Victorian Premier Daniel Andrews with pharmacist Peter Nguyen in the Amcal Max chemist in Mordialloc last year. The Harper competition review has urged state leaders to remove competition barriers even if Canberra refuses to act. But it’s a move that the powerful pharmacist lobby opposes. Photo: Eddie Jim “After a difficult shift I need to wind down and go to sleep. It’s that window when there’s really no choice that’s really difficult”: Helen Phillips-Vass from Bondi. Photo: James Brickwood
Imagine you’re a nurse in a busy hospital working late into the night most shifts. By the end of each day you’re hungry and exhausted but you haven’t done the shopping for days. Your groceries are running low. You would love to have a glass of wine tonight, too, but you have nothing at home.
Dammit. All the shops are closed by now.
Helen Phillips-Vass, of Bondi in Sydney, has worked as a registered nurse for more than 20 years. She says the above scenario is a familiar one.
“There are several times when I’ve thought I’ll just drop in to get some food or a bottle of wine and there’s just nowhere,” Ms Phillips-Vass says.
“Particularly after a difficult shift, when you think, ‘Oh, my gosh I have to do this again tomorrow, I need to wind down and go to sleep’. It’s that window when there’s no choice that’s really difficult.”
Every week,anyone whose job demands odd hours and odd sleeping patterns faces a similar experience. The lifestyle can be a difficult one. The old 20th century model of working from 9am to 5pm, with daily services structured around that, makes it hard to do things that others take for granted.
Like going to the pharmacy. Or getting a trolley full of groceries.
But all that could be about to change.
A year-long review of Australia’s competition laws completed this week is the first systemic shake-up of our competition regime in 22 years.
It could lead to a flowering of extra choice and opportunity for consumers and a revolution in the way Australians live.
Called the Harper Review, after its chairman Professor Ian Harper, it has given the Abbott government 56 recommendations which could hone an economic growth plan aimed at dismantling regulations that have kept huge numbers of workers and consumers locked out of easy access to services .
It’s trying to push Australia into the 21st century where online shopping and the digital economy via mobile phones and tablets competes with bricks and mortar shopfronts.
It gives the Commonwealth government the opportunity to pressure state governments to sweep away the most enduring market restrictions faced by Australians in their everyday lives, granting new access to goods and services from taxis to books to 24-7 shopping, including pharmaceutical and alcohol sales in non-specialist shops.
It wants to deregulate retail hours, leaving sacred only three days a year: Christmas Day, Good Friday, and the morning of Anzac Day.
It recommends that the highly regulated and protected taxi industry be broken open, which could be a major boon for would-be taxi providers under the online-based Uber alternative. It could also help poorer households afford taxis. The review says the taxi industry is “virtually unique among customer service industries in having absolute limits on the number of service providers”, and that lack of supply could account for as much as 15 to 20 per cent of the cost of taxi fares.
The review also wants to dissolve decades-old rules that dictate how many pharmacies can operate in a particular area, and who can operate them. It says regulations that prevent pharmacists from choosing where to locate their pharmacies and limiting ownership to pharmacists and friendly societies imposes costs on consumers. Under existing arrangements, a new pharmacy may not open within 1.5 kilometres or 10 kilometres of an existing pharmacy, depending on the location.
“The panel considers that the pharmacy ownership and location rules should be removed in the long-term interests of consumers,” the report says.
“They should be replaced with regulations to ensure access to medicines and quality of advice regarding their use that do not unduly restrict competition.”
On the surface, the package looks like a huge win for consumers.
And consumers could win, too – if the Abbott government adopts the review’s recommendations.
But “if” is the operative word. Few believe that the Abbott government has the stomach for another fight. Not after the bruising losses on things like the GP co-payment, university reform, “wait for the dole”, and now its pension indexation plans which look unlikely to get through.
The Pharmacy Guild and the taxi industry, and parts of the small business community, are already outraged by the review’s recommendations.
Small business says the attempt to deregulate trading hours will put even more power into the hands of the big supermarket chains and place greater pressure on owners of small businesses, who will struggle to compete. It will lead to the death of the small corner store, they say.
The Pharmacy Guild – one of Australia’s most powerful lobby groups – says the review’s recommendations will break a pharmacy regulation model that has served the community for decades and which millions of Australians say they prefer.
Ms Phillips-Vass says if she could get her groceries and medicine and a bottle of wine from one place, like a supermarket, it would be very convenient. But she can also see that such competition reform would be a two-edged sword.
“I wouldn’t like to see the small corner store disappear. I’d still make sure I shopped there on the weekends when I had time to wander around,” she says. “But if I could get everything in one place late at night then I’d probably end up using that, because it would be much easier sometimes.”
When the review was released on Tuesday, the panel members said they’d spent a year on it and they knew the way forward.
Professor Harper said it was time to stop talking and get on with it. “An early response will make the reform effort more manageable over time, allowing Australians to enjoy higher living standards sooner rather than later,” he stressed.
Peter Anderson, a review panel member and former chief executive of the Australian Chamber of Commerce and Industry, laid down the gauntlet to the business community, saying the report gave business the opportunity to prove that it actually believed in competition.
“It would be a serious missed opportunity if the business community looked at this report and decided to run scare campaigns because a particular sectional interest is advantaged or disadvantaged by our recommendations,” Mr Anderson told Fairfax Media.
He said there were areas which had already been subject to scare campaigns in the draft report, but “we looked at those issues and found many of them wanting”, particularly on taxis, aspects of pharmacy and on section 46 which refers to the legal definition of harmful competition. The review says a company should not behave in a way designed to deliberately hurt competition, but the business community is concerned the definition is not specific enough.
The Business Council of Australia – the country’s biggest business lobby group – welcomed many of the report’s recommendations, but it said it still had some concerns.
“We remain concerned about the revised proposal to introduce an effects test under section 46 but we will take the time to give full consideration to the proposal,” BCA chief executive Jennifer Westacott said. “Any changes must be subject to a rigorous Regulatory Impact Assessment and cost-benefit analysis.”
The way is obviously not clear for the Abbott government,
But what does it all mean?
If the government acted on Professor Harper’s recommendations, it would lead to radical changes to more than trading hours and pharmacy rules.
It would mean tougher rules would be imposed on anti-competitive behaviour by companies.
New arrangements affecting government services would be introduced to increase competition. That could see private schools, hospitals, and other services paid directly by government departments under an NDIS-type contracting-out model, creating a new class of quasi-public-private sector providers.
It would mean restrictions on so-called parallel importing would be dumped, allowing books and other goods such as second-hand cars to be bought legally overseas at cheaper prices to be sold here.
The overarching plan for such microeconomic reform is to put consumers’ interests ahead of commercial interests in the brave new digital world.
But it would pit state governments against two very powerful lobbies – the small business retail operators, and the owners and operators of the traditional taxi businesses.
It would also pit the federal government against the Pharmacy Guild. The guild is already flexing its muscle.
It has pointed to a speech that Prime Minister Tony Abbott made at the Pharmacy Guild’s annual dinner in November last year.
“How do you know that I respect the place of community pharmacy in our economy and in our society?” Mr Abbott said to them.
“Because the last time there was a serious push to threaten the place of community pharmacy in our society, I stood up against it.”
Mr Abbott had earlier that night said he did not want to approach the problems of Australia in a way that failed to respect the institutions that had made the country strong.
“I do not want to go for something which is untried and unproven against something which is tried and proven, and I never want to promote theory over practice,” he had said.
But the guild says that view runs in contradistinction to the push by Professor Harper to change Australia’s long-standing pharmacy location rules, which are designed to ensure that pharmacies are spread evenly across the country so the greatest number of people can easily access one.
Professor Harper’s wish to allow pharmacies to set up anywhere, to let the market rip to meet customer demand would result in pharmacies gravitating towards big cities and richer neighbourhoods, the guild warns.
But behind the scenes, the Pharmacy Guild doesn’t believe that there’s a real threat yet. It doubts Mr Abbott will move against it.
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