ANZ’s $4.9 billion Suncorp takeover will now go ahead. Is the government sending mixed messages on business competition?
Two years after the deal was first announced, Treasurer
The
It will of course be subject to some important enforceable conditions.
Among them, the combined entity must ensure there will be no net job losses across
ANZ must also “make every effort” to join Australia Post’s banking service “Bank@Post”, which offers cash withdrawals, deposits and balance inquiries at a range of post offices.
It will also be required to make lending commitments worth billions of dollars for a range of energy and infrastructure projects as well as business and housing more generally across
But three years isn’t a long time in the grand scheme of things, and this deal will inevitably lead to a reduction in competition in the banking sector.
With Australia’s high industry concentration already in the public spotlight, does this decision reflect an inconsistent approach by the government?
Mixed messages from the government
The ongoing cost-of-living crisis has put Australia’s industry concentration levels firmly in the public eye. Many industries – such as airlines, supermarkets and petrol retailers – have become dominated by a few large players, to the growing unease of the Australian public.
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Read more: Flying under the radar:
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The policy response has been inconsistent.
On the one hand, the government has just waved through this merger, despite the
But at the same time, they’ve been waving the big stick at Australia’s supermarket oligopoly, just this week committing to impose huge new fines for mistreatment of suppliers.
Pressure from the general public could be contributing to the mixed messages we seem to be receiving. All of this may reflect a breakdown of consensus on competition policy occurring in
It’s important to understand how thinking about competition has changed over the years.
For much of the 20th century, particularly in
But this was challenged by the “Chicago Revolution”, which emerged from the
The general result was a much more permissive attitude to mergers than there had been in the past.
In an opinion piece published soon after Labor took office, Assistant Minister for Competition
Yet the legislation underpinning our process remains influenced by the
If the ACCC doesn’t like a merger, it can be appealed to the
However, governments are much more likely to intervene when market power becomes politically sensitive.
Banks have managed to keep out of the spotlight somewhat since the fallout from the banking royal commission, so the ANZ-Suncorp merger may attract relatively little attention.
In contrast, the two big supermarkets are currently “on the nose” politically and seen to clearly dominate their industry. This is most likely what has emboldened the government to lean on them more directly.
Is post office banking an effective answer to branch closures?
One of the most interesting things about this announcement is the requirement for ANZ to seek to join Australia Post’s banking service.
All of Australia’s banks are facing broader structural pressures to close regional branches. The big shift in how banking is done – more online services and reduced use of cash, leading to fewer physical branches – is only likely to continue.
According to the
Using Australia Post as a service location for the major banks has emerged as the key public policy response to branch closures.
The alternative recently proposed by a
We’re unlikely to see reform anytime soon
More broadly across the Australian public, the view that there isn’t enough business competition and that the big players don’t have don’t have our interests at heart seems widely held.
But this largely isn’t reflected in any new legislation. As on many other issues, the Albanese government has established a review, but it is unlikely to report within the term of the current parliament.
For the moment, the mixed messages are only likely to continue.
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