Pretoria - If the competition authorities want to remain effective, they will have to tackle government on its anti-competitive practices.
These practices arise from, among other things, the way in which government awards tenders, as well as certain industries where regulations are hampering competition.
A report by the Auditor-General earlier this year indicated that the government had awarded more than R600m worth of tenders in an improper manner, impeding fair competition for those contracts.
Dave Lewis, former chairman of the Competition Tribunal, in the presence of Minister of Economic Development Ebrahim Patel, sharply criticised the role of the state.
"Those who are set on strengthening competition will have to accept that the market offers solutions that the state cannot, and also that the state itself is regularly the source of the problem."
Lewis made these remarks during the third conference on competition held by the Tribunal, the Competition Commission and the Mandela Institute in Pretoria.
Government's anti-competitive behaviour derives not only from its officials that stand in the way of competition through corrupt activities, but also from the application of its policy.
Lewis also believes government's competition policy framework does not support the competition authorities.
He referred to the Tribunal's ban on transactions in the liquid-fuel and sugar markets, based largely on government's declared intention to deregulate these markets.
But the deregulation has yet to take place.
"I am convinced that potential benefits from the application of competition law are threatened by the absence of such a framework for competition policy."
Lewis said it would not be easy for the competition authorities to call government to order.
Conflict with government policy
His "instinct" told him that these activities were unlikely to be contested because they conflicted with government policy.
Opposition would come as a result of a clash with private interests that benefit from anti-competitive elements in, for instance, the telecommunications policy or anti-competitive tender procedures.
"These parties will use their contacts in government to oppose the application of a sustained and robust competition policy."
In his speech, Patel referred to collusion in key sectors of the economy, including the construction industry.
The more than R700bn for infrastructure development that comprises the government's economic stimulus package will not have the desired outcome if companies are skimming off the cream, he told the conference.
In his turn, Lewis said that public works programmes would create jobs in the short term, but at a considerable cost.
They are not sustainable.
"In the long run economic development and sustainable job creation will be the consequence of investment in education and infrastructure.
"In the short term job creation and economic development will depend on new players' access to the economy and their ability to flourish."
These would be influenced by efficient suppliers of electricity, transport, finance and telecommunications.
Many new players are handicapped precisely by the lack of access to such high-quality services at competitive prices.
- Sake24.com
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