in General

Transcript-ABC Mid North Coast- Red tape, Fuel

Thursday, 29 January 2015

Interview with Michael Spooner.

Subjects: Manning Small Business Forum, red tape, fuel prices, ACCC fuel monitoring report, Food and Grocery Code, Harper Review


I spoke with the Federal Minister for Small Business Bruce Billson earlier this morning and began by asking what issues are going to be on the agenda at today’s forum.


We get first hand field evidence from small business operators about what they are seeing, how our policy program is being rolled out, its benefits for local small businesses and also good advice on what else we can do to energise enterprise.

Small business is the economy in the Port Macquarie-Manning region and we are very keen to do all we can to support enterprising people in your community. Create the jobs and economic opportunities that the region needs.


The term ‘red tape’ is becoming entrenched in the political rhetoric. It is essentially another way of referring to excessive bureaucratic process, but what does cutting red tape mean in practical terms?

What examples can you give that have made things easier for small business since the Government has been in power?


It gives time back to time-poor small business people, where they can put more time and energy working on and for the benefit of the business rather than doing pointless and needless red tape compliance and bureaucratic requirements.

Some of the examples we have already implemented are: reducing BAS and PAYG reporting requirements for nearly 400,000 small businesses, getting rid of and tidying up business name registration processes.

We have also tidied up how you manage the ownership of leased or hired assets so it is more streamlined and that impacts on a lot of small businesses, as well as the way superannuation is administered. So that is just a sample, but we have got to keep at this.


What feedback has Federal Member for Lyne Dr David Gillespie given to you about where processes and which processes could be streamlined in his seat of Lyne?


In particular he has got a lot of experience in running his own small business, and in the area around reporting for GST and those tax obligations, he can share first hand his experiences. But even in important areas like the medical field where there is so much paperwork and I often call it ‘beige tape’- where you have to fill out reports and send them through to bureaucracies but they do not seem to be used for anything – he has got some very good practical examples.

We also know there are chances to use technology in a better way so that BAS reporting and those tax reporting obligations can be streamlined. Even in the area of employment where a small business is able to recruit, sometimes getting a person into the work place with Tax File Numbers and all these sorts of mechanical things, there is plenty of opportunities to tidy that up and streamline that and reduce the cost to Port Macquarie and Manning employers.


Fuel prices have been a water-cooler issue here in the Mid North Coast lately. What about the disparity between city and country prices- why is it taking so long for fuel prices to flow onto regional and rural areas? What is the Government doing about it?


We have been unhappy about that, as your motorists and listeners have been. I have tasked the ACCC with a new requirement to produce quarterly reports on what is happening in the fuel market, so we can see where price fluctuations are being moved through quickly and there is efficient pricing for motorists, and also see where market forces alone do not seem to be enough to make sure motorists are looked after and we get efficient pricing.

That will cover the capital cities and 180 regional centres, including in your listening audience. Then I have added an additional power to the ACCC to say where there are these irregularities and curiosities – do a deep dive.

Do not just look at the headline data, use the powers that we have given to demand the production of documentation, find out who is making price gouging profits or if there is a lack of a strong, independent fuel retailer to keep the big boys honest.

This is the change that we have taken and in your listening audience in particular we have already seen in recent weeks that disparity that you are describing.

In the week to the end of January in Port Macquarie the average price was around 126.5 cents a litre, Taree 122.7 cents; yet the regional average in New South Wales is 123, and even that was several cents higher than the capital cities.

Transport costs alone do not account for it. Something else is going on in some of our petrol markets and that is why we have given a new tasking to the ACCC.


Are you confident they are going to work, because that is essentially asking them to report disparities after the event?


It is a good indicator of where there may be mischief. That is what is important. Having the power and the resources and now the tasking that I have given them as a direction from me to the Commission to do its work, and to target those areas where motorists and consumers seem to be disadvantaged because of some curiosity or irregularity.

In some areas it might simply be that there is only one supplier in town and that they are setting prices and the retailers and motorists are copping it. If that is the case a bright light will invite others to think ‘Here is a market opportunity, someone is making really handsome margins’ and encouraging other competitors.

Also the initiative you mentioned- the website. We see constantly that when a spotlight and public attention is drawn to these things miraculously some of the gaps in pricing diminish and all of a sudden there is better value for motorists. We think that combined approach will ensure your listeners get good value for money; consumers are protected even when market forces alone are not enough to do the job.


Minister, do your powers as Minister for Small Business also relate and extend to protecting small family owned primary industries such as milk and egg producers, who are forced to cut margins to the bone, and take deals offered to them by supermarket monopolies if they want to even survive?


It is an area that we focus on. You have seen some unconscionable conduct court cases being taken against some of the major supermarket chains, where they have used their economic muscle to push around small suppliers and have really driven some to the walls, and behaved in a manner that is not in keeping with fair and reasonable commercial conduct.

In addition to that I have almost concluded a Food and Grocery Code involving the major supermarket chains and hopefully the independents and ALDI as well.

It actually sets parameters for what is reasonable conduct between a big behemoth organisations dealing with a smaller supplier, and if the one supermarket chain is their main customer, the smaller supplier can be a vulnerable situation and may be at risk of being taken advantage of.

This is what we are changing, as well as the Harper Review to make sure our competition laws are fit for purpose and make sure that competition and conduct in the marketplace is fair and healthy.

Yes, I carry that can and if you have got listeners with experiences that are really quite troubling – please share them with me and the ACCC.


Can fair and reasonable conduct also extend to try and halt the powers of those big monopolies and the impact they are having on newsagencies for instance?

Something we dealt with on the program yesterday: that they are already selling newspapers, now they are taking the lottery tickets in NSW.

We know there has been a commercial deal done in NSW, but what can you offer to give some hope to newsagencies, and is this something you can offer to the ACCC to be able to step in or protect them?


There are a few things we have done. Giving the resources to the ACCC so it can carry out its work is one key part.

Secondly, making sure their toolkit is fit for purpose, that they are have the legislative powers that they need to ensure that fair and health competition operates in the marketplace.

The third bit is where it is one thing to have the law identify what is unlawful conduct but in some cases that is not enough to make sure it is fair and health conduct. That is why we have done things like the Food and Grocery Code, the reforms in franchising. We need to do some work on a horticulture code to make sure it is more effective – that is another area.

Finally, we have also been championing a campaign that is encouraging your listeners, the consumers, to use the power of their dollar. We have been running a ‘Shop Small Shop Local’ campaign, saying to your listeners and consumers more generally: ‘If you love and value these small businesses, put some of your hard earned behind them’.

Encouraging people to put some of their expenditure into those businesses is really the best thing we can do to make sure choice, variety and diversity in our economy is something we can celebrate and benefit from into the future.


Will you ever give the ACCC potentially enough powers to even reverse some of the deals that are hurting small business, such as newsagencies?


At the moment there are two areas where deals can be reversed. It usually relates to where there is a risk of harm in the marketplace or some anti-competitive consequence or detriment.


That certainly exists, doesn’t it?


That is the thing, there are tools in place for that, that is where the ACCC is empowered to either authorise certain mergers and acquisitions or has an influence over certain conduct in the marketplace.

There is an opportunity under those very specific legal parameters to reverse the deals or to direct a divestiture or something of that kind, but that very much relates to the merger and acquisitions area.

If a big business was about to take over its main competitor and you had nobody else offering choice and variety, the decision around the lotteries is one, that certainly the newsagents are running an excellent campaign on, pressuring what is essentially a state government decision to have a look at the implications.


Of course it is a state government decision but it sounds like the ACCC is really only offering powers, as you have said yourself, to large companies but not much on offer for the corner shop.


It is more around those merger and acquisitions. It is more like a transaction area that risks substantially less in competition.


There is not a lot of joy there for the corner shop, is there Minister? Those are the most vulnerable businesses.


This is why I think the best thing we can do is put our hard earned money behind those businesses. No Government anywhere can mandate the nature of our local economy – that is not within our gift. I am sure that is not what your listeners are looking for. But if you are like me and you value the corner shop, you value your smaller retailers; you value the nimble service providers that are small businesses and family enterprises.

As I said earlier there is no substitute for customers. Be a customer of theirs, have the money go into the till, empower those small businesses with the choices we make as consumers- that is part of the task as well as ensuring our regulators have the tools they need and the resources to carry out their work.