Annual Report 2018-19

Our priorities reflect the need to respond to key environmental challenges and opportunities. 

Scepticism about the effectiveness of markets for essential services is driving more interventionist approaches to regulating these markets.

People are more sceptical about the effectiveness of some markets for essential services. This is particularly the case where there is: 

• a high level of market concentration
• limited ability of customers to withdraw from the market
• a barrier to switching
• a lack of transparency about prices and/or service quality.

This has been demonstrated from findings issued by recent royal commissions and policy developments in the energy sector.

These changes have led to significant reforms (including intervention) in these markets.

Regulators are increasingly being challenged to take effective and proportionate enforcement action.

Recent royal commissions have criticised regulators for developing enforcement strategies that don’t use enforcement as a deterrent often enough, and fail to consider market structure risks (such as the existence of significant market power, and the inability of customers to exit markets).

The Victorian Government provided the commission with additional resources for enforcement and committed to giving it additional enforcement and information gathering powers. 

It’s critical that we deliver on these expectations.

Technology and innovation will continue to disrupt markets and supply chains in ways that we do not anticipate.

We have seen significant disruption affect regulated sectors (such as ride-sharing and distributed electricity generation, for example). 

Technical and business model innovation has the potential to disrupt markets.

Developments such as blockchain may:

• disrupt markets
• transform organisational governance
• reshape supply chains. 

While this can create benefits for consumers, it can also cause problems for them.

The Australian Government’s ‘consumer data right’ will seek to deliver benefits for consumers through ownership of data.

The right aims to: 

• give consumers the ability to safely access certain data 
• promote a consumer-focused environment that encourages competition by allowing data to be shared with accredited, trusted recipients such as comparison websites
• support consumer choice and value for money.

Changing economic conditions are likely to put additional pressure on government budgets. 

The Victorian economy has achieved sustained growth. However, affordability of essential services remains a critical issue for the community, particularly where incomes have been relatively flat. 

The recent slowdown of the housing market in Victoria has put further pressure on state budgets and emphasises the need to deliver services efficiently and effectively.