In 1995 Australian government bodies agreed to implement a National Competition Policy after a period of time when there had been an influx of foreign companies operating in Australia. The policy aimed to ensure Australian companies were not being disadvantaged by this change in business environment and that Australians had choice and were able to source products and services that suited them.
Twenty years on the Australian business environment has greatly changed and as a result the policy is under review. The review is a move that AUSBUY greatly welcomes as the current environment does not bode well for Australian owned companies.
Foreign companies have continued to invest in Australia which in theory aids in healthy competition, creating jobs for Australians and bringing more money into the local economy. Look a little closer though and you’ll see that many foreign companies are not on equal footing.
We have strict standards that must be adhered to particularly when it comes to food products and electronics. Naturally, ensuring standards compliance can add costs to the production process and consequently create a more expensive product. Fine except that many foreign companies don’t always have to adhere to the same standards, making their product cheaper. Similar costs come up when supply chain and packaging are considered and even some of the levies applied when importing goods are higher for Australian companies than when compared with local companies.
Taxation has been addressed in another article in this issue but is also a major contributing factor to anti-competitive behaviour.
The rise of the digital economy has been one of the biggest disrupters to business over the last decade. The online world has often meant that competitors don’t even need a physical presence in Australia to do business here or that a lot of operations can be easily outsourced. It is true that Australian companies can do the same but often to a far lesser extent and this can mean that jobs and money go offshore, a disturbing trend we are seeing. Online business and the digital economy is one of the major points that will be considered as part of the review.
Submissions were received by the review committee at the end of 2014 after the release of their draft report last September. We applaud a number of the draft recommendations but will wait for the full report before further feedback.
As the environment around us changes, the policies and laws that govern need to be flexible and adapt to these changes. The online world we now live in must be addressed in the way we do business and our government policies in order to create a healthy business environment that also ensures the best outcomes for all Australians.
You can read the full draft review at http://competitionpolicyreview.gov.au/draft-report/