The Senate should reject the Greens’ divestiture legislation to break up Australian businesses because it could make the cost-of-living crisis worse while risking jobs and investment, according to the Business Council.

BCA Chief Executive Bran Black said the last three major competition reviews – the Harper Review (2015), Dawson Review (2003) and Hilmer Review (1993) – all rejected divestiture powers.

“Experts looked at this policy most recently in 2015 and found it would negatively impact consumers, so this Greens Bill could cause prices to be more expensive,” Mr Black said.

“Multiple reviews have shown divestiture powers can put jobs at risk and upend the stability of critical sectors, particularly in regional and rural areas, which have very complex supply chains.

“This proposed law doesn’t solve the issues currently being reviewed, including price transparency from farm gate to the shelf, and nor does it take pressure off inflation.

“We are acutely aware cost-of-living and price pressures are biting hard for Australians, however trying to rush through laws which have considerable unintended consequences, including harming consumers with increased prices, is not the answer.”  

Mr Black said the legislation captured all businesses and would allow the courts to break up a business if it is found to have a competition issue.

“These are extreme powers which do not help the cost-of-living crisis and it would mean courts and the ACCC decide which businesses and jobs need to go.

“The National Farmers Federation have told a recent Senate hearing they are opposed to divestiture and even the ACTU has rejected this idea.”

In New Zealand, the Commerce Commission recently advised against divestiture powers following an extensive market inquiry.

The NZCC concluded that the costs would clearly exceed the benefits, and likely increase food prices because of lost economies of scale and increases in ongoing and one-off costs.

In 2015, the Senate Economics Legislation Committee recommended that divestment powers not be pursued.

That committee found “evidence has not demonstrated that the potential advantages of such a power would outweigh the likely disadvantages”.

It also stated that the “committee is concerned that court-ordered divestiture would risk significant disruption and economic damage, with unpredictable consequences for competition.”