Should Rod have rung Ron?


Senator Ron Boswell has a piece in the Australian about the ACCC-Metcash case. The article is here. If the paywall blocks you, a summary is here.

Senator Boswell seems to argue that the Metcash acquisition of Franklins is pro-competitive and somehow this is reflected both in:

  1. The use of a ‘balance of probabilities’ test rather than a ‘real chance’ test (I have commented on the problems with these approaches before); and
  2. The change from a  ‘dominance’ to a ‘substantial lessening of competition’ test in the relevant part of our competition laws in the early 1990s.

I will confess that I do not follow the argument. But there is an interesting aside in the title and middle of the article:

But all ACCC chairman Rod Sims had to do was to speak to me and the small business minister in the Keating government, Chris Schacht. For the cost of a lunch, he would have learnt what federal parliament meant and wanted when Section 50 of the Trade Practices Act was amended from a dominance test to a substantial lessening of competition test.

No! The chairman of the ACCC should not discuss active merger cases with members of parliament or former members. Nor should he ask them what parliament meant when it passed certain amendments.

Discussing an active merger with a member of parliament would be against the foundation of the ACCC as an independent statutory authority. It would undermine the independence of the Commission and would raise the spectre of political interference – no matter how ‘well meaning’ the conversation.

And it is the job of the courts to interpret legislation according to well known legal principles. Courts will look at the intention of parliament (e.g. looking at the first reading speech), but this is a long way from a fireside chat between those who pass the law and those who implement the law.

5 Responses to "Should Rod have rung Ron?"
  1. Why write down laws at all if you need a “friendly chat” to interpret them? Surely the good senator is saying, in a round-a-bout way, that he and his fellow honourable members drafted the law incorrectly.

  2. That’s ridiculous Stephen. I know for a fact that the ACCC has ‘friendly chats’ with politicians all the time. There was no need to discuss the details of the actual case but it would be perfectly appropriate for the ACCC to discuss legislation with members of parliament. 

    It’s this kind of obsession with probity which makes for bureaucracy and poor decisions.  

  3. drpage – there is a big jump from a ‘friendly chat’ to asking a politician whether or not a certain case is in line with that politician’s interpretation of a section of our Competition and Consumer Act. And that is what Senator Boswell is suggesting and what I am saying is inappropriate.
    When legislation is interpreted on the basis of who you know and what you have discussed with some politician then we have crony capitalism. That is the basis for poor decisions. High standards of probity HELP consistent and transparent decision making.

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