Competition is key to a strong and innovative Australian economy, says ACCC chairman, Rod Sims.

Speaking at the Australian Competition Policy Summit, Sims said only by ensuring effective competition can Australia ensure that it will be more productive and innovative.

Sims pointed out, however, that introducing pro competition policies is usually difficult as no business likes facing more competition. “Those currently protected from competition usually react strongly to policies that remove that protection,” he said.

Sims mentioned the many improvements to Australia’s competition laws recommended by the Harper Competition Review.

“Changes aimed at improving our price signalling, merger and misuse of market power laws and, importantly, bringing them into line with overseas practice are to be welcomed,” Sims said.

Sims argued implementing policy reforms recommended in the Harper review could significantly benefit the economy. In particular he mentioned putting more emphasis on choice in human services delivery, ensuring IP laws have the right balance and are not stifling innovation, allowing more competition in the supply of urban water, and reforming road transport.

“Our market economy can benefit significantly from competition advocacy and market studies,” Sims said.

He cited the ACCC’s recent advocacy to ensure that governments do not impose inappropriate market structures or regulation to boost privatisation proceeds. “Such actions boost short term, one-off proceeds from asset sales by effectively imposing a tax on future users of the privatised assets,” Sims said.

The ACCC is currently conducting market studies into petrol and the east coast gas market as revealing the benefits that can be gained from transparency.

“The working of Australia’s market economy can be strengthened by studies that highlight why some markets are not working as we might expect,” Sims said.