THE House of Representatives Standing Committee on Economics will hear from a range of experts in competition law, experimental economics and market design on Thursday, May 18, via videoconference as part of the committee’s inquiry into promoting economic dynamism, competition and business formation.

Committee Chair, Daniel Mulino MP, said, “Innovative market designs have been shown to lead to life-changing, and even life-saving, results, so the committee is looking forward to hearing from pioneering economists in this field, including CalTech’s Professor Charlie Plott; UQ’s Professor Flavio Menezes and John Quiggin; and the University of Melbourne’s Centre for Market Design (Professors Simon Loertscher and David Byrne, and Gary Stoneham)."

Dr Mulino said market design could lead to increases in quality of life while simultaneously providing better value for a range of government spending areas.

“A local example is a bus transport pilot for students attending the Northern School of Autism," he said. "Students were travelling up to two hours each way and missing classes. The long travel times increased the students’ anxiety, which led to increased tension among families.

“Market design economists used algorithms to devise a scheme that determined the optimal travel route; the optimal vehicle size; and the prices at which services were provided within the parameters of a maximum travel time of one hour each way. The result was happier children and families for no additional cost to government.”

Dr Mulino said 'matching markets' was another type of market design “and a great example is the kidney exchange system, which has saved many more lives following its implementation”.

‘‘Market design theory can be applied to Australia’s economy in a variety of ways — whether that be designing markets that are fair and efficient, mechanisms that encourage new entrants into the market and prevent collusion, as well as developing platforms and marketplaces that facilitate these transactions," Dr Mulin said.

Market design can also substantially improve procurement outcomes. This could be of direct relevance to a number of quasi markets that have been established for the provision of social services.

The committee has looked at a number of issues relating to market concentration and competition issues more broadly.

Dr Mulino said competition and merger law was another complex area, and the committee was looking forward to hearing from former ACCC Chair Professor Allan Fels AO and other competition law experts, including Professor Deborah Healey (UNSW) and Dr Rhonda Smith (the University of Melbourne) on their experiences and ideas for ways to improve competition, foster economic dynamism and increase productivity.

More details about the inquiry and upcoming public hearings, including the full terms of reference, are available on the committee’s website.

Public hearing details

Date: Thursday 18 May
Time: 9.30am to 2.45pm AEST
via VIDEOCONFERENCE

The public hearing will be broadcast live at https://www.aph.gov.au/live.

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IN RESPONSE to the significant findings in a recent Auditor-General report, the Joint Committee of Public Accounts and Audit (JCPAA) has expanded the scope of its existing inquiry into the Defence Major Projects Report (MPR) to include a detailed examination of Defence's procurement of Hunter Class Frigates, one of the projects included in the MPR.

Chair of the JCPAA, Julian Hill MP, said, “This is a deeply concerning report by the Auditor-General into a critically important Defence project. Given the seriousness of the concerns the committee initiated this inquiry less than 24 hours after the tabling of the report, and has scheduled initial public hearings for Friday 19 May.”

The committee has also invited written submissions by Friday, June 15, 2023 and has requested submissions from the contractor, BAE Systems, as well as the British High Commission.

Further information about the inquiry, including the updated terms of reference, is available on the Committee website.

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THE Select Committee on Workforce Australia Employment Services will continue its inquiry at a public hearing in Canberra on Wednesday,  May 17, with a focus on First Nations peoples, people with disability, people from culturally and linguistically diverse backgrounds, and people with experience of the justice system.

The committee will hear from peak and representative bodies and government agencies, as well as from organisations representing the social enterprise and social ventures sector.

Committee Chair, Julian Hill MP, said, "It's a myth that all unemployed people are ready to work or able to do the jobs available. In fact, the data shows a giant mismatch between what employers are seeking and the enormously complex caseload of unemployed people including skills gaps, disabilities and illness.

"There is strong evidence that the current system has failed to invest in people and is not adapted to their diverse needs, backgrounds, and circumstances," he said.

"Trotting out stereotypes of ‘dole bludgers’ who should just ‘get a job’ will get a headline but won’t actually change anything. Long-term unemployment won’t be reduced without understanding the actual experiences of people.

"Listening is critical so we can make recommendations for a future employment services system that meets the needs of all Australians. Many people argue that social enterprises can contribute much more to helping the most disadvantaged jobseekers to remain engaged and prepare for employment in the open market’.

Further information about the inquiry, including Terms of Reference, future public hearings, published submissions and hearing transcripts, is available on the inquiry website.

Public hearing details

Date              17 May 2023
Time              8.45am – 3pm
Location      Committee Room 1R3, Parliament House, Canberra 
                          and by videoconference
Witnesses  Australian Council of Social Service
                          Economic Justice Australia
                          National Indigenous Australians Agency
                          Department of Employment and Workplace Relations
                          Coalition of Peaks
                          Settlement Council of Australia
                          Social Ventures Australia
                          Social Enterprise Australia
                          Justice Reform Initiative
                          Western Australian Association for Mental Health

The hearing will be live broadcast via the Parliament’s Watch, Read, Listen website.

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THE Australian Workers' Union has announced it will move a resolution at the upcoming ALP National Conference that would commit Labor to "a tax on unprocessed exports of critical minerals and establish a production subsidy scheme to foster domestic refining, processing and component manufacturing from critical minerals".

AWU national secretary Daniel Walton will outline the union's new position in a speech to the Sydney Institute on Wednesday night.

Mr Walton has also announced today that after nearly seven years at the helm he has decided to move on from his role as national secretary. Mr Walton will stay on for the next couple of months to help handover and oversee the leadership transition.

"It has been a singular honour to lead the AWU and I'm incredibly proud of what our union has achieved by working together since 2016," Mr Walton said.

"We helped save the steel industry from the brink of collapse. We've celebrated inspiring industrial wins. We've helped improve conditions for vulnerable workers like fruit pickers. And we've had a positive impact influencing the national agenda, especially on energy prices and a fair go for manufacturing.

"Along the way we've modernised our processes and structures and our union is now growing strongly. I'm so pleased the AWU is today in great shape to continue the mission it started in 1886: fighting for a fairer deal for Australian workers."

Mr Walton also announced the AWU would begin a push for a new tax on the export critical minerals – such as lithium, cobalt, and rare earths – which are vital for the manufacture of renewable energy technology. Mr Walton will argue that the current free-for-all approach of raw mineral exports to China is compromising the national interest.

"We need to apply a significant, punitive tax on the export of raw critical minerals from Australia. And we need the revenue raised to be pumped directly back into subsidies for the manufacturing and processing on critical minerals onshore," Mr Walton said.

"Australia has been blessed with the world's most enviable supply of critical minerals, but simply digging these precious material up and loading them on ships is an incredibly limited way to view the opportunity.

"We lack a substantial national capacity to turn our critical minerals, like lithium, into anything useful. We are relying on the idea that we can just export these raw minerals to China and they will send us back the components and goods we need.

"But if Australia wants to make batteries that rival China’s do we think China will be happy to keep selling us the components we need? Do we really want to assume that we can keep digging up critical minerals, shipping them to China for processing, and China will just keep shipping them back to us to manufacture batteries? It’s not a bet I’d feel confident about.

"If we continue to just ‘let the market rule’ it will mean only one thing: Australia’s raw materials will be shipped off to China and China will be the only player in our region with the sovereign capacity to turn them into anything useful.

"The US is using its raw economic heft through the Inflation Reduction Act to force investment in its manufacturing capacity through subsidies. Australia is not in the same position to call the shots like this. But what we do have is a big chunk of the world’s critical minerals within our sovereign soil.

"That’s our leverage and we would be absolute fools not to use it. We know demand from the world for our critical minerals is astronomical. We have the power to create the rules under which they can have them. Treasury doesn’t have access to enough carrots to encourage the change we need here. We need to get out the stick."

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