New ACCC chief will need to tackle the top end of town

Naturally, there will be many challenges for Sims. He will need to go head to head with the best of the big end of town lawyers’ club.

While Sims is not a lawyer, he should know the ways of the big end of town lawyers having dealt with them over the years as an economist consulting for the big end of town and having been Chairman of IPART – the NSW Independent Pricing and Regulatory Tribunal, better known in the media as the body overseeing large electricity price rises in that State.

Sims will need to be able to stand up to both big and small businesses, as well as being known to consumers. Obviously, Sims will already be known to many NSW electricity consumers.

Of course, Sims doesn’t need to be loved by the various interested parties. For any new ACCC Chairman it’s better to be respected than loved by either big or small business.

Above all, Sims will need to rebuild the ACCC’s public image and its standing in a growing number of industry sectors. Just ask around small business circles and you will hear the word “useless” more often than not to describe the ACCC.

Then follow up by asking the Telco sector what they think of the ACCC and you will get mixed signals about how the ACCC has not been up to the task of reining in Telstra.

And, don’t stop at small businesses or particular industry sectors. Ask motorists what they think of the ACCC and its Petrol Commissioner.

Ask borrowers what they think of the ACCC decisions to allow the majors to take over St George and BankWest. Again, the words “toothless tiger” are not uncommon.

That’s why the Federal Government was prudent not to appoint any existing Deputy Chairman or full-time Commissioner to the top job.

These possible internal candidates would simply be too closely associated with the outgoing Samuel regime.

Appointing someone like Sims also provides the Federal Government with the opportunity to conduct a wide-ranging review of the ACCC. There are growing calls for such an independent review.

Why the calls for a review of the ACCC? Well, quite simply the ACCC in recent years hasn’t 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 perceived independence.

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 cheapest.

The pricing information that was collected for the website was out of date before it hit the website with the website itself being 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.

A fresh approach is sorely needed to tackle the growing levels of market concentration throughout the economy where cosy clubs of large and powerful companies keep pushing prices up at will.

It’s no surprise that Australia consistently has some of the highest levels of food inflation in the developed world. That means higher grocery prices for struggling Aussie families.

Moving to the four big 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 competition in the Australian banking sector.

Here there are no excuses from the ACCC as that takeover predated the Global Financial Crisis.

Finally, we need an ACCC that will regularly use Australia’s new cartel laws to put price fixers in jail. We have heard a lot of tough talk on clamping down on price fixers, but have seen little in the way of tough action.

Yes, the ACCC has launched the occasional cartel case, but that’s only scratching the surface. Much more needs to be done to weed out the criminal price fixers who use cowardly cartels to steal millions from consumers.

Given that United States competition law enforcers regularly put cartel participants in jail, it’s clear that the ACCC is well behind the pace when it comes to jailing the corporate crooks involved in cartels.

On this failure we get the usual ACCC line that it will “vigorously” investigate cartels, which to the average punter looks suspiciously like the ACCC doing a lot of “watching.”

Given the obvious lack of criminal prosecutions so far some would say that we need less talk of vigorous watching and more in the way of real enforcement action.

Clearly, Sims has a huge task in front of him as there is a lot to be done to lift the ACCC’s image in the public’s eyes.

There can be no doubt that the Federal Labor Government desperately needs a fresh approach to the competition and consumer issues that have so clearly haunted it since first being elected in 2007.

Will Sims bring a fresh approach so urgently needed at the ACCC or will he be like previous Chairmen? Let’s wait and see.