Chris Hayes (Werriwa, Australian Labor Party) Share this | Hansard source

It is right that the member of the member for Cook refers to the issue of pricing principles and the significance of pricing principles when it comes to investment in infrastructure. For those of us who have been in the House a little longer than the member for Cook, I do recall back in 2006 when I spoke on the Trade Practices Amendment (National Access Regime) Bill. In that piece of legislation that passed the House under the Howard government I indicated then that the government had been drawn kicking and screaming through its pig-headedness to implement a measure of pricing principles into that legislation. That was something they were most reluctant to do. So when we are talking about the champions of investing in infrastructure, when it came down to the issues of the National Access Regime, clearly, whilst the words were there, it took the vibrancy of an opposition committed to infrastructure reform to drag the Howard government kicking and screaming into addressing pricing principles in terms of the National Access Regime. I do, however, agree with the member for Cook in his comment about Michael Deegan, the head of Infrastructure Australia. Apart from being a good friend, I actually know Michael Deegan to be very diligent, very competent and a person who is absolutely dedicated to the task at hand.

The national infrastructure access regime was introduced in 1995, following a recommendation of the Hilmer committee. It is an important piece of economic regulation. It is a key component of Australia’s regulatory framework promoting the development of competition and efficient markets. When we are talking about infrastructure we are talking about the veins and the arteries of our economy. Infrastructure such as roads, ports, railways, airports, power lines and gas mains are certainly all significant public commodities. All go to adding to the economic infrastructure of the nation. Infrastructure is a critical source of economic competitiveness. It represents the basic building blocks for our economy, and efficient management of our infrastructure is crucial to the long-term success of our economic progress.

The National Access Regime establishes the circumstances under which access to nationally significant infrastructure can be provided. There are three pathways to access under the National Access Regime. Firstly, the access seeker may apply for declaration of an infrastructure service; secondly, a certified state or territory infrastructure access regime may provide for access; and, thirdly, the provider of an infrastructure facility may have an access undertaking that sets out the terms and conditions for access.

A service may be declared where: access would promote a material increase in competition in another market; it would be uneconomical to develop another piece of infrastructure—in other words, to duplicate infrastructure; the facility is of national significance; access is not the subject of an effective state or territory access regime; access can be provided without undue risk to human health and safety; and where access would not be contrary to the public interest. It is important to note that declarations do not provide a right of access but rather a right to arbitration by the Australian Competition and Consumer Commission if the commercial negotiations fail. I think that was the significance of the comment the member for Cook made when he referred to the issue of access to rail lines in the iron ore town up in the Pilbara. Although this regulation framework has proven to be a good model to date, infrastructure owners and access seekers have argued that processes under the access regimes are too lengthy and become too costly.

Some owners of nationally significant infrastructure have expressed concern that the Access Regime is generating regulatory risk that may hinder investment in essential pieces of infrastructure. That was the point I made in a speech in February 2006 when we were discussing the importance of incorporating pricing principles in the National Access Regime. People are not about to invest without certainty, and bear in mind that resources for investments in these pieces of infrastructure will ordinarily be raised publicly, whether through direct investment or through the share market. These things require certainty. Therefore, we need not only efficient operations but also efficient investment in these pieces of infrastructure in the first place. That was the point we made in the debate on the initial bill, in 2005, in terms of the government’s reluctance at that stage to incorporate pricing principles.

Although this regulation framework has proven to be a good model to date, people are still concerned about the certainty with which they would raise investment dollars in order to construct the infrastructure that falls under the National Access Regime. Some owners of nationally significant infrastructure have expressed concerns about what they want and each of those concerns has come down to certainty. They want to know whether, if they commit resources to invest in a piece of infrastructure, that piece of infrastructure is likely to be declared at some stage. They want to know whether it will be a matter that is open to competition—as in the case of the Pilbara rail line, operated by BHP—or, alternatively, it will be a matter of access, such as the national gas mains out of Moomba, for instance. The provider of these facilities needs to have significant knowledge as to whether they will be subject to the regime.

Therefore, this bill is designed to deliver a measure of certainty to those who are going to invest in the development of these pieces of infrastructure so that they can, at least, be mindful of two things: firstly, whether the infrastructure will fall under the regime and, secondly, how they will set the price for those who want to access those pieces of nationally important infrastructure.

Infrastructure is a critical component of the government’s productivity agenda. It is certainly significant in terms of micro-economic reform. Delays and cost in decision making under the Access Regime may have a clear and adverse impact on, firstly, the construction of the infrastructure and, in turn, on economic growth and national productivity.

This bill will provide regulatory certainty and will streamline administrative processes under the National Access Regime. The reforms in the bill drew on the recommendations of COAG, the Productivity Commission, the National Competition Council, the Australian Competition and Consumer Commission and the Australian Competition Tribunal. Firstly, the bill will establish time limits for decision making about third-party access to infrastructure and it will limit reviews of those decisions to information provided to the initial decision maker. The bill will also provide greater regulatory certainty for potential investors in new infrastructure. As I said, this legislation is designed to overcome what is considered to be an impediment to investment—that is, the lack of certainty when it comes to the construction of major pieces of infrastructure in the country.

Under the existing Access Regime, a private investor who is, at least, considering building an infrastructure facility cannot determine with any degree of certainty whether or not the service to be provided will be either declared or declarable. This bill provides an upfront decision to be made by the designated minister. If the minister decides that the service provided would not meet the test of declaration under the Access Regime then that particular project or piece of infrastructure cannot be declared for a least another 20 years. That provides the constructor or the investor in the infrastructure with that degree of certainty. In other words, access to that piece of infrastructure cannot be then contested for 20 years.

The bill also improves regulatory certainty by enabling a service provider to submit to the ACCC an access undertaking which includes one or more terms that will apply for a certain period beyond the expiry date of the undertaking. When important variables are fixed, service providers and access seekers can more easily determine the terms and conditions under which access arrangements or agreements can be set. This bill contains a number of modest but important measures to increase regulatory certainty and improve decision-making processes under the National Access Regime, helping to support infrastructure investment that is needed to underpin the economic growth and national productivity of this country.

We on this side of the House are, quite frankly, proud of our position in putting infrastructure investment at the forefront of our economic credentials. This government set up Infrastructure Australia. This government set up an inventory of economic-development-generating infrastructure. In terms of providing attention to infrastructure, only the Rudd Labor government has taken up the cudgels since the Hawke-Keating days.

As a matter of fact, it was the micro-economic reforms of the Hawke and Keating governments that led to the strong period of growth that the Howard government inherited and squandered over a period 12 years by its failure to invest in infrastructure. The efficient operation of roads, rail, ports, airports and electricity and gas facilities is essential for lowering the input costs of Australian businesses, which often results in Australian businesses being more competitive on a world scale and in reducing prices for domestic consumers. These are things that were started in the period of the Hawke and Keating governments. They were the things that the Howard government inherited back in 1996. Along with education and health, infrastructure was one of the other things that the Howard government refused to invest in. It refused to back the Australian people in terms of their future.

We on this side of politics are determined to keep Australia on a competitive international footing. We have one of the few economies that did not go into recession recently. Of all the OECD’s 30 mainstream economies, ours did not go into recession. Among those world economies, our economy is now leading the way in terms of positive growth. Part of that is because of the attention that we are now giving to investment in infrastructure. That is not something on which we are going to rest on our laurels; that is something on which we need to be ever so vigilant. We must ensure the efficiency of our ports and our rail mechanisms.

My electorate is in the south-west of Sydney, and I have the Australian Rail Track Corporation, or ARTC, constructing their freight line through the south-west of Sydney at the moment. That is going to establish the south-west of Sydney as an inland port. It is going to be significant for generating thousands upon thousands of jobs as advanced intermodal terminals are built. It will mean that areas from Eastern Creek through to Picton will be the beneficiaries of being an inland port. Containers will be accessed from Port Botany and will be able to be accessed through each of those locations. That will stimulate new growth and in fact new industries, not only because of the access provided by that freight rail but, in addition, because of access to the road infrastructure, such as the M7 and the widened F5. These certainly are matters which come within the purview of this government in terms of its attention to providing efficient infrastructure management for this country.

The Rudd Labor government has been committed to the F5 widening, a $140 million project that was established. We committed to that road widening when we were in opposition. It was actually opposed by the other side of politics. They did not think we needed it. I think the local member argued that instead of widening the road we could have some form of overhead conveyance or something else. This was not a project that was taken on to limit the road traffic crawl in mornings and afternoons in the south-west of Sydney. This was very much centred on having the appropriate pieces of infrastructure, including road infrastructure, to establish the south-west of Sydney as an inland port, whereby organisations and companies that would benefit by using the rail network would also have access to the main southern highway to distribute their goods and services. That was certainly a significant piece of infrastructure that was committed to by the Rudd government prior to our taking office. As I have said, that is something that was opposed by the other side but on which we demonstrated foresight as to what was necessary to kick-start industry efficiency and drive economic growth throughout all levels of our economy.

These are things that we in Labor are committed to. These are things that make us fundamentally Labor. These are things on which, with any advancement that has been made—particularly with the National Access Regime in 2005—the other side has had to be taken kicking and screaming to actually make the changes necessary, particularly when it came down to the pricing principles. These are fundamental to us. We are not picking winners. We certainly want to establish the necessary infrastructure framework under which Australian industry and the Australian economy can excel. For that reason, I commend the bill to the House.

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