Waterfront reform was about delivering effective competition and lower costs to exporters and importers, not shoring up cosy duopolies with 'orderly marketing', ACCC Chairman, Mr Graeme Samuel, said today.
Responding to criticism about the ACCC's recent finding that waterfront reform had stalled, Mr Samuel said the ACCC had reported that there had been strong productivity gains in stevedoring over the past decade.
"But the benefits from those gains may be in danger of being exhausted leaving Patrick and P & O with a cosy duopoly and much higher rates of return than the average Australian company.
"According to the stevedores' own figures they are enjoying returns on assets of around 27.8 per cent EBIT. These are well above international rates of return for comparable industries of seven to 17 per cent. These rates of return are a direct result of low levels of investment in expanded capacity.
"A figure such as 27.8 per cent is something about which most Australian companies can only dream.
"The stevedoring industry is now facing the next stage of reform: the introduction of greater competition, including increased capacity, to ensure productivity gains are returned to the Australian public.
"Patrick Stevedoring's Managing Director, Mr Chris Corrigan, was reported in the Australian Financial Review of October 28 as saying that: "It's easy to argue always more competition is better than less competition, but that's not necessarily the case' and noting that introducing more competition would cut 'reasonable rates of return' for the incumbents.
"This is akin to arguing that Australia should return to an era of 'orderly marketing' where companies arrange industry affairs to their own benefit. Such a retrograde step would come at great cost to Australian consumers, exporters, importers and ultimately the Australian economy with the benefits only accruing to the duopolies' shareholders".