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Intergovernmental Agreement On Competition And Productivity-Enhancing Reforms

Competition policy consists of policies, laws and public institutions aimed at improving the level of competition in the economy in order to better serve the long-term interests of consumers. The Commonwealth will provide payments to states for reforms that would boost Australia`s economic performance and standard of living. The Commonwealth and The States will cooperate, in accordance with this agreement and the Intergovernmental Agreement on Federal Financial Relations, to develop funding arrangements in the priority areas of Part 4. This important agreement lays the groundwork for cooperation between governments in building a more productive and efficient economy… Efforts are being made to remove unnecessary regulatory barriers to competition; Encourage innovation to provide quality and effective human services; promote efficient investments and the use of infrastructure for road transport, water and energy. The Harper Review provided a comprehensive assessment of Australia`s competitive environment. The audit body made 56 recommendations aimed at reviving competition policy at both the state and Commonwealth levels, reorganizing competition institutions, and modernising and simplifying Australia`s competition legislation. There have been some individual reforms at the state or territory level, but little inter-judicial cooperation for cross-cutting reforms of competition policy. This is not surprising, because not all legal orders have signed the intergovernmental agreement. On the other hand, the Productivity Committee found that ASC had not been an unqualified success. Not all reforms have achieved their objectives and some results have not been in the general interest of the Community. In addition, the adjustment burden has been considerable for some, particularly for some regional communities.

Despite these problems, the Productivity Commission as a whole concluded that the benefits outweighed the costs. State governments are responsible for purchasing goods and services on behalf of the public. A policy that distorts competitive markets will affect productivity growth. Promoting competition is an important aspect of NSW government procurement activities. In December 2016, the governments of Australia, New South Wales, Western Australia, Tasmania, the Australian Capital Territory and the Northern Territory signed the Intergovernmental Agreement on Competition and Productivity Reforms. The governments of Queensland, Victoria and South Australia have not signed the agreement. In implementing the recommendations of Harper Review have been slow to issue. Although reforms have been implemented in competition law since the signing of the Intergovernmental Agreement, little has been done in other areas, such as the implementation of competition reforms and productivity-enhancing reforms, and the institutional settlement to facilitate such reforms.