It's high time to abolish the ACCC

Bookmark and Share Deregulation Unit | John Roskam
Australian Financial Review 18th October, 2013

In the Federal Court last Friday Justice John Middleton ruled AGL and its agent had broken the law against unsolicited selling when one of their door-to-door salespeople in South Australia ignored a "Do Not Knock" sign on the front door of a house.

The case is ridiculous. And it demonstrates all that's wrong with how business is regulated in this country and all that's wrong with the Australian Competition and Consumer Commission.

AGL can be fined up to $50,000. If the company had asked the salesperson to spray graffiti on the home rather than sell electricity, its fine would have been smaller.

The fact it required a Federal Court judge to decide the meaning of a sign saying "Do Not Knock, Unsolicited door-to-door selling not welcome here" demonstrates the capacity of lawyers to argue over something that to any normal person is perfectly obvious.

But the piece de resistance of the case is the attitude of the ACCC. Rather than simply getting AGL to apologise, the Commission promised to pursue penalties against them as part of its campaign against illegal door-to-door marketing. (The ACCC spends part of its $150 million budget producing "Do Not Knock" stickers. The stickers feature the Australian coat of arms and the ACCC logo.)

Tony Abbott has proclaimed Australia is now "open for business". He can prove it by abolishing the ACCC. In fact the Institute of Public Affairs recommended exactly such action last year in its 75 radical ideas to transform Australia. Getting rid of the ACCC came in at No 9, between abolishing the Commonwealth Grants Commission at eight, and Australia withdrawing from the Kyoto Protocol at 10. (No 1 was repealing carbon tax.)

There's two main duties the ACCC undertakes: things the government has no role in whatsoever and things that can be left to state governments. On the very rare occasions when there is a genuine issue of competition policy, the matter can be decided by the Treasury department or directly by parliament.

Revealing snapshot

A quick look at the 10 most recent press releases from the ACCC is a revealing snapshot of how it's turned into a make-work organisation for bureaucrats, which is hardly surprising. Its chairman, two deputy chairs and three commissioners all have backgrounds as public servants, lawyers, and academics.

Between them they have as much experience in the private sector as the Labor Party's frontbench.

One of the 10 press releases was about the AGL case and another covered a speech given by the chairman. Other press releases dealt with credit card companies coordinating new authentication procedures; with music licensing; and with regulating the prices charged by the national broadband network.

The ACCC should have nothing to do with the national broadband network. As soon as the monopoly regime of the national broadband network was revealed, the entire senior staff of the ACCC - if they'd really had any commitment to competition - should have all resigned.

The ACCC also announced it had allowed the Queensland government to control the sale alcohol as part of a liquor control program, and it had permitted councils in New South Wales to coordinate rubbish collection. A further press release disclosed the ACCC had approved the Homeworkers Code of Practice. In simple terms the Code regulates the use of outworkers in the textile, clothing, and footwear industry. The Code entrenches the right of the relevant trade union to interfere in every stage of the manufacturing and management process in the industry. The Code mandates exactly the sort of behaviour the ACCC should be eliminating. Instead the Commission gives the code its blessing. Finally there's press releases about the dangers of trampolines, and warning parents not to allow babies to swallow small objects. Helpfully the Commission advises parents to supervise children on trampolines at all times. Exactly why the ACCC is telling parents how to raise their children is unclear. At least the Commission hasn't - yet - gone as far as Scottish government which recently proposed every child in the country have their own government official to oversee the child's upbringing.

The ACCC has outlived any purpose it may once have had. Someone else can make the "Do Not Knock" stickers.