“Growth in total market concentration – measured by the market share of the top four businesses in industry sectors – has nearly doubled, from 1.7 per cent in 2010 to almost 3 per cent in 2020, according to the e61 Institute.

“Around one-third of industries, including mining, utilities and retail trade, saw increased concentration of more than 5 per cent, more than offsetting the quarter of industries which saw a decrease,” the Treasurer stated.

“And the rate of entry of new companies is falling, as the average age of businesses rise. Over recent decades, the mark‑ups that businesses apply to goods and services have increased by more than 2 percentage points. Reforms that address the decline in competition can deliver big economic benefits.”

Merger reform, added the Treasurer, is the next step in this direction – and he noted that new research from the Competition Taskforce has shown that merger activity by large firms in Australia has risen over the last decade. While most mergers are positive, some can “cause serious economic harm”.

“It’s clear Australia’s approach to mergers is no longer fit for purpose. Australia is one of only three OECD countries that doesn’t require compulsory notification of mergers,” Chalmers said.

Australia’s current merger regime does not require merger parties to notify the Australian Competition and Consumer Commission (ACCC) of proposed acquisitions or to wait for ACCC clearance before proceeding.

The proposed reforms include introducing a mandatory notification requirement for merger deals above certain thresholds and a prohibition on merger transactions proceeding without receiving a determination from the ACCC or tribunal.

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“Last year, over 1,400 mergers were recorded, at a value of around $300 billion. And the ACCC looked at an average of 330 mergers a year over the past decade – around a quarter of the total. But we don’t know whether these are the right 330, or the mergers with the greatest potential to cause harm.

“When the ACCC does assess mergers, the current approach is not transparent for businesses or the community. And clearance can be too slow and cause expensive delays for some businesses as they wait. Having three current paths to merger approval is inefficient and can mean some businesses game the system to effectively avoid proper assessment,” Chalmers added.

“And certain kinds of acquisitions – serial acquisitions by large firms and acquisitions that entrench the power of market leaders – are not adequately captured by our competition laws. The changes I announce today are the biggest reforms to merger settings in almost 50 years.”

A “new system” will begin on 1 January 2026 and will consist of a more transparent, faster, stronger, simpler and more targeted merger regime.

Mergers above certain monetary thresholds will need to be approved by the ACCC – and the Treasurer promised that most mergers “will now be approved within 30 working days, where the ACCC is satisfied a merger poses no threat to competition”.

“Cost recovery fees will be introduced so the ACCC is sustainably resourced to meet the timelines, expectations and requirements we are establishing. Fees will be scaled to reflect complexity and risk, with higher risk mergers facing higher fees.

“Treasury expects fees to be between $50,000 to $100,000 for most mergers, but small businesses will be exempt. Along with additional resourcing, the implementation of the new regime will require a new set of skills at the ACCC,” Chalmers continued.

“The more comprehensive examination of mergers that a mandatory system creates will provide the ACCC with more evidence to build the case for and against proposed mergers.”

The announcement has been welcomed by the ACCC – and chair Gina Cass-Gottlieb said the proposed reforms follow submissions from the regulator calling for a fit-for-purpose merger regime to better identify and prevent anti-competitive transactions.

“We welcome the Treasurer’s announcement today that the government will move to strengthen Australia’s merger laws, which will benefit Australian consumers and businesses of all sizes, as well as the wider economy,” Cass-Gottlieb said.

“Higher prices, less choice and less innovation can result from weakened competition. Stronger merger laws are critical to ensure anti-competitive mergers do not proceed.”

“These proposed changes are significant and will reinforce public confidence in Australia’s competition laws.”