Sell Australia Post, says ACCC

The national competition regulator has urged Prime Minister Tony Abbott to sell assets such as Australia Post and Medibank Private and push for the privatisation of state-owned energy companies, The Australian Financial Review reports.

Australian Competition and Consumer Commission chairman Rod Sims said the federal government's root-and-branch review of competition laws would be more far-reaching than business expected. 

The review should recommend the government relinquish control of long-held assets to maximise productivity and create the greatest benefit to consumers, he said.

"I think it will be the most important driver of how Australia improves its productivity," Mr Sims told The Australian Financial Review. 

"Of all the reviews going on, this will be the most important because it will be removing impediments to competition right across the economy.

"Government ownership versus private ownership massively affects the incentives people have to drive productivity change," he said.

Mr Sims said consumers would have paid lower electricity prices if the assets had been in private hands.

"There is no doubt in my mind that energy prices, particularly in NSW and Queensland, would now be lower had the private sector owned those network business rather than them staying in the pubic sector," he said.

"I don't think there is any doubt about that."

Outlining his priorities for this year, the ACCC boss said he would continue to pursue large penalties against big companies for breaching consumer laws, was preparing for a series of significant merger decisions and was closely monitoring petrol prices.

Petrol discount limit

Mr Sims said the deal with Coles and Woolworths to limit shopper docket petrol prices to a maximum of 4¢ a litre should start to have an impact this month.

"It comes into effect on 31st December and people can still run off the discounts they already have. But I would see early in the new year you will start to see the effect," Mr Sims said.

In addition, the major investigation into the two big supermarket chains and their suppliers, which could result in enforcement action, would be completed by March.

The Prime Minister has launched a scoping study for a sale of Medibank Private but has promised not to rush any transaction.

The country's biggest health insurer was valued at $4 billion during the Howard government years and its sale is expected to help pay down government debt, which is forecast to peak at $400 billion within four years.

"I strongly believe that the private sector owning commercial assets will bring about a lot more productive use of the assets than government ownership of the assets," Mr Sims said.

Australia Post tipped for sale

There is speculation that the Coalition might follow Britain, which privatised the national mail service for a likely windfall of more than $2 billion.

The Institute of Public Affairs, among other bodies, has called for the sale.

Australia Post chief executive Ahmed Fahour told The Australian Financial Review last year that a sale would make no practical difference to the way he runs the business.

The ACCC chairman said the review into competition law should also examine beefing up the regulator's powers to examine the misuse of market power and collective bargaining and strengthen various industry codes.

It could also remove barriers to competition and recommend law reform across a range of industries, including coastal shipping "where it is very hard for foreign vessels to stop in more than one port".

Mr Sims dismissed recent calls by former ACCC boss Graeme Samuel to break up the competition watchdog to hive off consumer protection matters as well as access regimes for monopoly assets to new specialised regulators.

"I think that misunderstands the synergies about the roles. Splitting it up makes no sense."

AFR.COM.AU

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