So I testified before the Senate’s Economic Committee on the FuelWatch bill. Not surprisingly, virtually all of the questions I got came from the Opposition Senators. Senator Abetz was particularly concerned about the fact that I had co-authored so many papers with Stephen King (who had appeared earlier that day on behalf of the ACCC) and was also the PhD supervisor of one of the ACCC staff who ran the econometrics that proved so influential in getting FuelWatch into policy. He seemed to imply it was some sort of revelation but I guess that has never been a secret. So amusingly, the Senator pointed to a paper, co-authored with Stephen, and cited in my submission to the Committee as more evidence of this. Of course, the paper he picked was one of our series on shopper dockets; something that I argued that the ACCC had neglected to pay much attention to. This seemed to me to be a very odd way of implying I was somehow biased towards the ACCC. The (sometimes) “outrageous” Graeme Samuel is unlikely to see it that way.
Anyhow, my main point was that the data that was used by the ACCC for its study needs to be widely available for other econometricians (not myself) to use. Alas, the ACCC doesn’t have the rights to deliver that data to us and that right rests with Informed Sources who have been very selective in the academics they have given the data to; Sinclair Davidson and Don Harding — both of whom are anti-FuelWatch in their conclusions. I told the Committee that such selective data allocation undermines the independence of these researchers and serves no one’s cause (Something I think they will agree is the case). Put simply, while the industry is keeping the data to themselves or to those it can ‘trust’ one has to assume that, in fact, they are not confident about the results going in their favour. The problem is that this is denying some very talented, young IO econometricians a chance to study an interesting problem and contribute to public debates.
I also told the Committee that I hoped that (a) the underlying FuelWatch prices would be easily available and that the government should be proactive in making it available for use by entrepreneurs (unlike the toilet situation) and (b) that consideration be given to running trials of different mechanisms for FuelWatch including going away from the 24 hour pricing rule.
Senator Fielding then asked me about the position of independents. I said that I thought they had much more to worry about than FuelWatch (e.g., shopper dockets and chains). Also, I thought that if it moved the basis of competition to price and away from branding it would be an opportunity for them. Funnily enough for a conservative, he seemed to be implying that we shouldn’t want market forces to do their job in petrol retailing. What a tangled web politics is. I really hope we will be done with the whole FuelWatch thing soon.