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Fels tactic pays off

ALLAN Fels and his Australian Competition and Consumer Commission have been copping quite a pasting in recent times for their tough attitude and, most importantly, their exploitation of the media.

Terrible isn’t it. Big business has complained, claiming that the ACCC has been conducting trial by media.

The biggest complainant has been, can you believe it, from an oil company which didn’t like the way a raid on its offices was covered by the press and television.

There is no doubt that Professor Fels and his team are adept at using the media to get the exposure they are looking for. In many ways, media exposure is the most effective weapon in a regulator’s armoury. It’s immediate when compared with drawn-out legal actions, it’s cheap compared when lawyers’ fees, and it hurts retail-type companies where they hate it the most – at consumer level.

No wonder big business has railed against the ACCC.

I have nothing against big business per se, but many of those laying complaints against the commission could be accused of having given up on competition – having reached a level of market penetration where further profits must come from existing customers.

In WA, big business tends to mean a corporate head office located a long way from here.

So I have little sympathy for these people. I welcome a tough regulator who has everyone too scared to break the law – and that is what these people are being accused of.

Of course, regulators’ powers must be controlled (we don’t want McCarthyism in a different guise) but that is what the law is there for.

Big business resents the ACCC’s vocal ways because without the media they could tie up the regulator in legal knots for years, until an outcome is no longer relevant to market conditions and those responsible, quite likely, have moved on.

People want to see that big business is held in check.

The final irony is the central focus of these complaints – the use of the media.

As if these companies don’t already try to manipulate the media to their commercial advantage on a day to day basis.

Is it just that Professor Fels has a better story to tell than they do?

Insuring disaster

WHILE the US has become mired in the type of scandalous collapses that haunted the Australian market last year, America is not facing the threat to business at every level which the insurance crisis has created here.

It seems that it doesn’t matter which way you turn, all manner of businesses are facing huge premium rises that could force many operators to the wall.

This is a different crisis of confidence than the US, where investors are uncertain about the quality of reporting in public companies.

Over time, analysis of accounts will weed out the poorer performers and expose them in the way Enron, WorldCom and others have been.

But in Australia, both good and bad businesses seem to be treated equally as insurers take a view on sector or industry risk levels.

In many ways Australian businesses and professionals are being distracted by insurance problems just at a time when they should be asserting themselves as part of one of the world’s most vibrant economies.

We have long joked about the US penchant for litigating, even when the plaintiff is clearly the one at fault.

Yet the very same situation has developed here, too quickly for the market to keep pace. Of course, the waters are muddied by the fact that HIH falsely drove insurance premiums down, but that doesn’t remove the clear issue that business is facing, either directly or indirectly, the rising risk of spurious claims from so-called victims that are starting to look like gold diggers.

Of course negligent doctors should pay for their mistakes, as should anybody, but there should be controls put on who decides such payments and how much they should be.

Put such decisions in the hands of specialist commissions and cap the payouts – so that business can operate with some form of certainty.

Tripping over a bit of pavement should not be the equivalent of hitting the jackpot.

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