The House of Representatives Standing Committee on Economics will hear from the multinational investment firm BlackRock, institutional investor proxy adviser Ownership Matters, industry peak body the Financial Services Council and the Australian Treasury, about common ownership and capital concentration at a public hearing on Monday 11 October 2021.
Acting Committee Chair Hon Dr Andrew Leigh MP, said that 'to date, the committee has heard evidence from academic experts and the ACCC that common ownership has the potential to threaten competition within the Australian market.'
'My own research with Dr Adam Triggs shows that Vanguard and BlackRock are the largest shareholders in Australia, and that these two index funds are often the largest shareholders for competing companies. Our research reveals that among firms where we can identify at least one substantial owner, 31 per cent share a substantial owner with a rival company. Across the Australian economy, common ownership increases effective market concentration by 21 per cent.
'In the United States, common ownership has been shown to dampen competitive pressures, and produce worse outcomes for consumers in the airline and banking sectors. The committee is concerned to understand the extent of common ownership in Australia, the channels through which it may harm consumers, and how transparency reforms might help' Dr Leigh said.
'As well as investment firm BlackRock, the committee will hear from proxy advice service Ownership Matters and industry peak body the Financial Services Council to garner the views of industry insiders on this issue. We will also hear from Treasury about how the Australian Government sees this potential threat to vigorous competition between firms.'
Later in the day, the committee will also hear from the Energy Industries Superannuation Scheme (EISS Super) as part of the committee's review of the Four Major Banks and Other Financial Institutions.
The full Terms of Reference for the inquiry into common ownership and capital concentration and the review of the four major banks and other financial institutions are available on the committee's website.
Public hearing details
Date: Monday, 11 October 2021
9.30am to 12.45pm Common ownership and capital concentration
2.00pm to 3.00pm Superannuation sector review
A program for the hearing is available on the committee's website.
Due to health and safety concerns relating to the COVID-19 pandemic, this hearing is not currently scheduled to be open for public attendance. Interested members of the public will be able to view proceedings via the live webcast at aph.gov.au/live.
