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'Effects Test' win promises fair shake for farmers

Legislation passed in Parliament this week promises to level the playing field between farmers and big business.

You could easily have missed it amid this week’s citizenship saga, but hard-fought changes to competition laws quietly passed the Senate this week.

The changes will introduce an ‘Effects Test’ to Section 46 of the Competition and Consumer Act 2010 (Cth) (CCA). The new test will prohibit actions which have the effect of being anti-competitive.

Under previous arrangements, proof was required to show that anti-competitive behaviour was deliberate – which was difficult and costly to establish in court.

The ‘Effects Test’ will ensure the Australian Competition and Consumer Commission (ACCC) has the additional provisions it needs to help level the playing field for small business.

The 'Effects Test' proposal was strongly opposed by big business, and its passage through Parliament marks an important win for farmer and small business representatives.

Deputy Prime Minister and Minister for Agriculture and Water Resources, Barnaby Joyce, said that the government consulted widely with stakeholders on the design of these reforms and was confident that they would deliver fairness to businesses and a genuinely competitive marketplace for consumers.

“These reforms will address a long-standing weakness in the existing competition rules and will ensure that we have a more transparent and competitive marketplace that treats all supply chain participants fairly,” Minister Joyce said.

“Importantly, and for the first time in Australia, the Australian Competition and Consumer Commission (ACCC) will have meaningful provisions to protect businesses that have been subject to misuse of market power.”

These reforms will address a long-standing weakness in the existing competition rules and will ensure that we have a more transparent and competitive marketplace that treats all supply chain participants fairly.
The Hon. Barnaby Joyce MP, Deputy Prime Minister and Minister for Agriculture and Water Resources

Senator Fiona Nash, Minister for Regional Development and Deputy Leader of the National Party, highlighted the implications for farmers and regional businesses.

“This reform will finally give the competition regulator, the ACCC, real powers to protect small business against large companies and multinationals who misuse their market power to drive them out of business,” Senator Nash said.

“The new 'Effects Test' will look after the Aussie fair go and after small businesses which are the backbone of regional economies.”

“Until now, big companies such as supermarkets could claim their anti-competitive behaviour against a small business or farmer was unintentional or coincidental.”

The new Effects Test will look after the Aussie fair go and after small businesses which are the backbone of regional economies.
Senator the Hon Fiona Nash, Minister for Regional Development and Deputy Leader of the National Party

Farm sector response

The National Farmers' Federation (NFF) welcomed the passage of the amended section 46 of the Competition and Consumer Act 2010 (CCA) through the Parliament.

NFF Chief Executive Tony Mahar said the passage of the Bill was a watershed moment for Australian competition policy.

"The NFF has been calling for the introduction of an ‘effects test’ since the concept was flagged in the Harper Review in 2014,” Mr Mahar said.

The wide spectrum of support across the Parliament shows this is not an ideological issue but one of fairness and pragmatism.
Tony Mahar, CEO, National Farmers' Federation

“The Government, in particular the National Party, should be credited for bringing this reform to fruition. The Government consulted widely and showed a willingness to listen to industry to get the settings right."

The Bill also earned the support of the Greens, the Nick Xenaphon Team, One Nation and several independents.

“The wide spectrum of support across the Parliament shows this is not an ideological issue but one of fairness and pragmatism.

“We’d like to acknowledge the active support of NFF members and our valuable partnership with the Council of Small Business of Australia (COSBOA) and the Master Grocers of Australia (MGA) in assisting to get the result we did last night.

“The outcome has been a long time coming but the end result, a fairer operating environment for business including farm businesses, will be well worth it,” Mr Mahar said.

 

How far do you think these new laws will go in protecting farmers in their dealings with larger companies? Log in and leave us a comment below!

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