Like David Murray’s inquiry into the financial sector, Ian Harper’s inquiry into competition policy is shaping up to be more than the government bargained for.
The review was originally conceived as a vehicle for the Nationals’ obsession with limiting market forces where they didn’t like the results — curbing the power of supermarket chains, re-establishing regulated agribusiness industries — and some Liberals’ determination to ban consumer boycotts and social media criticism of the big companies. It went off the rails the moment Ian Harper, an outstanding economist with a strong background in public policy, was appointed to lead it.
Rather than chase the obsessions of the Coalition, he and his review team have looked long and hard at how the National Competition Policy has fared since the Keating government established it, and in their draft report found that while it has delivered substantial microeconomic benefits across the economy, much remains to be done. Part of the problem — though Harper doesn’t say it — is that the Nationals have always been opposed to the basic tenets of the NCP. But another part is the unwillingness of governments of all persuasions to take on entrenched monopolistic industries like pharmacies and taxis.
And as the report notes, there remains the longstanding problem of governments’ aversion to pricing access to politically sensitive infrastructure in an efficient manner. There are thousands of words in the acts implementing the NCP given over to the issue of fair and efficient access to private sector infrastructure, including pricing. But Australia’s governments have avoided the issue of fair and efficient access to roads, and road pricing, like the plague.
We live in hope that one day a brave state or federal government might take on this challenge. But we’re not holding our breath.