Daniel Mulino (Fraser, Australian Labor Party) Share this | Hansard source

On behalf of the Standing Committee on Economics, I present the committee's report, incorporating dissenting reports, entitled Better competition, better prices: report on the inquiry into promoting economic dynamism, competition and business formation, together with the minutes of the proceedings.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—I am pleased to be able to table Better competition, better prices. Competition and economic dynamism underpin everything we do in our daily life, whether it is shopping at the local supermarket, using our credit card to make a payment, using an app on our mobile phone to buy an airline ticket or to obtain the latest news, and so much more. Some of the most important decisions we make in our life, such as taking on a mortgage to buy a home, are also heavily influenced by the level of competition and dynamism in the economy.

Competition puts downward pressure on prices, as firms battle each other for our business. Competition also leads to better service. The more companies in any one sector, the harder that businesses must work to retain customers and secure greater market share. Economic dynamism includes such factors as the rate of new business formation; the efficient allocation of capital and labour; well-designed regulation; and the development of new factors of production, including skills.

Australia has one of the highest living standards in the world. That was built on the back of decades of high productivity growth. However, the data is showing declining competition and dynamism, as measured by the high market share of leading firms, the profit margins in key sectors and a declining rate of firm entry and exit in some sectors.

Australia needs to lift its game when it comes to competition and economic dynamism because together they drive innovation, which, in turn, drives productivity. In the short-term, this will put downward pressure on prices, thereby improving the cost of living. It will also place a check on poor corporate behaviour towards consumers. In the long run, it will drive higher productivity growth. If we don't tackle this challenge, future generations will be far poorer than they might have been.

This report puts forward practical steps that will help turn things around. Importantly, all 44 recommendations in the report and dozens of key findings were all adopted unanimously. This represents all sides of parliament working together constructively. I would like to acknowledge the positive, cross-partisan approach of all those committee members—government members, and those from the crossbench. It's not something to be taken for granted.

Some of the key outcomes in the committee's 44 recommendations include: key findings in relation to rigorous measures of competition and dynamism within our economy, pointing to some concerning overarching trends; recommendations aimed at bolstering the quality of and access to economic and market data collected by government agencies; recommendations to improve competition policy, including strengthening our mergers laws and better regulating non-compete clauses; recommendations for pilot programs and improvement in mortgage and deposit products from banks—so important in people's lives, particularly to achieve better outcomes for passive consumers or consumers with low financial literacy—and also measures to introduce new, more transparent products, such as tracker mortgages and innovative funding products to create a more level playing field across large and small banks; measures to improve regulation of the financial services market, including the payments system, and a regulatory grid, which we're pleased to see the government has taken positive action on in recent times; recommendations to reduce red tape for growing businesses and to better design regulation overall; recommendations to improve government procurement, including a social procurement framework starting with accreditation and procurement processes that give better access to social enterprises and to SMEs; better designed markets for the delivery of key social services, including the NDIS, Workforce Australia, skills and aged care, which would build on best-practice, cutting-edge economic theory already being applied in many contexts, including environmental offset markets, transport markets and student placements; and recommendations for improvements in digital platforms, the aviation sector, retail markets and the interoperability of markets within the economy.

The committee's wide-ranging and comprehensive report is the culmination of 14 months of evidence gathering and analysis from numerous sectors of the economy. The committee received more than 60 submissions from stakeholders across industry and government, and followed up with many stakeholders and other experts during over 18 days of public hearings. The House economics committee has a very busy schedule with its normal hearings into key organisations' annual reports, including the RBA, the big four banks and key regulators—so running this inquiry on top of that has been very taxing on the secretariat.

I thank all members of the secretariat. Knowing that it's always risky to single one person out, can I particularly acknowledge Lachlan Wilson, who was the committee secretary until just a few weeks ago. He devoted a considerable amount of time to this inquiry in organising many public hearings and through his rigorous analysis and writing. I also acknowledge the enormous contribution of Samantha Mannette, who, tragically, passed away earlier this year. She worked extremely hard on this inquiry and across the committee's entire workload, and brought a great deal of experience and wisdom.

I conclude by saying Australia is at a crossroads. This report identifies the many opportunities at an economy-wide and a sectoral level for meaningful reform that will not only produce immediate benefits for consumers but also deliver higher standards of living for future generations. I commend the recommendations in this report and the information that informed them to both government and market for a way forward for the betterment of the Australian economy and society.

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