Two supermarkets, two airlines, four banks: New report maps Australia’s corporate concentration

Australians own most of corporate Australia through superannuation and direct shareholdings, but many of the markets they depend on remain dominated by a small number of firms, according to new research examining ownership, profits, tax and competition across the nation’s largest companies.

The eleventh report in The Balance Sheet research series finds ten companies account for about 44 per cent of the Australian sharemarket, two airline groups carry 94 per cent of domestic passengers and Australia is more concentrated than the United States across 16 of 17 industry divisions.

The report, designed as a companion to the series’ small-business audit, follows the corporate economy from the share register to the tax office. Its central judgment is that the ownership of large Australian companies is less concerning than the lack of competition in several major industries.

“Australia has an increasingly concentrated corporate economy with a broadly democratic ownership base, and the public argument has spent twenty years worrying about the wrong half of that sentence,” the report says.

The corporate pyramid narrows sharply. Of Australia’s 2.73 million trading businesses, 5,322 employ 200 or more people. A separate group of 4,110 entities earning more than $100 million paid $95.7 billion in company tax in 2023-24, about two-thirds of the corporate total.

Tax payments are heavily concentrated even within that group. The 2.3 per cent of large entities earning more than $5 billion paid 59 per cent of large-company tax, while BHP paid $8.1 billion, the largest company tax bill in the country.

At the other end, 28 per cent of large entities paid no company tax. The Australian Taxation Office attributes most of those cases to accounting losses, carried-forward losses and available offsets rather than unlawful avoidance.

Ownership is more widely distributed than the public debate often suggests. Superannuation funds, including self-managed funds, hold an estimated 36 to 38 per cent of the sharemarket, while households own about 11 per cent directly. Foreign investors account for roughly one-third.

“Who owns them is a better question than it sounds,” the report says, while warning that beneficial ownership cannot always be measured accurately because share registers often record custodians and nominee companies rather than the investors behind them. About 61 per cent of Commonwealth Bank’s register, for example, is held through nominee accounts.

Official foreign-ownership registers also present a more measured picture than some public claims. Foreign interests hold 13 per cent of Australian farmland and 12.7 per cent of water entitlements. Chinese investors account for about 1.5 per cent of total foreign investment in Australia, while new Chinese investment flows are near record lows.

The report cautions that some of the most frequently repeated claims about foreign ownership of Australian mining rely on figures that are more than a decade old and highly sensitive to definition.

Australia pays roughly $90 billion more abroad each year in dividends and interest than it receives. But the financial relationship is increasingly two-way, with foreign investors holding about $5 trillion in Australian assets and Australian investors holding about $4.3 trillion overseas

Foreign capital still carries a measurable cost. Australia pays roughly $90 billion more abroad each year in dividends and interest than it receives. But the financial relationship is increasingly two-way, with foreign investors holding about $5 trillion in Australian assets and Australian investors holding about $4.3 trillion overseas. Both figures include debt and other financial claims as well as equity ownership.

The report says superannuation funds are directing a growing share of new investment offshore, meaning Australian retirement savings increasingly own foreign companies while overseas capital continues to own Australian assets.

Corporate profits remain large, but the way they are distributed is one of the paper’s central findings. Non-financial industries recorded about $629 billion in operating profit before tax in 2024-25. Separately, the big four banks reported a combined $29.8 billion in after-tax profit.

Listed companies paid approximately $91 billion in dividends during 2025 and completed a record $14 billion in share buybacks. The Australian dividend payout ratio is estimated to be roughly twice that of the United States.

“Corporate Australia distributes more and reinvests less than its major international peers,” the report finds, arguing that the pattern suits retirees and income-focused investors but sits alongside a business investment rate that remains weak by historical standards.

Market concentration provides the report’s strongest evidence. Woolworths and Coles account for about 67 per cent of grocery sales, the big four banks write roughly three-quarters of home loans, two pathology companies process about 80 per cent of tests and two brewers supply more than 85 per cent of beer.

Five fuel retailers account for more than 83 per cent of petrol sales, while Google handles about 94 per cent of internet searches.

Treasury research cited in the report estimates average corporate mark-ups have increased by about 6 per cent since the early 2000s. The rate at which new firms enter the economy has fallen from 14 per cent to 11 per cent, while job switching has also declined.

The report acknowledges the counter-case. Economy-wide concentration has risen only modestly on some measures, and Australia’s relatively small population, geographic distance and high infrastructure costs can reward scale.

But it argues national averages can conceal the industries that matter most to households.

“The average is arguable, the extremes are not, and the extremes are where Australians shop, fly, bank and insure,” the report says.

Competition policy has begun to respond. A mandatory merger notification system commenced on January 1, replacing the previous voluntary approach. The Australian Competition and Consumer Commission has also secured a $100 million penalty against Qantas, alongside customer remediation, while Coles was found liable over promotional discount claims.

The federal government is also moving to prohibit non-compete clauses for most workers, a measure intended to improve job mobility and make it easier for employees to move between firms or start competing businesses.

At the same time, an increasing share of large business activity is moving beyond the public sharemarket. More than 150 companies left the ASX in a single year, while Australia-focused private capital now manages about $139 billion. Private credit has expanded to roughly $200 billion, drawing regulatory concern over valuation practices, conflicts and disclosure.

The median ASX 100 chief executive realised $4.8 million in 2024-25, about 50 times the pay of a typical worker

The report warns that large businesses are increasingly moving into private ownership, where shareholders, journalists and regulators have less access to financial information.

On executive remuneration, Australia compares more favourably with other major economies. The median ASX 100 chief executive realised $4.8 million in 2024-25, about 50 times the pay of a typical worker.

That compares with executive-to-worker pay ratios near 280 to one in the United States and about 120 to one in Britain. The report credits some of the difference to Australia’s two-strikes rule, which allows shareholders to put company boards on notice after repeated votes against remuneration reports.

Artificial intelligence is likely to strengthen the advantages of scale, at least initially. Official data put AI adoption among large firms at about 35 per cent, compared with 11 to 12 per cent among small businesses.

The report cites a Westpac trial that measured a 46 per cent productivity improvement among engineers using AI assistants, Rio Tinto’s autonomous mining fleet and Woolworths’ automated distribution centres. It also points to Commonwealth Bank’s decision to reverse 45 voice-bot-related redundancies within weeks, acknowledging the decision had been an error.

Its assessment is that large firms currently hold the advantage because they have the data, capital, technical expertise and compliance systems needed to deploy AI across large workforces. Smaller businesses may gain access to similar tools, but there is little evidence so far that this has altered market shares.

The finding that links Papers 10 and 11 is a striking tax symmetry. Using the broad Taxation Office segment measures adopted across the two reports, the small-business population and the 4,110 large corporate entities each contribute roughly $92 billion to $96 billion in income tax, although their taxpayer structures differ.

One contribution is drawn from about 1.7 million sole-trader taxpayers and associated small-business entities. The other comes from a group small enough to fit inside a convention centre.

“That symmetry is the Australian private sector in a sentence,” the report says.

The paper concludes that large companies make a major contribution to employment, exports, taxation, wages and productivity. The concern is not that they are large, but that too few credible competitors operate in several industries used by Australians every day.

In keeping with the series format, the report identifies estimates and derived calculations, rates the confidence of its major findings and presents the strongest cases both for big business and against excessive concentration.

It also identifies several unresolved questions, including the absence of a public register that reveals beneficial corporate ownership and whether Australia’s preference for dividends and buybacks is reducing the investment needed to lift productivity.