Competitive neutrality reform

The competitive neutrality reform program was a commitment under clause 3 of the Competition Principles Agreement. Under clause 7 of the Competition Principles Agreement, states and territories committed to also apply this reform at local government level.

The Australian Government and all state and territory governments undertook to ensure that their publicly owned businesses did not enjoy any net competitive advantage simply because they are publicly owned. For significant government businesses, governments undertook to adopt a corporatisation model where appropriate and to impose on the business full taxes or tax equivalents and debt guarantee fees to offset advantages from government guarantees, and to apply to the business regulations normally applying to private sector businesses.

In 1996, each government published a competitive neutrality policy statement, outlining its implementation program and mechanism for handling complaints that significant businesses were not appropriately applying competitive neutrality principles. Governments also issued a policy statement that addressed the application of this principle to local governments.

Governments published annual National Competition Policy reports addressing implementation progress, including allegations of non-compliance, over the life of the National Competition Policy.

Each of the National Competition Council’s annual progress assessments considered competitive neutrality implementation.

Key competitive neutrality documents on this site

This site provides the following key documents relevant to the competitive neutrality commitment.

• The Hilmer Report
• The Competition Principles Agreement (see clause 3)
• Governments’ 1996 competitive neutrality policy statements, by jurisdiction
• State and territory governments’ 1996 local government policy statements, by jurisdiction
• Governments’ annual National Competition Policy reports, by jurisdiction, over the period of the National Competition Policy
• National Competition Council progress assessment reports (annual, supplementary and deferred assessments)