Monthly Archives: June 2015

Australian Businesses Competing in the 21st Century

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/

www.ausbuy.com.au

The Global Agreement Most of Us Know Nothing About

While focus has been on the recent Australia – China Free Trade Agreement, signed at the end of November, an agreement that could eclipse that and all other recent FTA’s Australia has signed continues to be debated and progressed with little knowledge from consumers or Australian businesses.

The Trans-Pacific Partnership could be Australia’s biggest trade deal for decades, but most people have not even heard of it. A survey released at the end of last year by the Australia Institute found 55 per cent of respondents did not know about the TPP, as it is known. Another 19 per cent said ”I’m not sure.”

Despite this there could be a range of significant consequences for AUSBUY members and the wider Australian business community.

For instance it has been reported that negotiations around government procurement in the TPP could restrict the ability of governments, including Australia, to preference local products and services over imported ones, including sustainable, locally grown food. This would limit their ability to shift towards a more sustainable food system on a local scale.

According to the Consumer advocacy group CHOICE, we can also expect higher medicine prices, the potential for Australians to face new criminal penalties and the right for big businesses, from overseas markets, to sue us if they don’t like consumer laws. A leaked draft suggests the US is pushing for criminal penalties, even jail, for illegally downloading popular television shows.

Leaked documents released by WikiLeaks also reveal the TPP include provisions to lengthen patents for some lifesaving drugs for up to an extra 12 years leading to Australian patients paying more for drugs for longer.

It is concerning that agreements that could have such far reaching consequences for Australian consumers and businesses alike have not had the open scrutiny they deserve. The main reason for this is that the negotiations are shrouded in secrecy. Convention dictates that international trade agreements such as this need to be discussed behind closed doors and the negotiating texts must remain confidential, driven by an agreement signed by the Labor government when the talks started.

In response to the claims by a number of groups of the secret nature of the agreements DFAT defended its position by saying that it ‘safeguards our negotiating positions and strategies’ and that there had been a lot of consultation. But many have claimed to have been excluded from real and meaningful dialogue.

Others have said that despite the secrecy Parliament will still need to ratify any agreement reached with our international partners. But others, such as Greens Senator, Peter Whish-Wilson, says they won’t have enough time to give it the proper review it deserves with only 20 days allocated to review the huge and highly complex agreement which goes far beyond a normal trade agreement.

“What is really unusual about the TPP deal is it goes way beyond what we would call the traditional trade in goods and services and breaking open market access. It straddles enormous areas of public interest and public importance, like for example internet usage, intellectual property, food labelling, quarantine standards. You really have to wonder what Australia has left to trade away in these deals, because the nature of these negotiations is you don’t get something unless you give up something.”

AUSBUY is concerned that we are being left in the dark about what we’re giving up during negotiations. We need transparency and a proper, considered process with adequate time to review the agreement to ensure Australia, consumers and business, don’t lose out.

www.ausbuy.com.au