“Competition is a really great thing,” Fortescue’s Andrew Forrest has been reported as saying at a Shanghai dinner last night. But surely Forrest was being sarcastic, since he has recently called for iron ore companies to work together to cap production as they feel the pressure of falling iron ore prices.
Both Treasurer Joe Hockey and the Australian Competition and Consumer Commission’s Rod Sims have reacted sharply to Forrest’s proposal, with the latter suggesting it was “a matter of grave concern”. “In general terms, any attempt by Australian businesses to encourage competitors to restrict outputs is a matter of grave concern to the ACCC,” Sims said.
Unfortunately Forrest’s attitude is all too common across Australian business: competition is great, but only for everyone else. It’s a neat illustration of what divides the interests of business from the national interest — things too commonly reflexively linked both by business lobbyists and their media cheerleaders.
The Australian economy is already plagued by oligopolies and duopolies engendered by the comparatively small size of our domestic market, including some of our most important industries, like banking and the media. The ACCC is under constant pressure to approve mergers that will further entrench the dominance of oligopolists across the economy, and history shows that big firms are only too ready to exploit market power over consumers and other businesses.
Competition is indeed a really great thing. Too bad we’re seeing less of it, not more.