By Matt Siegel
SYDNEY, March 16 (Reuters) - Australian Prime Minister Malcolm Turnbull said on Wednesday he would back a controversial change to the country's competition laws that would reduce the power of big businesses to monopolise markets and squeeze out smaller competitors.
The implementation of a so-called "effects test" was recommended as part of a broad economic review produced last year for the government of former Prime Minister Tony Abbott, who was ousted by Turnbull in a party coup in September.
Strong opposition from big business, which forms a traditional power base within Turnbull's Liberal Party, had stalled its implementation despite support from its coalition partner the National Party, which draws support from rural voters.
The move is designed to prevent "firms with substantial market power from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition."
"This is yet again a case of my government taking long overdue reforms out of the 'too-hard' basket and getting on with the job," Turnbull told reporters on Wednesday.
The move, while welcomed by small business groups, could pose a problem for the government as it prepares to consolidate political support ahead of elections due this year.
The Business Council of Australia has come out strongly against the measures, which it says unfairly target large businesses such as Coles, which is owned by Wesfarmers Group WES.AX , and Woolworths Ltd. WOW.AX
The decision was welcomed by the National Farmers' Federation (NFF), the peak industry body representing the agricultural industry, which has long complained that big supermarkets have unfairly influenced prices.
"While we do not view this as a silver bullet solution we do see it as an important tool to not only improve competitiveness but also to drive innovation, productivity and profitability across the sector," said NFF Chief Executive Officer Tony Mahar.
Treasurer Scott Morrison preemptively deflected criticism of the changes, speaking alongside Turnbull in Canberra.
"It's about competition. It's not about whether one is taking the view of larger businesses or smaller businesses or medium-sized businesses. It's about taking the view that competition benefits the consumer," he said.
The announcement was backed by the smaller opposition Greens Party, who control enough seats in the upper house Senate to insure its passage without support from the main centre-left Labor Party, who are against the change.