With so many duopolies or oligopolies dominating Australian business, it’s tempting to cheer Twiggy Forrest’s Fortescue Metals Federal Court success against BHP over access to its Pilbara railways, but the issue also raises questions that extend to the Telstra access standoff and other infrastructure.
What do we want or fear most: rule by bureaucrats or exploitation by business?
Yesterday’s win is just one more step in an incomplete journey for Fortescue. It lost a not dissimilar case against Rio and this just lets it now apply to the Australian Competition Tribunal for the right to run its own trains on BHP’s tracks.
There’s also a little matter of actually developing a mine in the Pilbara. That is several years further down Fortescue’s own business hopes – with timing that could well coincide with a major cooling of the resources boom anyway.
And let’s not forget this is all happening in Western Australia, where the state government intervened to help Rio out against Cazaly over the Shovel Anna iron ore project “in the national interest”, just as BHP is now claiming “the national interest” in wanting to keep Twiggy off its railway.
There are not unreasonable private property issues for matters such as BHP’s railways and Telstra’s networks – if I pay for it and own it, why isn’t it mine? But in the AFR opinion pages, Alan Moran from the Institute of Public Affairs argues there’s a worse problem: the bureaucrats behind access regimes effectively claim to know better than the business owners when it comes to what’s good business.
The regulator in this case also sees another possibility: that businesses are so self-centred that they need “jogging” to be alerted to sensible profitable opportunities (selling spare capacity).
This is a bureaucrat’s fantasy. Those who have never operated in a commercial world would never understand how even rivals like the Murdochs and Packers – Australia’s 21st century version of Verona’s Montagues and Capulets – will readily combine to pursue particular opportunities while remaining adversaries in other theatres…
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Australia has an expansive definition of facilities that are eligible for government regulation. Firms facing forced sharing of their facilities will fight against this. They and other firms confronting such dilutions of property rights will be ultra-cautious in embarking on new investments. The latest decision will create greater uncertainty and impede investment in telecoms, ports, pipelines and any other such facilities.