SYDNEY
– Australian Prime Minister Malcolm Turnbull says he will back a controversial
change to the country’s competition laws that would reduce the power of big
businesses to monopolise markets and squeeze out smaller competitors.

The
implementation of a so-called “effects test” was recommended as part
of a broad economic review produced last year for the government of former
Prime Minister Tony Abbott, who was ousted by Turnbull in a party coup in
September.

Strong
opposition from big business, which forms a traditional power base within
Turnbull’s Liberal Party, had stalled its implementation despite support from
its coalition partner the National Party, which draws support from rural
voters.

The
move is designed to prevent “firms with substantial market power from
engaging in conduct that has the purpose, effect or likely effect of
substantially lessening competition.”

“This
is yet again a case of my government taking long overdue reforms out of the
‘too-hard’ basket and getting on with the job,” Turnbull told reporters.

The
move, while welcomed by small business groups, could pose a problem for the
government as it prepares to consolidate political support ahead of elections
due this year.

The
Business Council of Australia has come out strongly against the measures, which
it says unfairly target large businesses such as Coles, which is owned by
Wesfarmers Group, and Woolworths Ltd.

The
decision was welcomed by the National Farmers’ Federation (NFF), the peak
industry body representing the agricultural industry, which has long complained
that big supermarkets have unfairly influenced prices.

“While
we do not view this as a silver bullet solution we do see it as an important
tool to not only improve competitiveness but also to drive innovation,
productivity and profitability across the sector,” said NFF Chief
Executive Officer Tony Mahar.

Treasurer
Scott Morrison pre-emptively deflected criticism of the changes, speaking
alongside Turnbull in Canberra.

“It’s
about competition. It’s not about whether one is taking the view of larger
businesses or smaller businesses or medium-sized businesses. It’s about taking
the view that competition benefits the consumer,” he said.

The announcement was backed by
the smaller opposition Greens Party, who control enough seats in the upper
house Senate to insure its passage without support from the Labor Party, who are
against the change.

– Reuters