There's no doubt that a huge number of Australians are suffering serious cost-of-living challenges, and there's significant political pressure to come up with instant solutions to make a real difference to the cost of living. While the government can have an impact on inflation, many of the factors affecting inflation and the cost of living are beyond the reach of the federal government. Geopolitics, pandemics, supply chain complexities—governments may be blamed for these things, but they can't really do much about them. But one of the things that the government can impact is competition. This is not a quick fix for the cost of living, but, over the long term, getting the rules right when it comes to how companies can compete in Australia has a significant impact on costs for consumers. Effective competition drives efficiency and productivity. That means better products at lower prices for Australian consumers.

Duopolies and oligopolies are bad for consumers. While competition law is complicated, most people understand this intuitively and are suspicious of big companies having too much power. For groceries and living essentials, the Coles-Woolworths duopoly has been accused of driving up prices and passing the buck to shoppers. For travel, the Qantas-Virgin duopoly has similarly been accused of forcing out competition and passing on poor service and high costs to travellers. And, here in politics, the duopoly of the Labor and Liberal political parties has been accused of using parliamentary power to shut out new political entrants. Now, obviously the political party duopoly is not considered as part of the Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024, unfortunately, but it is good to see the government promoting competition in business. Voters might be stuck with less political competition, but this amendment is a good move for consumers.

The existing merger law and clearance process has been in need of reform for some time. In 2021, the then ACCC chair Rod Sims argued for reform, and his successor, Gina Cass-Gottlieb, an eminent competition lawyer with extensive experience on both sides of the merger regulation process, also supports the creation of a formal merger clearance process. The current law in the Competition and Consumer Act says that companies can't acquire shares or assets in a company that would substantially lessen competition in any market. The key problem with this law is that there's no requirement for parties to notify the ACCC before completing a merger. Because there's no requirement, the ACCC instead has established an informal merger review process, where parties can first ask the ACCC for advice on the competitiveness of the merger before it's completed. This process, which has no formal status in law, lacks transparency and does not provide an informed basis for market participants to understand their legal and regulatory risk. In short, it's not fit for purpose.

This bill amends the Competition and Consumer Act to better reflect the requirements of modern markets. This bill introduces mandatory notification when companies involved in mergers meet certain thresholds. Monetary thresholds are the simplest way for companies to know when they need to notify. This regime needs to work for businesses. But the bill also preserves an ability for the minister to introduce market-concentration-based thresholds for compulsory notification in the future. I'm concerned about this. Although these types of thresholds have been used overseas, market-concentration-based thresholds for compulsory notification add complexity and are opposed by many experts in the field of competition law because they add uncertainty, risk and compliance cost to the first step in the clearance process.

For this reason I'll be proposing an amendment to delete section 51ABP(3)(c), to remove the ability for the minister to introduce market-concentration-based thresholds. It needs to be clear to companies when they need to notify. If, after a review of the act, it's found that the existing thresholds are not working, I think this should come back to parliament for consideration so that further complexity is not added for business without appropriate scrutiny and a weighing of the costs and benefits.

The bill also allows the Treasurer to designate high-risk parts of the economy where the ACCC will be able to review all mergers regardless of whether they meet other thresholds. This could be used for airlines, supermarkets, or any industry where there are specific competition concerns. While I support this aspect of the bill, the bill does not require the Treasurer to seek advice from the ACCC before making such a designation. I think this is a problem. ACCC consultation should be a requirement not an option. The government informs me that the ACCC is likely to be central to this process, so I see no need to allow the Treasurer to designate an industry as high risk without the advice of the ACCC.

I'm concerned that this could be used for political purposes, where a particular industry could be kicked with greater scrutiny in an effort to appease the public, rather than where there are specific and well-founded competition concerns. I'm not reassured by the government saying that the ACCC could always participate in a public consultation process. The ACCC has specific expertise and a specific role in this area, and should be consulted specifically in advance of any public consultation process. For this reason, I will propose that section 51ABQ(4) be amended to change 'may' to 'must' to ensure that the ACCC has a clear role in the designation of any high-risk parts of the economy.

I have one more concern. The merger-specific expanded definition of 'substantial lessening of the competition' is a significant change to a concept that's been the subject of decades of judicial application and reasoning. I'm still not clear why a different definition is necessary here, and I'm concerned that it may cause confusion. I'd urge the government to explain this added complexity and use any opportunity to clarify the difference in definitions.

These minor changes aside, the bill increases the transparency and scrutiny of private mergers and makes the regulation a mandatory reporting regime so that the ACCC can monitor how our business acquisitions are affecting competition. I recognise that we do need to reduce red tape so that businesses can get on with doing what they do best, particularly given our period of low productivity. I recognise that this will create a regulatory burden, particularly in the private equity sector. The coalition has pointed out some other concerns, such as ACCC resourcing and the compliance burden, and I respect that these need to be considered. But the benefits of this amendment could deliver for cost-of-living relief, and that's so important that I'm happy to support the passage of this bill, ideally with my amendments.

More competition in sectors like supermarkets, airlines, fuel and liquor should result in lower prices and more choice for consumers. We need to be more assertive in formulating law and policy to address the stronghold the duopolies and oligopolies have on Australian markets. A fit-for-purpose merger clearance process will improve the regulation of competition in Australia, in turn encouraging innovation and new entry into important sectors in Australia. The goal here is lower prices for consumers. The government must pull all levers possible to respond to the cost-of-living crisis, and ensuring better market competition is one lever to pull.

I commend this bill to the House.