We made the bold statement that ACCC chairman Allan Fels was Australia’s best regulator and certainly received a mixed bag of messages from the Crikey readership. As one of the few media outlets without a vested interest in the debate, we reckon Crikey is as well placed as anyone to independently canvass all sides of the debate.
The majority, though, tended to side with “big business” in criticising Fels.
We think debate about the role of the ACCC is an important one in business and we’re happy to use this forum to get differing points of view across.
Here’s how the debate unfolded, which kicked off in our sealed section of 2 May:
“5. MARK WESTFIELD’S ALLAN FELS ATTACK
Crikey reckons that ACCC chairman Prof Allan Fels is Australia’s best regulator and his powers should be enhanced such that he can force dominating companies to sell assets like competition regulators do in the UK and the US.
It is hard not to argue that Rupert Murdoch simply has way too much power in Australia and that he should be forced to sell a few newspapers, as controlling 70 per cent of the industry is unheard of anywhere else in the western world. We see countless examples of the abuse of power and look no further than the item below about Herald Sun editor-in-chief Peter Blunden.
We reckon Murdoch is the most powerful man in the world (the US President is a position not a person) so it amuses Crikey no end that Mark Westfield has launched another vicious attack on Professor Fels in today’s Murdoch-owned Australian accusing him of being ego-driven and the most powerful man in Australia.
Surprise, surprise, Fels is making noises to oppose the Foxtel/Optus Vision which Rupert wants to secure a monopoly over the pay-TV market in Australia in conjunction with Packer’s PBL and Telstra.
Westfield has run a sustained campaign against Fels ever since he blocked the Foxtel-Australis Media merger five years ago when he should realise that so blatantly doing Murdoch’s commercial bidding merely serves to damage his credibility.
Crikey used to happily write pieces in The Daily Telegraph to satisfy News Ltd’s commercial goals – it’s just part of the culture of being a News hack. But people like Westfield need to realise their credibility is on the line with this stuff.
Give it up Mark. You work for a bloke who abuses his power 10 times as much as Allan Fels does, but don’t expect to ever read this sort of piece in the Murdoch press.”
– Ends –
That little spray induced the following pieces against Fels:
I read with great interest your article last Thursday on Mark Westfield’s attack on Allan Fels.
Now it’s great to see the oil companies getting a bit of cattle prodding – not only do they pollute, pillage and destroy the natural environment, but they charge punters like us through the nose for it.
And yes, the ACCC is important, fighting to right the wrongs in corporate Australia.
But I’m a tad more cynical about your comments that Fels is ‘Australia’s best regulator’.
Mark Westfield may be a Murdoch serving twat, but he does have a valid point, Allan Fels’ truly gigantic ego is taking over the importance of the institution whom he represents. Ask anyone who has dealt with him directly in the media and government and you will know what I mean.”
– Ends –
No other regulator enjoys Fels’ media profile – think APRA, ASX (a “regulator” of sorts) and their ilk – but Fels’ gig as part “media tart” is probably a necessary evil to get his job done. We suspect that Fels’ media prominence is not a result of his “truly gigantic ego” as our correspondent alleges, rather, it arises because of his need to get the ACCC’s message across to the public.
Our guess is that Fels would probably prefer to be an anonymous behind-the-scenes whip-cracker if he could, but getting onto the media radar is part and parcel of his job. He certainly sets himself up for a huge fall if he gets anything wrong, something which nobody would enjoy despite the “trappings” of being a “celebrity regulator”, whatever they might be.
But if anyone who “has dealt with him directly in the media and government” can back up our correspondent’s allegations we’d love to run it.
We also received a Fels-bash from an investment banker, which we ran in our sealed section of 6 May:
I have to say that I disagree with you on Fels. He is a megalomaniac at the best of times and focusing on the loss making refining and marketing business in Australia is an absolute waste of time. He should focus on areas where he can make a difference, or otherwise you will see one of the big refining and marketing companies depart Australia and then you’ll find out what happens when an extremely competitive, highly capital intensive business loses a main competitor.
Australia could easily become a branch office economy over the next twenty years and that means there will be less and less jobs in professional services for our well-educated community. As a result, more and more over achieving Australians will travel to New York, London and Hong Kong and never come back. There are many things governments and regulators can do to attempt to reduce this, and one of them is to encourage the creation of far more powerful Australian companies, which by virtue of their size and market position, are able to attract international capital without having to relocate its head office to London or the US. To date, Fels has contributed significantly to the demise of Australian Corporates (and the result is foreign ownership). If Fels wants to become a politician he should stand for parliament and see whether the Australian people think he has done a good job!
Regards, name withheld”
– Ends –
The investment banker got a nod from another sole subscriber:
“I agree with your anon. contributor regarding Prof. Fels. He is on the wrong tack with the oil industry. World parity pricing, which is absolutely essential, has been a bonanza for the producers, not the refiners or the resellers. Petrol is too cheap and an increase in excise directed toward development of alternatives would enable us to achieve lower green house gas targets.
In the recent sell off of Franklins, Woolworths were forced to sell their King St. Newtown NSW. Metro store to be allowed to take over Franklins at Marrickville, some 4 to 5 kilometres away. Most of the Newtown customers were walk-ups from local residential areas. The new owners, IGA, won’t be there much longer I predict. Custom has fallen off dramatically and little wonder. Nothing in the store is less than 3% dearer than Woolworths and then only for store brand items. Most lines are 20 to 30% higher.
When IGA pull out, I suppose that Starbucks will move in and cut into the business of the existing small coffee shops.
Best wishes, Ian”
– Ends –
The following sole subscriber upped the ante with an excellent contribution fleshing out how the ACCC’s role and responsibilities should be viewed in the context of our other regulators:
The debate over the role of the ACCC in Australian corporate life is a little too complex to be debated using populist claptrap as spouted forth by your correspondent. It’s all too easy to fall back on the generally accepted “evils” of the corporate world by dragging out the old chestnuts of HIH, lawyers, executive salaries, Enron, Anderson and “unscrupulous” investment bankers and sell side analysts. I’m not sure if your correspondent understands the jurisdictions these issues fall under.
The HIH balls up falls under the banner of ASIC and APRA, not the ACCC.
John Reed’s salary and benefits from Citigroup fall under the stewardship of the board, and possibly the SEC, certainly having nothing to do with the ACCC. I’m not sure how large termination and pension payments for long term and high performing employees in the US relates to Australia’s competition policy?
The same stands for the Enron/Andersen relationship. However it is far too easy these days to lump the entire audit profession into one boat and sail it over the falls than identify specific cases of Australian graft – and even harder to find those relating to the ACCC – which would not actually be involved in the operation of the accounting industry.
The various cases of dodgy lawyers, analysts and investment bankers also has absolutely nothing to do with the ACCC and shouldn’t cloud the argument. Furthermore, the citing of Glass-Steagall, more accurately known as the Bank Act of 1933, is erroneous, as its role was to separate commercial and investment banking. Pump priming stocks would have occurred, and did occur, regardless of whether an investment bank was allowed to buy a commercial bank.
My point is that identifying instances of popular dissent over corporate operations is a simplistic, juvenile means of arguing an issue and not particularly constructive. Would you correspondent argue that the institution of marriage is going down the tubes and use Temptation Island as the example?
The powers of the ACCC, whilst often being used for “good” are often used for “evil” when they make decisions with their blinkers on (witness the required parallel roll out of cable TV services, costing Telstra and Optus billions all in the name of competition). The question of enabling Australian companies the economies of scale to compete globally is a question that must be looked at. Dredging through the mud for dirt not even applicable to the debate at hand is not helpful.
– Ends –
We followed up on Friday 3 May with the following in our sealed section:
“15. FELSY IN THE FIRING LINE
First QANTAS’s Geoff Dixon and now Shell’s Neville MacPherson have criticised Allan Fels and the ACCC in the past two days.
Looks like he’s doing his job well, then. Crikey is amazed that Qantas has the temerity to whinge about the ACCC when Felsy has never actually done anything to Qantas over the years, despite their massive abuse of market power.
Qantas used predatory pricing to destroy Ansett and should have been massively fined and taken to court by Felsy. Have you ever noticed how people who complain the most often have the most to hide? This applies to Qantas, which feigns outrage before Felsy has even done anything to them.
The oil companies are a different issue because they are actually losing money on their downstream operations at the moment. Sorry, Dan, try the banks, they are real shockers and make $12 billion a year.
– Ends –
Not surprisingly, our claim that QANTAS priced Ansett out of business generated some debate and we should clarify as we have in the past that this was one of many factors leading to Ansett’s demise, as this sole subscriber points out:
“I nearly fell off my chair when I read your column today claiming Qantas had killed off Ansett and that this meant Allan Fels deserved more powers.
I always thought Qantas and Ansett were a cosy duopoly and that Ansett’s demise was due to the fact that the Kiwis paid too much for dodgy assets run by an overpaid union-dominated workforce.
Even the unions are angry at Fels today claiming he dudded the Ansett staff by preventing Qantas putting in a decent bid for the vacant Sydney terminal.
This comes on top of Fels other recent successes including driving down Telstra’s profits and share price in his efforts to gain greater regulatory control and transfer profits to Singtel Optus and other offshore competitors.
Apparently Caltex is seriously reconsidering plans for a new Sydney refinery after Fels’ recent cowboy raids on the oil companies, inflicting huge brand damage all because of some alleged bitumen price rigging scheme in Taree.
Giving Fels more power would do wonders in turning Australia into a real basket case economy.”
– Ends –
Another interesting thread to the story will be how Qantas frequent flyer the Parrot will respond to Fels’ attacks on Qantas. We threw up this speculator in our sealed section of 8 May:
“3. THE PARROT AND QANTAS
At last, the ACCC has finally thrown the book at those predatory wannabe monopolists at Qantas. But why the hell has it taken 18 months to deal with the Virgin complaint on the Adelaide-Brisbane route?
Crikey is all about explaining and exposing power structures so keep watching for a Parrot attack on the ACCC today because Qantas have given him millions over the years. He is a key weapon in their powerful arsenal and they trot him out on a regular basis. Sorry, did someone try to say the Parrot’s opinions weren’t for sale.
Qantas CEO Geoff Dixon is great mates with the Parrot’s employer, John Singleton, and this is another element that was missing from the 4 Corners story. Why weren’t those handing over the cash for comment put under some more pressure?
Now that he’s under the spotlight a bit more, we bet the Parrot will be more oblique in his plugs. For instance, he has spoken before of the emphasis on cheap airfares, and not enough attention being paid to dealing with the decline in rural air services. He has got stuck into the two Marks recently about the failure to resolve Kendell/Hazelton, and we all know how Qantas is currently left holding most of the rural air network.
Keep your ears open Crikey family.”
So the debate on the role of the ACCC is well and truly alive here on Crikey and we’d like to keep it rolling.
Unfortunately, Fels’ high media profile tends to cloud the debate about whether he (as figurehead for the ACCC) is actually doing a good job.
We’re happy to keep the debate simmering on these pages, so please keep the contributions coming in.