A government minister is ringing the alarm bell on the "Achilles heel" in Australian markets silently keeping wages depressed and prices high.
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Andrew Leigh says opening up to competition reform inspired by reforms in the United States, Germany, and Canada could encourage innovation, starts-up, job-switching - all of which will help change lives for the better and deliver growth with fairness.
While the nation's economists declare the virtues of open and competitive markets, the competition minister says Australian markets have been heading in the opposite direction over recent decades.
"Australian markets have become more concentrated. Markups have risen, while startups have fallen. The share of employees starting a new job has dropped," he will say in an address to economists at the University of Sydney on Monday.
"Competition is one way to build resilience - a diverse and dynamic economy is also a resilient economy. It means we are better equipped to deal with unexpected shocks and absorb, adapt, and solve the challenges of an uncertain world."
Recent reforms included increasing the maximum penalty for anti-competitive conduct and banning unfair contract terms that allow the more powerful party cancel contractor or change prices. The government is also consulting on the recommendations from the Australian Competition and Consumer Commission's inquiry into digital platform services and how they are regulated.
Dr Leigh said the government's focus was on ensuring Australia's competition law supports an economy fit for the challenges of the future.
But there were lessons from reforms in other countries, he said, such as knowing impact can take time and that it was vital to get support from the public by arguing the case to get a fairer deal for consumers and suppliers - a lesson from America's gilded age reforms.
Germany's reforms after World War II showed more competitors equated to more innovation. "Proof that regulators around the world are right to closely scrutinise mergers," Dr Leigh will say. While Canadian reforms demonstrated how self-interested opposition will stand in the way and it was vital it is to persist with reform efforts.
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