Small business will strenuously oppose Energex-Ergon merger

Friday 15 April, 2016 | By: Darrell Giles | Tags: ergon, energex, GOCs, Productivity Commission;

The Chamber of Commerce and Industry Queensland (CCIQ) will fight against any plan to allow a merged GOC between Energex and Ergon to compete against small business electrical contractors for services to Queensland households.

CCIQ Director of Advocacy Nick Behrens warned that a monopoly GOC could not be allowed to enter the residential and commercial electrical contracting market.

“If you travel the length and breadth of this state each township has a resident sparky who will potentially be ruined by State Government seeking to establish business in a historically private sector,” he said.

“CCIQ’s fear is that Energex-Ergon will enjoy a significant advantage over its small business competitors, solely because it will not price fairly its services, choosing to cross-subsidise from its monopoly position elsewhere.

“It will also enjoy considerable and grossly unfair procedural and regulatory advantage.”

Mr Behrens said CCIQ acknowledged there were potential safeguards for business.

“For example, the Queensland Productivity Commission (QPC) has responsibility for the state’s competitive neutrality complaints mechanism.

“The competitive neutrality principle is applied to all GOCs carrying out significant business activities.

“Competitive neutrality is the policy that a public sector business should not have a competitive advantage over the private sector due to their government ownership.

“CCIQ strongly endorses the principle that Government GOCs carrying on a significant business activity should meet the same requirements as their private sector competitors.

“However, the problem is that it will only be after the fact that a small business can complain against the mega GOC. And the historic experience is that it is very difficult to prove a GOC is pricing unfairly against the private sector.”  

Mr Behrens said, typically, a small business and electrical contractors would not have the time and resources to make a complaint.

“The same applies to making a complaint under section 46 of the Competition and Consumer Act 2010 to the ACCC.

“The State Government must put an immediate stop to this.

“CCIQ is alarmed that the State Government is potentially giving a green light for a mega GOC to compete against small business. If anything, it should be supporting small businesses not competing against them.

“Queensland electrical contractors offer high quality services to households but ultimately it will be the wallets of battling Queenslanders that will determine their ability to compete against a GOC.

“And you can bet your bottom dollar that the competition will be unfair and stacked against the state’s sparkies.”

 

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