Competition watchdog powers to increase in major merger reset

Treasurer Jim Chalmers will on Wednesday outline what he describes as Australia's biggest merger reforms in almost 50 years as he delivers the Bannerman competition lecture, hosted by the ACCC and the Law Council of Australia.

"The changes I announce today are the biggest reforms to merger settings in almost 50 years," Dr Chalmers is expected to say in the Sydney speech.

"They mean the ACCC will more efficiently and effectively target mergers that are anti-competitive while allowing mergers that are pro-competitive to proceed faster.

"This will bring our merger settings into the 21st century."

It comes amid a focus on competition reform, with cost-of-living pain in the community, a "David and Goliath" battle of the supermarkets, and the government giving in-principle support to "fair go" recommendations of the interim report on the grocery code of conduct.

There is a different push from the Nationals, The Greens and independent MPs such as Andrew Wilkie and Bob Katter for new powers to break up giant supermarkets.

Dr Chalmers regards the new merger reforms as part of a fifth wave of competition policy for the nation and he promises they will make the merger regime faster, stronger, and simpler while also adding transparency and accountability.

"Getting competition policy right can help make economic change fairer, smoother and more prosperous, which is key to building a more modern economy," he is to say.

"It will encourage greater innovation, agility and world class business practises that mean we can maximise not just manage the big shifts coming at us."

Under the proposals, which would start from January 1, 2026, and some of which would need to be legislated, there would be a mandatory notification system for mergers and the ACCC would be empowered to be the single decision maker on all mergers.

Dr Chalmers describes it as a response to new business players, new markets, and new disruptions, while also acknowledging Australia's competitiveness has been declining since the 2000s.

He is to say that most mergers are an important feature of a healthy, open economy and the benefits can flow through to consumers through greater product choice and quality as well as lower prices.

But the Treasurer points to some that can cause serious economic harm.

"This happens when players are not interested in improving profitability by lifting productivity," he is to say.

"When they're solely focused on squeezing out competitors to capture a larger percentage of the market. This can strangle innovation, reduce productivity in our economy and punish consumers with reduced choice."

Under the plans, a merger would be approved within 30 working days if the ACCC is satisfied a merger poses no threat to competition.

Three streams for merger approvals are to be reduced to a single, streamlined path. Mergers consistent with the "national economic interest" will be fast tracked, while those that "create, strengthen or entrench substantial market power" will be identified and stopped.

The ACCC chair said the reforms would bring Australia into line with most other developed economies.

"We welcome the Treasurer's announcement today that the government will move to strengthen Australia's merger laws, which will benefit Australian consumers and businesses of all sizes, as well as the wider economy," ACCC Chair Gina Cass-Gottlieb said in a statement.

"Higher prices, less choice and less innovation can result from weakened competition. Stronger merger laws are critical to ensure anti-competitive mergers do not proceed."

In a transparency and accountability move, a public register of notified mergers and acquisitions would also be set up.

"Australia's approach to mergers is no longer fit for purpose" the Treasurer is to say.

"Australia is one of only 3 OECD countries that doesn't require compulsory notification of mergers. Right now, merging businesses do not have to notify the ACCC or wait for the ACCC's view before completing a merger.

"Our voluntary system means the ACCC isn't properly equipped to detect and act against anti-competitive mergers."

Dr Chalmers will also announce that mergers expert and former Professor of law and economics Phillip Williams will take up the position of ACCC Commissioner from June 27.