A More Competitive Australia - Speech

Appropriation Bill (No. 1) 2024-2025 
Consideration In Detail, 6 June 2024

When Labor came to office, Australia's economy was insufficiently competitive. We had seen one of the lousiest decades of productivity growth in the postwar era. Australia's household living standards had suffered, and real wages had flatlined as a result of what they described as a ‘deliberate design feature’ of their economic architecture. And so Labor, since taking office, has set about injecting a little bit more dynamism, a little bit more competition, into the Australian economy.

We know that the Australian economy under the former government had some serious competition problems. We know that, over that period, we saw an increase in market concentration in many industry sectors. Work by the OECD's Dan Andrews and Macquarie University's Elise Dwyer has shown that, if you compare Australia and the United States across 17 industries, the Australian economy is more concentrated than the US economy in 16 out of those 17 industries. This isn't just a matter of Australia being a medium-sized economy. If you look over the period from 2006 to 2020, Dan Andrews and Elise Dwyer find that the Australian economy became more concentrated, not less. Our size grew, but the market concentration problem got worse.

Under the former government, we saw markups increasing. We saw the rate of business startups—that is, business startups that employ workers—declining over this period. We also saw a decline in job mobility, another key indicator of a dynamic economy. I want to pay tribute to the member for Fraser, Daniel Mulino, an extraordinary economist who has led a critical inquiry by the House of Representatives Economics Committee, which has looked at the issue of market dynamism and made a series of recommendations right across the board about how Australia's economy can be made more dynamic and more competitive.

I want to go to a couple of particular reforms that the government is making. One of those is in the area of supermarkets. In the area of supermarkets, we've referred supermarket competition to the Australian Competition and Consumer Commission. We have asked Craig Emerson, the former competition minister, to review the Food and Grocery Code of Conduct. Dr Emerson's interim report made clear that in his view the code, which was set up under the Liberal and National parties as a voluntary code, should be made a mandatory code. The government is giving serious consideration to this recommendation. Later this month, CHOICE will be bringing down the first of its quarterly price monitoring reports, giving Australian shoppers guidance as to where they can get the cheapest basket of groceries. This is the sort of straightforward practical advice that encourages supermarket competition and ensures that shoppers and farmers can get a better deal.

We're also looking seriously at the issue of noncompete clauses. Across the Australian economy we now know that one in five workers have a clause in their employment contract that hampers them from moving to a better-paying job. That dampens wages and business startups. If you want to start a new firm in a full-employment economy you need to hire workers from other firms. But if all the talent is locked up by noncompete clauses, you may not be able to get your business off the ground. In recommending a full ban on non-competes across the US economy, the US federal Trade Commission has suggested that such a ban would lead to a US$524 annual increase in wages for the typical American worker and would create 8,500 new American businesses. We're giving serious consideration to those issues here, and we have just closed an issues paper at the end of May.

Just as on the sporting field, competition in the economy is a good thing. The member for Gippsland and I have a healthy competition on the running front, and both of us benefit from competition when we're out there racing and training. The Australian economy, too, needs a bit more competition, a bit more economic dynamism, in order to raise the living standards of all Australians.


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  • Andrew Leigh
    published this page in What's New 2024-06-06 16:18:34 +1000

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.