Competitive neutrality


Victoria is a party to the inter-governmental Competition Principles Agreement (CPA) which is one of three agreements that collectively underpins National Competition Policy.

A key function of the CPA is to set out signatories’ obligations with respect to competitive neutrality.

Competitive neutrality ensures that the significant business activities of publicly owned entities compete fairly in the market. It is about transparent cost identification and pricing in a way that removes advantages arising from public ownership.

Competitive neutrality under the CPA does not apply to non-business, non-profit activities of government, but it does apply to local government businesses.

The practical application of competitive neutrality in Victoria is set out in the Competitive Neutrality Policy - see related publications.

This policy outlines a process for lodgement and investigation of complaints against public entities.

The Commissioner for Better Regulationexternal-link.gif is responsible for the conduct of independent investigations of complaints.

As a signatory to the Competition and Infrastructure Reform Agreement (cl. 6) Competition and Infrastructure Reform Agreement, Victoria also reports annually to COAG on its compliance with some enhanced competitive neutrality principles.

These principles relate only to a small subset of government businesses, namely those ‘engaged in significant business activities in competition with the private sector’.