How the treasurer’s merger reforms end up working in practice will be known in just a few years. Whether they achieve their economic objective will not be known for decades.
Already a subscriber?It will be many years before we know whether Treasurer Jim Chalmers’ overhaul of merger approvals achieves its stated objective.
This, in turn, has resulted in reduced competition, which has allowed companies to lift profit margins by “more than 2 percentage points over recent decades”. Chalmers’ rejection of the Australian Competition and Consumer Commission’s push to create a regime that would, in effect, reject deals unless parties can convince the regulator it would not substantially lessen competition, will be welcomed by business and lawyers.
The Business Council of Australia labelled it “redundant and potentially problematic”, while suggesting if a merger creates, strengthens or entrenches substantial market power, it would already be covered.pointed to it as a key development to help the watchdog block larger players buying up smaller competitors, particularly when combined with the removal of the Federal Court as a dispute forum.
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