The Australian Competition and Consumer Commission welcomes an increase in funding announced in tonight's Budget. ACCC funding will increase by 27 per cent to $73.4 million in 2001-2002.
"The increase follows a rigorous funding review of the ACCC by the Department of Finance and Administration", ACCC Chairman, Professor Allan Fels, said today. "This review found that the ACCC was under-resourced for the demands on it and funding needed to be increased".
Such funding reviews are done for all Departments and Agencies and this is one case where an increase was found necessary. "There are four elements to the funding increase. Funding of $5.6 million for the ACCC's activities in telecommunications, gas and small business that would have lapsed has been extended. An additional $15.8 million has been granted to enable the ACCC to maintain its high workload, and to increase its focus on some priority areas.
"A litigation reserve fund, of initially $10 million, has been created to assist the ACCC in its court activities. The fund will build to a reserve of $20 million. This will strengthen our capacity to deal with major litigation. A further $3 million has been allocated through the conversion of a $3 million loan into equity.
"In my view, and that of others, for a number of years the ACCC has been under-funded and DOFA's systematic review has clearly verified that. The ACCC has lived very close to the margin on occasions. In the past, the ACCC has received specific funding for particular roles, including its role in the transition to the New Tax System. However a full and comprehensive review of its base funding has not been undertaken since its establishment. In the meantime, the ACCC has been meeting increasing international challenges including the impact of globalisation, a major increase in its regulatory activities, increased complexity of markets and technological changes (such as e-commerce).
"The additional funding will enable the ACCC to maintain its current high standard of service delivery and to meet emerging priorities such as e-commerce and rural and regional issues.
"The review involved an evaluation of the ACCC's strategic operating environment, its costing systems, interviews with various stakeholders and extensive benchmarking of some strategic functions against Australian and overseas agencies. "The ACCC's workload has, and continues to increase in both volume and complexity.
"While the ACCC has re-positioned some of its resources to target critical sectors and emerging issues, the workload has grown in all strategic areas of its operations.
"Between 1996-1997 and 1999-2000 complaints and inquiries lodged with the ACCC increased from about 25,000 to about 44,000 per annum, about a 76 per cent increase. Authorisation and notification applications, including those involving industries under reform, have increased from 116 to 391 during the same period, an increase of 237 per cent. Merger activity during the same period increased by 55 per cent. At the same time, the ACCC has maintained a high success rate in enforcing the Trade Practices Act 1974, with 131 matters instituted. The ACCC had a 97 per cent success rate between 1997 and 2000".