The Commonwealth Government has commissioned an independent review of Australia's competition laws and policy.
The key areas of focus for the review are to:
- identify regulations and other impediments across the economy that restrict competition and reduce productivity, which are not in the broader public interest;
- examine the competition provisions of the Competition and Consumer Act 2010 (CCA) to ensure that they are driving efficient, competitive and durable outcomes, particularly in light of changes to the Australian economy in recent decades and its increased integration into global markets;
- examine the competition provisions and the special protections for small business in the CCA to ensure that efficient businesses, both big and small, can compete effectively and have incentives to invest and innovate for the future;
- consider whether the structure and powers of the competition institutions remain appropriate, in light of ongoing changes in the economy and the desire to reduce the regulatory impost on business; and
- review government involvement in markets through government business enterprises, direct ownership of assets and the competitive neutrality policy, with a view to reducing government involvement where there is no longer a clear public interest need.
The Review Panel released an issues paper in April 2014. The AER provided a submission to the issues paper on 1 August 2014.
On 22 September 2014 the Competition Policy Review draft report was released for comment. The AER provided a submission response to the draft report on 24 November 2014.
The main focus of our submission is on the recommendation to create a national access and pricing regulator – a recommendation that would have the effect of splitting the functions of the AER between a national access and pricing regulator and the ACCC. We consider that the proposal to divide the AER’s functions between two regulators fails to recognise the integrated and changing nature of energy markets. The recommendation to transfer the AER’s retail roles to the ACCC also mischaracterises our current roles under the National Energy Retail Law and Rules. Further, there are significant practical implementation issues associated with this proposal that would need to be addressed.
The submission also comments on the energy market reform recommendations proposed in the report. We are fully supportive of the reforms outlined to finalise the energy reform agenda, including proposed retail market and reliability standards reforms.
Finally, we comment on the proposal to broaden the information that the Australian Competition Tribunal should be able to consider in its reviews. In energy, this issue has recently been considered at length and amendments to the merits review arrangements finalised. We consider that it would be premature to amend these new arrangements, particularly as they have not yet been tested.