Dick Adams (Lyons, Australian Labor Party) Share this | Hansard source

The lack of public infrastructure spending over the last 12 years prior to 2007 has led to many areas of our states and territories selling off assets and now having to buy them back because of their neglect or closure. Because the public sector should operate under the same terms of reference as those in the private sector, there needs to be regulatory processes to ensure that that is the case and that it is as transparent as possible.

My learned colleague the member for Isaacs just mentioned access to iron ore trains in the Pilbara in the north of Western Australia and the amount of costs that have gone into the courts since 2004 as one example where there needs to be quite a lot more work. I think the Trade Practices Amendment (Infrastructure Access) Bill 2009 will pull together some of that and save people a heck of a lot of money.

The honourable member for Kalgoorlie, who is at the opposition table, has probably come to the front bench under the reshuffle of the leadership on that side of the House. I congratulate him on that promotion. I am sure he will comment a great deal about this bill when he has an opportunity to speak.

There has been a lot of news coverage and discussion lately about the large corporations, and about one wanting to hire or use the present infrastructure instead of building their own. This bill deals with that important matter. I note also that the declaration does not provide a right of access but rather a right to arbitration by the ACCC if commercial negotiations fail. We need to make sure that it is cost-effective. Tying arguments up in courts over a long period of time certainly does not serve our nation well. It does not get that infrastructure working in the interests of the nation so that infrastructure and capital, where it has been outlaid, are paying their way and increasing productivity. According to the Independent Committee of Inquiry into National Competition:

As a general rule, the law imposes no duty on one firm to do business with another. The efficient operation of a market economy relies on the general freedom of an owner of property and/or supplier of services to choose when and with whom to conduct business dealings and on what terms and conditions. This is an important and fundamental principle based on notions of private property and freedom to contract, and one not to be disturbed lightly.

Despite this acknowledgement, the Committee of Inquiry report of August 1993—known as the Hilmer report after the chairman, Fred Hilmer—recommended the implementation of a national competition policy for Australia to improve productivity, to increase international competitiveness and to maintain and improve living conditions. Australia’s commitment to national competition principles was subsequently enshrined in the Competition Principles Agreement and the Agreement to Implement the National Policy and Related Reforms entered into by the Commonwealth, state and territory governments in April 1995.

Amendments to the TPA which came into effect in 1995 established a new legal regime under which firms could be given a right of access to essential facilities owned by another firm, when the provision of such a right meets certain public interest criteria. That legal regime is the National Access Regime, which is contained in part IIIA of the Trade Practices Act. Section 44DA of part IIIA requires decisions about access regimes to be consistent with the principles set out in the Competition Principles Agreement. In 2001 the Productivity Commission reviewed the National Access Regime. It considered that:

Given the in principle case for some curbs on the exercise of monopoly power in the provision of essential infrastructure services, the limited experience in Australia with access regimes, and ongoing structural change in a number of infrastructure sectors, abandoning access regulation at this stage would be inappropriate.

However, the Productivity Commission did recommend a number of changes. The government’s response to the recommendations was largely positive. The Trade Practices Amendment (National Access Regime) Act 2006 made the necessary amendments to the TPA. In particular, the amending act inserted statutory pricing principles to provide guidance for pricing decisions and to contribute to consistent and transparent regulatory outcomes over time as well as certainty for investors and access seekers.

I believe that this bill is an important piece of economic regulation because it helps to address the time taken in allowing government to undertake scrutiny of projects and it will help transparency and consistent guidelines to operate. It is a key component of Australia’s regulatory frameworks, which promote the development of competition and efficient markets.

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: (1) an access seeker may apply for a declaration of an infrastructure service; (2) a certified state or territory infrastructure access regime may provide for access; and (3) the provider of an infrastructure facility may have an access undertaking that sets out the terms and conditions of access.

A service may be declared where access would promote a material increase in competition in another market; where it would be uneconomical to develop another facility to provide the service; where the facility is of national significance; where access is not the subject of an effective state or territory access regime; where access can be provided without undue risk to human health and safety; and, of course, where access would not be contrary to the public interest.

It is important to note that declaration does not provide a right of access but rather, as I said earlier, a right to arbitration by the ACCC if commercial negotiations fail. One would hope that corporations—and we are encouraging them—could work together and reach those commercial arrangements. But if that cannot happen then the ACCC can arbitrate. Although this regulatory framework has proven to be a good model to date, infrastructure owners and access seekers have argued that processes under the access regime are too lengthy and costly. We heard the previous speaker on this side of the House, the member for Isaacs, outline the legal situation in relation to that very well. One case which began in 2004 has not been resolved yet.

Infrastructure is a critical component of the Rudd government’s productivity-raising, microeconomic reform agenda. This was also the case under the Hawke and Keating Labor governments. They laid down this regime and spent a lot of time endeavouring to improve the infrastructure in this country. The Rudd Labor government has gone out of its way to build on the needs of the nation with infrastructure. We need to catch up on a lot of infrastructure which the last government failed to put in place or to encourage the states to get involved in to help increase the productivity of the nation.

Australia needs to use its infrastructure well and cost efficiently. We have to make sure that we are increasing our productivity through the use of infrastructure. When you look at all the coal ships anchored outside ports and coal loaders with bottlenecks in rail services to them, you see that these are all inefficiencies where the infrastructure needs to be improved. We need to make sure that these costly inefficiencies are dealt with. Roads around capital cities which cause congestion are also costly. Of course, with climate change, congested roads pollute greatly and the vehicles on them use more fuel. Transport needs to be efficient and effective to reach its total potential. And then there is the matter of the Pilbara, which I mentioned earlier.

Tasmania has many infrastructure issues. We had a real issue with our rail system, but a lot of money is now being put into it by the Rudd government. The infrastructure money is bringing our rail system between the north and the south and the north-west coast down to the west coast back to a reasonable state. This infrastructure, which transports our mining resources to the port of Burnie, was greatly rundown by the previous operator over many years. The need to upgrade it has been great.

Delays and costs in decision making under the access regime may have an adverse effect on the infrastructure investment that is needed to underpin economic growth and national productivity. This bill will improve regulatory certainty and streamline administrative processes under the National Access Regime in several ways. The reforms in the bill draw on recommendations from COAG; the Productivity Commission; the National Competition Council, NCC; the Australian Competition and Consumer Commission, ACCC; and the Australian Competition Tribunal. 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. Under the existing access regime, a private investor who is considering building an infrastructure facility cannot determine with certainty whether or not services to be provided by the proposed facility would be declarable. The bill provides for an up-front decision to be made by the designated minister. If the minister decides that a service provided by the proposed facility would not meet the test for declaration under the access regime, it cannot be declared for at least 20 years, thereby providing the certainty investors need.

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 for access under future arrangements.

In conclusion, I think this bill contains a number of modest but important measures to increase regulatory certainty and improve decision-making processes under the National Access Regime. This will help to support the infrastructure investment that is so vitally needed to underpin economic growth and national productivity in this country. I support the bill.

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