July 14th 2001


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COVER: Singapore's economic lessons for Australia

Canberra Observed: Electoral map shows uphill battle for Coalition

Falling fertility debate reignited

Dissenters highlight dangers in UN report

Cloning: how far will states ban go?

Keep the single selling desk for wheat

The Media

Straws in the Wind

Letter: Export figures disputed

Minister resists competition push

Mass destruction in the future

Manufacturing and the sinew of war

Is corporate cost cutting becoming lethal?

French applaud 35-hour week

Books: Colonial Consorts, by Marguerite Hancock

Books: The China Threat - How the People's Republic Targets America, Bill Gertz

Letter: Barley story wrong

Letter: Trade, US-style

Letter: Riddle solved

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Minister resists competition push


by Peter Wilkinson

News Weekly, July 14, 2001
In a surprise move, to those outside the packaged liquor industry, Victorian Minister for Small Business, Marsha Thomson delivered a counterblow to the National Competition Policy as interpreted by the bureaucrats and ideologues in the National Competition Council (NCC). In so doing, she upheld one of the Bracks Government's key electoral policies on liquor retailing, which stated:

* "Labor will create an environment in which a vibrant, dynamic and prosperous small and medium-sized business sector can thrive. Labor will give them the support and encouragement they need to get on with the job.
* Small business is where Victoria's best prospects for future jobs and prosperity lie."
Victorian Labor when opposition, concerned at the growing concentration of ownership of the packaged liquor and hotel industries, promised to "close the legislative loopholes which allow large retailing chains to accumulate more than eight per cent of the total number of packaged liquor licences" and reinstate and strengthen the eight per cent cap limit on market concentration in other area of retail liquor licensing.
Labor's policy was a recipe for confrontation with the gurus of the National Competition Policy (NCP), determined to force liquor deregulation reviews on all states. If liquor deregulation succeeds, the major chains' domination in the packaged liquor industry is assured. Victoria was the first state to feel the liquor deregulation push. It was the small independent liquor retailers in the forefront of opposition to the National Competition Council.

Ironically, Victoria has the greatest diversification of retailers and product following the Nieuwenhuysen liberalisation in 1987 and the Storey's review's alterations in 1998. But the National Competition Council wanted more. Milkbars, delicatessens, take-away pizza stores, butcher shops, restaurants and petrol retailers were all set to get packaged liquor licences.

However, the post-1987 proliferation of packaged liquor licenses destabilised the industry and the orderly market in the state. The price of Victorian liquor stores after 1987 sagged, then plummeted post-1998. Goodwill, the keystone of small business success, was destroyed.

Last year, Prime Minister Howard assured the Australian Hotel Association that it was never the intention of NCP to let an industry end up in the hands of two or three major companies. Assurance indeed.

Following a National Competition Council-forced review, by the Office of Regulatory Reform (ORR) in Victoria, Minister Thomson stuck to her commitment on liquor. The National Competition Council retaliated with threats of withholding millions of dollars in National Competition payments to the state.

Still, Thomson went one step further in May 2001, introducing parliamentary amendments to uphold the "eight per cent cap" on packaged liquor licences.

Safeway retaliated with a multi-million dollar purchase of the Liberty chain of liquor stores and their liquor licenses.

Now under the new law, the major chains must divest those liquor licences they hold above the eight per cent cap. The National Competition Council backed down on the threat to withhold NCP payments. It was a victory for small business and common sense.

A strange hallmark of the Bracks Government is that while one Minister does something positive for one sector, the others are doing everything to destroy that same sector.

It appears that Victoria is beginning to imitate Hitler's vision for Germany, wherein smoking was forbidden, vegetarianism was compulsory, and there existed a Commissioner for the Care of Dogs.

Small business retailers are reeling from the draconian legislation initiated by the Health Ministry covering tobacco retailing after July 1, 2001.

The Health Department, using legal, administrative and economic diktats, destroyed goodwill for tobacco retailers. In a fit of neo-colonialist nostalgia, the Health Department has re-invented the spy system of fizgiggs against retailers that aggravated the Kelly Outbreak in the late 1870s. Similarly, the nonsensical Racial Vilification Bill has major ramifications for small business.

Treasurer Brumby's progressive implementation of State Business Taxes has mauled small business and self-funded retirees.

Meanwhile, the June 2001 release of the Victorian all-parliamentary Inquiry into Public Drunkenness, responds to the problems brought about by deregulation of alcohol and proliferation of liquor licenses.




























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