Economics Explored Economic Freedom & Efficiency: Lessons from Australia’s Competition Reforms - EP244
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
- Australian competition policy history and reforms. (0:00)
- Free market competition and its impact on living standards. (7:56)
- Economic policy and its impact on individuals, including a tragic story from Karen Chester illustrating the costs of high tariffs. (12:31)
- Economic policy reforms in Australia during the 1980s and 1990s, including the Hilmar report and National Competition Policy (16:08)
- The benefits and costs of National Competition Policy in Australia. (23:36)
- Sequels and the original, with examples from movies and economics. (31:51)
- Competition policy and its benefits, challenges, and potential reforms in Australia. (35:27)
- Cost of living and government interventions. (40:12)
- Government intervention in various sectors, including energy, childcare, and alcohol/tobacco. (44:42)
- Government policies and their unintended consequences, including fraud in disability support programs. (49:23)
- The size and role of government in Australia and the US, focusing on the founding fathers' intentions. (53:43)
- Competition policy in Australia and the US, focusing on regulation and deregulation. (1:00:10)
- Economics, regulation, and antitrust law with a focus on Australia and the US. (1:06:07)
Takeaways
- National Competition Policy (NCP) significantly improved economic efficiency and consumer benefits in Australia.
- 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.
- Despite being from a traditionally left-wing political party, the Hawke-Keating Government was crucial in initiating market-friendly reforms.
- Future competition policy reforms face challenges due to political and lobbying pressures, especially in regulated sectors like pharmacies.
- 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:
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:
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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