Competition and consumer policy in the Australian Government's second term

What you need to know

• The re-elected Labor Government has an ambitious and extensive agenda to develop competition and consumer policy. It now also has a decisive majority in the House of Representatives and a likely more favourable Senate composition, enhancing its ability to pursue legislative reforms.
• The Government already announced changes targeting cost of living and productivity reforms, as well as enhancements to the Australian Consumer Law, revitalising national competition policy and ongoing national energy regulation reform. We expect it will proactively pursue its reform agenda.

What you need to do

• Review the changes that are coming and consider the impact on your business. 
• Plan ahead: with what seems likely to be at least 6 years in power, there is more than enough time for the Government to legislate and implement its long list of reforms.

Introduction

With the contest of ideas about the direction of the country resulting in a decisive victory for the incumbent Labor Government, businesses will naturally begin to turn their minds to what to expect from the Government in its second term. 

On election night, Treasurer Jim Chalmers flagged a shift in Labor's economic agenda, stating that the Government's "first term was primarily inflation without forgetting productivity, [while] the second term will be primarily productivity without forgetting inflation". Competition policy will feature centrally in the Government's productivity push, with the Treasurer saying that "the competition policy on working with the states, reviving national competition policy – [that will be] a priority for me as Treasurer". 

The question we know you're asking: where is Australia's competition and consumer law headed with the Government's increased majority in the House of Representatives and likely more favourable Senate composition? We expect the Government will proactively pursue its reform agenda.

The Government's competition and consumer law agenda for its second term

Before its resounding victory in Saturday night's election, the Government had already outlined an ambitious and extensive agenda to reform competition and consumer policy, if elected.  To help you understand the key elements of that agenda, we set out below what to expect from the Government in its second term. 

Cost of living, enhancing the Australian Consumer Law and franchising

• Supermarket price gouging to be banned: During the campaign, Labor promised to outlaw supermarket price gouging if re-elected and to set up a taskforce to provide advice on introducing an "excessive pricing regime" for supermarkets, enforced by the ACCC (notwithstanding that was not an ACCC recommendation in its Supermarkets Inquiry Report). The taskforce would be directed to investigate overseas laws and report back within 6 months on the best path forward. The Government will also adopt the recommendations of the ACCC's Supermarkets Inquiry Report.
• Excessive surcharges: The Government is proposing to ban debit card surcharges and has given the ACCC an additional $2.1 million in funding for it to tackle excessive surcharging. The funding is to improve compliance with the current legislative ban on excessive surcharges by increasing monitoring activity and developing a campaign to increase awareness and understanding of surcharging.
• Unit pricing code amendments: The Government has announced a crack-down on shrinkflation by strengthening the Unit Pricing Code. No further details are available yet.
• Unfair trading practices protections – confirmed and extended: The Government confirmed (via the pre-election Budget) that it would work with the state and territory governments to introduce the proposed bans on unfair trading practices, including subscription traps. The Government has also announced that it intends to extend the yet-to-be-finalised prohibitions on unfair trading practices, to protect small businesses. Treasury will consult this year on the design of the protections for businesses, including on whether a principles-based prohibition should apply and whether specific unfair trading practices should be targeted to protect small businesses. 
• Strengthening enforcement and extending protections from unfair contract terms and unfair trading practices to all businesses under the Franchising Code of Conduct, plus additional funding: The Government has announced that it intends to strengthen the enforcement of the Franchising Code of Conduct and extend protections from unfair contract terms and unfair trading practices to all businesses regulated under the Franchising Code, including automotive dealerships. It will provide $7.1 million over 2 years to strengthen the ACCC's enforcement of the Code, plus $0.8 million in 2025-26 for Treasury to develop and consult on options to extend protections against unfair trading practices to small businesses and protect businesses regulated by the Franchising Code of Conduct from unfair contract terms and unfair trading practices.
• Consumer Guarantees and supplier indemnification: Treasury recently consulted on prohibitions and penalties for failure to comply with Consumer Guarantees and Supplier Indemnification under consumer law. In the Budget, the Government announced that it would empower regulators to issue infringement notices or pursue penalties when businesses fail to provide remedies for breaches of the Consumer Guarantee and Supplier Indemnification provisions of the Australian Consumer Law (ACL). The Government may also move to legislate the proposed prohibitions and penalties.
• Scams Prevention Framework Bill: The Scams Prevention Framework Bill passed both houses and received assent on 20 February 2025. The law will be supported by: (i) scams prevention framework rules; (ii) mandatory sector codes; and (iii) a multi-regulator framework (ACCC, ASIC and ACMA). 
• Franchising taskforce: Treasury has established an internal taskforce to assess the feasibility of introducing a licensing regime for the franchising sector. Such a scheme would require the government authority to approve (licence) a franchisor to be able to conduct business. The suggestion has come out of the February 2024 review of the Franchising Code of Conduct by Dr Michael Schaper. The taskforce released a consultation paper, outlining five potential functions of a licensing regime and seeking views on how one or more of these could best address the needs of the franchising sector. These functions may include regulatory oversight, dispute resolution, disclosure of information, business model preconditions to franchise, and education and resources. Consultation closed 8 December 2024. 

Legislative, market and productivity reforms

• Non-compete clauses to be banned: The recent Budget contained an announcement that the Government would ban non-compete agreements if re-elected. The ban would apply to workers earning less than the high income threshold in the Fair Work Act 2009 (Cth) (currently $175,000). The Government will also close loopholes in competition law that (i) allow businesses to fix wages by making anti-competitive arrangements that cap a worker's pay and conditions, and (ii) use "no poach" agreements to block staff from being hired by competitors. The Government will consult on policy details, exemptions, penalties and transition arrangements and will also consult further on non-solicitation clauses for clients and co-workers, and non-compete clauses for high-income workers. The proposed reforms would take effect from 2027.
• National Competition Policy agreement: The Government has published the Intergovernmental Agreement on National Competition Policy which it signed with the states and territories last year, together with Notes and a Federal Funding Agreement Schedule. The Agreement is intended to maintain and promote consistent and complementary competition policies and laws. It is part of the Government's commitment to revitalise National Competition Policy (NCP). The Agreement introduces National Competition Principles and outlines the first steps of a 10-year reform program, supported by a $900 million National Productivity Fund. The Agreement also sets out new institutional arrangements including a key role for the National Competition Council in assessing implementation and payments. The first tranche of the NCP reforms focuses on easing the cost of living and regulatory burdens to benefit consumers, workers and businesses. The reforms are:
  • Zoning: Streamlining commercial planning and zoning systems to improve competition by encouraging firm entry and expansion and reducing business and regulatory costs.
  • Safety standards: Lowering barriers to the adoption of international and overseas standards in regulation. Fast tracking the recognition of equivalent or superior overseas product safety standards, rather than relying only on domestic standards, to deliver safer and cheaper products. Following this, working collaboratively to identify the priority sectors for the next phase of this reform.
  • Housing: Supporting modern methods of construction such as prefab and modular by levelling the regulatory playing field with traditional methods of construction, unlocking time and cost savings, overcoming labour shortages and boosting lagging construction productivity.
  • Labour mobility: A nationally consistent worker screening check to boost labour mobility for care workers.
  • "Right to repair": Developing broader rights to repair, including for agricultural products, which could reduce repair costs and waste by providing consumers and businesses more choice for repair services.

Further reform rounds will be informed by community consultation and the Productivity Commission’s five new inquiries. They include inquiries into:

• creating a more dynamic and resilient economy;
• building a skilled and adaptable workforce;
• harnessing data and digital technology;
• delivering quality care more efficiently; and
• investing in cheaper, cleaner energy and the net zero transformation.

• Bedding down the new merger control regime: The amendments to the Competition and Consumer Act 2010 (Cth) to give effect to the new mandatory and suspensory merger regime were passed late last year, with the new regime to come into force on 1 January 2026. While the framework of the new regime is enshrined in legislation, important aspects of the regime will be set by way of Determination by the Treasurer, including the all-important thresholds for determining whether an acquisition is notifiable. We expect the Government will finalise the draft Determination in the coming months following a consultation period prior to the election. We also expect the Government will be eager to closely monitor the implementation of the new regime to ensure that the thresholds have been set at a level that achieves the Government's policy objectives without creating undue delay in the new system (for example, if the thresholds capture significantly more mergers than anticipated). 
• Separating the Australian Energy Regulator from the ACCC: Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2024 was introduced into Parliament on 20 October 2024 and had passed the House but not the Senate before Parliament was prorogued. The bill proposes to separate the Australian Energy Regulator, the key enforcer of prohibitions under the National Electricity and Gas Laws and Rules, from the ACCC.
• Privilege review: The Attorney-General's Department has recently consulted on its Discussion Paper concerning the use of legal professional privilege (LPP) in regulatory investigations. The review aims to address concerns that some claims of privilege are being used to obstruct or frustrate investigations undertaken by Commonwealth agencies.

Competition law for the future

• Future of cash: the Government has consulted on a planned mandate for businesses to accept cash when selling essential items (with appropriate exemptions for small businesses). Consultation concluded 14 February 2025.
• Digital competition regime: Treasury recently consulted on a proposed new digital competition regime. The framework proposes that large platforms that are of significance would be designated by the Minister. Once designated, the platform must comply with broad obligations (that would apply to all designated entities) and service-specific obligations. The Government proposes to prioritise app marketplaces and ad tech services for service-specific obligations, with the potential to expand to more services in the future. Submissions closed 14 February 2025.
• AI and Consumer Law: Treasury conducted a consultation on AI and the ACL. Consultation concluded 12 November 2024.
• Review into small and medium-sized banks: The Treasurer asked the Council of Financial Regulators, in consultation with the ACCC, to examine the state of the small and medium-sized banking sector, with a focus on competition. The Issues Paper has been released and submissions were requested by 7 February 2025. 

Other announcements from the pre-election Budget

Other announcements from the Budget include:

• $3.9 million in 2025-26 for the ACCC to extend the National Electricity Market Inquiry and enforcement activities to protect consumer price outcomes and ensure electricity providers comply with their obligations;
• $38.8 million to the ACCC to boost its capability to ensure consumers get a "fair go" (including the $30 million in retail sector funding) and relief to reduce the costs of 30 essential products in 76 remote stores in First Nations communities;
• Working with states and territories, employers and unions through national competition policy to design a national licensing scheme for electrical occupations (see notes above regarding the National Competition Policy);
• $6.7 million to extend the operation of the National Anti-Scam Centre within the ACCC;
• $1.8 million in 2025-26 to continue the Measuring Broadband Australia program to assist consumers to make informed choices about broadband services;
• $2.9 million over three years from 2025-26 to assist fresh produce suppliers to understand and enforce their rights under the Food and Grocery Code to achieve more favourable commercial outcomes when negotiating with large grocery businesses.