Rod Sims: New reforms will add commercial common sense into merger laws

Treasurer Jim Chalmers’ proposed changes to Australia’s merger laws represent important public policy reform.

This is because a market economy, based on companies and individuals pursuing their own interests, only works if those companies and individuals face sufficient competition.

Increasingly over the last 20 or so years in Australia, this has not been the case. Our weak merger laws have contributed to this situation.

Announcing the reforms on Wednesday, Chalmers said in recent decades the mark-ups Australian businesses apply to goods and services have grown by more than two percentage points.

He also cited a recent analysis by the Treasury and the Reserve Bank that found even merely returning competition to the levels Australia experienced 20 years ago would lift GDP between 1% and 3%.