Federal Politics

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If only a 'political effects test' applied to the Prime Minister

Now the Coalition is introducing an 'effects test' for business, it'd be nice to have one for politicians.

The big end of town has been caught off-guard by the Turnbull government's insertion of an "effects" test in competition law. No longer would a small retailer need to prove that a large chain had actually intended to harm the competition. As long as the "effect" of a decision was to reduce competition, the claim would be justiciable.

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'Effects test' win for small business

Malcolm Turnbull announces changes to competition law to protect small business from uncompetitive behaviour by big firms.

Well-intentioned though this win for small business might be, the change will either (a) inhibit major new investment decisions, (b) become a lawyers' picnic, or (c) some unfortunate combination of both.

It is hilarious that politicians should discern the differences between intention and effect and yet decide that for others they amount to the same thing.

That's because in politics, a vast gap between intention and effect is a daily reality. Governments and oppositions withhold information, parse words, and shimmy for advantage as a matter of course.

That they do so in their own interests is so routine as to be unremarkable.


Take Malcolm Turnbull and Scott Morrison. Both insist their long-heralded tax package will be released when they're ready. The delivery date of said package, which started out large but is shrinking in its wrapper, has changed from at budget time, to before the budget, to back within the budget, and most recently, to before the budget but with the full details revealed on budget night.

Adding to the confusion, the budget itself, will be in May, but the PM and Treasurer will no longer say definitively if it will be May 10 as scheduled, or May 3 as widely speculated. And that uncertainty, is merely the first sponge in a triple-decker cake of unknowns which go to what's in the tax package, what's in the budget, and whether the nation will be taken to an early double-dissolution election.

The insertion of a new effects test in s46 of the Competition and Consumer Act could well have unfortunate effects itself - most notably if large businesses simply eschew new investments if there's even a small chance that some other competitor could be disadvantaged. Forget about the simple business case, this is a new level of risk.

Meanwhile the sustained inscrutability of governments over matters of great interest to voters fuels uncertainty and economic disruption, and yet goes unchallenged.

As the government protests that it will not be "spooked" into revealing its hand before it is ready, it might ponder what a political effects test might conclude. Oh wait, that's called an election - whenever that is.

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