ANU forum on competition policy reforms - Ken Henry

The ANU Crawford School hosted an excellent forum on Friday, mostly a retrospective from key players in the 1995 Hilmer competition reforms, but also with some interesting insights into competition policy design and work left to do for the Abbott Government's new review.


Ken Henry argued that, while our economic circumstances are nowhere near as dire as they were in the early 1990s, Australia is facing both short and longer-term challenges to sustainable growth for which we are poorly equipped: 

• the need to restore structural budget balance
• population ageing, which is already depressing workforce participation
• on-going structural adjustment to the terms-of-trade that disadvantages manufacturing and many other relatively labour-intensive industries
• land use tensions, especially as between non-conventional gas extraction and agricultural interests
• the re-emergence of drought conditions affecting a considerable proportion of agricultural land
• the accelerating emergence of disruptive digital technologies for which Australian businesses, in many sectors, might prove ill-prepared
• increasingly congested, and expensive, cities blighted by decades of poor planning and even poorer infrastructure delivery
• continuing question marks about our ability to withstand another external financial market shock—whether from the United States where the economic and financial recovery remains fragile, China where high rates of credit growth have inflated a shadow banking system, or (most likely) the Eurozone where the pressure on structural fault lines continues to build

Henry's experince in leading the development of the White Paper on Australia in the Asian Century provided insights into how our Australian uniqueness might guide our economic future. Some of these are:

• excellence in governance
• innovation and design
• problem solving
• incorruptibility
• safe working conditions
• environmental sustainability
• social harmony
• economic and social opportunity
• tolerance

Henry argued for the need to develop a narrative (echoing the narrative used in the early 1990s to drive the tariff and competition reforms) which would explain that there is much more to our economic reform requirements than what we normally associate with competition enhancement and deregulation. Among other things, it would make a case for:

• facilitating ongoing structural adjustment
• building a set of national capabilities, including Asia literacy and an innovation culture
• contributing to regional security
• nurturing regional relationships with predictable patterns of behaviour based on tolerance and mutual respect
• adopting a more ambitious and consistent approach to environmental sustainability
• finding smart ways of delivering a morally defensible distribution of income and wealth
• financing the right investments in social infrastructure and culture

There are messages for competition policy and deregulation in this agenda. Achieving integration with the region means rediscovering those paths on which we embarked some three decades ago, by focussing with renewed vigour on the remaining barriers to trade and investment, and reforming the way we approach the provision of economic infrastructure; and it means finding new pathways to pursue the harmonization of regulation and skills recognition, not only within the Australian federation, but across the region. Most importantly, it demands concerted political effort, not only by the Commonwealth, but by the States and Territories as well.

Forum website - Crawford School
Ken Henry's speech