The continuing debate in Australia about the future course of microeconomic reform and, in particular, National Competition Policy, reaffirms the importance of policy choices being made on the best available information on the likely benefits and costs, including adjustment and distribution consequences, according to a report released today by the Productivity Commission.

The Commission Research Paper Structural Adjustment - Key Policy Issues observes that this debate highlights two challenging issues for policy advisers and policy makers alike.

The first relates to the evaluative framework used for assessing reform proposals and in particular:

• the way in which the benefits, costs and distributional effects of a proposed policy change are assessed when deciding whether a particular reform is in the interest of the community, and
• the approach taken to handling policy trade-offs - in particular, those which can arise between efficiency and distributional objectives.

The second relates to the development of implementation strategies to give effect to policy changes, namely:

• the circumstances in which there is a role for additional measures, beyond the social security and tax systems and other generally available adjustment measures, to support the implementation of policy changes, and
• the relative merits of each of the additional measures as aids to the implementation of policy changes.

Chairman Gary Banks said 'This paper sets out the Commission's views on these important issues, drawing on its own research and experience over the course of many public inquiries, as well as input from leading policy analysts who participated in a Commission workshop. While some of the issues lend themselves to useful decision rules, many can only be resolved on a case-by-case basis - as part of the assessment process and implementation strategy for particular reforms'.