Assessment of governments' progress in implementing the National Competition Policy and related reforms: 2005

October 2005

 Commonwealth of Australia 2005 ISBN 0-9757067-6-4 This work is subject to copyright. Apart from any use as permitted under the Copyright Act 1968, the work may be reproduced in whole or in part for study or training purposes, subject to the inclusion of an acknowledgement of the source. Reproduction for commercial use or sale requires prior written permission from the Attorney General’s Department. Requests and inquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Attorney General’s Department, Robert Garran Office, National Circuit, Barton ACT 2600.

Inquiries or comments on this report should be directed to: Media and Communications Manager National Competition Council Level 9 128 Exhibition Street MELBOURNE VIC 3000 Ph: (03) 9285 7474 Fax: (03) 9285 7477 Email: info@ncc.gov.au

An appropriate citation for this paper is: National Competition Council 2005, Assessment of governments’ progress in implementing the National Competition Policy and related reforms, Melbourne.

The National Competition Council The National Competition Council was established on 6 November 1995 by the Competition Policy Reform Act 1995 following agreement by the Australian Government and state and territory governments. It is a federal statutory authority which functions as an independent advisory body for all governments on the implementation of the National Competition Policy reforms. The Council’s aim is to ‘improve the well being of all Australians through growth, innovation and rising productivity, and by promoting competition that is in the public interest’. Information on the National Competition Council, its publications and its current work program can be found on the internet at www.ncc.gov.au or by contacting NCC Communications on (03) 9285 7474.

Table of contents
Overview and recommendations 1 The National Competition Policy and related reforms The National Competition Policy agreements National Competition Policy payments 2 Competitive neutrality Changes to competitive neutrality coverage Processes for handling complaints Financial performance outcomes Assessment 3 4 Structural reform of public monopolies New legislation that restricts competition Governments’ obligations Preserving the gains from reform The Council’s approach Assessment of gatekeeping A way forward 5 The Conduct Code and Implementation Agreements Conduct Code Agreement Implementation Agreement 6 Electricity The national electricity market: recent progress Retail market competition Structural reform and legislation review and reform vii 1.1 1.1 1.3 2.1 2.1 2.3 2.7 2.10 3.1 4.1 4.1 4.2 4.6 4.8 4.14 5.1 5.1 5.1 6.1 6.1 6.4 6.12

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Gas National Competition Policy commitments National Gas Access Regime Legislative restrictions on competition Industry standards

7.1 7.1 7.3 7.9 7.12 8.1 8.2 9.1 9.1 9.3 9.5 10.1 11.1 12.1 13.1 14.1 15.1 16.1 17.1 18.1 19.1

8

National road transport reform Implementation of reforms outstanding at 30 June 2004

9

Review and reform of legislation Assessing compliance Competition payments Developments since the 2004 NCP assessment

10 11 12 13 14 15 16 17 18 19

Australian Government New South Wales Victoria Queensland Western Australia South Australia Tasmania The ACT Northern Territory National legislation reviews

Appendices
A B Australian Government Office of Regulation Review: report on compliance with national standard setting National Competition Policy contacts A.1 B.1 R.1

References

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Boxes
1 2.1 4.1 4.2 4.3 4.4 4.5 5.1 9.1 10.1 10.2 11.1 14.1 Elements of best practice gatekeeping Competitive neutrality coverage reviews Primary, subordinate and quasi regulation The influence of the Pharmacy Guild of Australia on pharmacy reforms Withholding reforms shown to be in the public interest Gatekeeping and the Victorian Competition and Efficiency Commission Elements of best practice gatekeeping Changes to principles and guidelines of the Council of Australian Governments Competition payments—suspensions and deductions Consents to export wheat in bags and containers Health fund cover offerings Progress in implementing the domestic rice market reforms recommended a decade ago Analysis of market power-related price premiums xiii 2.11 4.2 4.4 4.6 4.10 4.16 5.3 9.5 10.3 10.14 11.5 14.4

Figures
1 2 Governments’ progress with completing their priority legislation review and reform matters, 2003-05 Total competition payments received by jurisdiction, 1997-98 to 2003-04 xi xxi

Tables
1 2 1.1 Summary of outcomes, by jurisdictions Council’s recommendations on 2005-06 competition payments and suspended 2004-05 competition payments Governments’ provision of 2005 NCP annual reports xviii xxxviii 1.2

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1.2 2.1 2.2 2.3 4.1 4.2 6.1 6.2 7.1 7.2 7.3 7.4 7.5 7.6 8.1 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10

Estimated maximum NCP payments for 2005-06 GTE return on assets by industry sector GTE return on assets, by jurisdiction, weighted by size Forestry GTE return on assets Productivity Commission’s reporting of RIS requirements and processes National Competition Council’s assessment of gatekeeping arrangements for new legislation Tasmania’s retail contestability timetable Review and reform of electricity related legislation Summary of government commitments Enactment and certification of access regimes Contestability timetables for the National Gas Access Regime Amendments to petroleum (submerged lands) legislation Implementation of AS 4564/AG 864 Review and reform of legislation relevant to natural gas Reform implementation, 30 June 2005 Overall outcomes with the review and reform of legislation Progress with legislation review and reform—Australian Government Progress with legislation review and reform—New South Wales Progress with legislation review and reform—Victoria Progress with legislation review and reform—Queensland Progress with legislation review and reform—Western Australia Progress with legislation review and reform—South Australia Progress with legislation review and reform—Tasmania Progress with legislation review and reform—the ACT Progress with legislation review and reform—the Northern Territory

1.4 2.8 2.9 2.10 4.17 4.18 6.11 6.16 7.2 7.4 7.7 7.11 7.14 7.15 8.3 9.6 9.8 9.9 9.10 9.11 9.12 9.15 9.17 9.18 9.19

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9.11 10.1 11.1 12.1 13.1 14.1 15.1 16.1 17.1 18.1

Key to legislation topic areas in the jurisdictional chapters 10−18 9.20 Noncomplying review and reform of Australian Government non-priority legislation Noncomplying review and reform of New South Wales’ non-priority legislation Noncomplying review and reform of Victoria’s non-priority legislation Noncomplying review and reform of Queensland’s non-priority legislation Noncomplying review and reform of Western Australia’s non-priority legislation Noncomplying review and reform of South Australia’s non-priority legislation Noncomplying review and reform of Tasmania’s non-priority legislation Noncomplying review and reform of the ACT’s non-priority legislation Noncomplying review and reform of the Northern Territory’s non-priority legislation 10.23 11.28 12.11 13.15 14.43 15.21 16.9 17.13 18.15

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