'Trev', I have no doubt that there is 'intelligent life' west of the Murray - and lots of it - as indeed there is south of Bass Strait where I grew up. So please take the 'big city' chip off your shoulder (and the 'academic' chip off the other one, while you're at it).

The NCC did not impose 'fines' on South Australia for refusing, prior to 2003, to deregulate its retail trading hours. It simply withheld money that would have been paid if South Australia had chosen differently. The whole point of payments to State Governments under NCP is to return to State Governments some of the additional tax dollars that flow to Canberra as a result of the boost to economic activity that flows from pro-competitive reforms. If States choose not to implement those reforms, as is their right, then why should they get any payments?

ABS figures show that there are, on average, about 12,300 more people employed in the retail sector in South Australia thus far in 2005 than there were in 2002, the year before shopping hours were finally de-regulated (although I'm certainly not suggesting that all of that increase, or even most of it, can be directly attributed to deregulation).

The figures don't show (and I'm not aware of any which do) the extent to which these extra jobs have been created in large or small retailers. But I don't see why that matters. There's nothing sacred about employment in small as distinct from large retailers. And it's not the job of government to preserve or promote employment in any particular sector, or size of business - particularly if doing so is at the expense of jobs in other sectors.

The fundamental point is that businesses exist to serve the needs of consumers, not the other way round, and that businesses who cannot serve the changing needs of consumers have no right to remain in business at the expense of consumers, or at the expense of other businesses which can meet their needs.

What is the Difference between a Fine of $50 Million and a Permanent
Deduction of $50 Million, the effect is the same.
The Annoying thing is the NCC is denying they threatened the SA government with a $50 Million Permanent Deduction which flows into the report by the Federal Parliament Joint Committee that The Committee has received evidence that the legislative reviews undertaken by State Governments are not always being undertaken in an open, transparent manner with the views of all interested parties taken into consideration. The Committee agrees with the NCC's view that there is a requirement under NCP for transparency in the review process.
And
The Committee is concerned by the application of NCP as a `one model' approach to all sectors. A flexible outcome ought to be sought by an application of the `public interest' test that allows for changing concepts of what is in the `public interest'.
And
The lack of hard evidence can be blamed for much of the suspicion of NCP, as the community should not be expected to accept NCP as an article of faith. The Committee is concerned that where estimates of benefits have been provided, these estimates may have failed to identify the social impacts of the reforms or may not accurately measure the economic benefits. There were a number of differing views on the actual outcomes of NCP. The committee heard evidence that whilst the national reform and co-ordination in areas such as gas and electricity have delivered some benefits that the overall benefits have not been as large as was anticipated. There is clearly a need for proper quantification of the benefits – both social and economic – of the reforms.
Given I haven’t been able to get any hard evidence from the SA Premiers Office on how the decision to implement the NCP retail trading hours was put in place and given the effect of NCP on retail has been to force out smaller retailers it has lead to fewer retailers and hence less competition in the marketplace.
?

'Trev', the difference between "a fine of $50 Million and a permanent deduction of $50 million" is that if I, having no obligation to give you (say) $10, nonetheless promise to give you $10 if you do something that I want you to do, and you decide not to do it, I then don't give you the $10. That represents a 'permanent deduction' of $10 from what I promised to give you if you did do it. If on the other hand I had (for some peculiar reason) promised to give you $10 even if you did nothing, and then withheld the $10 from you when you did nothing, that would be a 'fine'.

The point here is that States are only entitled to payments under National Competition Policy if they implement National Competition Policy. If they don't, they have no right to get paid. Simple as that.

And the extent of competition in the retail industry is not necessarily measured by the number of retailers. There is, for example, pretty intense competition between TV stations even though there are at most five TV stations operating in any given Australian market.

To repeat, it is not the objective of National Competition Policy to guarantee small retailers - or anyone else - a continuing profitable existence. Business people like to portray themselves as 'taking risks', 'having their houses on the line', and so forth. To the extent that they are successful, and the value of their businesses increase, they now pay less tax on the value thereby created than those of us who merely earn wages and salaries.

But it's not the responsibility of government to eliminate the downside risks facing business proprietors. The only guarantee they should have of continuing existence is their ability to meet the needs of customers, at prices customers are willing to pay whilst covering their costs. If they can't do that, then they have no right to remain in business - and no right to expect governments to protect them against competition from others who can.

Jellyback asks “what benefits are we supposed to have seen from all this national competition”. The answer: faster growth in real wages and living standards, 30-year lows in the unemployment rate, unprecedented household wealth and strong consumer confidence. S/he says “Lets raise tariffs and create jobs for everyone by building infrastructure”. Fact is, tariffs don’t create jobs, they destroy them – Australia’s unemployment rate was far higher before it started cutting tariffs in the 1980s. And make-work schemes create government debt not sustainable employment in the longer term.

Of course, economic success is not the only thing that people value and governments should aim for. But many of the ills blamed on NCP have nothing to do with it (“destroying volunteering”, for example). And some of the things that people call adverse effects others regard as benefits. I for one find it morally offensive that the government should forbid me to shop when and where I like in order to line the pockets of Trev and his like. Saul is spot on to say that businesses exist to serve the needs of consumers, not the other way round. Trev, I don’t owe you a living

Have a Soul Saul.
If it’s not the Governments Job to protect small business then why did the government waste
Time and Trees with TRADE PRACTICES ACT 1974
- SECT 46
Misuse of market power
(1) A corporation that has a substantial degree of power in a market shall not take advantage of that power for the purpose of:
(a) eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market;
(b) preventing the entry of a person into that or any other market; or
(c) deterring or preventing a person from engaging in competitive conduct in that or any other market.
(1A) For the purposes of subsection (1):
(a) the reference in paragraph (1)(a) to a competitor includes a reference to competitors generally, or to a particular class or classes of competitors; and
(b) the reference in paragraphs (1)(b) and (c) to a person includes a reference to persons generally, or to a particular class or classes of persons.
I believe last year the ACCC Commissioner was doing the lecture circuit talking about a particular National Retailer who had issued a fax to its employees warning of visits by ACCC officials and demanded staff take photos of the officials under the guise of “Customer of the Week” and email them to HQ. The lecture and anything else negative rarely gets to the mainstream media because they know the National Chains will pull their advertising budgets.
Where would you draw the line defining the difference between Misuse of Market Power and fair competition?
Rgs Trev

Trev

The answer to your two questions is the same: the role of government is not to look after the welfare of businesses, but of their customers. That is what the Trade Practices Act is for, and that is how to differentiate between misuse of market power and fair competition. Misuse of market power restricts competition and may drive a competitor out of business in order to allow the supplier to charge higher prices and provide poorer service; this is bad for consumers and is illegal. Fair competition may drive a trader out of business because consumers prefer the prices, range or quality of goods offered by a competitor; that is good for customers, and should be encouraged. In practice, of course, telling the two apart can be hard, but the underlying principle is quite clear, and it aims to serve consumers, not to “protect” small business.