May 10th 2008

  Buy Issue 2779

Articles from this issue:

COVER STORY: Labor abandons small business

EDITORIAL: Overhaul Australia's quarantine system!

HOUSING: How to make the Australian dream come true

CANBERRA OBSERVED: Daunting challenges for Swan's first Budget

AGRICULTURE: Behind the world's food shortage

NATIONAL SECURITY: Is it ever too early to foil a terrorist plot?

STRAWS IN THE WIND: Dial an anti-climax / Carrying a torch for China / Economic gobbledegook / Adolescent roulette... and culture shock / Zimbabwe

CHINA: Beijing spying apparatus gears up for Olympics

HIGHER EDUCATION: The high cost of free love

POPULATION: Russian life expectancy worse than Bangladesh's

MEDIA: ABC program's Castro whitewash

Point overlooked (letter)

Competition policy review (letter)

China's jackboot diplomacy (letter)

No voice for unborn at Rudd summit (letter)

Our next Governor-General (letter)

It's time to help boys (letter)

BOOKS: RISING '44: The Battle for Warsaw, by Norman Davies.

BOOKS: SILENT MOVIES: The Birth of Film and the Triumph of Movie Culture, by Peter Kobel

Books promotion page

Competition policy review (letter)

by Chris Hilder

News Weekly, May 10, 2008

With the change of federal government we are seeing both a top-down (e.g., departmental program and expenditure committees) and bottom-up policy review (e.g., Kevin Rudd's 2020 "ideas summit") taking place.

Meanwhile, the Coalition is wisely reflecting upon and undertaking a review of its own policy positions.

It is critical for successful policy outcomes, of course, that the policies that result are built on sound premises.

Along with other readers, I find Colin Teese's economic analyses intelligent and firmly grounded in objective reality (i.e., based on sound factual premises rather than on idealistic and simplistic theory).

I have also recently read a decade-old report by John Quiggan of James Cook University on the Hilmer reforms and NSW agriculture (dated June 24, 1997), and an article by Evan Jones of the University of Sydney on microeconomic reform ("Economic utopia and its handmaidens", Australian Review of Public Affairs, September 8, 2000).

The combined analyses of the above writers point to, I believe, a simplistic understanding of competition and market behaviour as being a root cause of the many economic problems that confront Australia.

I therefore propose that now is the opportune time to re-examine National Competition Policy and its supporting pillars, an ideologically narrow Australian Productivity Commission and its lack of accountability for the decisions it makes.

To avoid being simplistically accused of being anti-competition or free markets, I am a firm believer that real competition in free and fair markets produces the greatest wealth for the nation.

However, it must be recognised that both operating mechanisms function in an imperfect world where pragmatic action must be taken to prevent uncompetitive and unfair actions by players in the various markets, and, in addition, that an economic approach to public policy is broader than a narrow interpretation of economic efficiency, but includes equity, employment and externality effects.

A review of National Competition Policy will also require careful attention to significantly strengthening trade practices law, because the methods by which players in markets can engage in anti-competitive behaviour are now too sophisticated for the existing law to cope with.

I hope News Weekly will lead an appropriate lobbying effort. I believe that, if the Government and the Coalition get the competition premises right, then other News Weekly policy proposals on ethanol, car manufacturing and water-trading will have a greater chance of success.

(Mr) Chris Hilder,
Queanbeyan, NSW

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