Politics with Michelle Grattan: Andrew Leigh on competition

The Albanese government and the Australian public are currently focused on the cost-of-living crisis and its impact on household budgets.

For Australia’s longer-term economic outlook, the government is looking at reforms that are needed to increase competition and our flat-lined productivity.

Andrew Leigh is in the middle of this debate. He’s Assistant Minister for Employment and Assistant Minister for Competition, Charities and Treasury. In a speech he delivers on Thursday, Leigh homes in on one issue inhibiting competition which affects a surprising number of workers – “non-compete” clauses that ban people from competing with their former employer, for a certain time, or in a specific geographical area, or even both.

Andrew Leigh joined the podcast to talk about this and other competition issues, including the push from some advocates for the government to legislate for power to break up companies that behave badly. We also venture into the territory of Australia’s duopolistic party system, where the voters are trying to inject a bit more competition by supporting “community candidates”.

On why the Australian economy needs competition reform, Leigh says:

If you look at the Australian economy, you do see an economy which is, at the very top, strikingly similar to what it was 40 years ago. Whereas in other countries you’ve seen much more turnover, churn, dynamism, more productive job creation.

On supermarkets, accused by many consumers of misusing their market power:

We do have a very concentrated supermarket sector in Australia, and much more concentrated than a typical European country or, say, the United States.

We’ve now got Craig Emerson, the former competition minister and one of Australia’s very best policy economists, looking at whether the food and grocery code of conduct should be made mandatory. That’s looking hard at the supplier side. Then we’ve got the Australian Competition and Consumer Commission doing a whole-of-economy analysis of the supermarkets’ impact, but also looking at the consumer side, things such as loyalty schemes and how they play out for consumers.

But Leigh is not a supporter of the divestiture route:

If you look at the Harmer review or the Hilmer review, they didn’t recommend divestiture powers. The ACTU has said they’re concerned about divestiture powers, through the potential impact on workers at those firms. The National Farmers Federation has argued against them. So they’re not the government’s priority right now. We’ve got the competition task force in Treasury looking at non-compete clauses, looking at merger reform, looking at the way in which the data digital net zero economies can remain competitive.

Finally, what about competition in federal politics where voters are shifting away from the major party blocs towards small parties and independents? Leigh sees both sides:

It is healthy for us to be kept on our toes, whether it’s by opposing teams or by opposing individuals. I like and respect many of the independents who have joined the house over the time since I came into parliament in 2010. And political competition is just part and parcel of a healthy democracy.

Sometimes it’s undersold, but the strength of a political party is the strength of teamwork, that you can really work together to come up with a set of policies that are better than any individual could come up with on their own.

That interplay when a political party is operating well is something that no individual independent can match.