Speaking to ACM, the member for Fenner claimed reform of Australia's current competition policy framework is needed to ensure sectors are not monopolised by one or two big players.

He flagged fewer choices lead to poorer outcomes and would stifle innovation among business sectors.

"Banks, baby food, beer. Pick your industry, typically it's dominated by a couple of big players," he said.

"There's an increasing body of economic research which is saying that's bad for consumers, but potentially also bad for workers too."

Dr Leigh highlighted productivity growth within Australia had been subdued over the past decade and that can be partly contributed to a lack of competition.

The argument also lies in fewer competitive players, resulting in less choice and product development.

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Greater competition in markets can lead to better price and choice outcomes for consumers Dr Leigh said.

An example of this is the entry of Aldi into Australia which brought down food prices and created a third competitor to Coles and Woolworths.

"If you've got only a couple of firms dominating the market, they don't have much incentive to go out and create new products," he said.

"Instead, what they've got an intention to do is to build up their market share and get ready to buy a competitor."

Competition policy in Australia is largely regulated by the Australian Competition and Consumer Commission.

Dr Leigh has not yet landed on a possible draft policy framework on competition reform, but says what had been "crystallised" was the issue was a factor in fuelling the existing cost-of-living crisis occurring across the country.

"I've certainly crystallised on the problem and the fact that this is a big issue for both cost of living and productivity," he said.

"If you've got monopolists dominating industries, then everything is going to the profit bottom line.

"What I'd like to see is more of the benefits of economic growth going to consumers and workers."

Australia's cost-of-living constraints last week were brought back to the forefront after the latest consumer price index figures revealed annual inflation had shot up 6.1 per cent to the June quarter.

The Reserve Bank is expected on Tuesday to hike interest rates by 50 basis points due to surging inflation.