Professor Allan Fels, AO, Australian Competition and Consumer Commission Chairman will resign as ACCC Chairman on June 30, 2003 to become Foundation Dean of the new Australia and New Zealand School of Government (ANZSOG).
ANZSOG is a major new initiative by the Governments of Australia, New Zealand, Victoria and Queensland in conjunction with nine university and business school members (ANU, Griffith, Melbourne, Monash, Melbourne Business School, New South Wales, Queensland, Canberra, Victoria University of Wellington).
The school aims to be a first tier world class school of government and will offer graduate degrees and high level executive programs and courses for current and future public sector leaders and those involved with the public and non profit sector.
(Other information about the School is set out in releases today from the School and the governments involved).
"Whilst I would have otherwise been keen to continue as ACCC Chairman until June 2004, ANZSOG opens its doors to more than 100 Master of Public Administration students in May and if I am to be Dean, I need to be present from the start", Professor Fels said.
"I decided not to seek reappointment because I have been a fulltime regulator since 1989. Also ACCC Chairmanship is a job which makes heavy demands and involves frequent absences from home which causes some family difficulties. I would like, however, to be able to do at least one more substantial job as part of my career and ANZSOG provides an exciting opportunity.
"There has been a series of major challenges since 1989 – making the Prices Surveillance Authority, then the Trade Practices Commission, more effective and visible; launching the ACCC and the Hilmer reforms; overseeing Goods and Services Tax transitional pricing. 2003 is a suitable time to leave with the ACCC in a strong position", Professor Fels said.
It is expected that after his resignation Professor Fels will continue to play an ACCC advisory role on a transition basis, and maintain his Australian chairmanship of the important OECD Trade and Competition Committee.
Professor Fels served as Chairman of the Prices Surveillance Authority from March 1989 until October 1992. During this time the visibility of the PSA was lifted, as part of the Prices and Incomes Accord. It played a prominent role in the overseeing of petrol prices during the Iraq-Kuwait war. It advocated removal of parallel import restrictions on books, CDs, computer software and also removal of the use of copyright in labelling and packaging of products to restrict imports. Reports were done on many subjects, including credit cards, post, petrol, LPG and cinema.
Professor Fels served as Trade Practices Commission Chairman from July 1991 until November 1995. He was the first economist to hold this post (although he holds a law degree). During this period, the activities of the TPC in enforcing both the competition and consumer protection sections of the Trade Practices Act 1974 were substantially increased. There were major cases involving cartels, such as those concerning the freight express industry, and substantial increases in court-determined penalties. There were also major consumer protection cases, for example concerning the sale of life insurance policies to Aboriginals in outback Australia. Also the AMP life insurance case led to refunds of more than $50 million to consumers in relation to misleading policies. The TPC began to be seen as a credible, effective and visible enforcer of the Trade Practices Act.
In 1993 following strong support from the TPC the test for judging mergers was changed from one of dominance to one of substantially lessening competition. There was also a rise in the maximum penalties under the Trade Practices Act from $250,000 per offence maximum to $10 million per offence maximum.
Following the Hilmer Report, Professor Fels was appointed as inaugural Chairman of the Australian Competition and Consumer Commission in November 1995. This was formed from a merger of the TPC and the PSA. The Competition Policy Reform Act 1995 extended the coverage of the Act to such new areas as the professions, State public utilities, agricultural marketing boards and unincorporated bodies trading within the States. An important activity of the newly formed body was to educate these sectors about the Act and to apply it. The Act now extends for example in full to the medical and to the legal profession and a number of significant cases have occurred. These have included actions including the Australian Medical Association (WA) in Perth which was penalised $240,000 for its role in price-fixing. At present the Royal Australasian College of Surgeons is seeking authorisation for its arrangements in relation to restricted entry into its colleges.
After 1995 the ACCC continued with its normal set of enforcement activities in relation to competition and consumer protection matters. An important early case concerned price fixing in the building industry where penalties of $20 million in total were imposed on Boral Resources (Qld) Pty Ltd, CSR Limited and Pioneer Concrete (Qld) Pty Ltd in relation to unlawful price fixing agreements for concrete in south east Queensland. Penalties of the order of $26 million have been imposed in relation to price fixing for multinational vitamin companies (Australian vitamins companies were not involved). More recently penalties of almost $21 million have already been imposed in relation to price fixing in the power transformer industry with the case still not concluded.
The ACCC has also been closely involved in credit card reform issues. The Prices Surveillance Authority reported in 1992 recommending deregulation of fees of that industry. This report however was instrumental in uncovering the interchange arrangements between banks and has ultimately led to Reserve Bank proposals to reform credit card schemes and to reduce interchange fees.
The ACCC has also been active in applying sections 45 D and E of the Trade Practices Act. It has taken court action in six cases including two concerning the Maritime Union of Australia, one pursuant to the waterfront dispute and one more recently concerning hold cleaning in which fines of around $200,000 were obtained.
However perhaps the most significant change in 1995 was the extension of the ACCC's role to cover major public utilities at Federal level and also to apply the access and regulatory provisions of the Act to electricity and gas at the level of their interstate and transmission operations. The ACCC has also been active in relation to airports and rail.
An important reform to the Trade Practices Act was the introduction of a general access regime under Part IIIA. Linked with that were access and other provisions in relation to telecommunications in Part XIB and XIC. The ACCC has done a great deal of work regulating access to key infrastructure industries in recent years in many cases determining whether there should be access and then in determining on what terms and conditions access should occur.
Australia has been a world leader in regulating utilities in communications, energy and transport and in combining this activity with competition law.
From July 1999 to June 2002 the Goods and Services Tax pricing laws were enforced vigorously by the ACCC. There was also a major campaign to educate business about its obligations under the Act and the public about their rights and entitlements and about the likely price rises that would occur under the GST.
Another important development over the years has been the extension of the Act to deal with issues of concern to small business. The ACCC has been active in applying the unconscionable conduct laws, as well as generally seeking to benefit small business through sound enforcement and regulatory activities.
Most recently it has been advocating to the Dawson Inquiry the adoption of criminal sanctions for hard core collusion under Part IV of the Trade Practices Act.
Presently there are 80 cases before the Federal Court of Australia. This compares with five in the year that Professor Fels became chair of the Trade Practices Commission in 1991. At the international level, Professor Fels has been Deputy Chairman of the OECD Competition Committee and since 1996 Co-Chair of the important Trade and Competition Committee, an important post for an Australian to hold. He is a member of the interim steering committee of the International Competition Network.
The ACCC has generally sought to make competition law and policy more effective, to obtain better compliance with it, and to build more support for it, through vigorous enforcement and a high profile.
Professor Fels was also a part-time Member of the Prices Justification Tribunal from 1973 until 1981; of the Prices Surveillance Authority from 1984-89; was Prices Commissioner Victoria 1982-91; and held a number of other part-time regulatory positions.
He was Professor of Administration at Monash University from 1985-1996 and now will continue as Honorary Professor, Faculty of Economics and Business, a post he has held since 1996 (in addition to his new position as Professor at the University of Melbourne).