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Competition law change to help small firms

AAP logoAAP 1/12/2016 Colin Brinsden, AAP Economics Correspondent

It's the driest of issues - guaranteed eye-glazing - but planned new competition laws could benefit Australian consumers.

The so-called "effects test" will help Australia's two million small businesses operate without feeling they operate in the shadow of big business.

The Turnbull government has introduced legislation to strengthen competition rules that prevent firms with substantial market power engaging in conduct that harms competition.

"These amendments will make markets work better for the benefit of all Australians and help to lift our long-term productivity growth," Revenue Minister Kelly O'Dwyer told parliament on Thursday.

"They will provide another tool for regulators to ensure Australian businesses can flourish."

The recommendation to strengthen competition and consumer laws featured in the recent Harper review.

The "effects test" means a small firm no longer has to prove a bigger rival is deliberately trying to force it out of business, only that it has been affected by its presence.

"The new provision will more effectively address anti-competitive conduct, protecting the process of competition rather than individual competitors," Treasurer Scott Morrison said in a statement.

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