The Competition Policy Review Panel (Panel) chaired by Professor Ian Harper issued its draft report on 22 September 2014.

Among a range of recommendations relevant to all sectors of the economy, the 307 page draft report makes specific recommendations for competition policy reform in the Health, Education and other Human Services sectors. 

The draft report identifies three major forces impacting the Australian economy which will influence whether Australia's competition policies, laws and institutions remain fit for purpose: 

  • the rise of Asia and other emerging economies, which will provide significant opportunities and challenges
  • an ageing population which increases the array of needs and preferences amongst older Australians
  • new technologies which are 'digitally disrupting' the way many markets operate, the way business is done and how consumers engage with markets.

The Panel observed that competition policy is aimed at improving the economic welfare of Australians. It is about making markets work properly to meet their needs and preferences. In their view, competition policy should:

  • make markets work in the long-term interests of consumers
  • foster diversity, choice and responsiveness in government services
  • encourage innovation, entrepreneurship and the entry of new players
  • promote efficient investment in and use of infrastructure and natural resources
  • establish competition laws and regulations that are clear, predictable and reliable
  • secure necessary standards of access and equity.

The panel singled out access to high-quality human services – including health, education and community services as vital to the lives of Australians.  It considers that a 'presumption of choice' could have significant benefits in many human services sectors and that putting consumers in control often means that service providers must become more responsive to individual requirements.

Tthe Panel also acknowledge that choice is not the only important objective in the area of human services, citing the importance of equity of access, universal service provision and minimum quality standards.

On balance though, the Panel was satisfied that deepening and extending competition policy in human services is a priority reform. Removing barriers to entry can stimulate a diversity of providers, which is necessary to expand user choice.  If competition policy reform can drive even small gains in productivity in these large and growing sectors of the Australian economy, it has the potential to deliver large gains across the community.

The Panel's draft recommendation  in relation to Human Services is:

Australian governments should craft an intergovernmental agreement establishing choice and competition principles in the field of human services.

The guiding principles should include:

  • user choice should be placed at the heart of service delivery
  • funding, regulation and service delivery should be separate
  • a diversity of providers should be encouraged, while not crowding out community and voluntary services
  • innovation in service provision should be stimulated, while ensuring access to high-quality human services.

Each jurisdiction should develop an implementation plan founded on these principles that reflects the unique characteristics of providing human services in its jurisdiction.

The Panel is seeking submissions on its draft report until 17 November 2014.