Government aims to boost economic competition with landmark reforms
The Albanese government has overhauled Australia’s merger rules with the introduction of landmark reforms to parliament.
Treasurer Jim Chalmers said the new merger reforms introduced into Parliament represent a big step towards boosting competition and productivity in the economy.
“This legislative package is the biggest reform to Australia’s merger settings in almost 50 years,” he said.
“It will create a regime that more efficiently and effectively targets mergers that are anti-competitive, while allowing mergers that are pro-competitive to proceed faster.”
According to Chalmers, The Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024 delivered the merger reforms announced in April.
The reforms were anticipated to make the merger approval system faster, stronger, simpler, target specific and more transparent.
Subject to the passage of legislation, the new system would be effective 1 January 2026, with businesses able to make voluntary notifications under the new regime from 1 July 2025.
Modernising the country’s merger system was a priority for the Albanese government, which the bill was set to achieve.
Chalmers said this would make it easier for most mergers to be approved quickly, so the Australian Competition and Consumer Commission (ACCC) could focus on the minority that raised competition concerns.
“We understand that most mergers have genuine economic benefits and are an important feature of any healthy, open financial system but some mergers can cause serious economic harm,” Chalmers said.
“Under the new regime, there will be a mandatory notification system for mergers above certain thresholds and the ACCC will be the decision maker on approvals.”
Within the bill, the key thresholds include any merger being looked at by the ACCC if above $200 million and if the merger involves a large business with a combined Australian turnover more than $500 million.
The third key threshold targets serious acquisitions and all mergers by businesses with combined Australian turnover of more than $200 million, where the cumulative Australian turnover from acquisitions in the same or substitutable goods or services over a three-year period is at least $50 million, or $10 million if a large business is involved.
The thresholds, set to be reviewed every 12 months, would allow the ACCC to focus its efforts on the mergers “that really matter.”
Land acquisitions involving residential property and certain commercial property acquisitions were not included within the thresholds.
The legislation would also allow flexibility for the Treasurer, as the thresholds can be adjusted and calibrated to respond to evidence-based ACCC concerns about high-risk mergers.
This action was taken by the government following recent concerning activity in the supermarket sector.
Chalmers said the government intended to use this designation power to get the competition regulator to review purchases of an interest above 20 per cent in an unlisted or private company, if one of the companies involved in the deal has turnover more than $200 million.
“We consulted widely on these thresholds and the legislation, including with consumers, businesses, the agriculture sector, legal practitioners, investors, academics, and industry associations,” he said.
“This legislation will improve competition in our economy, which means higher quality choices for consumers and fairer prices.”
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