COSBOA gives effects test the thumbs up

Ultimately the effects test will be good for small business in general, but the biggest winners will be the manufacturers and farmers.

We talked to Peter Strong, CEO of COSBOA – The Council of Small Business Australia – about the government’s decision to make changes to Section 46 of the competition regulations, in line with the recommendations of the Harper Review.

ISB: Does the effects test decision mean there has there been a climate change in regard to government taking small-business concerns into consideration when framing policy?

PS: Yes, this is the first time in decades that the Government hasn’t simply done what the two giants that make up retail duopoly and the BCA have asked them to do. Finally, they have followed due process – as far as COSBOA are concerned they haven’t gone far enough, but they have taken everyone’s needs into consideration and come up with a solution that is fair for businesses of all sizes.

What impact did Bruce Billson and/or Kelly O’Dwyer have on this climate change?

PS: Both have played a crucial role. Bruce Billson started fighting for this a long time ago, and never gave up that fight, and Kelly O’Dwyer has taken it on. It seems Government have also started to address the concerns of the Nationals and the Greens, who know what a negative effect the previous rules were having on businesses in country towns.

What will the change mean in a practical sense for small business?

In the long-term it will give them more confidence that they won’t be pushed around by the top end of town. Frankly the naysayers – the mega-retailers and their supply chains – are behaving like petulant children in opposing this: it won’t have a negative effect on competition, if there was any chance of that it wouldn’t have been ratified by Government or the ACCC.

Are certain sectors of the small-business community likely to benefit more than others?

Ultimately the effects test will be good for small business in general, but the biggest winners will be the manufacturers and farmers. It will add to retail diversity – with not just SME retailers but larger ones outside the duopoly getting a fairer go, and that means more choice for consumers. It also means supply chains that have been bullied on price and product lines in the past will have more channels into which to sell their goods.

Is there any danger that a change of government in Canberra this year could jeopardise the legislation?

Thus far Labor have followed the line of the big retail unions, and said they do not agree with the change. However, I am convinced there are plenty within Labor who agree it is a good idea – as indeed they should, because it is good for Australia. If Labor do win we’ll have to fight to persuade them not to reverse the decision. As I see it, we have won the battle, but not yet won the war.

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