The Dog with a Selective Bark
Charlie Nelson
August 2000
The Australian Competition and Consumer Commission (ACCC) is under attack about perceived inaction on petrol prices (The Age, August 19 2000).
Petrol prices have risen by over 20% in the last year to $1 a litre. Despite much anecdotal evidence of price fixing by oil companies, the ACCC has never come up with evidence than it believes will stand up in court.
ACCC chief watchdog Allan Fels blames the OPEC cartel. Queensland Premier Peter Beattie said if the ACCC did not investigate "it should be wound up".
On this occasion, and in the past, the ACCC has been accused of tackling the easy problems - to much fanfare - and avoiding the difficult ones.
This issue of selectivity is important to Australia's economy because if consumer prices rise too quickly, then another arm of the government, the Reserve Bank of Australia, will increase interest rates.
The ACCC has barked quite loudly at, and sometimes bitten, retailers, airlines, and communications companies lately. But it seems to have allowed insurers, schools, and hospitals to rob us.
There is competition in the insurance industry. There is also competition between private and public schools. Likewise hospitals. But how effective is that competition?
Of course, the ACCC, may argue that it has no mandate to investigate the education and health industries. If so, that is a poor excuse - they should seek the mandate.
There have been several times lately when the dog should have barked. One was when the Kennett government in Victoria entered into a contract with the builder of the City Link road with a provision that the government would compensate the City Link for any loss of profits should a rail link between the airport and the central business district be constructed in the future. That, surely, is anti-competitive!