ABSTRACT
This chapter looks at the nature of the National Competition Policy and its implications for the Australian economy. It examines the implications in terms of the review process that has been put into place to judge whether government regulation that impedes competition is in the public interest. The introduction of the National Competition Policy in the mid-1990s meant that the principle that all business captivity should be subject to the greatest level of competition possible was accepted. Areas of economic activity that previously had been exempted from the policy were progressively opened up to competition, and the Australian economy experienced a burst in productivity growth. The policy itself made no judgement about whether governments should own and operate businesses, but there were implications for the operation of such businesses as the policy was implemented. By putting competitive pressure on government owned businesses and raising the risk of operating them, the policy did in effect encourage the process of privatisation.
