The McKell Institute Address with Dr Andrew Leigh | Unshackling Innovation: Rethinking Non-Compete Clauses for a Dynamic Economy

Competition is very much at the forefront of public discussion and thinking globally, driven partly by the rapid increase in cost-of-living pressures. It has a role in turning around sluggish productivity growth, boosting wages and getting better consumers outcomes.

In August 2023, the Albanese government established a Taskforce to run a two-year Competition Review to examine Australia’s policy settings to help build a more dynamic and productive economy. Among its broad remit, the Taskforce has been asked to look into non-competes and related clauses.

There is a growing body of international evidence of the increasing prevalence of these clauses, and the dampening impact they have on labour mobility and wages growth. Among lower paid workers these clauses simply seem unfair, and the literature shows that such clauses are likely to be stifling productivity and innovation.

We heard directly from the Assistant Minister for Competition, Charities and Treasury, Hon Dr Andrew Leigh, as he launched the Taskforce’s issues paper into non-compete clauses in employment contracts on 4 April 2024. The Minister highlighted research suggesting that such clauses are “harming job mobility, innovation and wages growth”, and affect workers at every level, with 1 in 5 Australian businesses using non-compete clauses for at least some of their employees in 2023.

Find more information on the issues paper and the Taskforce’s consultation process here.


4 April 2024


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