Break up firms that abuse market power, says former competition tsar

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Former Australian Competition and Consumer Commission Allan Fels is calling on Labor to introduce powers to break up large firms so they take competition laws more seriously.

Former competition tsar Allan Fels is calling on Labor to create laws to break up firms that abuse market power, as part of a suite of proposals that also includes a revival of Paul Keating’s national competition policy.

The inquiry comes as policymakers grapple with flatlining labour productivity, which Reserve Bank of Australia governor has labelled a key risk to the inflation outlook. In Australia, the largest four firms account for more than 40 per cent of total industry output in the mining, utilities, media, manufacturing and transport industries, according to a submission from the Productivity Commission.Treasurer Jim Chalmers will consider the findings or recommendations from the inquiry.

The reforms made the economy up to 5.5 per cent larger over the long term, according to the Committee for the Economic Development of Australia.“What remains seems to be more difficult matters,” he said.“It’s important to have a national competition policy. We should revive it. At the moment, it is dormant. It should be aimed particularly at new legislation which limits competition.”

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