States sign up for new competition agenda to lift wages

State, territory and federal governments held a closed-door meeting on Thursday in a bid to kick-start a new wave of competition reforms that would strengthen the economy and increase real wages for working Australians.

This masthead can reveal the meeting, held in Sydney and hosted by NSW Treasurer Daniel Mookhey, forms a starting point for federal plans to renew competitive pressures to lift productivity.

Increased competition forces businesses to invest in new equipment and their staff.Credit: Bloomberg

Representatives from every administration in the country, as well as the federal competition taskforce and Ian Harper, who headed a competition review in 2015, were also at the meeting.

This week’s national accounts showed that while productivity has lifted over the past six months, it is still lower than before the COVID-19 pandemic. Last week, the Productivity Commission reported Australians had lifted their working hours but business investment that would boost output had slipped.

Many economists believe the global and Australian slowdown in productivity is partly due to a lack of competitive pressures, which force businesses to find new ways to lift output or better employ their staff.

A suite of competition reforms started under the Hawke government, from breaking up state monopolies to cracking down on collusion between businesses, was found by the commission to have delivered a 2.5 per cent boost to GDP. In today’s dollars, that is equivalent to $62.5 billion.

Federal Competition Minister Andrew Leigh told Thursday’s meeting that competition benefited consumers and businesses, from cities to regions and across the economy.

“Australians enjoyed cheaper electricity, more choice in telecommunications that brought down prices, and gained an important and respected regulator in the form of the Australian Competition and Consumer Commission,” he said.

“We have an opportunity to do this again. And it’s important that we do. Competition policy is one way we can help lock in structural action to deliver lasting cost-of-living relief.”

The meeting canvassed emerging competition issues, including in the areas of electric vehicle charging stations and NDIS providers, and the growth in non-compete and no-poach clauses in workplace contracts or agreements.

Australian Bureau of Statistics research last week revealed 47 per cent of businesses imposed at least one form of restraint clause on their workers. Non-disclosure clauses were the most common but 25 per cent sought to bar staff from soliciting clients if they left a firm, 21 per cent had non-compete clauses while 18 per cent had non-solicitation of co-worker clauses.

The competition taskforce is already examining issues around non-compete clauses and the extent to which they are hurting the incomes of workers.

Leigh signalled the government wanted to go further than just refresh the reform agenda of the 1980s, saying there was an opportunity to reconsider the proposals put forward by Harper’s review.

“It’s important to look forward, and in looking forward to revitalising national competition policy, we make sure that the principles that drive national reforms are appropriate to the contemporary and emerging issues we want to address,” he said.

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