Economics Explored

Economic Freedom & Efficiency: Lessons from Australia’s Competition Reforms - EP244

Episode Summary

Darren Brady Nelson joins Gene Tunny to discuss the evolution of competition policy in Australia over the past few decades. Darren draws on his experience as an economist in the NSW Treasury and the Queensland Competition Authority. Gene and Darren reflect on the successes of the original National Competition Policy reforms and assess the more limited scope of the subsequent competition policy review. Darren analyzes CPI data to understand rising living costs and argues for reducing government interventions. The conversation also covers unintended policy consequences (e.g. fraud in disability services provision), the US Founding Fathers’ vision for limited government, and debates around the appropriate roles and sizes of government in Australia and the US.

Episode Notes

Darren Brady Nelson joins Gene Tunny to discuss the evolution of competition policy in Australia over the past few decades. Darren draws on his experience as an economist in the NSW Treasury and the Queensland Competition Authority. Gene and Darren reflect on the successes of the original National Competition Policy reforms and assess the more limited scope of the subsequent competition policy review. Darren analyzes CPI data to understand rising living costs and argues for reducing government interventions. The conversation also covers unintended policy consequences (e.g. fraud in disability services provision), the US Founding Fathers’ vision for limited government, and debates around the appropriate roles and sizes of government in Australia and the US. 

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What’s covered in EP244

Takeaways

  1. National Competition Policy (NCP) significantly improved economic efficiency and consumer benefits in Australia.
  2. Reforms under NCP included corporatization and privatization of government-owned businesses, and opening up markets such as telecommunications and airlines to competition, leading to lower prices and better services in many cases.
  3. Despite being from a traditionally left-wing political party, the Hawke-Keating Government was crucial in initiating market-friendly reforms.
  4. Future competition policy reforms face challenges due to political and lobbying pressures, especially in regulated sectors like pharmacies.
  5. Transparent and rational community service obligations were key to ensuring fair distribution of competition policy benefits. 

Links relevant to the conversation

Where you can find Darren’s submission to the Productivity Commission’s National Competition Policy analysis inquiry:

https://www.pc.gov.au/inquiries/current/competition-analysis/submissions

AFR article “PC's Karen Chester's love of economics born of despair” (pay-walled):

https://www.afr.com/politics/pcs-karen-chesters-love-of-economics-born-of-despair-20161206-gt4poh

Whitlam Era book featuring Gene’s article on Whitlam and the Economy:

https://www.connorcourtpublishing.com.au/THE-WHITLAM-ERA-A-REAPPRAISAL-OF-GOVERNMENT-POLITICS-AND-POLICY_p_511.html

Productivity Commission’s 2005 NCP review:

https://www.pc.gov.au/inquiries/completed/national-competition-policy/report/ncp.pdf

Episode featuring John Nantz, Free Markets & Limited Government: Lessons from the Founding Fathers for Today  – EP218: 

https://economicsexplored.com/2023/12/14/free-markets-limited-government-lessons-from-the-founding-fathers-for-today-ep218/

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Thanks to Obsidian Productions for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. 

Full transcripts are available a few days after the episode is first published at 

www.economicsexplored.com.