There’s a lot of faux-support around these days. Faux-support – let’s resist the temptation to coin a lame neologism like “fauxport” – is when someone declares they are in support of something, but in a modified form that ensures it wouldn’t actually have any impact whatsoever.
The emissions trading scheme is a good example. Many businesses vocally “support” doing something about climate change and think an ETS is a great idea, but in a form that would leave them untouched by its operation.
The more honest alternative would be to say they’d either prefer to let the planet cook or let everyone else do something about it while they get on with making money, thanks very much. But this might not go down too well with consumers.
Faux-support is what today’s AFR editorial offers when it declares that the Plutocrats’ Gazette has long “supported” the criminalisation of cartels, just not in the form proposed in the draft bill unveiled by Chris Bowen yesterday.
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Indeed, as it turns out, it doesn’t support it in any sort of workable form. The AFR dislikes the fact that the requirement to prove dishonesty on the part of cartel participants has been dropped. At least it admits that a similar requirement had been an “obstacle” to convictions in the UK – if you can call a completely insuperable problem that has prevented any successful prosecutions an “obstacle”. Bowen, copying the approach of most other jurisdictions around the world, has opted for the US model, which skips the need to prove deliberate dishonesty on the part of those prosecuted.
In contrast, the AFR, on behalf of its business readers, would doubtless prefer the sort of criminalisation that means the chances of anyone with an IQ above room temperature ever going to gaol are zero.
And while it was offering a commentary on competition policy, the AFR had a go at Wayne Swan’s declaration of BHP and Rio’s iron-ore railways in the Pilbara under the third-party access provisions of the Trade Practices Act.
Third-party infrastructure access has been probably the least successful aspect of competition policy. Never popular with infrastructure owners (who’d have thought?), the very principles of the policy have come under sustained attack in recent years. Henry Ergas has spent years – and earned plenty – “demonstrating” that third-party access more or less heralded economic apocalypse. Phil Burgess, in between leading armed raids on the ACCC, argued access was a form of organized theft that punished altruistic companies like Telstra. Even the Productivity Commission, worried about the effect on infrastructure investment, mulled over ideas like “access holidays”.
And back in February, Minister for Very Big Holes In The Ground Martin Ferguson said the TPA needed to be overhauled so the infrastructure access provisions would not “destroy what is the best mining logistics chain in the world” in the Pilbara.
Good thing he wasn’t deciding on the National Competition Council’s recommendation, huh?
And the process laid down under National Competition Policy has, to use the AFR’s terminology, a few “obstacles”. After years of applications, negotiations, deliberation by the NCC and studied silence from Wayne Swan’s predecessor, Fortescue has only obtained the right to negotiate on access to the rail lines with BHP and Rio. A Fortescue director, in that pious tone adopted by successful litigants trying to wish away an adversary’s right to appeal, said he looked forward to negotiating with BHP and Rio rather than further court action. But the miners can look forward to years of appeals yet before they can ever be forced to the negotiating table. All the damn ore will be dug up and shipped out before anyone gets access to anything.
The only near-term benefits is likely to be a demonstration effect that might encourage other infrastructure owners to move to negotiation with access-seekers rather than hope the Government will kill off requests for declarations.
In August, Chris Bowen — in whose portfolio the TPA actually sits, rather than Ferguson’s — announced he wanted to overhaul the third-party access provisions. Not in the Ferguson sense of wiping them out, but in getting them to operate more quickly. Bowen’s office says they are still working through a number of the issues at the moment but will be seeking to stimulate debate. Bowen, who is to be applauded and not bagged for wanting to extend the TPA into areas the Coalition was too scared or lazy to venture, will doubtless face considerable opposition in any serious attempt to speed up the handling of access proposals. And that’s before he even gets out of the Cabinet room.
But at the moment we have the worst possible policy – one with all the uncertainty that comes from infrastructure owners and investors worrying about third-party access, and the administrative and litigation costs associated with that, but with few of the competitive benefits that would come from access. In short, the only real winners from the current provisions are competition policy lawyers.