Competitive Neutrality

With the objective of improving the efficiency and productivity of the Australian economy, all Australian governments have agreed to adopt a number of competition initiatives with respect to government business activities, known collectively as National Competition Policy. Competitive neutrality is a key element of this policy.

Competitive neutrality requires that public sector business activities which are in competition with the private sector should not have competitive advantages or disadvantages simply by virtue of their government ownership or control.

The advantages which government business activities may have include:

• full Commonwealth or State taxes or tax equivalent systems;
• debt guarantee fees directed towards offsetting the competitive advantages of government guarantees;
• procedural or regulatory requirements of the Commonwealth, the State or a local government on conditions equivalent to the conditions to which a competitor or potential competitor may be subject, including, for example, requirements about the protection of the environment and about planning and approval processes.

Competitive neutrality does not extend to competitive advantages or disadvantages arising from factors such as business size, skills, location or customer loyalty.

For more information on competitive neutrality and its administration by the Queensland Competition Authority see the Competitive Neutrality page.