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Report Details


Committee Name:

Standing Committee on Uniform Legislation and Intergovernmental Agreements

House:

Legislative Assembly
Report Type:Report

Title:

Competition Policy: Consideration of the Implementation of a National Competition Policy
Report No:12
No of Pages:112
Physical Location:State Law Publisher

Presentation Date:

01/29/1996


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Hide details for Executive SummaryExecutive Summary

The purpose of this report is to examine competition policy in Australia, to provide an overview of the recommendations of the Independent Committee of Inquiry into National Competition Policy (the Hilmer Report) and the legislative initiatives already introduced, or still needed, to implement those recommendations.

The Report of the Independent Committee of Inquiry completed in August 1993 called for Commonwealth and State legislation, the adoption of certain policies and principles and the formation of two new institutions in place of the existing structures.

The States and Territories have reacted positively to the proposed competition policy reforms, although concerns were raised about possible revenue implications. States and Territories earn large returns from their public monopolies. However, there is no evidence to indicate that these returns would actually decrease in a more competitive environment, given the low returns on assets typically earned. Reforms in electricity in New South Wales are a good example of the win-win potential of much needed change. In that case there have been benefits to consumers as well as increased dividends to the State Government from efficiency improvements.National Competition Policy Review, Issues Under Consideration by the Independent Committee of Inquiry, February 1993, p 4.

This report addresses the economic issues of competition and efficiency and the implications for national competition policy as a result of Australia's federal structure. Chapters Four and Five examine the history of competition law in Australia and the background and operation of anti-competitive regulations in the Trade Practices Act 1974.

Chapter Six examines the Hilmer competition strategies which required not only extension of the provisions of the Trade Practices Act 1974, but more significantly affect public trading enterprises and particularly public utilities.

Chapter Nine examines the implementation of the competition policy framework which requires the establishment of the National Competition Council (NCC) and the Australian Competition and Consumer Commission (ACCC). These bodies require substantial co-operation between Federal, State and Territory jurisdictions and reflect the national and multigovernmental focus of the competition policy agreement.

In Chapter Nine of the report the Competition Policy Reform Act 1995 and the Intergovernmental Agreements which represent a complete response to the recommendations of the Hilmer Committee are also discussed. The reforms create institutions which can encourage businesses and governments to act in accordance with competition principles and importantly these principles apply to all Australian businesses regardless of ownership or legal form.

This report in Chapter Two acknowledges the crucial role of States and Territories in implementing a national competition policy and the importance of co-operative federalism. Chapter Two also notes the role of federalism and micro-economic reform and in particular the major changes already undertaken by all jurisdictions, especially infrastructure reforms by State Governments of public utility monopolies, the professions and agricultural marketing authorities. A number of government business enterprises have become significant multinational corporations, for example, Telstra and some State agencies have entered the international stage to maximise returns to the taxpayer.

The Standing Committee notes that governments are increasingly prepared to find ways to deliver services. While in the past Commonwealth/State co-operation was accomplished through formal intergovernmental agreements or the referral of State powers to the Commonwealth, governments are now willing to experiment with intergovernmental arrangements to avoid cumbersome outcomes. Federalism can be an instrument for future co-operation and be more pluralistic and adaptive to changing needs of society.

Chapter Seven describes the benefits that competition will bring by way of economic efficiency to the Australian economy and outlines some of the approaches and processes being put into practice both in Australia and overseas.

It is critical to national economic success to develop policies for the development of competitive industries with access to efficient infrastructure, higher sustainable rates of economic growth, continued low inflation, more investment and job creation.

Chapter Ten raises issues concerning the fulfilment of community service obligations relating to the corporatisation and privatisation of some government business enterprises. The accountability of such organisations is a matter which has not been adequately addressed in either the Hilmer Report or the legislative package. This may be an area which requires further investigation and a separate report. The Standing Committee has made a number of recommendations which address some of those concerns.

Submissions and evidence from witnesses have been considered in the report. After considering these, the Standing Committee brings to the Legislative Assembly of Western Australia’s attention, concerns raised by the agricultural sector about the anti-competitive effects of statutory marketing authorities which lead to inefficiency and costs. This we do in our recommendations.

Chapter Eleven outlines the position in Western Australia and concludes with an explanation of some of the issues and principles arising from national competition policy including its merits and limitations as well as its benefits.

The Standing Committee in its investigations found that there is general approval among governments, industry, unions and the community for a national competition policy. The Standing Committee notes that New South Wales has passed "template"This model is described in this Standing Committee’s previous Reports as Structure 2 Complementary or Mirror legislation. legislation (the Competition Policy Reform (New South Wales) Act 1995) which is the model for all of the other States and Territories. (See Annexure E). It is expected that all the other States and Territories in Australia will pass their own application of laws legislation in their respective jurisdictions within the next twelve months. At the time of this report the Western Australian application of laws legislation had been drafted, while some jurisdictions had passed legislation or were at various stages of the legislative process. (See Table 11 for a summary).