Lower interest rates, richer households: Just add a dash of competition

Overhauling the different and complex occupational licences between the states, the commission found, would boost the economy even more, at between $5.1 billion and $10.3 billion.

The government this month said it would introduce a general “right-to-repair” rule, following complaints from farmers and car owners that multinational firms are using intellectual property rights on their vehicles to prevent low-cost repairs by non-dealership mechanics.

So-called “golden handcuffs” used by employers to prevent staff from moving to competitors, the commission found, costs the economy up to $5.1 billion. It also found gains could be made by changing the ways governments tender for contracts, targeting anti-competitive behaviour in the pharmaceutical sector and making it easier for patients to use telehealth services.

Chalmers told his fellow treasurers that the government’s success in parliament getting support for a raft of policy reforms, including the overhaul of the Reserve Bank, showed change could be delivered.

He said the proposals examined by the Productivity Commission would form the basis of a decade-long period of competition reform that would benefit all Australians.

“We can achieve more working together than we can alone,” he said. “The national competition policy reforms of the 1990s brought a period of sustained economic growth, and this new, ambitious, decade-long program will deliver significant benefits for consumers and businesses across Australia.”

Some of the Reserve Bank reforms, such as less frequent but longer meetings and press conferences by governor Michele Bullock, have already been in place since they were recommended by an independent review of the bank.

But the review’s most important proposal, to create a standalone committee focused solely on setting interest rates while retaining a bank governance board, had been stalled in the Senate for the past six months until this week. The Coalition refused to back the changes, accusing Chalmers of wanting to stack the new committee.

Chalmers revealed on Friday that the new committee would not sit until after the RBA’s mid-February meeting early next year.

Markets and economists do not expect the RBA to start cutting interest rates until May, which is firming as the month Anthony Albanese will go to the polls.

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Chalmers said he would consult the Coalition on appointees to both the interest rate committee and the governance board.

“We will appoint first-class, first-rate people to both of the new boards of the Reserve Bank. We have put a lot of thought into it already,” he said.

Shadow treasurer Angus Taylor said that by relying on the Greens to support the RBA reforms, the government would adopt the minor party’s “radical” economic policy after the next election.