If this week’s inflation report is anything to go by, our cost-of-living crisis could run through Christmas and beyond. Prices are up 3.8 per cent from a year ago and rising across the board, from travel and jewellery to medical fees and takeaway food.

The result underscores the point made in Policy Institute Australia’s new report, Match Fit, that Australia’s high cost of living is at risk of becoming entrenched. To break the back of inflation, and put Australians back in control of their lives, we argue it is time to unleash the one force most able to directly and sustainably drive prices down: competition.

Illustration by Simon LetchCredit:

Competition tackles inflation because it forces firms to offer customers more goods and services with better quality at lower prices. When Australians have choice, and the power to exercise it, prices are kept in check.

We know competition works – because groceries at Coles and Woolworths cost less when an Aldi is nearby, because petrol prices are lower around a Costco discount petrol station, and because taxi services improved across the board when Uber came to town.

Competition worked with the introduction of Netflix and Binge, so that $20 now buys instant access to more than 17,000 movies as against three titles borrowed overnight from the local video store. It........

© The Age