The Australian two-speed economy – fierce competition for SME’s, none for the oligarchs. We need surgery by the ACCC
The vast majority of Australian small and medium sized businesses face white-hot competition and engage in a fierce struggle to gain and hold customers. This is considered a good thing – it keeps costs down and spurs continual innovation.
Competitive pressures are a major source of productivity, higher incomes and national wealth.
But there is another group who enjoy the quiet life of stable high margins and limited competitive pressures: the oligarchs.
There are the money-making ‘heroes’ who can dictate terms to their suppliers, customers and competitors and can defy substitute products.
A common economists’ measure of oligarchy is where the top four firms together enjoy more that 80 per cent of any market.
Let’s see: that includes the banks, the oil companies, gas and electricity utilities, fertilizer producers, cardboard manufacturers, steelmakers, supermarkets, media… Is my list complete? Far from it!
Economic reform – what a wonderful idea. Nice when it happens to others; something to be deeply suspicious of when it threatens you and your livelihood. But if that livelihood comes from playing monopoly, economic surgery is required.
Our protection is Graeme Samuel and the Australian Competition and Consumer Commission, who are responsible for reviewing industry mergers and cartel busting.
The Democrats believe the ACC should be given a sharp knife to require divestments in cases of market failure. We have long championed small business in their battles with oligarchs – going as far back as our battle for small petrol retailers against the oil companies.
Don’t look for competition support from the L/NP conservatives. They sell influence to industry lobbyists. If you can’t afford a lobbyist, you cant influence their decisions.
And don’t look for competition support from the ALP, either. They have been infected by the conservatives’ disease – money buys privilege.
Some commentators wring their hands and describe Australia as a small, weak economy with a small population. Ahemmn. We are the 14th largest economy in the world and big enough and tough enough and smart enough to resist oligarchs… aren’t we?
