Coalition divided over ‘effects test’ to help small business

Coalition MPs are voicing their concerns about Prime Minister Tony Abbott’s decision to delay action on an ‘effects test’ which would protect small business from big business power.

As the SMH reports, Small Business Minister Bruce Billson wants to introduce the test, which was recommended by the Harper Review, into competition law.

The purpose of the test would be to prevent large corporations using things like predatory pricing to reduce competition and damage small businesses.

Billson called the current law “a hunting dog that won’t leave the porch”.

Another MP who supports the effects test, Matt Canavan told the party room, "Given the strong support in the party room for an effects test, I hope this is reconsidered by cabinet.

"Big business is a protected species under current competition laws. The laws are too complex and hard to enforce."

On the other side, Liberal MP Matt Williams opposes the test.

"I believe the effects test is a false argument," he said. "What was proposed by Harper would take small business backwards rather than forwards. My view is different to a lot of other people."

The Guardian reports that, on the strength of this issue, the small-business lobby may campaign on the issue in key marginal seats.

Chief executive of the Council of Small Business, Peter Strong said that, although the Labor Party opposes the test, “Nick Xenophon and the Greens both back our position”.

 “We are considering campaigns in some marginal seats, pointing out which parties stand up for the interests of small business,” Strong said.

Though he added this would not go as far as backing any party.

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