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HoustonKemp contributes to the revitalisation of the National Competition Policy

HoustonKemp is pleased to announce our recent submission to the consultation on revitalising the National Competition Policy (NCP) to support a competitive and innovative Australian economy.

The original NCP – a landmark reform

The original NCP, introduced in the mid-1990s, was a landmark microeconomic reform program. Developed in response to the Hilmer Report of 1993, the NCP aimed to promote competition across various sectors of the economy, many of which had previously been shielded from competitive forces.

The implementation of the NCP led to significant benefits for the Australian economy, including increased productivity, lower prices for many goods and services, enhanced quality and choice for consumers and improved international competitiveness of Australian businesses.

Revitalising the NCP

Revitalising the NCP provides an excellent opportunity to expand and improve the use of competition as a tool in the Australian economy. Our submission to the consultation addressed four key areas:

  1. Competition provides a range of benefits to consumers and the economy, but there are well recognised market failures that can cause poor outcomes. Competition can take many different forms and governments should aim to make competition and markets work as well as practicable, noting that in reality competition will never be perfect.
  2. The removal of government barriers to competition is good economic policy, where these barriers are not otherwise justified by reference to the public interest. Government action can support competition in some circumstances however, poorly designed actions may introduce distortions that could lessen competition and reduce its benefits.
  3. The accountability of governments at all levels to implement competition reforms as intended is critical to ensure they are successful. The introduction of a government action review principle would provide a mechanism to evaluate all forms of government intervention affecting competition. Further, there is a role for an independent Australian Council for Competition Policy to lead, coordinate and review competition policy.
  4. The land transport sector urgently needs reform – it is facing a number of challenges, driven by increases in demand and the need to decarbonise the sector. Reform will increase the efficiency of the use of land transport and investment in its assets.

Looking forward

We encourage all stakeholders to participate in this crucial discussion about the future of competition in Australia to create a more dynamic, innovative, and prosperous economic environment that benefits all Australians.

For more information about HoustonKemp’s work in competition economics or to discuss our submission to the NCP consultation, please contact Daniel Young, Luke Wainscoat, Martin Chow or Zoe Odgers.

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