Competition policies are laws that the government introduced that make it illegal to partake in any activity that reduced competition. They carry an aim of increasing competition between monopolies, reducing price discrimination,and prevents exclusive dealing (which occurs when firms set conditions that prevent other competitors from entering the market). A specific example of a competition policy is the National Competition Policy (1995). The NCP is an agreement between the Commonwealth and State governments to encourage microeconomic reform in monopolies such as electricity, gas and water. The actions of the NCP have resulted in increased competition between these monopolies, which has led to these monopolies implementing more efficient and productive production methods. This competitive neutrality has lead to lower prices for consumers, contributed to greater productivity which has led in continual rates of economic growth, greater business innovation, and has also helped meet some environmental goals such as efficient use of water. Thus it can be concluded that the NCP has had a positive impact on the Australian economy.
