On 25 February 1994, the Council of Australian Governments adopted a strategic framework for water reform, which it subsequently incorporated into the national competition policy agreements. The main objectives of the reform were to establish effective and sustainable water management and to halt the widespread degradation of natural resources, for which water use is partly responsible. The framework included pricing, evaluation of investments in rural water supply systems, specification and trade of water claims, resource management (including recognition of the environment as a water user through formal allocations), institutional reforms and better public consultation. Since the completion of the NCP reforms in the early 2000s, Australia`s productivity growth has declined significantly (see the article “Australia`s Productivity Challenge” in this publication), although the Australian economy has experienced positive gross domestic product (GDP) growth over the past 27 years (see the article “27 years and more since Australia`s last recession” in this publication). The Government will redirect $303.7 million in funding over two years from 2017 to 2018 from the National Partnership on Regulatory Reform to a new reform agenda that will reward states and territories that reduce the regulatory burden on small businesses. The funding includes $3.7 million, which will be redistributed by the National Competition Council to the Treasury Department to develop and manage agreements. This contrasts with the high level of cooperation between the Australian Government and state and territory governments early in the life of the NCP, when all governments recognized the need for reform and the benefits to the community would outweigh the costs. This political consensus was facilitated by an analysis begun by the Productivity Commission (then known as the Industry Commission), which estimated the potential gains and how this would lead to increased incomes at the Commonwealth and state levels. On the other hand, the Productivity Commission concluded that the NCP was not an unqualified success. Not all reforms achieved their objectives and some results were not in the general interest of the Community.

In addition, the adjustment effort has been considerable for some, particularly for some regional communities. Despite these problems, the Productivity Commission as a whole concluded that the benefits outweighed the costs. Access to infrastructure services included the introduction of national rules providing for access to services provided by the main monopolistic entities of the infrastructure. (See clause 6 of the Agreement on Principles of Competition) On the other hand, a key feature of the previous NCP reform process was the creation of an independent NCP with a wide range of functions. At that time, the NCC monitored competition reforms in all jurisdictions, reported publicly on progress, and noted instances where commitments had not been met or measures were insufficient. It has brought transparency to the NCP process and has helped to ensure that the flexibility of case law is consistent with the agreed high-level principles and objectives of the NCP reform agenda. The scheme aims to promote economically efficient operation, use and investment in the infrastructure through which services are provided, thereby promoting effective competition in both upstream and downstream markets. This important agreement lays the foundation for governments to work together to build a more productive and well-functioning economy.

Efforts will be made to remove unnecessary regulatory barriers to competition; promote innovation to provide efficient and high-quality human services; promote efficient investment and the efficient use of road, water and energy infrastructure. There is no institution responsible for taking the initiative or leading implementation. The inability to revive an existing body (such as the National Competition Council (NCC)) or to create a new body proposed in the Harper Review under the name of the Australian Competition Policy Council to monitor progress on competition reform appears to be a key factor contributing to the lack of progress in implementing the competitiveness and productivity reform agenda. The Productivity Commission`s review is an opportunity to launch a national debate on the need to update and update competition policy in the infrastructure sector. Governments should reaffirm their commitment to national competition policies that remain relevant to the current economic situation and identify and pursue further reforms that ensure that the provision and use of infrastructure increases economic performance, increases productivity and improves living standards. The national competition policy reform programme has been extended to local authorities. States and territories are committed to cooperating with local governments to review and reform legislation, competitive neutrality and structural reform principles. States and territories have undertaken to prepare, by June 1996, a declaration on the application of these principles to local authorities. (See clause 7 of the Agreement on Principles of Competition) Professor Ian Harper`s 2015 review of competition law and policy showed that competition policy reform will be crucial to boosting future productivity growth in Australia. It has proved difficult for the Australian government and the states and territories to revive competition policy.

The Harper review made 56 recommendations. Most of the recommendations on competition law have been implemented. However, very little progress has been made on the recommendations on competition policy and governance. Article 46 now prohibits an undertaking with significant market power from engaging in conduct which has as its object or effect or could have had the effect of appreciably restricting competition in any market in which the undertaking supplies or acquires goods or services. Article 46 previously prohibited an undertaking with significant market power from engaging in conduct aimed at appreciably restricting competition in any market in which the undertaking supplies or purchases goods or services. Australian governments created a vision for a national approach to competition policy reform in October 1992 when they established the Independent Commission of Inquiry into a National Competition Policy for Australia. The independent committee, known as the Hilmer Committee after its chairman (Frederick Hilmer), reported in August 1993 and made recommendations in six areas for action: According to the Productivity Commission`s 2005 review of national competition policy reforms, efficiency improvements in the main infrastructure industries targeted by the reforms increased Australia`s gross domestic product by 2.5%. The report also highlights that NCP reforms have helped boost productivity by improving living standards and increasing the annual income of the “average” Australian household by about $7,000 (in 1998-99 dollars). Competition policy consists of government policies, laws and institutions aimed at improving the level of competition in the economy so that it better serves the long-term interests of consumers. In December 2016, the governments of Australia, New South Wales, Western Australia, Tasmania, the Australian Capital Territory and the Northern Territory signed the Intergovernmental Agreement on Reforms to Improve Competitiveness and Productivity.

The governments of Queensland, Victoria and South Australia have not signed the agreement. To gain ground, the new competition reform agenda requires increased commitments from all Australian governments. As called for in the Harper review, this also requires an institution that provides transparent oversight of the reform implementation process. This may require a completely independent body separate from the ACCC. .