NSW Treasury Competition policy

The 1995 Competition Principles Agreement was made between Australia’s Commonwealth, States and Territories Governments in 1995 (amended 2007). This agreement promotes consistent competition policies for all Australian businesses regardless of ownership. 

This original National Competition Policy (NCP) agreement set a guiding principle that legislation should not restrict competition unless it can be demonstrated that the benefits of the restriction to the community outweigh the costs, and the objectives can only be achieved by restricting competition.

Updated NCP agreements were signed on 29 November 2024 by Commonwealth, state and territory treasurers. There are two agreements that work together with the Competition and Consumer Act 2010 (Cth) to maintain and promote consistent and complimentary competition policies:

• The Intergovernmental Agreement (IGA) on National Competition Policy aims to build on the achievements of the 1995 National Competition Policy agreements. It sets out a framework for nationally harmonious competition laws and revitalised NCP principles.
• The IGA is accompanied by agreement to a 10-year reform program in a Federal Funding Agreement (FFA) schedule. Following the example of the first NCP, NSW will share in the economic benefits of competition-enhancing reforms that it implements, supported by the Commonwealth Government’s $900 million National Productivity Fund, and overseen by a new National Competition Council.
• An updated FFA schedule was signed by all Treasurers at the end of 2025. This update introduces additional reform streams (and associated funding arrangements), and makes minor updates to the reporting and assessment processes. 

NSW Government agencies should contact NSW Treasury for guidance on applying the principles of the updated IGA.

The National Competition Principles provide the foundation for how the NSW Government can promote, remove impediments to, and avoid restricting competition. There are seven principles:

1. Harness the benefits of competition: foster innovation, put downward pressure on prices and widen consumer choice by ensuring major government decisions do not unnecessarily restrict competition, and consider reforms to actively promote competition.
2. Consumer empowerment: examine reforms to empower consumers to reap the benefits of competition - for instance, by making it easier for consumers to switch between services.
3. Reform of public monopolies, including privatisation should not harm consumers: before leasing, privatising or restructuring public monopolies, put in place processes to avoid entrenching the monopoly's market power and causing consumer harm.
4. Competitive neutrality: remove any net competitive advantages arising from a government business' public sector ownership so that government business activities compete fairly with the private sector and do not unnecessarily crowd out private competitors.
5. Single national market: remove barriers to trade, operating businesses and working across state and territory workers, to lower costs and improve choice for consumers.
6. Efficient government pricing: promote efficient and transparent pricing practices for goods and services provided by governments, to drive better long-term outcomes for consumers. This includes accounting for external social benefits (such as health improvements, decreases to congestion and knowledge spill overs) or costs (such as pollution).
7. Access regimes: promote competition in markets upstream and downstream of significant monopoly infrastructure by maintaining frameworks to allow businesses access to significant monopoly infrastructure at reasonable terms and prices. 

This ​​​​​​​​timetable (PDF 134.57KB) sets out the NSW Government's plans to implement the National Competition Principles. The full description of each principle is set out in the Intergovernmental Agreement on National Competition Policy.

The NSW Government promotes competitive outcomes through its competitive neutrality and procurement policies.

The competitive neutrality principles aim to promote efficient competition between public and private businesses. Specifically, they seek to ensure that government businesses do not enjoy competitive advantages over their private-sector competitors by virtue of their public-sector ownership.

Read the NSW Government’s ‘Policy Statement on the Application of Competitive Neutrality’.

A review of the NSW Government’s competitive neutrality policies and processes was recommended in the 2021 NSW Productivity Commission White Paper. The NSW Government has accepted this recommendation and tasked the NSW Independent Pricing and Regulatory Tribunal (IPART) with undertaking the review. Further details are available on the IPART website. 

The Government has assigned to IPART partial responsibility for investigating and reporting on Competitive Neutrality complaints. Read more about this on the IPART website.

State Governments are responsible for procuring goods and services on behalf of the public. Policies that create distortions in competitive markets will detract from productivity growth. The promotion of competition is a key consideration in the procurement activities of NSW Government agencies.

The NSW Government Procurement Policy Framework (the Policy) sets out the policy and operating framework for the NSW public sector procurement system, and provides a single source of guidance on the rules for procurement.

As outlined in the Policy (see page 10 of the framework document), a key objective of the NSW Government is to improve procurement outcomes through fair and open competition, as well as facilitating access to government procurement business by the private sector, especially small, medium, and regional-based enterprises.

Regulation can create barriers to entry and restrict competition. It can also help to foster healthy markets, by ensuring market participants are adequately protected and compete on a level playing field. Effective regulatory policy carefully considers and balances these, and other, costs and benefits.

NSW Treasury has responsibility for regulatory policy in NSW. The NSW Productivity and Equality Commission website provides further information for assessing the impacts of regulation on competition.

NSW Government agencies can seek advice on competition and regulatory policy matters by emailing BetterRegulation@treasury.nsw.gov.au.