FSU calls for shift in regulator approach to mergers
When examining mergers, regulators need to shift their approach from a focus on competition concerns to a consideration of the likely benefits, according to the Finance Sector Union (FSU).
These comments came in response to the acquisition agreement reached between NAB and AXA for AXA’s Australian and New Zealand businesses.
FSU policy and communications director Rod Masson said that the Australian Competition and Consumer Commission’s acknowledgement that the Westpac takeover of St George created problems after the fact was evidence that the Government’s current approach does not work.
“Today, mergers get approved if there’s no proof that competition will be hurt,” said Masson. “It’s time to reverse the onus, and require proof of social benefit before already powerful companies get even bigger.
“Given how financial companies behave, there’s little reason to give them the benefit of the doubt. Consumers facing ongoing interest rate gouging or workers seeing their jobs sent abroad know the problems this approach creates.”
Masson pointed to increasing consolidation in the wealth management industry and the possibility that should the deal be approved, NAB will control up to 25 per cent of the market. He asserted that the government is “the last best hope to put the national interest firmly in the middle of the boardroom”.
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