Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary for Science and Water) Share this | Link to this | Hansard source

The Trade Practices Amendment (National Access Regime) Bill 2006 changes the regime under which a service provider can obtain access to an infrastructure facility. The purpose of the bill is to seek to ensure access to infrastructure where elements of natural monopoly exist to enhance competition and restrain monopoly behaviour while encouraging investment in infrastructure. The Productivity Commission reviewed the regime some four years ago and this bill is the government’s second response to the Productivity Commission’s recommendations. I say second response because the government has already indicated its support for the Productivity Commission’s recommendations. However, we have learnt from this government that ‘there’s many a slip ’twixt the cup and the lip’, to quote Shakespeare, and this is exactly what has happened in the most significant element of the bill—the pricing principles for evaluating a declaration of access under part IIIA.

However, before looking at this question and other aspects of the bill, I want to outline Labor’s vision for reform of this crucial section of the Trade Practices Act. The perennial dilemma for a nation governed by a federal system is that there are competing interests between different spheres of government. The horns of the Australian dilemma are that on one hand the economy is truly national in structure and targeted at international competitiveness, but on the other the core business of the states is in regulated sectors of the economy. The result is that, while the un-derlying economic reality favours a national regulatory system for all but intrastate commerce and trade, the political economy of the federation tends to encourage the states to set up their own regulatory structures.

The obvious success of the Hilmer reforms is that they gave birth to the idea of a truly national competition policy. The less obvious failure is that in practice this goal has proved to be elusive. Rather than creating a unified regulatory structure, the Hilmer reforms have spawned a legion of 22 regulators at different levels of government and in different sectors. Market access regulation has become an entangled web held hostage not just to federal-state tensions but to internal disputes at state level over ministerial responsibility. This was seen most clearly in the creation of the national energy regulator, which was created as a compromise to ensure that state energy ministers might not be held hostage to the decisions of state treasurers. The original Hilmer vision was that state price market and access regulators for nationally significant natural monopoly infrastructure would evolve into a national regulatory regime.

The national access regime has three components under part IIIA of the Trade Practices Act. Under the current regime, the Treasurer, any responsible state or territory minister or any other party can apply to the National Competition Council to have a monopoly facility declared essential. The National Competition Council then makes a recommendation to the responsible minister, and the applicant has a right to appeal the minister’s decision in the Australian Competition Tribunal. Once declared, access arrangements, including price, can be negotiated between the facility owner and those seeking access, and the arrangement is registered with the ACCC. If the parties cannot agree, the ACCC arbitrates. The result of the arbitration can be reviewed by the tribunal, and the tribunal’s decision can be appealed in the Federal Court. Alternatively, the owner of a monopoly facility may set out the terms of access for any party wishing to gain access. This undertaking is then registered with the ACCC.

A major, outstanding issue relates to clause 6 of the competition principles agreement. Clause 6 states that the Commonwealth’s access regime is not intended to apply to essential facilities in a state or territory where a conforming state access regime is in place unless the National Competition Council determines the scheme is ineffective. The state regimes were expected to eventually make themselves subject to the declaration regime in part IIIA. This has happened very rarely. Certification of state market arrangements has also rarely been used because these regimes do not meet the minimum standards of the TPA. What has happened is that the states have set up their own regimes that often entrench the natural monopolies. I note that some state regulators fiercely contest this, and it is true that some regimes are reasonable.

Still, the result is clear—the original dream of a national market access regime has failed miserably. Prospective market entrants simply are not prepared to take on the legal power of state governments. The current arrangements are a mere formal compliance with the Hilmer vision enshrined in the competition principles agreement under COAG that Labor Prime Minister Paul Keating created. The spirit of the Hilmer program remains a distant dream.

This story remains largely untold. There is a lack of appreciation in the policy community that proponents or financiers of major infrastructure projects have to deal with a number of regulators and regulatory regimes. The national access regime is a case in point. There are state regulators, industry regulators, the National Competition Council and potentially also the ACCC to deal with. It is not just an issue of unnecessary compliance burden through regulatory duplication; there is also the issue of inconsistent regulatory frameworks and the concomitant disincentive to invest in the face of heightened risk of regulatory failure.

This has occurred under the Howard government. It accords with a generic theme of the Howard government being a high-cost government for business. It is open to Labor to highlight that the government has, albeit unintentionally, presided over a rather frightening increase in the compliance burden on business. This has become a central tenet of the Business Council of Australia’s approach.

The key focus should be unifying the competition policy architecture. In this regard there are two important issues. The first relates to the diffuse roles of the national regulators—the ACCC, the Australian Competition Tribunal and the National Competition Council. The second relates to the state based price and access regulators, including sectoral specific arrangements. In relation to both areas the fundamental question to be asked is: ‘What scope exists to both harmonise and rationalise the regulatory framework?’ The primary policy goal is simple: to reduce the compliance burden. But there is also the ostensibly subsidiary but philosophically significant goal of seeking to ensure that all these arrangements are structured to combat social exclusion in a coordinated way. This bill fails to capture the true vision, Labor’s vision, of a unified competition policy infrastructure.

The bill changes the existing regime in the following ways: it includes a new objects clause that decision makers will need to have regard to; pricing principles embodied in part IIIA of the Trade Practices Act are to be determined by the Commonwealth minister; the threshold for the application of the regime is raised to include only projects of national significance; new arbitration arrangements and appeal procedures are provided for; it restricts access to the federal legislative regime to where no effective state access regime exists; it provides immunity from the regime where a government service is provided by competitive tendering; and it includes new target time limits, procedures for consultation and reporting of decisions.

A new objects clause is inserted into part IIIA to provide for greater certainty for infrastructure owners, access seekers, investors and other interested parties. The bill also requires decision makers under part IIIA to have regard to the objects clause when making their respective decisions. This is intended to promote consistency and provide guidance in relation to each decision maker’s approach, thereby enhancing regulatory accountability. This is a positive development that Labor supports. But the objects clause could hardly be described as bringing a hard edge to the legislation. This interpretive provision could have included much stronger pro-competitive language. There is no mention of restraint on monopoly behaviour, for example. I will return to a discussion of the pricing principles after dealing with other elements of the bill.

Firstly, the threshold for the application of the regime is raised to include only projects of national significance. The government has agreed to amend the ‘promote competition’ declaration criteria contained in section 44G(2)(a) to ensure that access declarations are only granted when the expected increase in competition in an upstream or downstream market is not trivial. Labor supports this. Secondly, regarding the new arbitration arrangements and appeal procedures, the bill provides that the commission will be given the discretion to conduct multilateral hearings in arbitrations following notification to the parties to the dispute and, consistent with the provisions of the telecommunications access regime in part XIC of the Trade Practices Act, the commission will also be given the discretion to grant interim arbitration determinations.

The arbitration provisions will be amended to make it explicit that, when arbitrating a dispute, the commission can require a service provider to permit interconnection to its facility by an access seeker. Consistent with the appeal rights applicable to other access routes provided under part IIIA, this bill establishes rights to merit review by the Australian Competition Tribunal in relation to decisions made by the commission about access undertakings and access codes.

The Productivity Commission also recommended that the arbitration provisions of part IIIA should be amended to provide for two-sided information disclosure requirements involving both the access provider and the access seeker. The access seeker should be required to provide sufficient information, including technical and commercial requirements, to enable the access provider to respond to the request for access. The provider of the declared service should be required to provide sufficient information to an access seeker to facilitate effective negotiation on the terms and conditions of access. This should include information on the availability of the service, including any reasons why the service is not available on the conditions sought by the access seeker; an offer of the terms and conditions of access to the service; and sufficient information, such as the costs of operating the facility and providing the service, to enable the access seeker to make a reasonable judgement on the basis of which the terms and conditions of access were determined. This information should be provided within 28 days of the access seeker submitting its request for access to the service provider.

This was not accepted by the government, which deemed that such information requirements were impractical. Rather than applying a generic regime, they preferred an industry-specific regime. The government’s rejection of this key Productivity Commission finding, recommendation 8.1, is highly questionable. Prima facie, the Productivity Commission’s recommendation is pro-competitive and feasible. Labor calls on the government to reconsider this aspect of the bill.

The bill amends the Trade Practices Act to explicitly prevent the commission from accepting an access undertaking or access code where a decision is in force that a state or territory access regime is an effective access regime. This removes the incentive for industry gaming through forum shopping, and Labor supports this. The bill introduces a mechanism to enable the commission to grant immunity from declaration for services to be delivered by government-sponsored infrastructure where the construction and the operation of the facility is to be awarded through a competitive tendering process. Again, Labor supports this.

The bill applies a number of non-binding target time limits to various decisions under part IIIA and introduces legislative provisions for public input on declaration and certification applications, and proposed access undertakings. The bill places additional obligations on ministers, the council and the commission to publish reasons for their decisions or recommendations. As the government’s key adviser on the regime, the council will be required to report annually on the operation and effects of the regime, including on specific matters identified in the bill.

Then we come to the vexed question of pricing principles. In its formal response to the Productivity Commission report Review of the national access regime, the government agreed that statutory pricing principles should be established in relation to part IIIA in order 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. However, the bill did not enshrine the principles in legislation. It is proposed that these pricing principles are to be determined by the Treasurer and specified in regulation. The Australian Competition and Consumer Commission will be required to take into account these principles when making a final determination on an access dispute and when assessing a proposed new or varied access undertaking or access code.

Relegating the pricing principles to a regulation is a significant watering down of the previous position taken by the government. According to industry sources, Treasury appears to be seeking greater flexibility on the setting of the principles. Labor sought to have this bill and the issue of the pricing principles considered by the Senate committee, which has now reported. The outcome of the inquiry was unanimous support of organisations making submissions for the pricing principles to be in the legislation. This is a major development. The infrastructure sector has told the government its preferred model, as enshrined in the bill, is deficient. So strong was the argument by the sector that all senators on the committee—government, opposition and minor parties—agreed and recommended that the pricing principles be in the act. The government has been criticised by the infrastructure sector and its own senators, which is a highly embarrassing setback for the government.

The decision to not include the pricing principles in part IIIA would involve consequences. Firstly, it greatly diminishes the principle of certainty that the industry has been seeking for both existing and future infrastructure investment. Secondly, because part IIIA effectively acts as a model access regime for industry-specific access regimes, removing the pricing principles from part IIIA permits greater divergence across industry-specific access regimes, rather than a consistent approach. Making the pricing principles a matter for ministerial discretion is poor policy. It does not foster regulatory transparency and opens the government to the possibility of capture by the sector. It is open for Labor to consider amending the bill in the Senate to include the pricing principles, so it is pleasing that the government has seen the merit in Labor’s proposals to put in the pricing principles. The government should have first sided with Labor and the Productivity Commission, but in the end reason prevailed.

Labor had its own form of pricing principles that was moved in the House of Representatives. This involved the notion that regulatory risk was seen as an element of commercial risk rather than as a separate category. Labor still holds this position but will not seek to delay the passage of the bill by insisting on its amendment. After all this, government took four years to respond to the Productivity Commission recommendations and it has taken 14 months for the bill to get to this point in the parliamentary process, which is hardly a strong sign of commitment by the government to trade practices reform. But it is not surprising. This government’s record on trade practices reform is a bit of a blank page. Where is the bill for criminal sanctions for cartels, which is so urgently needed? Where are the promised changes to section 46 of the Trade Practices Act? Then there is the government’s flawed Dawson bill, which still hangs in abeyance. While not declining to give the bill a second reading, I move the second reading amendment standing in my name:

At the end of the motion, add “but the Senate condemns the Government for:

          (a)   delaying the introduction of this bill for almost 3 years since the Productivity Commission report was released;

          (b)   failing to amend Part IIIA of the Trade Practices Act 1974 to include the pricing principles in the bill;

          (c)   failing to produce a single, clear and pro-competitive legislative framework for infrastructure regulation; and

          (d)   failing to advance meaningful reform of the Trade Practices Act 1974”.

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

Before commencing my contribution, I seek leave to have Senator Murray’s remarks incorporated in Hansard.

Leave granted.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

The incorporated speech read as follows—

Although the Australian Democrats support the Trade Practices Amendment (National Access Regime) Bill 2006, there are still aspects concerning the national infrastructure access regime we have serious concerns about, and which still need to be addressed by the Government, particularly in light of recent actions by the Treasurer.

The Trade Practices Act is increasingly being seen as the enemy of small companies or new entrants to markets, and that is not the effect it was supposed to have when it was first passed.

These amendments address issues of timeliness in decision making and set out the criteria to be taken into account in those decisions. However, it is increasingly clear that there are further matters to be addressed by this Government and the State governments, in relation to competition regulation in particular in relation to large infrastructure.

In a perfect world all strategic infrastructure would be provided by the Government at either a State or Federal level, but this has not been the case for a long time. I accept that there are times when a public/private arrangement has merit. I also accept privately funded infrastructure which is well-regulated can provide a good outcome for the public and users.

The regulation of competition in Australia is through a system of certification and declaration and it has, in some respects, worked well. The companies themselves can apply for certification of infrastructure, two companies can negotiate a contract for use of certain infrastructure at a commercial rate, and if these two avenues fail then the Australian Competition and Consumer Commission and the National Competition Council can ‘declare’ the infrastructure.

And if one party does not like the declaration they can apply to the Minister for a decision. But more on that later. And if all these avenues are exhausted then they can resort to the Federal Court.

In a recent battle over rail lines in the northwest of Western Australia, the smaller mining company Fortescue Metals Group Ltd or FMG applied for access to the larger BHP Billiton’s rail line to transport ore from a proposed mine site in the area. FMG has not yet exploited the site because it took the sensible approach that a guarantee to transport access was essential prior to exploiting the area. The National Competition Council found that FMG should have access to the rail line.

The NCC’s decision was appealed to the Treasurer and it sat on his desk for 90 days, and lapsed because he did not make a decision. Nobody knows his reasons for not making a decision (he doesn’t have to provide any if he doesn’t actually decide anything) and now FMG must pursue its rights through the courts, at great expense and delay.

During the recent Estimates session, Mr Feil, Executive Director of the NCC pointed out the complexity of competition regulation in Australia, and highlighted for the Committee the fact that there are different avenues at Federal and State level that companies can utilise in relation to access to infrastructure. These different avenues mean that forum shopping between the state and federal systems, and forum shopping between different competition regulators is available, all of which slows down and confuses the decision making process.

In light of these complexities the Australian Democrats are pleased that the Treasurer is considering the creation of a national regulatory regime for infrastructure.

We note that in the OECD Economic Survey of Australia released recently, that it said

The time taken for regulatory decisions should be closely monitored especially where it is likely to impinge on export performance.

This advice needs to be taken seriously, especially in light of the Treasurer’s failure to make a decision for 90 days in relation to the FMG matter—that is 3 months, which is half the time recommended by the recent COAG agreement that an appropriate timeframe for such decisions should be 6 months.

However, this bill does not address such a streamlining, but I was heartened by Senator Minchin’s comments at Estimates that there could be a COAG consideration of the problem to try and bring about streamlining competition regulation nationally.

At the same Estimates hearing, Mr Feil pointed out that Part IIIA of the TPA applies to both interstate and intrastate state-owned and privately owned assets. He said that there are 3 routes open to companies in relation to competition questions. One is the State specific route, the other two are national and it is the choice of the asset owners, applicants and governments which they choose.

This also leads to forum shopping which I do not agree with, and which I see as an impediment to the speedy and cost-effective resolution of competition questions. It ensures that those with the deepest pockets will win the competition battle; that new players can effectively be excluded and in the long run, they can be bought up by the big players, when their patience and their pockets are exhausted.

I was disappointed to hear at Estimates that the fact that even though the Western Australian government facilitated the building of the BHP rail line which is now ‘privately owned’ by BHP, the taxpayers contribution to this private asset was not a matter which the NCC took into account when making its decision.

In his own words Mr Feil said

The contribution the state made some time ago in facilitating the construction and planning of the railway line was reflected to a degree in the state access regime, so the quid pro quo was some conditions for third party access and a number of other things including royalties. As it turns out, the state access regime does not appear to have provided the degree of access that perhaps at the time parties thought might have occurred but it is very hard to read exactly what the trade-offs were. So we treat this as a fresh application for an asset that is essentially privately owned.....

He went on to say

I do not think it is necessary or appropriate to consider how much the state government or the people of WA might have contributed some time in the past.

From that one can gather that if you are large enough, even if you gained concessions from the Government at either a state or federal level at public cost a long time ago, those are not matters which are considered relevant to the decision making of a competition regulator.

That simply seems wrongheaded to me.

Let me again put my views on the record. I do not agree with infrastructure monopolies in private hands. I do agree with private owners getting a full commercial return. I do agree that the new entrant must fund or help fund additions to the infrastructure if that is required.

If a rail line was built because the public let it be built, through taxpayer provided easements, facilitation, and concessions, it was built in the public interest not the private interest, and should be shared.

If taxpayers have helped facilitate or fund a piece of infrastructure which is now in private hands, then shouldn’t the company have to repay in dollars the actual competitive advantage it now enjoys? And at the very least, provide access, at a commercial rate, to competitors?

It is clear from the evidence of the NCC at Estimates and in light of FMG’s ongoing application for access to rail lines, that a workable national competition policy which inhibits forum shopping and promotes real competition must be hammered out between the States and Federal government sooner rather than later.

The proposed amendments to the Objects clause provide guidance to the ACCC/NCC in making determinations in relation to infrastructure ensuring ‘economically efficient operation of, use of and investment in the infrastructure’ and to provide for a ‘consistent approach to access regulation’.

The Democrats note that the Objects clause proposed in this bill takes into account economic efficiency but does not address one of the Democrats key concerns in National Competition Policy, that is, the need for an objects clause which addresses market conditions or behaviours that may impede the emergence of ecologically sustainable industries, business and business processes.

The Democrats support the aspect of the Objects clause which provides a framework to encourage a consistent approach to access regulation in each industry.

This amendment addresses a key concern of the Democrats with regard to the methodology and ideology that is applied to the decision making by the regulator. It is also obvious, that given the limited amount of jurisprudence in the area, such matters need to be spelt out in the Act.

The objects clause is intended to promote consistency and provide guidance in the decision making process, which the Democrats hope will enhance regulatory accountability.

Some of the submissions to the Economics Legislation Committee were concerned that these objects were adding a further layer for consideration, and in fact would not provide clarity. The argument was that it would mean juggling a number of considerations without any firm idea of which consideration should take precedence.

That is a pessimistic view of the matter and the inclusion of considerations of economically efficient operation and investment in infrastructure are important guides for the competition regulator.

In relation to the ‘declaration’ of certain infrastructure there is a further criteria of determining whether the service would ‘promote a material increase in competition in at least one market whether or not in Australia’. This amendment enshrines in legislation the way in which the regulator currently interprets the requirement.

My difficulty with this amendment is not that it changes the way in which the regulator works, but it brings me to my ongoing difficulty with declarations. The Australian Democrats do not believe there is a role for the Treasurer, who is the Minister in competition regulation matters. This has been borne out by his recent behaviour in relation to FMG and BHP Billiton.

If the regulator is making the decision against certain criteria, which are the same criteria that the Minister will apply in making his decision (if he bothers to make a decision), then how can the outcome be different?

It can be different if the Minister is lobbied so extensively that he changes the outcome of the declaration. It makes a mockery of the role of the regulator and it is a waste of taxpayers’ money. It also creates further delays, which impede the effectiveness of other provisions of this bill which provide for time lines within which the regulators must make decisions.

And what about the Ministerial decision-making process being private not public? That is contrary to good due process.

If large transnational companies do not like a declaration from the regulator, then they know that they can go to the Minister and with the various carrots and sticks available to them, possibly get him to change an outcome.

Given the number of politicians (of all political persuasions) who have jumped from various Parliaments into the arms of large infrastructure providers, investment banks and other corporations I do not think that I am being unduly cynical when I am wary of the role of Ministers in these matters.

Either you have faith in your regulator and the frameworks you are setting in place by legislation, or you need to work harder on your legislative drafting.

Just as the Health Minister no longer has a final say in determining which drugs are available in Australia, then I think the Minister should not have a role in this. If the companies do not like the decision of the regulator then, as in other matters, appeals to the Federal Court should sort out the matter.

Many of the amendments proposed in this bill increase the transparency of decision making, provide time lines for decision makers and increase accountability through publication of reasons.

These are all matters on which the Australian Democrats have campaigned long and hard in the past, so the Senate will not be surprised that we support these amendments.

It ensures that those applying for access to infrastructure are able to identify, with some certainty we hope, the amount of time it will take for the decision to be made. This increases certainty for investments and forward planning for businesses.

The bill also proposes that the regulator can seek public comment on a recommendation regarding a declaration. The Democrats have always advocated a public interest test—one that takes into account the social and environmental impacts along with the economic impact of certain behaviours.

Previously the public interest test has been construed very narrowly and has been under-utilised. This amendment appears to mean that public interest is of some concern to the Coalition. Public interest is an all encompassing term. The Democrats are cautiously optimistic that this provision will go some way to providing the possibility for a better assessment of all the relevant facts.

This bill also provides for the publishing of reasons by the NCC, the ACCC and the Minister. However this amendment has serious limitations which have become clear since the Treasurer failed to make a decision in relation to FMG and BHP. In that case he made no decision, he let the application lapse, so in that circumstance there was no requirement to provide reasons because there was no decision. That was technically within the letter of the law, but few would suggest that it was the way in which people envisaged the Trade Practices Act working.

The Australian Democrats support these amendments to the TPA but looks forward to the Coalition addressing obvious shortcomings in the national competition policy as soon as possible.

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

Twelve months ago tomorrow, on Thursday, 11 August 2005, the Senate Economics Legislation Committee held its hearings into the Trade Practices Amendment (National Access Regime) Bill 2006, so it has taken 12 long months for us to finally debate this legislation and for Senator Stephens and me to have the opportunity to make our contributions. Initially, I want to place on record my thanks to the people who appeared before the committee and particularly to the committee chair, Senator Brandis. As has been alluded to, our hearing on this piece of legislation was probably an example of what Senate committees do well. Industry came to the committee and pointed out some concerns that they had with this piece of legislation. Some suggested improvements. There was no partisan view about how those improvements should be made, and there was good, old-fashioned, bipartisan discussion—in fact, tripartisan discussion, because Senator Murray from the Australia Democrats was there as well—and sensible public policy was recommended.

Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary for Science and Water) Share this | Link to this | Hansard source

Commonsense.

Ruth Webber (WA, Australian Labor Party) Share this | Link to 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.

Sandy Macdonald (NSW, National Party, Parliamentary Secretary to the Minister for Defence) Share this | Link to this | Hansard source

The government would like to thank those honourable senators who participated in the debate on the Trade Practices Amendment (National Access Regime) Bill 2006. This bill implements the government’s response to the Productivity Commission’s review of the national access regime. The regime provides an avenue by which firms can seek access to services provided through infrastructure facilities owned and operated by others. Importantly, the regime seeks to enhance the competitiveness of the Australian economy by promoting the efficient investment in and the use of infrastructure facilities of national significance. At the request of the government, the Productivity Commission conducted an inquiry into the operation of the national access regime. The commission supported retention of the regime and recommended a number of enhancements. The government accepted the majority of the recommendations, agreeing that scope exists for improvements to the regime including to clarify its objectives, promote more efficient investment in and operation of infrastructure, establish more timely and less costly regulatory procedures, and enhance the transparency and accountancy of decision-making processes under the regime.

The changes contained in this bill result from a robust consultation process that we have heard about. The changes are also consistent with the proposals of the export infrastructure task force report, released by the Prime Minister in June of last year. The task force examined the number and complexity of access regimes across Australia and made recommendations aimed at streamlining processes where appropriate. Significantly, this bill takes steps in the same direction. I also note that this bill is consistent with the underlying principles governing infrastructure regulation that were agreed to by the Council of Australia Governments in February this year as part of the new national reform agenda.

The government is committed to effective and efficient regulation and targeted laws. The bill we have before the Senate has been the subject of extensive consultation with industry and stakeholders consistent with our red tape commitments. There is a very high level of support for this bill by those stakeholders. The amendments that the ALP suggests need to be made—inserting the pricing principles into the Trade Practices Act 1974—have been effected in the other place and in this bill before the Senate. The Australian government has always recognised the need for effective infrastructure regulation and certainty in respect of the same. This is what this bill helps to achieve: a positive development that, I am pleased to say, is supported by the ALP. I note the leadership of this government in talking at COAG to continue moving forward with simpler and more consistent national regulation for significant infrastructure.

Finally, I was pleased to see that submissions provided by a wide range of industry stakeholders to the Senate Economics Legislation Committee during this inquiry were, as we have heard from Senator Webber, highly supportive of the bill, as was the committee itself. I note also the positive responses to this bill reported in the media following its introduction into parliament. In conclusion, this bill forms a key part of the government’s Trade Practices Act reform agenda, announced during the previous term, to benefit Australian consumers and businesses. This agenda also includes implementation of the government’s response to the Dawson committee’s review of the competition provisions of the Trade Practices Act, development of measures to afford additional protection to small business under the Trade Practices Act and to further clarify the misuse of market power provisions, and the development of proposals to introduce criminal penalties for serious cartel conduct.

I welcome the proposed improvements to the national access regime as contained in this bill, including the minor amendments moved by the government in the House of Representatives. I am hopeful the government will receive the support it needs to implement these important improvements to the regime. I commend the bill to the Senate.

Question negatived.

Original question agreed to.

Bill read a second time.