If anyone needed proof that competition drives better performance, you only need to look at the Matildas, whose peak World Cup soccer matches attracted more viewers than any Australian sporting event in at least a decade.
What made the Matildas great is that they have been playing against champions in major overseas leagues. As captain Sam Kerr puts it: “To be the best, you have to beat the best.”
Australia didn't win the World Cup but there's no doubt that it brought out the best in the Matildas.
Kerr's equalising goal in the England match may well have been the greatest of the tournament. You don't produce magic like that without testing yourself against elite players.
Just as on the sporting field, competition in the business sector brings out the best from our companies. Innovation is more likely to emerge when firms test themselves against competitors, not when a monopolist dominates the market.
When consumers lack choice, prices tend to be higher. When workers lack choice, wages tend to be lower.
Uncompetitive markets hurt the most vulnerable. If you don't have a car, it's harder to shop around for the best deal. If getting a fair price from your supplier involves an annual phone call, then the well‑heeled are more likely to make the call.
It's no accident that payday lenders and door‑to‑door water cooler salespeople tend to proliferate in low income communities.
Over recent decades, the problem has become worse. Market concentration has risen. Price markups have swelled. Meanwhile, the number of new firms with employees has fallen, at least as a share of the total pool of businesses.
These declines in market dynamism have coincided with a lousy period for productivity. In the decade before Labor took office, Australia recorded our worst productivity performance in the post‑war era. Real wages flatlined. And because earnings are the main source of income for most households, real household income growth was painfully sluggish.
That's why Treasurer Jim Chalmers and I have announced a review of competition policy settings to help build a more dynamic and productive economy.
A Competition Taskforce has been established in Treasury to conduct the review, which will be progressed over two years and involve targeted public consultation.
It will provide continuous advice rather than a formal report, so progress can be made over time.
Our inspiration for the competition review is the work initiated by former prime minister Paul Keating in 1992.
In that year, Keating tasked competition expert Fred Hilmer to lead reforms that would collaborate across federal, state and territory governments to boost competition.
In themselves, many of the reforms were small. In one case, a state law that banned bakers from starting their ovens before a particular hour in the morning was abolished.
But by focusing attention on competition, the reforms added up. Assessing their impact in 2005, the Productivity Commission concluded that National Competition Policy had been a major driver of the 1990s' surge in productivity.
That analysis estimated a permanent increase of 2.5 per cent in Australia's national income from competition reform. Today, that lift equates to around $50 billion a year, or around $5000 per household.
The challenges the Australian economy faces today are different from those of a generation ago.
We need to make the most of artificial intelligence and digitalisation. It's vital to support the net‑zero transformation. We need to ensure that workers aren't unfairly prevented from shifting to a better job. And we must look after the most vulnerable.
The economic environment has shifted too. A generation ago, economists had a rosier view of privatisation than many do today. We now know that putting a government monopoly into private hands might yield a short‑term windfall, but cost taxpayers in the long run.
Thinking on competition has shifted too, with the “big is beautiful” philosophy falling out of favour among many experts.
The Competition Taskforce will be supported by an expert panel, including as members the head of the Grattan Institute, Danielle Wood, and former chair of the Australian Competition and Consumer Commission, Rod Sims.
Their broad perspective and wise insights will help ensure that the competition review is driven by fresh evidence, not outdated ideology.
Just because the topic is competition, it doesn't mean the policy process can't be collaborative. We're keen to work with states and territories, business, consumer groups and academic experts. The benefits of competition flow to consumers, workers, innovators and the economy, so we're keen to garner good ideas wherever they can be found.
A more dynamic economy will be better able to seize the opportunities of the renewable transition, to harness new technologies, and to look after Australia's most vulnerable.
Inspired by the Matildas, competition can help shape a fairer society and a stronger economy.