16 April 2009

Interview with Kieran Gilbert, Sky Agenda

SUBJECTS: Creeping acquisitions, ABC Learning, Alcopops


Welcome back to AM agenda and this week of course the Government announced that the vast majority of ABC Learning centres will remain open.

The Government is also looking at ways to reform laws to ensure that the same sort of problem that we saw with ABC learning won't occur again. The focus of those changes are to do with what is known as creeping acquisitions. The person in charge of looking into the reforms is the Assistant Treasurer Chris Bowen. He joins us now on AM agenda.

Mr Bowen thanks your time. Could you give us an update on where we are at with dealing with this issue of creeping acquisitions and just how this work with the ABC Learning issue.


Sure, good morning Kieran.

Look, there has been a problem for some time in that the ACCC, the competition regulator, has always had clear powers to deal with big acquisitions - so this is where one company buys another whole company. Where they have less power, they are more constrained and certainly more questionable power is where a company might acquire a range of outlets over a long period of time.

So if company A buys company B, then clearly the ACCC has the power to say 'no, look that is too much concentration'. If company A buys one shop a week for the next 52 weeks, and effectively massively increases their market power - it is a lot more difficult for the ACCC to act. Now this is what we call creeping acquisitions.

We had an election commitment to deal this; we also have an election commitment to consult very closely because this is a very nuanced, complex area. What we don't want to do, particularly in this current environment, is to stop the legitimate and organic growth of businesses. So there is a very fine balance to be reached.

Last year I issued a discussion paper, with two options there was a lot of feedback on those options. Some people like them - some people hated them. There were a lot of submissions in, and we have been working through that very closely.

In the not too distant future I will be releasing some more information about a proposed way forward, and we will again be consulting on that. But we will make no apologies for proceeding resolutely, but cautiously, because this has the potential to be a very important change but we need to make sure we get the balance very clearly right.


So we have had one discussion paper, and we are going to have another, is that right? [inaudible]


….I will be talking about the way forward in the very near future. As I say Kieran, this reform has been a long time coming; the previous government rejected the need to act. But what we can't do is rush into it.

I would rather spend more time getting it right then rushing something in which has unintended consequences and stops legitimate businesses going about their business. It is a complex area, this is a new area of law for Australia, and we need to get the balance right and we need to consult and that's what I am committed to doing.


Are there precedents around the world, are you looking at any other countries that have implemented similar legislation?


Well interestingly every country has their own competition law and are all different. Creeping acquisitions is not something that is covered by many competition laws around the world.

This is if you like a new area. Other countries have divestiture powers, which the ACCC doesn't have, we have taken the view that we should go down the creeping acquisitions route. So there is no model around the world, which has made it more complex - so we can't say look country X does it really well, let's just plop that into Australia - that's just not the case in this particular area of reform. That's why we are proceeding with some caution to make sure that we get the balance 100% right.


So when can we expect a final outcome, you say you are being deliberate and taking your time, but when can we expect some sort of definitive announcement?


Well we have said that we will deal with this, this term. Once we put out the proposed way forward there will be a period of consultation and then we would hope to have legislation into the Parliament this year.


Okay just finally on the issue of the alcopops tax, obviously you're the Assistant Treasurer, you know it is worth quite a bit of money over the - one half billion - over the forward estimates. Is it about revenue, is about a health measure, or is this return of the alcopops tax all about politics and putting the heat on Malcolm Turnbull?


No look this is about binge drinking. The community expects Government to play its part to act. I am a Western Sydney MP, I talk to my principals, school principals, they all tell me that binge drinking is a big problem facing the community, we need to act.

Around the world governments are acting. When you look at some of the things that governments around the world are doing, we are all acting in this space, to deal with the binge drinking issue. Australia is no different. We are being stymied and obstructed in the Senate, and the Australian community doesn't expect us to just walk away from this they expect us to keep going. It is very much a health measure and we intend to keep going with it.


Assistant Treasurer Chris Bowen, appreciate your time.


Always a pleasure Kieran.