National Competition Policy analysis 2025

I am writing to request advice from the Productivity Commission (PC) to support continued pro-competitive reform under National Competition Policy (NCP).

As you know, in November 2024, the Commonwealth, state and territory treasurers agreed to a revitalised NCP, including a first tranche of priority reforms focused on easing cost-of-living pressures and reducing regulatory burden. This was supported by the Productivity Commission's work last year modelling the impacts of a revitalised NCP.

Treasurers are working through this year to develop other reforms that could be included under NCP. This includes the development of a national licence for electrical trades, as committed to in the 2025-26 Budget, and further work on adopting trusted overseas standards, already agreed as a priority reform in the NCP Federation Funding Agreement.

To support this work, I am requesting advice from the PC under s 17 of the Productivity Commission Act in the form of analysis and modelling for the following set of reforms:

• an occupational licensing scheme for electrical trades and other occupations that provides for labour mobility nationally, with impacts identified by occupation, and recognising that as the scheme relates to high-risk occupations, it will address the need for high standards, while cutting red tape, delays and multiple fees for trades people
• adopting international and overseas standards in regulatory frameworks, and harmonising regulated standards across Australia, in priority sectors identified by governments
• any other reform options identified as a priority by governments during the term of this study.

For each of these reforms, the PC should:

• detail implementation options (where relevant), and a recommended pathway to implement the reform and reasons for why this pathway is recommended relative to other implementation options
• provide an assessment of the economic and revenue impacts, including expected:
  • impacts on GDP, GSP, dynamic efficiency and other measures of economic progress and national prosperity
  • costs and benefits for Australian households, including:
    • estimated impacts on aggregate measures of incomes, prices and wages
    • distributional impacts, where possible, including by age, gender, income and education, and any other relevant demographic classification (including impacts on First Nations Australians)
    • other impacts on consumers that may be difficult to quantify, such as improved quality of service or wellbeing, or greater choice.
  • impacts on relevant industries and sectors. To the extent possible, this should include estimated impacts on sectoral output, prices, productivity, employment and growth
  • net additional revenue accruing to the Commonwealth, state, territory and local governments.

The PC should provide an interim report, including initial modelling outcomes, to the Government by 31 July 2025 and a final report by 31 October 2025. The reports should include an explanation of the methodology and assumptions and sensitivity analysis showing how results change under different assumptions. In preparing these reports, the PC should undertake consultation, including with the Australian, state and territory governments.

The Hon Jim Chalmers MP
Treasurer

[Received 27 March 2025]