Steven Ciobo (Moncrieff, Liberal Party) Share this | Hansard source

Mr Deputy Speaker, I join with you and associate myself with your remarks. I am pleased to speak today to the Trade Practices Amendment (National Access Regime) Bill 2005, and I will comment about the remarks that the member for Perth made in his contribution to this debate. It is important to recognise that the national access regime plays a crucial role in our national economy. Many years ago, the roll-out of cable and broadband which took place, most notably across the suburbs of Sydney and Melbourne, saw a duplication of the type of infrastructure that, potentially, we could be talking about with respect to this bill.

Whilst a competitive environment in an open economy such as Australia is something to be cherished and fostered because it typically leads to the most optimal economic outcomes, it can also be said that an overly competitive environment, especially where economic efficiencies can be gained from natural or near natural monopolies, would result in suboptimal economic outcomes. Recognising this, the principle of a national access regime was introduced as part of the Hilmer recommendations in the early to mid-1990s.

Various speakers in this debate have highlighted those principles contained in the competition principles agreement that was reached between the federal and state governments at COAG. At that point, it was generally regarded that a national access regime would provide the kind of framework that would lead to good economic outcomes that were in consumers’ interests where natural monopolies existed or natural monopoly characteristics existed in a particular market. The key, of course, is to differentiate between those markets in which it is important to protect a natural monopoly because it provides optimal economic outcomes and those markets in which monopolies ought not be protected because they lead to, for example, price gouging or other economic inefficiencies leading to suboptimal economic outcomes.

In that regard, I am pleased that the government is taking steps to address some of the features that have emerged as a consequence of a number of reviews of the operation of the national access regime. We know that the Trade Practices Act is designed to promote competition in markets—that is a positive thing. Part IIIA of the Trade Practices Act puts in place a legal regime to facilitate user access to services provided by essential facilities that operate as natural monopolies—for example, railway lines, gas pipelines and electricity and water infrastructure.

My constituents may wonder what is the benefit and purpose of a national access regime. How does it apply to their daily lives? For all Australians the efficient utilisation of not only capital but, importantly, the goods or services produced in natural monopoly markets does have an impact, for example, on the prices that we pay for some of these services. Electricity, water and gas are all common services and it is important that we regulate them correctly.

In recent years, we have also seen the great economic stock that Australia has as a result of being the world’s best producer in primary industry and energy markets. In particular, in Australia’s west, in Queensland and in parts of Central Australia we see very large amounts of our natural resources being successfully exploited and sold to foreign markets, all of which has helped to contribute to the long period of economic growth and sunshine that Australia has enjoyed. When one considers that there are many billions of dollars worth of capital tied up in sunk costs to exploit this type of energy and these natural resources, it is absolutely crucial that the respective governments of the day, Commonwealth and state, have the correct policy settings if they are to continue to provide the incentive necessary to create a commercial return for those companies that sink those billions of dollars of capital.

I heard the member for Perth making various comments about his concern over what he alleges are delays by the government in the introduction of this bill. I also heard him speak of a lack of a uniform approach with respect to access, as well as a number of other aspersions that he cast on the operation of this bill. In fact, I think the line that the member for Perth used was that, after five long years of hurt being felt by the national economy, he was pleased to see this bill before the House. I am fascinated that apparently five long years of harm has been done to the national economy, because the last time I looked at the figures the Australian economy was in better shape than it has been for decades. Under the stewardship of the Treasurer, Peter Costello, we have seen the Australian economy continue to move forward with the investment of record amounts of capital in new infrastructure projects. We have seen record prices achieved overseas for Australia’s natural resources. This has been done under the existing access regime—an access regime, I might add, which was introduced by the Australian Labor Party.

In stark contrast, I turn the parliament’s attention to the operation in Queensland of a separate, state based access regime, which operates under the Queensland Competition Authority Act. In particular, the Queensland Competition Authority, for a period of slightly less than two years, was looking at the issue of how to deal with a coal port in Queensland at which we were getting an exceptionally poor level of service. This is the kind of infrastructure that is crucial to our national economy, crucial to maintaining export growth and crucial to generating wealth for this country. Yet, under a state Labor government, we saw that infrastructure bogged down because the Queensland Competition Authority was unable expeditiously to make an informed decision which would lead to the kind of certainty that was required by the companies involved.

It is important that governments act, but it is also important that governments get the policy settings right, and this bill does get those settings right. In September 2005, the Senate Economics Legislation Committee recommended that the bill be amended so that the pricing principles would be included in the bill itself rather than implemented through a subordinate legislative instrument. The government has accepted this recommendation, and I too am pleased that this took place. Effectively, the amendments as a result of the acceptance of this recommendation are that a minister must, by legislative instrument, determine principles relating to the price of access to a service and that the bill should set out the pricing principles relating to the price of access to a service. The ACCC will be required to have regard to the pricing principles when making an arbitration determination and when deciding whether to accept an access undertaking or access code. The fact that the pricing principles are contained in the statute rather than in subordinate legislation is, as I said, a step in the right direction, and I am pleased that the Australian Labor Party acknowledges that.

Access regimes, by their very nature, are complex. An access regime typically involves the utilisation of infrastructure worth hundreds of millions of dollars, if not billions of dollars, and the companies involved are playing a high-stakes game. In that regard, it is little wonder that many of the existing infrastructure projects that the Australian economy is enjoying the use of are subject to often protracted negotiations between the various parties when it comes to an access regime. It almost goes without saying that it is in the interests of the parties to achieve as expeditious a resolution on an access regime as possible. It goes without saying that, where there is clearly a benefit to be gained through the utilisation of existing or forward-looking infrastructure that is to be introduced into Australia, and where there is capacity that allows for one or more companies to utilise that infrastructure, there is something to be gained by companies working together.

It has been my observation that this has occurred on many occasions. In fact, there have been a number of instances in which the national access regime has worked very well. There are, of course, those instances in which, when it comes to the national access regime, a stakeholder does not wish to see access granted to its infrastructure. And it is typically in these instances that we see the protracted kinds of negotiations and indeed the protracted arbitration that often takes place. Where an effective access regime can be put in place, or access undertakings provided, we have seen that utilised. But we are now dealing with, for example, infrastructure under a declared service. That declared service, as others have mentioned in this debate, provides for negotiation and subsequently arbitration by the ACCC where resolution cannot be achieved. It is these most difficult aspects of negotiations on access regimes for the piece of infrastructure concerned that often capture the media headlines and the interest of the business community, because any big business with a piece of infrastructure that is potentially subject to being a declared service places a lot of stock in the judgments made and decisions taken by the ACCC as part of the arbitration process.

The fact that we see the incorporation of pricing principles into legislation that is not necessarily industry specific makes an important contribution and provides indicators to the various stakeholders and potential new market entrants as to the kinds of considerations that the ACCC will take into account with respect to that piece of infrastructure or indeed to a piece of infrastructure that may potentially be subject to being a declared service. In this regard, pricing principles must be transparent. I am pleased that, through the amendments the government has agreed to, we will see that transparency contained in the bill.

Pricing principles are important also because it is very clear that, for those who are engaged in industry, the economic powerhouse that drives this country and creates wealth—the infrastructure that we see particularly in Western Australia, Central Australia and along the eastern seaboard—is the kind of infrastructure for which owners want to know that a commercial return will be supplied. Owners are of course seeking optimal economic result for the kind of capital that is sunk into major infrastructure projects. In this regard, the incorporation of the pricing principles helps to provide the certainty that is required.

In many respects, despite the protests of the member for Perth and other members opposite, many aspects of access undertakings have proved to be very successful. Access undertakings and effective access regimes do work effectively, and we have seen that on many occasions. So it is a bit false for members opposite to claim that where you have protracted negotiations under a declared service it is somehow an indication of the inappropriateness of the national access regime—principally because, by virtue of the fact that if an effective access regime were not put in place or if access undertakings were not provided, it almost goes without saying that that particular piece of infrastructure was always going to be the subject of negotiation and indeed arbitration. So in that respect, this bill is a positive step forward. The pricing principles are included in the legislation, and that is a positive step forward. I am very pleased to commend the bill to the House today.

See this speech in context