The Albanese Government has unveiled draft legislation aimed at reforming Australia's merger rules.

The government claims the changes will enhance competition and productivity within the economy. 

However, the proposed reforms, set to begin on 1 January 2026, have sparked a debate on their actual impact on the merger approval process and market competition.

The government says that the new laws will streamline and expedite merger approvals, strengthen regulatory powers, and improve transparency. 

It is seeking to enable quicker approvals for mergers deemed in the national interest, allowing the Australian Competition and Consumer Commission (ACCC) to focus on potentially harmful transactions. 

The government argues this will lead to “higher quality choices for consumers and fairer prices” while boosting innovation and productivity.

The effectiveness of these changes remains to be seen. 

While the government promotes the reforms as a means to simplify the merger process, there are concerns that the focus on speeding up approvals might overshadow the importance of thorough scrutiny. 

Strengthening the ACCC's powers to identify and scrutinise risky transactions is likely to be a positive step, but its implementation will be crucial in ensuring market power does not become overly concentrated, to the detriment of consumers.

The draft legislation's consultation period is open until 13 August 2024, allowing stakeholders to provide feedback. 

Andrea Gomes da Silva has been appointed as an independent expert advisor to guide the ACCC and Treasury on implementing the new system. 

Ms Gomes da Silva, with her experience at the United Kingdom Competition and Markets Authority (CMA), is set to provide insights on ACCC capabilities, practices, and resourcing.

Treasury will further consult on notification thresholds later this year, adding another layer of oversight to the reform process. 

The government says these reforms are part of a broader economic strategy aimed at alleviating the cost of living pressures while fostering economic growth.