Inflation-fighting policy and the Accord had changed to the extent that the Prices Surveillance Authority and the Trade Practices Commission should be merged, the chairman of both bodies said yesterday.(tuesjul28)
Professor Allan Fels was commenting after the authority issued a report this week on real-estate agents after an inquiry headed by Dr D.C.Cousins.
The report concentrated on the competitive elements of the industry which caused high fees, rather than regulatory measures to hold them down. It attacked recommended maximum prices (which were rarely discounted) and high entry qualifications.
It welcomed an indication by the commission that it, too, would inquire into real-estate agents later this year. That inquiry will be mainly into real-estate multiple-listing schemes which were authorised by the commission state-by-state mainly in the mid-1970s.
Professor Fels said many inquiries by the authority and the commission overlapped.
“”This is not due to bad management or miscalculation, but the conceptual nature of the inquiries and the issues,” he said.
There would be benefits in locating the inquiry efforts in one body, not merely co-ordinate those efforts as is done now. He would prefer a merger, but it was a matter for the government in view of wider considerations.
Professor Fels has been chairman of the authority since 1989 and chairman of the commission since last year.
The commission has always had the promotion of competition as a major function. Pricing bodies have had a different history.
Professor Fels said the Prices Justification Tribunal set up in 1973 was an inflation fighter and price regulator, irrespective of competition. When the authority was set up in 1984 it was both an inflation fighter and had a role in promoting competition. In 1989 when he became chairman of the authority he took the view that it was “”about competition almost exclusively”.
“”Any pricing matter has to analyse the state of competition and assess prices with respect to that,” he said. “”It is a case of removing restraints to competition, especially legislative ones, rather than price control.”
He said there was a view that the authority was tied to the Accord and should therefore be separate.
“”I have less sympathy for that view,” he said. “”The argument against it is that the Accord has moved on and so has prices policy.”
In 1974 policy was directed at inflation and prices; now it was directed at prices and competition. As the promotion of competition was also a major function of the commission, it would be better if the commission and the authority were merged.
The Government had looked at it and he expected a decision soon, but not before the Budget.
In another comment on the real-estate report yesterday, the ACT Attorney-General, Terry Connolly, said, “”The fees charged by real-estate agents in the ACT are not set by government as they are in some other states. This policy option will have to be considered in the light of the PSA interim report.”