Australia has one of the most concentrated and least entrepreneurial corporate sectors in the developed world and one of the weakest sectors of family and small business. Our Competition & Economic Ownership Policy will change the status quo.
Employee ownership of firms in Australia is relatively poorly developed compared to other advanced economies, and our once important mutual and cooperative sector has been allowed to wither by successive governments of both Left and Right.
Large populations of workers, people with disabilities and mental illness and their carers, older people and indigenous citizens have been locked out of economic ownership for generations. Both the Right and Left have presided over this large-scale social and economic exclusion.
Our aim is to strengthen the Australian economy by dispersing ownership and economic power as broadly as possible, building the capacity of consumers and family and small businesses, eliminating corporate welfare in all its forms, and overhauling the many legislative and institutional arrangements that prevent market competition from benefiting ordinary people.
Our approach to economic policy rejects both the anti-competitive culture of Big Business and the anti-enterprise culture of many trade unions. We support measures to build greater ownership of capital by a greater proportion of Australian citizens. We seek a bigger sector of self-employment, micro-, family and small businesses, and a bigger mutual and social enterprise sector.
The Big Four Banks embody all that is wrong with the Australian economy. We have the most concentrated ownership of banking and financial institutions in the western world. The Big Four have a de facto government guarantee against failure while operating effectively as a cartel, circumventing competition laws and (through their economic dominance) imposing a non-entrepreneurial culture on Australia’s corporate and institutional investors.
They shun lending to small businesses and the self-employed, preferring equity and debt in the risk-free property sector and mergers and acquisitions which boost returns without having to be innovators or risk-takers. They do all this while gouging consumers and ratcheting up executive salaries to obscene levels.
Our energy sector is dysfunctional, producing higher prices, uncertain supply and perennial policy uncertainty. The Big Three companies (AGL, Origin and Energy Australia) have been permitted to operate both generations and retailing: these functions should be separated. Market share caps should be imposed on the Big Three to encourage new entrants, and subsidies for both fossil fuels and renewables should be removed to allow consumers to drive the market.
Australia’s retail sector is dominated by two companies (Coles and Woolworths) which have 70% of the market share. By contrast, the two biggest retailers in the USA command 20% of the market share. Australia’s extreme levels of concentration have an adverse impact on both consumers and suppliers, particularly in farming and rural communities. Both Left and Right are philosophically blind to these adverse consequences of concentrations of ownership.
We seek a more inclusive and competitive economy, with favourable taxation and other incentives for firms with employee ownership and shared governance arrangements, and for businesses that include people with disabilities, mental illnesses and other disadvantages.
Starting Points
A nation of owners (we seek the widest possible distribution of economic ownership amongst individuals, families and communities)
A break up of cartels (we require a forced divestiture of assets by firms with more than 40% of national market share, and firms that misuse market power)
Empowerment of consumers (we stand for a greater capacity for consumers, fewer restrictions on competition, and removal of restrictions on new entrants in all sectors)
Inclusion of people with disadvantages and disabilitiesin the mainstream economy (we support comprehensive incentives for firms to include the disadvantaged in employment and ownership)
An end to corporate welfare (we will abolish corporate hand-outs, subsidies, rebates, tax concessions, research grants and tariffs as measures that favour the powerful and exploit the weak)
We support
1. A break up the Big Four Banks by:
Prohibiting banks from operating in superannuation, insurance, wealth management and financial planning markets as a condition of holding a banking licence;
Introducing a cap on market share by any one bank of 20% in any market segment, and a forced divestiture of assets by any bank which exceeds the cap;
Prohibiting banks from owning equity in other corporations, prevent banks from acquiring a dominant place in the national economy and ensure banks remain servants of other corporations, not their masters;
Introduction of mandatory prison sentences for bank executives or directors who breach ASIC reporting or disclosure requirements, or Trade Practices Act provisions dealing with anti-competitive behaviour, price-fixing or collusive behaviour;
Removal of institutional impediments to the transfer of a customer’s business from one bank to another, and prison sentences for bank executives who place obstacles or delays in this process;
Creation of a level playing field for all financial institutions, removing product and function restrictions favouring the Big Four, easing the regulatory and compliance burden for small institutions, and removing regulatory impediments to the formation of new banks, and credit unions and building societies.
2. A break up of the Big Three Energy companies by:
Prohibiting energy companies from operating both generation and retailing functions, and requiring the Big Three to divest assets to new entrants;
Introducing a cap on market share at current levels by any energy company in generation and retailing, and permitting only new entrants to operate in new energy sources such as thermal;
Requiring retailers to offer a ‘default product’ independent of standing offers at prices no higher than those determined by the Australian Energy Regulator;
Creation of a level playing field for all energy providers by removing all subsidies across all energy sources, and allowing consumers to drive the market.
3. A break up the Big Two Retailers by:
Introducing a cap on market share by anyone retailer of 30% in any market segment, and a forced divestiture of assets by any retail group which exceeds the cap;
Introduction of mandatory prison sentences for retail executives or directors who breach Trade Practices Act provisions dealing with anti-competitive behaviour, predatory pricing, price-fixing or collusive behaviour;
Prohibit retailers from acquiring interests in gaming, insurance, alcohol and tobacco companies.
4. A breakup of Telstra by separating its retail operations from its network operations.
5. Introducing a 15% corporate tax rate for companies in which:
employees own at least 50% of equity and/or exercise at least a 50% share in governance;
20% or more of employees are people with disabilities, mental illnesses, ex-offenders and/or have a history of long-term exclusion from the labour market.
5. Reforming the superannuation system by:
allowing employees to opt-out of the superannuation system (if an employee opts out, the employer super contribution of 9.5% of pre-tax wages (rising to 12$ in 2025) would be paid to the employee’s regular bank account;
permitting members of super funds who opt-out to withdraw up to $20,000 per year from their existing super account over a transition period of 10 years, with any remaining funds transferred at the end of the 10th year;
abolishing all super tax concessions (earnings on balances in super funds would continue to be taxed at 15% before and after retirement, as would annual pre-tax and post-tax super contributions; and
abolishing the special Commonwealth Government employee rate of superannuation at 15.4% and replacing it with the ordinary citizen rate of 9.5%.
6. Supporting the self-employment, family and small business sector by:
giving small business owners protection from unfair contracts and unscrupulous behaviour by Big businesses and Governments;
permitting small businesses to collectively negotiate with suppliers, acquirers and franchisors; and
exempt businesses which employ less than 20 people from the requirement to collect superannuation contributions by transferring this function to the tax system.
7. Encouraging competition and a level playing in all industries by:
requiring a forced divestiture of assets in any firm controlling more than 40% of the national market share in any domestic market;
removing restrictions on new entrants in banking, retailing, insurance, utilities, airlines, shipping and the media to encourage more enterprises and more options for consumers;
restricting licensing fees for industry entrants to cost-recovery rates for supervision and regulation, not for revenue-raising purposes for governments;
removing incentives to invest in property and housing ahead of productive value-adding businesses by scrapping negative gearing; and
scrapping all forms of corporate welfare including subsidies, development assistance, relocation incentives, research grants, tariffs and industry adjustment schemes.
