Hilmer Report 1993
National Competition Policy
Report by the Independent Committee of Inquiry
Terms of Reference | Review Panel | Final Report | Key Recommendations | Submissions | Resulting legislation
Overview
Reporting body
Independent
Members
Prof Frederick G Hilmer (Chair)
Mark R Rayner
Geoffrey Q Taperell
Length of report
385 pages
Submissions
150 written submissions
Status
Complete (1993)
Government in power
Labor (Keating)
Copyright in Report
Commonwealth of Australia
Background and timeline
Recommended the implementation of a national competition policy.
The Inquiry found that there was 'strong and widespread community support' for the implementation of a national competition policy and the benefits such a policy could have for improving international competitiveness.
On competition policy
'Competition policy is not about the pursuit of competition per se. Rather, it seeks to facilitate effective competition to promote efficiency and economic growth while accommodating situations where competition does not achieve efficiency or conflicts with other social objectives. These accommodations are reflected in the content and breadth of application of pro-competitive policies, as well as the sanctioning of anti-competitive arrangements on public benefit grounds.' (p xvi report)
Review Panel
Professor Frederick G Hilmer
(Chair)
Professor Hilmer AO is an Australian academic.
Qualifications include
Bachelor of Laws (University of Sydney)
Master of Laws (University of Pennsylvania)
Master of Business Administration (Wharton School of Finance)
Key roles include
Vice-chancellor of the University of New South Wales from June 2006 until June 2015
Chief Executive Officer, Fairfax Holdings Limited from 1998-2005
Mr Mark R Rayner
Mr Geoffrey Q Taperell
Lawyer
Key recommendations
On Part IV
(1) the prohibition on price fixing should be strengthened 'by removing the distinction between goods and services, which potentially allows agreements relating to services to be authorised, thus sending an unambiguous signal about the undesirability of collusive price-fixing' (Report p xxiii)
[not implemented - authorisation in fact extended to capture all forms of PF]
(2) removing the per se prohibition on third line forcing and subjecting it to a competition test
[not implemented; the same recommendation by the Dawson Committee ten years later also not implemented]
(3) permitting authorisation of resale price maintenance where it offers net public benefits
[implemented]
(4) repealing specific prohibition on price discrimination (any anti-competitive conduct could be addressed by the misuse of market power provisions]
[implemented]
(5) remove 'unjustified distinctions between goods and services'
[implemented]
On national competition policy
See recommendations 9.1-9.4 regarding implementation of a national competition policy and the role of the NCC.
Exemptions and authorisation
The 'general conduct rules of a national competition policy should, in principle, apply to all business activity in Australia, with exemptions for any particular conduct only permitted when a clear public benefit has been demonstrated through an appropriate and transparent process.' [Report p xxiv] The primary method for granting such exemptions should be the authorisation process with some limited specific exemptions in the TPA (eg, export contracts and certain intellectual property issues) [Report p xxiv] .
Shield of Crown
Should be removed 'to ensure that the Act applies to State and Territory businesses to the same extent it applies to Commonwealth businesses.' [Report p xxvii]
Access
A new access to essential facilities regime should be implemented to operate by 'specific declaration' [Report page xxxii and Chapter 11 - from p 239]
[implemented]
National Competition Council
A new 'National Competition Council' should 'be established jointly by the Commonwealth, State and Territory Governments to play a key role in policy decisions relating to the additional policy elements ... the objective is to provide a high level and independent analytical and advisory body in which all governments would have confidence.'
[implemented]
Australian Competition Commission
A new Australian Competition 'should be established to administer relevant aspects of the proposed competition policy.' [Report p xxxvii]
[partial implementation; Trade Practices Commission re-named Australian Competition and Consumer Commission and given wider responsibilities in relation to competition regulation]
Australian Competition Tribunal
Trade Practices Tribunal should be re-named Australian Competition Tribunal [Report p xxxvii]
[implemented]
Submissions and consultation
Written submissions
Nearly 150 written submissions were made.
1 Jatco (Australia) Pty Ltd
2 Law Reform Commission of Victoria
3 Mr A Grieg
4 Mr W J Rourke, AO
5 Mr P J Boyle
6 Industry Commission·
7 Gas & Fuel Corporation of Victoria
8 Dr R Albon
9 Mr P R Meatheringham
10 Australian Dairy Farmers' Federation
11 Dr W PengiIIey
12 Australian Council of Professions
13 Law Institute of Victoria
14 Australasian Dental Technicians' Society - South Australian Branch
15 Australian Forest Growers
16 Mr A I Tonking
17 Australian Gas Association
18 Professor R Baxt
19 NSW Public Service Association - Hospital Scientists Branch
20 Australian Medical Association
21 Esso Australia Ltd
22 Australian Institute of Petroleum
23 Sydney Public Television Group
24 AGL Gas Companies
25 ANZ Bank Ltd
26 Assoc. of Hospital Pharmacists of Victoria/Medical Scientists Association of Victoria/ Victorian Psychologists Assoc.
27 Caltex Australia Ltd
28 Unilever Australia Ltd
29 New Zealand Ministry of Commerce
30 Shell Australia Ltd
31 Australian Federation of Construction Contractors
32 Public Broadcasting Association of Australia
33 Victorian Bar Council
34 Carlton & United Breweries Ltd
35 New Zealand Commerce Commission
36 Spark & Cannon Pty Ltd
37 United Independent Cinemas Ltd
38 Professor S Domberger
39 Australian Mining Industry Council
40 Australian Information Industry Association
41 Australian Telecommunications Authority
42 Coopers & Lybrand
43 Institute of Patent Attorneys of Australia
44 Telstra Corporation Ltd
45 Australian United Fresh Fruit & Vegetable Association Ltd
46 BP Australia Ltd
47 Victorian Gas Users Group
48 State Energy Commission of Western Australia
49 Australian Earthmovers & Road Contractors Federation
50 Department of Primary Industries & Energy (Commonwealth)
51 Queensland Sugar Corporation
52 United Dairyfarmers of Victoria
53 Australian Dairy Industry Council
54 Western Australian Regional Port Authorities/Department of Transport (Western Australia)
55 Fremantle Port Authority
56 Mr R Sutherland
57 Department of Employment, Education & Training (Commonwealth)
58 Department of Transport & Communications (Commonwealth)
59 Metal Trades Industry Association of Australia
60 Mr P Argy
61 Department of Finance (Commonwealth)
62 State Chamber of Commerce & Industry (Queensland)
63 Sydney Electricity
64 Mr S Stern
65 Law Council of Australia - Trade Practices Committee
66 Australian Legal Reporting Group
67 Canegrowers
68 Real Estate Institute of Australia
69 Trade Practices Commission
70 Mackay Sugar Co-op Association Ltd
71 National Bulk Commodities Group
72 Mr M Corrigan
73 Australian Chamber of Manufactures
74 Australian Road Transport Federation
75 A & R Removals
76 The Treasury (Commonwealth)
77 Australian Industrial Property Organisation
78 Qantas Airways Ltd
79 Food Industry Council of Australia
Terms of reference
In October 1992 Prime Minister Keating established the National Competition Policy Review.
The Terms of Reference were set out in Annex A of the Final Report:
1. I, Paul John Keating, Prime Minister of the Commonwealth of Australia, having regard to the agreement between myself and the Premiers of the States of New South Wales, Queensland, South Australia, Tasmania, Victoria and Western Australia and the Chief Ministers of the Australian Capital Territory and the Northern Territory that national competition policy and law should give effect to the following principles:
(a) no participant in the market should be able to engage in anticompetitive conduct against the public interest;
(b) as far as possible, universal and uniformly applied rules of market conduct should apply to all market participants regardless of the form of business ownership;
(c) conduct with anti-competitive potential said to be in the public interest should be assessed by an appropriate transparent assessment process, with provision for review, to demonstrate the nature and incidence of the public costs and benefits claimed;
(d) any changes to the coverage or nature of competition policy should be consistent with, and support, the general thrust of reforms:
(i) to develop an open, integrated domestic market for goods and services by removing unnecessary barriers to trade and competition; and
(ii) in recognition of the increasingly national operation of markets, to reduce complexity and eliminate administrative duplication;
appoint Professor Fred Hilmer to Chair the Committee of Review of the Application of the Trade Practices Act 1974, and Mr Geoff Taperell and Mr Mark Rayner as the other two Committee members,
2. The Committee is to inquire into, and advise on appropriate changes to legislation and other measures in relation to:
(a) whether the scope of the Trade Practices Act 1974 should be expanded to deal effectively with anti-competitive conduct of persons or enterprises in areas of business currently outside the scope of the Act;
(b) alternative means for addressing market behaviour and structure currently outside the scope of the Trade Practices Act 1974; and
(c) other matters directly related to the application of the principles above.
3. In conducting the review the Committee should consider, against the background of the nature of markets in Australia and influences upon them:
(a) whether the authorisation and exemption provisions of the Trade Practices Act 1974 have sufficient scope, flexibility and transparency;
(b) the need for, and approaches to, the transition of government regulatory arrangements - including any associated revenue impact on States - to more competitive and nationally consistent structures;
(c) the best structure for regulation including price regulation, in support of:
(i) pro-competitive conduct by government business and trading enterprises and in areas currently outside the scope of the Trade Practices Act 1974; and
(ii) the interests of consumers and users of goods and services; and
(d) the past and present justification for the current exemptions from application of the Trade Practices Act.
4. In performing its functions, the Committee is to:
(a) take into account:
(i) the principles stated in paragraphs 1(a) to (d) inclusive;
(ii) legislation other than the Trade Practices Act and other arrangements that affect market behaviour and structure; and
(iii) the fact that some government, business and trading enterprises may operate in industries having aspects, including pricing, of natural monopoly; and
(iv) current moves to reform government trading enterprises; and
(v) overseas experience.
(b) take written submissions; and
(c) consult interested parties where necessary; and
5. The Committee is to report to me by May 1993.*
* Note, in May 1993 the Inquiry was extended until August 1993 to facilitate further consultations with States and Territories
Resulting legislation
National Competition Code
Competition Policy Reform Act 1995 (Cth) (and states)