Our toothless consumer watchdog

Unfortunately, as an organisation the ACCC has not in recent years been as sharp or as pro-active as it could have been. Often the ACCC is spread too thinly and over the years has accumulated a vast array of functions and responsibilities. More dangerously for the ACCC it has increasingly been drawn into political debates. The ACCC’s involvement with such political failures as GroceryChoice and Fuelwatch has no doubt tarnished its reputation and some would say its independence.

Of course, the ACCC is no stranger to criticism. ACCC Chairmen, in particular, seem to attract a considerable share of criticism. Allan Fels and Graeme Samuel have both had their critics. Having observed both Chairmen very closely one thing is clear and that’s the level of criticism dramatically increases towards the end of the Chairman’s second term.

We saw it with Fels and now we are seeing it with Samuel. With Fels the big end of town and their advisers mounted a furious personal campaign centred on Fels’ use of the media. With Samuel the focus has turned to his and his family’s link with the financially troubled DFO and the potential conflicts of interest that may arise from that link. Serious questions were asked during last week’s Senate Estimates hearings about what Samuel knew or did not know. There have even being calls for an Inquiry into the various issues and allegations.

If there’s one thing that emerges from both the Fels and Samuel experience is that two terms should be the maximum for any ACCC Chairman. After two terms it’s clear that a new perspective is needed at the top. Naturally, of course, the particular Chairman feels that he may have more to contribute, but after two terms it’s just time to move on.

Therein lies the challenge for anyone in public life. Knowing when to go is always a tough call, but when it comes to a regulatory body such as the ACCC there is no doubt that after two terms the organisation would benefit considerably from new ideas at the top and a fresh perspective to competition and consumer issues. New ways of thinking can re-energise the organisation and prompt staff to think outside the square previously set out by the outgoing Chairman during his two terms.

As for possible replacements for Samuel there is no shortage of big end of town lawyers or economists ready to take over. No doubt also that all his fellow Commissioners would think they are capable of doing the top job. Why a big end of town adviser or fellow Commissioner as a replacement for Samuel? Quite simply these would be “acceptable” to the big end of town which would no doubt “mobilise” against any candidate who would be seen as “unsympathetic” or “too independently minded.”

With Samuel’s second term expiring in the middle of next year it would be opportune to also review the ACCC. There are growing calls for such a review and as these calls grow louder it will not doubt present a challenge for the Gillard Government. Having relegated the competition and consumer law portfolio to a parliamentary secretary position, it’s clear that there are those in the Labor Government that would prefer that not much of any substance happen in the portfolio. Of course, the window dressing statements and amendments will continue but sadly that will only allow competition to be further eroded and consumers to be ripped off even more.

Regrettably, the window dressing is not limited to the politicians. There has been a lot of that at the ACCC in recent years. Indeed, the standing of the ACCC amongst consumers and small businesses has been severely undermined by a perception that any ACCC action on key issues is often too little, too late.

Take the GroceryChoice debacle for example. The ACCC was given carriage of the project and after wasting millions of taxpayer dollars consumers were no wiser as to which particular supermarkets were the cheapest. The pricing information that was collected for the website was out of date before it hit the website with the website itself very poorly designed. All we got was excuses from the ACCC and still no effective action to help rein in the growing market dominance of Coles and Woolworths.

Yes, the ACCC did seek to deal with restrictive terms in shopping centre leases which were used by Coles and Woolworths to prevent new supermarkets entering the shopping centre, but the problem was that no commitment was obtained by the ACCC from shopping centre landlords to actually allow new supermarkets into the shopping centre to take on Coles and Woolworths.

Stopping Coles and Woolworths from trying to prevent the entry of a new supermarket is certainly not the same thing as seeing new supermarkets in shopping centres as that depends on the shopping centre landlord. The end result is that, despite the ACCC moving against the restrictive lease terms from a Coles and Woolworths perspective, we could end up with no new supermarkets in the shopping centres simply because landlords will not allow any new supermarkets into the shopping centre that might annoy Coles and Woolworths. In short, the ACCC has fallen short as shopping centres landlords know which side their “bread is buttered on” and they will not act in any way that annoys Coles and Woolworths.

Moving to the four major banks it’s clear that the ACCC has to take full responsibility for allowing Westpac to acquire St George, a takeover which represented a major blow to Australian banking competition. Here there can be no excuses from the ACCC as that takeover predated the Global Financial Crisis.

The recent ACCC failures and window dressing in the grocery and banking sectors are just two areas where we need a fresh approach or, more particularly, a “new broom.” Will the Federal Government be courageous enough to appoint a new ACCC Chairman or will we just get more of the same excuses and window dressing from the ACCC? Time will tell, but a new Chairman would no doubt signal that the Federal Labor Government wants a fresh approach to issues that so clearly haunted it throughout its first term.