- Introduction
Background
1.1Following a reference from the Treasurer, the Hon Dr Jim Chalmers MP, on 31January 2023, the House of Representatives Standing Committee on Economics commenced an inquiry into promoting economic dynamism, competition and business formation.
Scope
1.2The Committee acknowledges the foundation of competition policy in Australia was laid by two previous significant inquiries, the 1993 Hilmer report and the 2015 Harper review. Indeed, the Committee commenced its work on this inquiry with background briefings from the esteemed authors of these inquiries—Professor Frederick Hilmer AO and Professor Ian Harper AO.
1.3However, the Committee did not seek to cover old ground. Rather, its focus was on understanding why competition and business dynamism in Australia appears to have stalled in recent years—reflected in productivity rates at generational lows—and to consider new solutions. In particular, the Committee sought to consider how new technologies could be leveraged to boost competition and dynamism, while remaining conscious of the regulatory challenges posed by these same technologies.
1.4Economic dynamism and competition are relevant to the lives of all Australians and businesses. These issues affect the prices they pay at the supermarket, their options for travel on Australia’s aviation network, the quality of the government services they receive, or can enable a small business to bid for a government contract from a level playing field.
1.5Accordingly, the Committee consulted as widely as possible, hearing from witnesses across industries and social enterprises, communities, academia (including from overseas), thinktanks, consumer groups, regulators and government departments. And, beyond Canberra, inquiry hearings were held across the eastern seaboard to gain a broader perspective—including in Toowoomba, Sydney, and Melbourne.
1.6The Committee sought to first put down a conceptual framework for the inquiry, grounded in data and research. Its initial public hearings, commencing on 16 March 2023, were with academics, thinktanks and regulators to understand the history, contemporary context and strategic challenges that policymakers face in relation to competition and business dynamism.
1.7Prominent cross-cutting issues quickly emerged that the Committee was then able to investigate in more detail. These included data gaps, the need for overarching renewal of national competition architecture, the requirement for merger law reform, labour mobility, and the disproportionate impact on young firms and young people of low rates of competition and dynamism.
1.8From there, the Committee took a sectoral approach to understand how such issues manifest across the economy, including in the public sector and the care economy. Hearings were held with representatives from the finance sector (including regional and community-owned banks), social enterprises, Big Tech, Tech start-ups, media enterprises, airlines and airports, supermarkets, brewers, the mining sector, e-conveyancing, and from state governments.
1.9Finally, the Committee returned to the regulators and thinktanks to test the viability of the ideas and proposed solutions that it had heard. Its 15 September 2023 hearings with the Australian Competition and Consumer Commission (ACCC), the Productivity Commission, the National Competition Council, and with Treasury’s Competition Review Taskforce was the culmination of an intense program of 18 days of hearings over the preceding six months.
1.10Additionally, the Committee acknowledges that many of the issues and reform ideas suggested in this inquiry are also being considered through initiatives such as the Government’s Competition Review, the review into the Food and Grocery Code of Conduct, the Aviation White Paper, and the continuous program of inquiries that the ACCC conducts into various competition issues (including its current inquiry into prices and competition in the supermarket sector). As this inquiry report shows, competition and business dynamism is of central importance to productivity and, by extension, the future prosperity and wellbeing of Australians. Accordingly, the Committee lends its support both to these bodies of work and to a continuing future focus by government on competition policy reform.
1.11The Committee is sincerely grateful to all those who provided evidence to the inquiry, whether at a hearing or through a submission. It was a window into how Australians think about these issues and their views were invaluable in informing the inquiry’s findings and recommendations.
1.12A list of organisations and individuals who appeared as witnesses can be found at Appendix A.
1.13A list of submissions can be found at Appendix B.