Transport and retail competition overhaul set

THE Turnbull Government has delayed action on two key proposals for competition reforms until at least March next year.

Treasurer Scott Morrison on Tuesday announced the government's response to the "root and branch" Harper Competition Policy Review.

While he accepted 44 of 56 recommendations from Ian Harper's review, action on the controversial "effects test" governing misuse of market power, was delayed.

The government has, however, pledged to act on issues form road transport regulation to retail trading hours, many of which are actually governed by state governments.

Mr Morrison said the government had not rejected any recommendations, but would put out a "discussion paper" on the effects test, with responses due by February, before Cabinet considered the issue in March next year.

Mr Harper said it was an appropriate response to the "most controversial" recommendation from his review.

The effects test governs whether big companies have too much market power, and whether it has misused such power, but has been criticised by farming groups and the small business sector for having a threshold too high for legal action against the big end of town to succeed.

But while Mr Harper had urged the government to relax ownership and location rules governing where pharmacies could be opened, the government similarly delayed action until next year.

The government had already agreed with the Pharmacy Guild to start another review of the location rules, which will report back to government in March next year.

However, that agreement was contingent on pharmacies being able to continue operating under the current rules for another five years, until at least 2020.

In the formal response to the Harper Review, the government wrote it recognised the need for the location rules to be "examined closely".

The response also said the government would consider paying state governments to implement reforms which would improve competition, related to the location rules.

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