Australia has announced a two-year review of its competition laws, policies, and institutions with the goal of boosting productivity and wages, as reported by Bloomberg on August 23. Treasurer Jim Chalmers stated that a task force established within the Treasury will lead the review, focusing on key issues such as potential revisions to existing merger laws and measures that hinder labor mobility toward higher-paying jobs. The assessment will also address competition challenges posed by new technologies, the transition to a net-zero economy, and the growth of the care sector.

In the decade leading up to 2020, Australia’s average labor productivity growth had slowed to 1.1%, compared to 1.8% over the previous 60 years ending in 2019. Chalmers attributes this decline in productivity growth and competition to increased market consolidation, rising prices, and reduced dynamism across various sectors of the economy. He emphasized the need for competition policies that are “fit for purpose” in order to address challenges associated with digitalization, the growth of the services sector, and the transition to a net-zero economy. A report from the Productivity Commission released prior to the review also highlighted the importance of fostering a flexible and dynamic economy through increased competition, which can lead to greater worker mobility and better matching of workers with emerging job opportunities.

Sources:

https://www.bloomberg.com/news/articles/2023-08-22/australia-to-review-anti-trust-laws-to-boost-productivity-wages?srnd=premium-asia

https://www.theguardian.com/australia-news/2023/mar/15/workers-face-longer-hours-for-less-pay-without-productivity-boost-jim-chalmers-says

https://www.theguardian.com/australia-news/2023/aug/20/last-decade-saw-australias-lowest-productivity-growth-in-60-years-intergenerational-report-says