government has the will to take on many of the reforms proposed in the Final Report. This would mean the taking on of powerful vested interests by a Government that has arguably already expended much of its political capital in the first half of its three-year term.