The head of Australia’s competition watchdog has backed big reforms from a recent review.

The proposed Harper competition reforms can boost national prosperity and help turn the tables on many years of past poor infrastructure policies and practices, ACCC Chairman Rod Sims has told an Infrastructure Partnerships Australia conference in Sydney.

“We see policies that prevent competition in coastal and liner shipping, inadequate dedicated rail freight paths, a poor policy framework for road investment, limits on supply and competition in urban water, costly past rules for energy network regulation, limits on infrastructure competition in many areas, and I could go on,” Mr Sims said.

“Into this environment comes the Harper Review of competition policy. It is extremely timely, and has important recommendations on many fronts.”

Mr Sims said there are a number of key areas which will do further harm to Australia’s future productivity and prosperity if not addressed, but claimed there is a way ahead that is “entirely doable and saleable” with two steps.

“First, the revenue raised from road use should flow directly to the entities that build and maintain our roads.”

“Second, the level of these road user charges should be set based on the need for future road expenditure.”

But Sims was keen to warn against privatising infrastructure assets with the wrong objective in mind.

He said governments should avoid a situation where immediate financial benefit comes at a cost of an effective ‘tax’ on future generations.

“Some of Australia’s key infrastructure assets, including significant ports and railways, are likely to be privatised in the coming years.

“The value of the assets to be sold is likely to be high and governments have begun announcing projects they will invest in as a result of the profits generated from these privatisations.”

“This creates a strong incentive for governments to structure their privatisation processes in a manner that maximises the sale price they receive. In order to maximise sale prices, governments will have little incentive to closely examine whether the market structure and regulatory arrangements that will apply post-privatisation are conducive to competition and appropriate outcomes,” Mr Sims said.

The full speech is available here.