National Competition Policy Payments

The Australian Government makes National Competition Policy Payments (NCPPs) to the States for implementing National Competition Policy and related reforms. These reforms include a commitment to review legislation that restricts competition, apply competitive neutrality to government business activities and introduce specific reforms in electricity, gas, water and road transport.

NCPPs commenced in July 1997 with the first of three tranches of payments. The third tranche commenced in July 2001 at an annual level of $600 million in 1994-95 prices.

Each State’s NCPPs are subject to that State making satisfactory progress with the implementation of reform commitments. Prior to the scheduled payment of NCPPs in each year, the National Competition Council (NCC) assesses whether each State has met the specified conditions and provides recommendations for consideration by the Australian Government.

Out of an estimated maximum level of payments in 2003-04 of $759 million, the NCC recommended permanent deductions of $53.9 million and suspensions of $126.9 million. The NCC has indicated that it will recommend that suspensions be lifted or reduced and the release of suspended monies if and when jurisdictions sufficiently progress reform.

Table 16 shows estimates of NCPPs from 2003-04. Each State’s amount for 2003-04 reflects that permanent deductions and suspensions recommended by the NCC have been applied. The amounts reported below for 2004-05 and 2005-06 are the current estimates of each State’s maximum level of payment (that is, if no permanent deductions or suspensions apply).

Table 16: National Competition Policy Payments

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