Ruth Webber (WA, Australian Labor Party) Share this | Hansard source

As Senator Stephens has just said, commonsense prevailed. That sensible public policy was around the issue of pricing principles. Part of the significant evidence that the committee heard at the time was from AusCID, the Australian Council for Infrastructure Development. They gave us probably the most persuasive evidence about the need to insert pricing principles. In evidence, one of their representatives, Dr Mundy, informed the committee of their view. He said:

... as far as general pricing principles are concerned, economic regulators such as the ERA—

from my home state of Western Australia—

the essential services commissions of Victoria and South Australia, IPART, the Queensland Competition Authority and the ACCC have been undertaking pricing decisions of one type or another for a long time, and there is significant academic literature on this.

In other words, the way of dealing with pricing principles was well known to regulators and there was significant literature that we could look at on how those principles would be interpreted. There was discussion, therefore, about the best way of inserting those principles—whether it should be, as the Productivity Commission recommended, which Senator Stephens has mentioned, within the legislation itself or whether it should be done by regulation.

AusCID went on to point out that it may well be the government’s reasoning that it is much easier to draft a regulation and easier to get it before the parliament; although, having said that, with the government having the numbers in both chambers, legislation being introduced could hardly be seen to be difficult these days. AusCID conceded that the government may have chosen this path for ease. However, their real point was the need for certainty. Dr Mundy went on to say:

The real point is certainty, and it needs to be understood that the investments we are talking about for which certainty is required have asset lives best understood in decades. People are investing today—

that was 12 months ago—

in assets that may last 50 or 100 years, so they need to understand very much what the policy principles are that are going to govern activities. Regulators are always going to have to make decisions, no matter how these words are set out or where they are set out. In regard to the issue about where they sit, in our view it is preferable that they are contained within the primary statute.

It seemed to be the view of industry, no matter which sector we heard from, that the best way of providing that certainty was for the pricing principles to be in the primary statute.

Sometime after the committee conducted its hearings, there was a meeting of the Council of Australian Governments where they also discussed the issue of pricing principles. All Australian governments agreed that pricing principles needed to be a priority and they agreed on the framework where they should be contained. So, for the life of me, I cannot understand (a) the delay in bringing this legislation to this place and (b) the reluctance to address the issue of inserting pricing principles within the legislation at the time.

When the committee heard from officers from the various departments, the only real reason we were given for the lack of willingness to insert the principles within the primary statute was the need—as the chair, Senator Brandis, put it at the time—to balance certainty and flexibility. However, it seems to me that when every industry representative involved in this discussion appears before a committee chaired by a member of a government that likes to boast of its links and responsiveness to industry and says that doing these things by regulation does not provide sufficient certainty to enable the significant investment this country needs to meet its infrastructure needs in the future then a responsive, responsible government would do what industry needs and what COAG has recommended—that is, to insert the principles in the primary statute.