1 1.1 Legislation review Why is legislation review necessary? Restrictions im posed on m arkets by governm ent regulation, for exam ple, through the creation of legislated m onopolies or the im position of particular pricing practices, can be a m ajor im ped im ent to com petitive outcom es. Com pliance w ith these regulations can also im pose significant costs on business. In recognition of this, the Competition Principles A greement (CPA) states that legislation (includ ing Acts, enactm ents, ord inances or regulations) should not restrict com petition unless it can be d em onstrated that:  the benefits of the restriction to the com m unity as a w hole outw eigh the costs; and  the objectives of the legislation can only be achieved by restricting com petition. This is generally referred to as the ‗public interest test‘ (see also Box 3 on page 13). The CPA further states that all existing anti-com petitive legislation (enacted prior to 1996) should be review ed against these criteria and m od ified or repealed w here there is no net com m un ity benefit to its retention. The requirem ent to d em onstrate net com m unity benefit also applies to the introd uction of new or am end ed legislation that restricts com petition. To satisfy this com mitm ent the Australian Governm ent introd uced its regulation im p act assessm ent process (see Section 1.4.1). Im portantly, this process also provid es that legislation that restricts com petition m ay be retained or introd uced w here it is d em onstrably in the public interest. H ow ever, recognising the continually changing economic environm ent and social objectives, legislation subjected to the public interest test m ust be review ed at least every ten years after its initial review or 11 introd uction. This requirem ent also applies to anti-com petitive legislation reliant on a section 51(1) exem ption und er the Trade Practices A ct 1974 (TPA) (see Chapter 6). Box 2: When is legislation anti-competitive? While alm ost no regulatory activity is completely neutral in its im plications for com petition, legislation m ay be regard ed as affectin g com petition w here it d irectly or ind irectly:  governs the entry and exit of firm s or ind ividuals into or out of m arkets;  controls price or prod uction levels;  restricts the quality, level or location of good s and services available;  restricts ad vertising and prom otional activities;  restricts price or type of inputs used in the prod uction process;  confers significant costs on business; or  provid es ad vantages to som e firm s over others by for exam ple, sheltering som e activities from the pressures of com petitio n.1 The objective of the CPA legislation reform program is to rem ove restrictions on com petition that are d em onstrated not to be in the interest of the com m unity as a w hole. H ow ever, follow ing the Prim e Minister‘s policy statem ent M ore Time for Business (1997), the Australian Governm ent‘s legislation review requirem ent w as expand ed to includ e the assessm ent of legislation that im poses costs or confers benefits on business. The aim is to red uce com pliance costs and the paperw ork burd en for business. 1 H ilm er, F., M. Rayner, and G. Taperell (The Ind epend ent Com m ittee o f Inquiry into a N ational Com petition Policy), 1993, N ational Competition Policy, Australian Governm ent Publishing Services, Canberra, p. 191. 12 An essential com ponent of legislative reform is the validity of the review process. To ensure all relevant costs and benefits are recognised , the CPA sets out a range of issues that should be consid ered in exam ining any particular piece of legislation. These issues are set out in Box 3 below , and includ e social, regional and environm ental factors. In m any cases, it m ay be d ifficult to quantify all the costs and / or benefits of specific regulation to the comm unity as a w hole. The requirem ent to id entify non -quantifiable effects of a particular course of action m eans that these can be explicitly consid ered in the d ecision m aking process, rather than exclud ed d ue to the lack of an agreed d ollar value. A clear id entification of the costs, benefits and d istributional im pacts resulting from the removal of a regulation on w id er public interest ground s w ill also assist governm ent to introd uce targeted ad justm ent m echanisms. Such assistance m ay be considered necessary to m itigate the im pact of transitional costs of reform on particular sectors of the com m unity. Box 3: Assessing the public interest Without lim iting the m atters to be taken into account, in assessing the costs and benefits, the follow ing m atters should be consid ered :  governm ent legislation and sustainable d evelopm ent; policies relatin g to ecologically  social w elfare and equity consid erations, includ ing Com m unity Service Obligations (CSOs);  governm ent legislation and policies relating to m atters such as occupational health and safety, ind ustrial relations, access and equity;  econom ic and regional d evelopm ent, includ ing em ploym ent and investm ent grow th;  the interests of consum ers generally or of a class of consum ers;  the com petitiveness of Australian businesses; and  the efficient allocation of resources.2 2 Competition Principles A greement, 1995, sub-clause 1(3). 13 The Au stralian Governm ent‘s com pliance w ith its legislation review requirem ents is independ ently assessed by the N ational Com petition Council (N CC), and is also reported in Regulation and its Review 2002-033. A d etailed exam ination of Australian Governm ent progress in the review and reform of existing anti-com petitive legislation is id entified in the follow ing section, Com m onw ealth Legislation Review Sched ule. A sum m ary of com pliance w ith regulation im pact assessm ent requirem ents for legislation introd uced or am end ed after 1995 is in Section 1.4. Where Australian Governm ent legislation is complem ented or matched by State or Territory regulation, a coord inated national review m ay be und ertaken. Australian Governm ent participation in national review s is exam ined in Section 1.3. 3 This function is und ertaken by the Office of Regulation Review , an ind epend ent office located w ithin the Prod uctivity Com m ission. 14 1.2 Commonwealth Legislation Review Schedule The Com m onw ealth Legislation Review Schedule (CLRS) d etails the Australian Governm ent‘s tim etable for the review and , w here appropriate, reform of all existing legislation that restricts com petition or im poses costs or confers benefits on business by the year 2000. 4 The original Sched ule, prepared in June 1996, listed a total of 98 separate legislation review s. H ow ever, changing circumstances have resulted in som e review s being ad ded , resched uled or d eleted .5 Legislation m ay be d eleted from the CLRS if it is not consid ered cost effective to review w here the com petition effects are sm all relative to the cost of im plem enting new arrangements — or it is repealed as a consequence of changes to Governm ent policy. Any changes to the CLRS require the approval of the Prim e Minister, the Treasurer and the responsible Portfolio Minister(s). Within the Treasury portfolio, since the N ovem ber 2001 election, the Treasurer‘s CLRS role is norm ally perform ed by the Parliam entary Secretary to the Treasurer. The CLRS as at 31 March 2003 is at Append ix A. Reporting requirements for legislation reviews The follow ing sections provid e inform ation on Com m onw ealth progress d uring 2002-03 in m eeting its sched uled legislation review com mitm ents. 4 5 CoAG at its m eeting of 3 N ovem ber 2000, d ecid ed that this d ead line w ould be extend ed to 30 June 2002. This includ es the extension of the CLRS to incorporate review s sched uled on the basis of d irect or significant indirect im pacts on business. 15 This inform ation has been organised to reflect the d egree of progress m ad e to d ate. For each ind ivid ual review , inform ation is provid ed on the follow ing 6: Complexity of the review and details of the review panel The priority and im portance of the legislation being review ed varies. Accord ingly, the m ethod of review for the legislation takes into account its significance and the extent of expected benefits from reform . More significant pieces of legislation are review ed by an ind epend en t com m ittee of inquiry or the Prod uctivity Com m ission. Where such review costs are not consid ered w arranted , review s are generally und ertaken by a com mittee of officials. The m inisterial portfolio w ith current responsibility for the legislation, 7 and the com m encem ent d ate of the review , are also id entified . Terms of reference The scope and structure of each review are outlined in its term s of reference. Without lim iting the term s of reference for each review , the CPA establishes that sched uled review s should :  clarify the objectives of the legislation;  id entify the nature of the restriction on com petition;  analyse the likely effect of the restriction on com petition and on the econom y in general;  assess and balance the costs and benefits of the restriction; an d  consid er alternative m eans of achieving the sam e result includ ing non-legislative approaches. 6 7 Inform ation on progress has been provid ed by the responsible portfolio d epartm ent or agency. In som e cases, m inisterial responsibility for particular legislation m ay have changed d uring the reporting period . Sim ilarly, d epartm ent titles referred to in connection w ith various review s m ay d iffer over tim e. 16 The Office of Regulation Review (ORR) is required to approve the terms of reference for any sched uled CLRS review . To assist this process, and to ensure a consistent approach and focus to review s, the ORR has d eveloped a tem plate term s of reference to be tailored to suit each piece of legislation to be review ed .8 There are no new review term s of reference since the previous Com m onw ealth N ational Com petition Policy Annual Report. Extent of public consultation Public consultation is a required part of all CLRS legislation review s. This obligation w as stipulated by the Australian Government in the release of the CLRS. The N CC has recom m end ed that, to m eet this obligation, all review s should be cond ucted in an ind epend ent, open and transparent w ay, against clear term s of reference, and in a m anner that allow s interested parties to participate. The review term s of reference set out the m inim um public consultation to be und ertaken. In the interest of transparent d ecision making and ensuring the broad est range of view s on the m atter und er consid eration are received , this generally involves ad vertising the review and seeking w ritten subm issions on a national basis. There m ay also be m ore targeted consultations w ith specific stakehold ers. Review progress or recommendations and Government response Further inform ation is reported d epend ing on the extent of progress of the review . Where the review has been com pleted , if possible, a sum m ary of the m ain review recom m end ations is provid ed . The final report of each review is to be m ad e publicly available, although for particularly sensitive review s this m ay not occur im m ed iately. A sum m ary of the Governm ent‘s response recom m end ations is includ ed , w here applicable. to the review 8 Prod uctivity Com m ission (1999), Regulation and its Review 1998-99, AusInfo, Canberra, p . 49. 17 1.2.1 Reviews completed and reform outcomes announced The follow ing sections report on the Com monw ealth‘s review and reform activity in the period 1 July 2002 to 31 March 2004. Details of review s com pleted in previous reporting period s are available in previous annual reports (available at: w w w .treasury.gov.au). Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Department of the Environment and Heritage) The A boriginal and Torres Strait Islander Heritage Protection A ct 1984 preserves and protects from injury or d esecration areas and objects that are of particular significance to Aboriginal and Torres Strait Island er peoples. In October 1995, the previous Governm ent comm issioned a review of the Aboriginal and Torres Strait Island er H eritage Protection Act by the H on Elizabeth Evatt AC. The review w as alread y und er-w ay at the tim e of the publication of the CLRS in June 1996. Review progress The Evatt Report w as received by the Governm ent in August 1996. The report m ad e recom m end ations concerning reform s to Australian Governm ent, State and Territory ind igenous heritage protection regim es. The m ajor recom mend ations includ ed :  establishm ent of national standard s for the protection of ind igenous heritage;  separation of d ecisions on the issue of significance from the question of site protection;  provid ing ad equate protection for culturally sensitive inform ation d isclosed in the course of ad m inistering heritage protection legislation;  prom oting negotiated outcom es through m ed iation; and 18  establishm ent of an Indigenous H eritage Protection Agency/ Office. Government response The recom m end ations of the Evatt Report w ere taken into consid eration w hen form ulating the Aboriginal and Torres Strait Island er H eritage Protection Bill 1998. The Bill provid es for accred itation by the Australian Governm ent Minister of State and Territory regim es w hich m eet certain stand ard s for protection of ind igenous heritage and reform s the process und er w hich the Australian Governm ent w ill assess applications in the absence of an accred ited State or Territory regim e or in ‗national interest‘ cases. The Bill w as introd uced into the H ouse of Representatives in April 1998 and after the 1998 election w as re-introd uced into the H ouse of Representatives in N ovem ber 1998. The opposition m ad e num erous am end m ents to the Bill in the Senate in N ovember 1999, m ost of w hich w ere unacceptable to the Governm ent. The Governm ent consulted further w ith all m ajor stakehold ers over the next tw o years. The Bill lapsed w hen Parliament w as prorogued prior to the 2001 election. The Governm ent is consulting further w ith all m ajor stakehold ers w ith a view to pursuing its election com mitm ent of reform ing the Act. Australia New Zealand Food Authority Act 1991 Food Standards Code (Department of Health and Ageing) The review of the Food Stand ard s Cod e com m enced in May 2000. It w as und ertaken by a review com m ittee com prising representatives from the Departm ent of the Treasury, the Departm ent of Agriculture, Fisheries and Forestry, the Departm ent of Ind ustry, Tourism and Resources, the Departm ent of H ealth and Ageing and the Office of Sm all Business. Food Stand ard s Australia N ew Zealand (FSAN Z) (previously the Australia N ew Zealand Food Authority — AN ZFA) ad vised stakeholders of the NCP legislation review through a notice on its w ebsite posted on 26 May 2000, and an ad vertisem ent in national new spapers in accord ance w ith the requirem ents of the term s of reference. In ad dition, FSAN Z includ ed the notice and call for subm issions in a m ail-out to over 200 stakehold ers. The notice and 19 ad vertisem ent provid ed background on the review , and invited all interested persons to make subm issions by 7 July, and com m ents on the likely effects on com petition and business of the legislative restrictions im posed by the Cod e, includ ing the potential regulatory im pact on consum ers, ind ustry, governm ent and the w id er com m unity. Ten organisations m ad e subm issions. N one of the subm issions ad d ressed the N CP review of the existing Cod e, rather, they largely revisited issues relating to the proposed d raft joint cod e w hich had arisen in the earlier consultation on the stand ard by stand ard review of the existing Cod e. Review progress The review report w as forw ard ed to the responsible Minister in February 2002. The review com mittee found that the Cod e d id act to restrict com petition and , w hile it achieved its objectives, particularly the protection of public health and safety, it also imposed costs on ind ustry and governm ent. The review com mittee recom m en d ed a m ore cost-effective m eans be ad opted to achieve the Cod e‘s objectives through a new cod e based on minim um effective regulation principles. The report is available on the FSANZ w ebsite at: w w w .food stand ard s.gov.au . Government response A new joint Australia-N ew Zealand Food Stand ard s Cod e w as im plem ented on 20 Decem ber 2000. It w as introd uced und er transition arrangem ents that allow ed the old food stand ards cod es of Australia and N ew Zealand to rem ain in force for tw o years. These cod es w ere subsequently repealed on 20 Decem ber 2002. Given this, the Governm ent consid ers no further action is required . The Governm ent‘s response is available on the FSAN Z w ebsite at: w w w .food stand ard s.gov.au . 20 Australian Postal Corporation Act 1989 (Department of Communications, Information Technology and the Arts) The review of the A ustralian Postal Corporation A ct 1989 com m enced in May 1997. It w as cond ucted by the N CC.9 Government response In April 2000, the Governm ent introd uced the Postal Services Legislation Am endm ent Bill 2000 into Parliam ent. This legislation form ed the Governm ent‘s response to the N CC review . The Bill w as unable to obtain passage through the Parliam ent and w as w ithd raw n in M arch 2001. The Governm ent is continuing to exam ine m easures aim ed at im proving the efficiency of the postal ind ustry. For exam ple, the Postal Services Legislation Am end m ent Bill 2003 introd uces reform s in the postal sector, includ ing:  Provid ing the ACCC w ith the pow er to require Australia Post to keep and m aintain record s in a m anner d eterm ined by the ACCC (as a m eans of ensuring transparency in Australia Post's accounts);  Extend ing the ACCC's pow ers to arbitrate in relation to d isputes about all term s an d cond itions of a bulk interconnection agreem ent and not just the discount rate as is currently the case;  Provid ing the Australian Com m unications Authority (ACA) w ith the pow er to oversight Australia Post's service perform ance (this w ill includ e transferring the Aud itor-General's responsibility und er section 28D of the Act to aud it Australia Post's perform ance against prescribed perform ance stand ard s);  Requiring the ACA to estim ate the cost of provid ing the Com m unity Service Obligations under section 27 of the Act;  Measures to legitim ise the current business practices of d ocum ent exchange and aggregation service provid ers. 9 See the 1997-98 Commonwealth N ational Competition Policy A nnual Report (p 63) for ad d itional inform ation on this review . 21 The Bill w as passed in the H ouse of Representatives in February 2004 and has been proposed for d ebate in the Senate. The Governm ent also announced on 1 October 2003 its intention to introd uce legislation to establish a Postal Ind ustry Om bud sm an (PIO) w ho w ill have jurisd iction over Australia Post and any other postal operators w ho elect to ‗opt into‘ the schem e. Legislation to establish th e PIO is being finalised and introd uction to Parliam ent w ill be sought as soon as possible. Customs Tariff Act 1995 – Automotive Industry Arrangements (Department of Industry, Tourism and Resources) The Customs Tariff A ct 1995 im poses Custom s duty on good s im ported into Australia. The autom otive ind ustry arrangem ents und er the Act w ere initially review ed as part of a 1997 Ind ustry Com m ission inquiry entitled The A utomotive Industry. Review Progress The purpose of this review w as, am ong other things: to encou rage the d evelop m ent of a su stainable, p rosp erou s and internationally com p etitive au tom otive m anu factu ring ind u stry in Au stralia; to im p rove the overall econom ic p erform ance of the Au stralian au tom otive ind u stry; to p rovid e good qu ality, com p etitively p riced vehicles to the Au stralian consu m er; and its com m itm ent to abid e by Au stralia‘s international obligations and com m itm ents. The Com m ission noted in its report that: history show s that the higher the level of assistance to the ind u stry the p oorer the ind u stry‘s p erform ance. The Com m ission therefore recom m end ed that tariffs on m otor vehicles and com ponents be red uced to five per cent by 2004 (the tariff w as then at 22.5 per cent but w as alread y sched uled to fall to 15 per cent by 2000). The Com m issioners cond ucting the review , how ever, w ere not unanim ous in their conclusions about the autom otive ind ustry. 22 The m inority report contained in The A utomotive Industry stated that: u nilaterally cu tting car tariffs to 5 p er cent p ost -2000 cou ld w ell see Au stralia lose tw o car p rod u cers. If this w ere to hap p en the fallou t am ong com p onent p rod u cers w ou ld be even m ore seriou s. To d eal w ith this situation the m inority report recom m end ed that: Tariffs on p assenger m otor vehicles, original equ ip m ent and rep lacem ent com p onents be m aintained at 15 p er cent u ntil 2005, w ith a review to be held in, say, 2003 to consid er p ost-2005 assistance arrangem ents for the ind u stry. Government Response The Governm ent received the report of the Ind ustry Com m ission an d follow ed a m id d le course betw een the view s expressed by legislating to red uce the autom otive tariff to ten per cent in 2005, and providing $2.8 billion through the Autom otive Com petitiveness and Investm ent Schem e to assist the autom otive ind ustry w ith its transition to low er tariffs. In March 2002 the Treasurer asked the Prod uctivity Com m ission to report on w hat assistance arrangem ents for the autom otive ind ustry should be in place beyond 2005. The Prod uctivity Com m ission‘s inquiry - Review of A utomotive A ssistance - w as released on 13 Decem ber 2002. The Treasurer released the Government‘s response to the Prod uctivity Com m ission‘s inquiry on 13 Decem ber 2002. The Governm ent accepted m ost of the Prod uctivity Com m ission‘s recomm end ations. Only one recom m end ation of the Prod uctivity Comm ission w as rejected outright, w hile another recom m end ation w as d eem ed by the Fed eral Governm ent to be outsid e its area of responsibility. The Governm ent also agreed that support from the Autom otive Com petitiveness and Investm ent Schem e had been im portant in transform ing the Australian autom otive industry and should be extend ed to assist w ith the ind ustry adjust to low er tariffs. The Governm ent therefore announced a $4.2 billion extension of the Autom otive Com petitiveness an d Investm ent Schem e to 2015, and d ecid ed to red uce automotive tariffs to five per cent in 2010. 23 The Customs Tariff Amendment (A CIS) A ct, N o. 97 2003 received Royal Assent on 14 October 2003. The A CIS A dministration Amendment A ct, N o. 96 2003, w hich is a com plem entary piece of legislation has also passed through Parliament. The Customs Tariff A mendment (A CIS) A ct 2003 red uces the autom otive tariff to five per cent in 2010. The A CIS A dministration Amendment A ct 2003 extend s the Automotive Com petitiveness an d Investm ent Schem e (ACIS) from its initial finishing d ate of 2005 to 2015 in ord er to assist the autom otive ind ustry ad just to the low er tariff regim e. Customs Tariff Act 1995 – Textiles, Clothing and Footwear Arrangements (Department of Industry, Tourism and Resources) The Customs Tariff A ct 1995 im poses Custom s duty on good s im ported into Australia. The arrangem ents relating to textiles, clothing and footw ear in the Act w ere initially review ed as part of the 1997 Ind ustry Com m ission inquiry into textiles, clothing and footw ear ind ustries. Review Progress The Ind ustry Com m ission presented its final report on 7 Septem ber 1997. Its m ajor recom m end ations and im plementation strategy includ ed :  that this should be the last sectoral program to apply to these ind ustries. The program for changes to assistance should be legislated and tariff red uctions inscribed in Australia‘s APEC Ind ivid ual Action Plan;  a program of phased tariff red uctions to 5 per cent by 1 July 2008 should be im plem ented w ithout pause from 1 July 2001;  policy by-law s should be term inated as of 1 July 2008;  the Overseas Assem bly Provisions Schem e should be extend ed and sim plified ; and  a program of ad justm ent assistance should be im plem ented to accom pany the tariff reduction program . 24 Government Response The Governm ent initially d ecid ed to continue w ith the current sched ule for TCF tariff phase d ow n until 1 July 2000, at w hich point tariff levels w ould be m aintained until 1 January 2005. Follow ing this d ate, tariffs w ould be red uced to a maxim um of 17.5 per cent. This position w as based on a com m itm ent to prom oting job security w ithin this ind ustry, involving the ad option of a range of practical transition arrangem ents, by encouraging ad ditional investm ent and prom oting the d evelopment of an internationally com petitive TCF sector in the lead up to the free trad e environm ent beyond 2010. TCF tariffs w ere to be further review ed in 2005, w ith consid eration to be given to APEC free trad e com m itm ents and progress on m arket access. On 19 N ovem ber 2002, an inquiry by the Prod uctivity Com mission into post-2005 assistance arrangem ents for the TCF ind ustry w as announced . The Com m issioner to the inquiry w as Dr David Roberston w ith Associate Com m issioner Mr Philip Weickhard t. A d raft report w as com pleted in April 2003 and released for public com m ent. A final report w as d elivered to the Governm ent on 31 July 2003. The m ain recom m end ations contained in the report includ ed a five year pause in tariff red uctions from 2005. Tariffs are to be red uced in 2010 and again in 2015, by w hich tim e TCF tariffs w ill be in line w ith the five per cent average tariff applying to m anufacturing ind ustries generally. The Prod uctivity Com m ission also recom m end ed that the proposed tariff red uctions be supported by a further continuation of assistance for the sector. The Governm ent announced its response to the inquiry on 27 N ovember 2003. Recom m end ations relating to tariff red uctions w ere ad opted . A $747 m illion package of assistance to assist the process of adjustm ent w as includ ed in the announcem ent. The core elem ent of this package, a $600 m illion schem e to encourage investm ent and innovation, w ill require new legislation. A Regulation Im pact Statem ent w as prod uced as part of the Governm ent response. 25 Am endm ents to the Customs Tariff A ct reflecting both the tariff red uctions and a new item for the proposed im port cred it scheme w ill be required . All legislation is expected to be introduced into Parliam ent in 2004. TCF By-law s, w hich form part of the Customs Tariff A ct, rem ain unaffected . Customs Act 1901 — sections 154 — 161L (Attorney-General’s Department) The legislation provid es the basis for d eterm ining the custom s value of good s im ported into Australia. Custom s value is used to d eterm ine the d uty payable on im ported good s, to com pile im port statistics and also contributes to the collection of sales tax w here this is payable at the time of im portation. Custom s value also contributes to the calculation of GST on im ported good s. The legislation enacts Australia‘s obligation s und er the World Trad e Organisation Custom s Valuation Agreem ent. The taskforce cond ucting the review com prised officers from the then Departm ent of Ind ustry, Science and Resources, the Departm ent of Foreign Affairs and Trad e and the Australian Custom s Ser vice. Officers from the Australian Taxation Office, the Australian Bureau of Statistics and the Departm ent of the Treasury acted as observers in the review process. Review progress The review report, w ith six recom m end ations, w as m ad e public on 16 June 1999. Government response In early 2001, im plem entation of the review ‘s recom m end ations com m enced w ith Custom s seeking the necessary approvals for legislative am end m ents. These approvals have now been obtained . The Prim e Minister and relevant Ministers have supported the am end m ent of the legislation. 26 Custom s has com m enced processes to am end the valuation provisions of the Custom s Act (to give effect to the first four recom m end ations of the review ). Custom s is consid ering the feasibility of a system of public v aluation rulings (recom m end ation five). Custom s already provid es a valuation ad vice service. Each piece of ad vice is provid ed only to the applicant for that ad vice. Most ad vice w ould not have general applicability, given that it is tailored to particular circum stances, includ ing the contractual arrangem ents, of the applicant. Custom s intend s to provid e inform ation to the public once the new legislation is enacted (recom m end ation six). Export Control Act 1982 (such as fish, grains, dairy, processed foods etc) (Department of Agriculture, Fisheries and Forestry) The Export Control A ct 1982 provid es a com prehensive legislative base for the export inspection and control responsibilities for certain good s. The Act provid es for the application of export controls to good s specified in regulations; d etails inspection responsibilities and provid es the authority for inspection staff to carry out these responsibilities; and sets penalties to apply in the case of fraud or d eliberate m alpractice. Review progress The review (in relation to good s such as fish, grains, d airy, and processed food s) com m enced in January 1999. The report w as finalised on 23 Decem ber 1999, and released publicly in February 2000. The review w as und ertaken by a review com m ittee, chaired by Mr Peter Fraw ley, formerly Executive General Manager of CSR and Chairm an of Livecorp; Mr Raoul N ieper, previously H ead of the Queensland Departm ent of Prim ary Ind ustries, now an ind epend ent consultant; Mr Lynd say Makin, an ind epend ent consultant, previously General Manager, Export for N estlé, and Ms Barbara Wilson, Assistant Director, Technical Services and Operations in the Australian Quarantine and Inspection Service (AQIS). 27 Government response The Governm ent response w as approved by the Minister on 22 April 2002. Progress has been m ad e against all recomm end ations. AQIS has engaged all relevant export ind ustry consultative groups in the im plem entation process. Progress has been particularly significant in relation to the m eat export ind ustry w here a harm onised na tional stand ard has been d eveloped and subord inate legislation is being restructured to reflect the three-tier m od el proposed by the Report. Im plem entation of the recom m endations in the Report is being m onitored by the Quarantine and Exports Ad visory Coun cil. Export Control (Unprocessed Wood) Regulations under the Export Control Act 1982 (Department of Agriculture, Fisheries and Forestry) The objective of the Export Control (Unprocessed Wood ) Regulations und er the Export Control A ct 1982 is to control the export of unprocessed w ood (includ ing w ood chips and logs). Subsequent am end m ents to the regulations have lifted export controls on plantation sourced w ood in all States except Queensland and the N orthern Territory, and to w ood sourced from native forests in regions covered by Regional Forest Agreem ents (RFAs). The review panel w as com posed of: Rob Raw son, General Manager, Forestry Ind ustry, Agriculture, Fisheries and Forestry Australia (AFFA); Chris Sant, Office of Legislative Drafting; and Richard Sisson, Innovation and Operating Environment, AFFA. AFFA provided secretariat support. Review progress The review w as com pleted in 2001. The review recom m end ations are: Recommendation 1 The Governm ent should rem ove export controls over sand alw ood . Recommendation 2 The Governm ent should consid er its position on export controls over plantation-sourced w ood follow ing the outcome of the review of the plantation cod es of practice for Queensland and the N orthern Territory. 28 If those review s result in rem oving the need for an export licence for w ood sourced from w ithin those jurisd ictions because N ational Plantation Principles are observed , then the regulations become red und ant and should be rem oved . Recommendation 3 The Governm ent should reconsider its position on export controls over hard w ood w ood chips sourced from native forests and either:  rem ove the requirem ent for an export licence for any hard w ood w ood chips or other unprocessed w ood prod uced from w ood harvested in a native forest — includ ing those native forests outside RFA regions; or  allow the export of hardw ood w oodchips from regions not covered by an RFA under licence w here options for a future com prehensive, ad equate and representative forest reserve system w ould not be com prom ised by the granting of such a licence. Government response The Australian Governm ent is currently planning the rem oval of export controls on sand alw ood and is consulting w ith Western Australia on this. Discussions are yet to take place w ith Queensland , the other State that exports sand alw ood . Discussions w ith Queensland on a Cod e of Practice for plantation tim ber w ill be progressed later this year. The Australian Governm ent has agreed to rem ove export controls on plantation tim ber from the N orthern Territory and is finalising ad m inistrative proced ures for this to occur. Once export controls have been rem oved for plantation timber from the N orthern Territory and Queensland , export controls on hard w ood chips from non-RFA regions can then be consid ered for rem oval. It is noted that hard w ood chips from native forest in non -RFA regions are prohibited from export. 29 Fees charged under the Trade Practices Act (Department of the Treasury) The overall objective of the TPA is to enhance the w elfare of Australians by prom oting com petition and fair-trad ing and provid ing appropriate safeguard s to consum ers. The fees charged und er the Act attem pt to offset some of the costs of provid ing these services through user charges. This review has been includ ed w ithin the tw elve m onth Prod uctivity Com m ission inqu iry, Cost Recovery by Regulatory, Ad m inistrative and Inform ation Agencies — includ ing fees charged und er the TPA, w hich com m enced in August 2000. Review progress The Prod uctivity Com m ission‘s final report w as released on 14 March 2002. The Comm ission‘s only find ing relevant to the legislation review requirem ent is that current TPA charges (by the ACCC) appear to have little if any im pact on com petition and econom ic efficiency and hence are not inconsistent w ith the com petition tests und er the CPA. Government response The Treasurer‘s press release of 14 March 2002 (joint w ith the Minister of Finance and Ad m inistration) noted that this com pletes this review com m itm ent und er the CPA. Fisheries Legislation (Department of Agriculture, Fisheries and Forestry) The review encom passes a num ber of Com m onw ealth Acts that govern fisheries m anagem ent in Australian w aters:  Fisheries M anagement A ct 1991  Fisheries A dministration A ct 1991  Fisheries Legislation (Consequential Provisions) A ct 1991  Statutory Fishing Rights Charge A ct 1991 30  Fisheries A greements (Payments) A ct 1991  Fishing Levy A ct 1991  Foreign Fishing Licences Levy A ct 1991 The m ost significant of these Acts are the Fisheries M anagement A ct 1991 and the Fisheries A dministration A ct 1991, w hich set out the objectives of the Com m onw ealth‘s involvement in fisheries m anagem ent and the m ethod s by w hich these objectives m ay be pursued . These objectives includ e the pursuit of efficient and cost-effective practices, the need to preserve the long-term sustainability of the m arine environm ent and accountability to the fishing ind ustry and the broad er Australian com m unity. Apart from the m anagem ent of Australia‘s fisheries, other issues regulated und er the Acts, w hich are the subject of the review , includ e the im position of levies and the issue of foreign fishing licences. The review com m enced in October 1998 and w as cond ucted by a com m ittee of officials. Review progress The review w as finalised in Septem ber 2002 and is available from the Departm ent and on the AFFA w ebsite. Government response The Governm ent referred the report to the w id er review of Com m onw ealth fisheries policy. The Fed eral Fisheries Minister, Senator Ian Macd onald , tabled a report of this policy review , Looking to the Future in Parliament on 25 June 2003. Th e report noted that: The Com m onw ealth Governm ent, in consultation w ith relevant stakeholders, w ill prepare a policy paper to guid e the fishing ind ustry on how the m anagem ent of Com monw ealth fisheries pursues the objective of m axim ising economic efficiency w hile ensuring consistency w ith the principles of ecologically sustainable d evelopm ent. The Australian Fisheries Managem ent Authority w ill continue to provid e regulatory im pact statem ents w hen developing statutory m anagem ent plans. 31 The Com m onw ealth Governm ent w ill seek to am end the Fisheries M anagement A ct 1991 (the Act) to clarify the requirem ent that m anagem ent plans explicitly includ e objectives consistent w ith those und er the legislation, and includ e criteria and tim efram es for perform ance review . The Australian Fisheries Managem ent Authority w ill com plete fisheries m anagem ent plans for all m ajor fisheries as soon as practicable, as required und er the Act. The Australian Fisheries Managem ent Authority w ill continue to im plem ent the Governm ent‘s cost recovery policy for Com m onw ealth -m anaged fisheries. In 2003, the N ational Com petition Council (N CC) assessed that the Australian Government has m et its CPA clause 5 obligations in relation to the Act. All of the Act‘s significant restrictions on com petit ion w ere found to be in the public interest. Three case stud ies confirm ed that com petition restrictions applied via statutory m anagem ent plans are in the public interest; m ore generally, such regulation is subject to the public interest test via regulatory im pact statem ents and regular review s.‖ Hazardous Waste (Regulation of Exports & Imports) Act 1989, Hazardous Waste (Regulation of Exports & Imports) Amendment Bill 1995 & also related regulations (Department of Environment and Heritage) The Hazardous W aste (Regulation of Exports and Imports) A ct 1989 states that the objective of the Act is to regulate the export, im port and transit of hazard ous w aste to ensure that it is m anaged in an environm entally sound m anner so that hum an beings and the environm ent, both w ithin and outsid e Australia, are protected from the harm ful effects of the w aste. This review w as originally sched uled for 1998-99, how ever it w as d eferred to 1999-2000. The term s of reference w ere approved by the ORR on 28 February 2000. The review w as und ertaken by a taskforce w hich com prised second ed officials from Environm ent Australia, the Attorney -General‘s Departm ent, the Departm ent of Foreign Affairs and Trad e, the Departm ent of Ind ustry, Science and Resources, the Departm ent of 32 H ealth and Aged Care and the ORR. A consultant from the Allen Consulting Group assisted the panel. Review progress A d raft report of the review w as d iscussed w ith stakehold ers at a m eeting of the H azard ous Waste Act Policy Reference Group in N ovem ber 2000. The taskforce of officials required that num erous changes be m ad e and the final report w as received on 23 February 2001. A copy of the report can be located at: w w w .ea.gov.au/ ind ustry/ chem icals/ hw a/ pap ers/ review .html. Government response The Governm ent response, agreeing to m ost of the review recom m end ations, w as released on 12 June 2001 and can be located at: w w w .ea.gov.au/ ind ustry/ chem icals/ hw a/ papers/ review -response.htm l. Am endm ents to the H azard ous Waste (Regulation of Exports and Im ports) Act 1989 comm enced on 16 October 2001, im plem enting some of the recom m endations. Am endm ents have also been m ad e to the ‗Australian Guid e to Exporting and Im porting H azard ous Waste: Applying for a Perm it: Second Ed ition‘ im plem enting som e of the other recom m end ations. A d raft regulation impact statem ent on amend m ents to the Fees Regulations w as d iscussed w ith stakehold ers in Septem ber 2003 and the am end m ent process is currently being initiated. Further recom m endations w ill be im plem ented in am endm ents to the OECD Decision Regulations that are expected to be m ad e in 2004. 33 Health Insurance Act 1973 Part IIA (Department of Health and Ageing) This review w as ad d ed to the CLRS for review in 1998-99 and com m enced in January 2000. The review w as overseen by a steering com m ittee com prised of representatives from Departm ents of H ealth and Ageing and Treasury. The Act establishes the Med icare benefits schem e and sets out the arrangem ents that apply to the provision of pathology services. The m ain provisions relating to pathology services are contained in Part IIA, how ever, other parts of the Act also relate to the provision of pathology services and these have been includ ed in the review . In ad d ition, the Act also provid es for a range of regulations and other pieces of d elegated legislation to be mad e w hich established the pathology operating fram ew ork. All these pieces of legislation com e und er the scope of this review . Review progress The final report w as approved for public release in February 2003 and is available on the Departm ent of H ealth and Ageing‘s w ebsite: w w w .health.gov.au/ haf/ branch/ d tb/ review path.htm . Government response A Governm ent response has been agreed and finalised , and is generally supportive of the recom m end ations. The Departm ent of H ealth and Ageing is w orking to implem ent the recom mendations as a priority. Imported Food Control Act 1992 and Regulations (Department of Agriculture, Fisheries and Forestry) The Imported Food Control A ct 1992 and its associated regulations com prise the legislation that enables AQIS to m onitor and inspect im ported food s. The legislation provid es that the requirem ents w ith w hich im ports m ust com ply are those contained in the Food Stand ard s Cod e, w hich w as d eveloped by FSAN Z (previously AN ZFA). The Act specifies (am ong other things): 34  the role of FSAN Z in risk m anagem ent;  the Food Stand ard s Code as the applicable national stand ard ;  the pow er of the Minister of the Departm ent of Agriculture, Fisheries and Forestry to m ake ord ers w hich, for exam ple, specify food s consid ered risk categorised food s;  the m aking of regulations and their coverage;  control proced ures relating to im ported food ;  the certification and quality assurance arrangem ents that m ay be accepted in lieu of inspection;  the treatm ent of failing food ; and  enforcem ent provisions and d ecision review . The review com m enced in March 1998. It w as cond ucted by an ind epend ent com m ittee, chaired by Carolyn Tanner, Chair, University of Syd ney and m em ber of the Quarantine and Export Ad visory Council; Tony Beaver, Secretary of the Food and Beverage Im porters Association, Mem ber of the Im ported Food Ad visory Council, the AQIS Ind ustry Cargo Consultative Com m ittee and the Ind ustry Working Group on Quarantine; And y Carroll, Manager, Anim al Program s Section, AQIS; and Elizabeth Flynn, Program Manager for Monitoring and Surveillance, FSAN Z. 35 Review progress The report w as finalised on 30 N ovem ber 1998, and released to the public in February 1999. Government response The Governm ent Response agreeing to all 23 recom m end ations from the N CP review of the Act w as issued on 29 June 2000. The outstand ing recom m end ations involve m ajor changes to IT system s and legislativ e changes. Significant progress has been m ad e on im plem entation of the outstand ing recom m end ations. Work on changing the IT system s is progressing w ell and further substantial changes are proposed . Am endm ents to the Act have been introd uced into Parliam ent and are currently before the Senate. Am end ments to regulations that w ill support the introd uction of a targeted surveillance system for im ported food in line w ith the N CP review recom mend ations are close to finalisation. Intellectual Property Protection Legislation (Designs Act 1906, Patents Act 1990, Trade Marks Act 1995, Copyright Act 1968 and Circuit Layouts Act 1989) (Department of Industry, Tourism and Resources, Attorney-General’s Department) The objective of each of these Acts is to encourage investm ent in innovation and creative effort for the benefit of society. Without intellectual property rights, it w ill be possible for free -rid ers to easily copy w ork by others and d eprive the creators of appropriate rew ard for their investm ent; thus there w ill be little incentive to invest in creative effort. The review of the intellectual property protection legislation w as und ertaken by an ind epend ent com m ittee — the Intellectual Property and Com petition Review Com m ittee — com prising Mr H enry Ergas (Chairm an), Associate Professor Jill McKeough and Mr John Stonier. The com m ittee com m enced its review in June 1999. 36 Review progress The review com m ittee presented its Report on Parallel Im porting und er the Copyright A ct 1968 in June 2000 and its final report, Review of Intellectual Property Legislation und er the Com petition Principles Agreem ent d ated Septem ber 2000. The report w as released in Decem ber 2000. Government response The Governm ent announced its response to the review on 28 August 2001. The Governm ent fast-tracked im plem entation of the m ore significant patent initiatives. The Patents A mendment A ct 2001 am end s the Patents A ct 1990 to strengthen its novelty and inventiveness requirem ents. The introd uction of a grace period for patents w as achieved through am end m ents to the Patents Regulations 1991. These am end m ents to both the Act and Regulations com m enced on 1 April 2002. Further legislative am end m ents to the Patents Act and Trad e Marks Act are expected to be introduced d uring 2004. The Advisory Council on Intellectual Property‘s (ACIP) review into possibly extend ing the jurisd iction of the Fed eral Magistrates Service to patent, trad e m arks and d esign m atters w as presented to Governm ent in Decem ber 2003. ACIP expects to report to Governm ent on Trad e Ma rk Enforcem ent by m id 2004. In relation to the Copyright Act, the Governm ent accepted the recom m end ation to repeal copyright control over parallel im portation except in relation to film s. Am end m ents w ere introd uced and passed , w ith am end m ents exclud ing ch anges relating to books. The relevant legislation, the Copyright A mendment (Parallel Importation) A ct 2003, cam e into force in May 2003. In its form al response the Governm ent accepted the Com m ittee‘s recom m end ations regard ing the copyright term and the efficient operations of the Internet but has since had further occasion to review the issue of term of protection and the am end m ents m ad e by the Copyright Am end m ent (Digital Agend a) Act in the context of 37 negotiations on a free trad e agreem ent (FTA) w ith th e USA and a specific review of the d igital agend a amend m ents. In consequence of the conclusion of the FTA announced in February 2004 the Governm ent has agreed that it w ill increase the term of protection by an ad d itional 20 years. Further, it proposes to m ake changes to provisions concerned w ith technological protection and the arrangem ents for m anaging the liability for Internet service provid ers to m ake these areas m ore in line w ith US law . The review of the d igital agenda am end m ents w as not com plete at the tim e of w riting. In regard to Crow n ow nership of com missioned w orks, the Governm ent d ecid ed to consid er best practice guid elines for the Com m onw ealth in com m issioning w orks to elim inate unjustifiable ad vantage to the Governm ent. The Governm ent announced , on 20 N ovem ber 2003, a broad er review of Governm ent ow nership of copyright to be cond ucted by the Copyright Law Review Com m ittee. The Governm ent d id not accept the recom m endation to rem ove the cap on royalties for broad casting sound record ings. The Government, in accepting in part the Com m ittee‘s recom m end ations regard ing collecting societies, id entified existing as w ell as future actions to implem ent the com mittee recom m end ations. Motor Vehicle Standards Act 1989 (Department of Transport and Regional Services) The M otor V ehicle Standards A ct 1989 provid es a m echanism for setting national safety, em issions and anti-theft standard s for road vehicles supplied to the Australian m arket. The Act applies to all new and im ported vehicles. The review com m enced in December 1997. It w as und ertaken by a taskforce of officials, head ed by the Fed eral Office of Road Safety, w ith representatives from the then Departm ent of Ind ustry, Science and Resources, the Australian Custom s Service, the N ational Road Transp ort Com m ission and Environm ent Australia. 38 An independ ent reference comm ittee assisted the review process by ensuring the taskforce‘s w ork w as ind epend ent, strategic and effective by reflecting as broadly as possible the view s of stakehold ers. Review progress The d raft report of the review of the Motor Vehicle Stand ard s Act and its associated recom m end ations w ere released by the Minister for Transport and Regional Services, the H on John And erson MP, on 12 May 1999 for consid eration and comm ent before the rep ort w as finalised . This provid ed an opportunity for all interested parties to provid e their view s to the taskforce prior to the final report being consid ered by Governm ent. The taskforce consid ered com ments from m ore than 100 stakehold ers. The taskforce m ad e a num ber of recom m end ations concerning the eligibility arrangem ents for vehicles entering the m arket through the Low Volum e Schem e (LVS) as specialist and enthusiast vehicles. Includ ed in the recomm end ations w ere that consid eration be given to revising the current eligibility criteria to m ake them less subjective and that vehicles w ith d iesel engines or turbo-charged engines w ould be consid ered as a d ifferent m od el for the purposes of the LVS. Government response On 8 May 2000, follow ing the review , the Governm ent announced new arrangem ents to ad m inister th e im portation of used vehicles. The M otor V ehicle Standards A mendment A ct 2001 com m enced on 1 April 2002. The Registered Au tom otive Workshop Schem e also com m enced on that d ate. Work is progressing on other m atters arising from the Governm ent‘s response to the review . National Residue Survey Administration Act 1992 and related Acts (Department of Agriculture, Fisheries and Forestry) The N ational Resid ue Survey (N RS) m anages m onitoring program s for chem ical resid ue in m any Australian agricultural food com m od ities. The purpose of the legislation is to put in place statutory arrangem ents under 39 w hich the N ational Resid ue Survey Trust Account operates und er full cost recovery. The review com m enced in June 1998. It w as conducted by a com mittee of officials. Members of the com m ittee w ere: the chair, Dr Melanie O‘Flynn, Director, Resid ue and Stand ard s Branch, N ational Office of Food Safety, AFFA; Mr Paul Bellcham bers, Manager, Ind ustries Stud ies Section, Ind ustry Analysis Branch, Departm ent of Ind ustry, Science and Tourism ; Mr Richard H um phry, Senior Legal Counsel, Office of Legislative Drafting, Attorney-General‘s Departm ent; and Dr R J Sm ith, Manager, Chem ical Review , N ational Registration Authority. The N RS Secretariat sent letters to peak ind ustry bod ies that have an N RS program and to other interested groups seeking subm issions/ com m ent on the review . N otification of the review appeared in the national press. Review progress The review com mittee conclud ed that the legislation d id not restrict com petition and actually provid ed a substantial com petitive benefit to Australian prod ucers by facilitating local and international trad e. Government response The Governm ent accepted the review recom m end ations and it has been forw ard ed (out of session) to the Standing Com m ittee on Agriculture and Resource Management (SCARM) and the Stand ing Com m ittee on Fisheries and Aquaculture for inform ation. The report has been m ade public. National Road Transport Commission Act 1991 and related Acts (Department of Transport and Regional Services) The purpose of the N ational Road Transport Commission A ct 1991 is to provid e a statutory basis for the N ational Road Transport Com m ission (N RTC), w hich is also governed by H ead s of Governm ent Agreem ents sched uled to the Act. The prim ary role of the N RTC is to ad vise the Australian Transport Council (ATC) on reforms that w ill im prove the safety, efficiency, and red uce the ad m inistrative cost, of road transport. 40 All regulatory proposals arising from these activities, w hich in som e cases have been given effect in Australian Governm ent Road Transport Legislation as the basis for State and Territory legislation, have alw ays been subject to strict regulatory im pact assessments. These assessm ents w ere m od ified slightly in 2001 to m eet guid elines issued by CoAG. The N RTC w orks closely w ith the ORR to ensure com petition policy requirem ents are m et in its subm issions to the ATC. In N ovember 1996 DOTARS and the ORR agreed that the term s of reference for the review of the N ational Road Transport Com m ission Act and related Acts (w hich w as then und erw ay) w ould ad equately ad d ress the CPA requirem ents for legislation review . The review w as cond ucted in 1996 by a steering com m ittee and an ind epend ent consultant. The steering com m ittee consisted of John Bow dler, form er Deputy Secretary of DOTARS; Ron Finem ore of the Road Transport Forum ; Colin Jord an of VicRoad s; Barrie MacDonald of the Australian Bus and Coach Association; Lauchlan McIntosh of the Australian Autom obile Association; and Bruce Wilson of Queensland Transport. Stuart H icks, a Western Australian based consultant, cond ucted the review . Review progress A review report ad d ressing the term s of reference w as provid ed to the ATC in Decem ber 1996. The review w as consid ered at a special m eeting of the ATC in February 1997 and the com m unique of that m eeting m ade public. Ministers‘ recom m end ations to CoAG w ere transmitted in April 1997 und er a joint letter from the ATC Chair, The H on John Cleary, MH A and John H urlstone, Chair of the N RTC. The review ‘s recom m end ations focused on im proving the N RTC and the d elivery of its outcom es. N o changes w ere need ed to ad d ress the requirem ents of the CPA. CoAG w as generally supportive but had som e view s on specific aspects of the recom m endations of the ATC. These took som e tim e to fully resolve. In fact, the ATC‘s specific issues about being host for ‗Com m onw ealth tem plate legislation‘ und er resid ual pow ers w ere not resolved until August 1999. H ow ever, CoAG d id agree to the public release of a H ead s of Governm ent Recom m itm ent Statem ent about road 41 transport reform through the N RTC. It also agreed to the amending legislation for the Act w ith attend ant Am end ing H ead s of Governm ent Agreem ents and to continue the related Acts. CoAG d id not agree to the public release of the review w orking d ocum ents. Government response The Governm ent response to the review report and view s of CoAG w as that the N ational Road Transport Com m ission Act be am end ed to give effect to the enhancem ents and that the related Acts w ere to continue. In this process, the ORR agreed a RIS w as not required , as the am end m ents d id not propose new or am end ed regulations. H ow ever, as stated above, all of the N RTC‘s regulatory proposals are subject to assessm ent of their im p act. Follow ing a further review of the Act com m encing in December 2001, H ead s of Governm ent agreed to the repeal of the Act and the establishm ent of a new bod y, the N ational Transport Com m ission, und er the N ational Transport Commission A ct 2003. The N ational Transport Com m ission com m enced on 15 January 2004 w ith a focus on cooperative national regulatory reform , w ith responsibilities for road , rail and inter -m odal transport. The InterGovernmental A greement for Regulatory and Operational Reform in Road, Rail and Intermodal Transport form alises the cooperative arrangem ents betw een the States, Territories and the Australian Governm ent and d efines the role and responsibilities of the new Com m ission, the Australian Transport Council and jurisd ictions. Ozone Protection Act 1989 & Ozone Protection (Amendment) Act 1995 (Department of Environment and Heritage) The Ozone Protection Act 1989 and the Ozone Protection (Amendment) A ct 1995 (the Act) im plem ent Australia‘s obligations und er the M ontreal Protocol on Substances that Deplete the Ozone Layer. The Act provid es for a system of controls on the m anufacture, im port and export of substances that d eplete ozone in the atm osphere. The key objective is the phasing 42 out of ozone d epleting substances (ODS), prim arily throu gh encouraging Australian ind ustry to replace and/ or red uce its use of ODS, in som e cases ahead of the Montreal Protocol requirem ents, w here this is d eem ed possible. The ORR approved the term s of reference for a review of the Act in March 2000. Review progress The review taskforce consisted of representatives from Environment Australia, the Australian Greenhouse Office and the Attorney -General‘s Departm ent. Price Waterhouse Coopers assisted the taskforce.  A review of the legislation w as com pleted in Januar y 2001 and end orsed by the Minister for the Environment and H eritage in May 2001. The report is available on Environm ent Australia‘s w ebsite at: w w w .ea.gov.au/ atm osphere/ ozone/ legislation/ legrev .html. Government response In a press release on the 2002-3 Bud get, the Minister for the Environm ent and H eritage announced m easures in response to the review . The release id entified the follow ing m easures:  upd ating the Ozone Protection Act to provide for a national uniform approach to end -use controls on ozone-depleting gases and incorporating synthetic greenhouse gases;  extend ing of the legislation to require im porters, exporters and m anufacturers of synthetic greenhouse gases to hold a controlled substances licence und er the Act;  requiring im porters of pre-charged air conditioning equipm ent containing H CFCs and H FCs to d em onstrate that they have appropriate arrangem ents in place to m anage refrigerants at the end of their serviceable life; and 43  am end ing the Ozone Protection Reserve to includ e fund ing of synthetic greenhouse gas em ission m inimisation initiatives. The Governm ent introd uced the Ozone Protection and Synthetic Greenhouse Gas Legislation Am end m ent Bill into Parliam ent in June 2003. Parliament passed the Bill in Decem ber 2003, am end ing the Ozone Protection A ct 1989 to the Ozone Protection and Synthetic Greenhouse M anagement A ct 1989. The am end m ents:  extend the im port, export and m anufacture licensing system for ozone d epleting substances (ODS) to also cover synthetic greenhouse gases (SGG) w here they are used as alternatives to ODS.  provid e for establishment of national end -use controls on the purchase, sale, handling and d isposal of these gases.  im plem ent the Beijing Am end m ent to the Montreal Protocol, banning the im port and m anufacture of brom ochloromethane, and banning trad e in certain ozone d epleting substances w ith non -Protocol countries.  broad en the purpose of the Ozone Protection and SGG Account to includ e N ational H alon Bank revenue and exp end iture, and expend iture on ODS phaseout program s and program s to m inim ise ODS and SGG em issions. The Departm ent of the Environm ent and H eritage and the Australian Greenhouse Office have com m enced implem entation of the am end m ents. The licensing system for synthetic greenhouse gases and equipm ent pre-charged w ith H CFCs or H FCs com m ences on 1 April 2004. Consultation has com m enced w ith the fire protection and refrigeration and air-cond itioning ind ustries to establish end -use regulations and prod uct stew ard ship arrangem ents. End -use regulations for these sectors are expected to be in place by m id -year 2004. Petroleum (Submerged Lands) Act 1967 (Department of Industry, Tourism and Resources) The review of this Act w as includ ed in the national Review of Petroleum (Subm erged Land s) Acts (see page 75). 44 Prices Surveillance Act 1983 (Department of the Treasury) The Prices Surveillance Act 1983 (PSA) assigns three specific functions to the ACCC. These are: to consid er price rises notified ‗d eclared‘ organisations; to m onitor selected prices; and to hold inquiries into m atters relating to prices as d irected by the Minister. Review progress The Prod uctivity Com m ission reported in 2001 on its review of the PSA. The Com m ission recomm end ed , am ong other things, that the PSA be repealed and that lim ited new inquiry and m onitoring functions be w ritten into a new part of the TPA. Government response The Governm ent accepted the recom m end ation that the PSA be repealed and a new part inserted in to the TPA. The Treasurer‘s press release of 20 August 2002 and the Governm ent‘s response to the Com m ission‘s report are available at w w w .treasurer.gov.au. An Act to give effect to the Governm ent‘s response w as passed on 17 Decem ber 2003 and com m enced on 1 March 2004. Primary Industries Levies Act and related Collection Acts (Department of Agriculture, Fisheries and Forestry) The Prim ary Ind ustries Levies Act and related Collection Acts authorise the collection of statutory levies im posed on prim ary ind ustries under separate legislation for specified purposes (for exam ple, research and d evelopm ent, prom otion, statutory m arketing authorities, N ational Resid ue Survey, capital raising) and provid es ad m inistrative arrangem ents for levy collection. The review com m enced in June 1998. It w as conducted by a com mittee of officials, com posed of David Ingham , Chair, Acting Assistant Secretary, Econom ic Policy Branch, AFFA; Phillip Fitch, Ind ustry Developm ent, AFFA and Roger Mackay, Office of Legislative Drafting, Attorney-General‘s Departm ent. In October 1998, submissions w ere sought from interested parties. 45 Review progress The review w as d elayed w hile the Primary Industries Levies and Charges (Consequential A mendments) A ct 1999 and other Acts w ere am algam ated . The resultant am algamated Acts — the Primary Industries (Customs) Charges A ct 1999 and the Primary Industries (Excise) Levies A ct 1999 — m irror the provisions contained in the earlier Acts apart from several m inor changes. To ensure full consultation, a second round of public consultatio n w as initiated in Septem ber 1999 w ith letters sent to interested parties inviting further submissions to the review . Work on the review continued throughout 2000, w ith the Centre for International Econom ics being com m issioned in Septem ber 2000 to cond uct the public benefit test for the review . A d raft report w as d elivered to the review com m ittee in October 2000, sent for stakehold er comm ent in N ovem ber and com pleted in Decem ber 2000. The review found , in general, that the benefits to the com m unity of the present structure of levies legislation outw eigh the costs and should be retained . Only som e m inor changes to the legislation and the guid elines w ere recom m end ed , includ ing a proposal that the guid elines ind icate a preference for voluntary arrangem ents unless the free-rid er costs are assessed to exceed com pliance, enforcem ent, ad m inistrative, and other costs. Government response The Minister approved the Governm ent response on 20 Decem ber 2003. The Governm ent considered that there w as sufficient flexibility in these arrangem ents to accomm od ate the issues raised in the review report w ithout the need to explicitly ind icate a preference for voluntary levy arrangem ents in the legislation or the guid elines. H ence, am end m ents to existing legislation and guid elines w ere not necessary. Proceeds of Crime Act 1987 & regulations (Attorney-General’s Department) The principal objects of the Proceeds of Crime A ct 1987 are: 46 (a) to d eprive persons of the proceed s of, and benefits d erived from , the com m ission of offences against the law s of the Com m onw ealth or the Territories; (b) to provid e for the forfeiture of property used in or in connection w ith the com m ission of such offences; and (c) to enable law enforcem ent authorities effectively to trace such proceed s, benefits and property. Ad d itional objects of this Act includ e: (a) provid ing for the enforcem ent in the Territories of forfeiture ord ers, pecuniary penalty ord ers and restraining ord ers m ad e in respect of offences against the law s of the States; (b) facilitating the enforcem ent in Australia, pursuant to the Mutual Assistance Act, of forfeiture ord ers, pecuniary penalty ord ers and restraining ord ers m ad e in respect of foreign serious offences; and (c) assisting foreign countries, pursuant to the Mutual Assistance Act, to trace the proceed s of, benefits d erived from and property used in or in connection w ith the com m ission of foreign serious offences. Review progress The term s of reference w ere approved in February 1998. The review w as brought forw ard from its sched uled tim etable for review in 1998-99, and w as cond ucted by the Australian Law Reform Com m ission in conjunction w ith a m ore d etailed and far -reaching review of Com m onw ealth legislation relating to forfeiture of the proceed s of crim e. The Prim e Minister and the Treasurer agreed to the ch ange in timing and m od ality of the com petition principles review of the Proceed s of Crim e Act 1987. The Attorney General tabled the report of the Australian Law Reform Com m ission, Confiscation that Counts, on 16 June 1999. The Com mission had been unable to com plete the com petition principles review and recom m end ed that a w orking group be established to com plete aspects of the Com m ission‘s review and exam ine certain m atters. The com petition principles review of the Financial Transaction Reports 47 A ct 1988 (FTR Act) w as com pleted in August 2000. That review includ ed a review of Division 4 of Part IV of the Proceeds of Crime Act 1987 as w ell as of Part III of the FTR Act, both parts d ealing w ith various obligations on financial institutions such as banks and like organisations to retain various record s and d ocum ents. Division 4 of Part IV of the Proceed s of Crim e Act 1987, w hich im poses record retention obligations on financial institutions, is the only Part of the Proceeds of Crime A ct 1987 w hich affects the business sector. Government response The Proceeds of Crime A ct 2002 and the Proceeds of Crime A ct (Consequential A mendments and Transitional Provisions) A ct 2002 cam e into effect on 1 January 2003. The Proceeds of Crime A ct 2002 greatly strengthens and im proves Com m onw ealth law s for the confiscation of the proceed s of crim e. The Proceeds of Crime A ct 2002 includ es im proved provisions for conviction based confiscation and also provid es for a new civil forfeiture regim e (nam ely forfeiture w hich d oes not require conviction of a crim inal offence as a cond ition preced ent). It also includ es provisions for literary proceed s ord ers to prevent crim inals exploiting their notoriety for com m ercial purposes. Am ongst other things the Proceeds of Crime A ct (Consequential A mendments and Transitional Provisions) A ct 2002 repeals Division 4 of Part IV of the Proceeds of Crime A ct 1987 and replaces the repealed provisions by a new Part VIA in the FTR Act. The Act includ es provision for an ind epend ent review of the operation of that Act to be und ertaken after the third year of its com m encem ent (that is, as soon as practicable after 1 January 2006). 48 Quarantine Act 1908 (in relation to human quarantine) (Department of Health and Ageing) The review of the hum an quarantine provisions of the Quarantine A ct 1908 com m enced in Septem ber 1997. It w as cond ucted by a com m ittee of officials com prising representatives of the Departm ent of Defence, the Australian Custom s Service, AQIS, the then Departm ent of Im m igration and Multicultural Affairs, the Chief Quarantine Officer and the then Departm ent of H ealth and Family Services. 49 Review progress The review d eterm ined that the hum an quarantine provisions of the Quarantine Act have m inimal im pact on com petition and business. Where an im pact w as iden tified , the review w as satisfied that the costs to the Governm ent and ind ustry w ere m inor, and w ere outw eighed and justified by the benefits to public health from the prevention of d isease outbreaks. H ow ever, the review found that the current hum an quarant ine provisions, though ad equate, w ould benefit from possible upd ating to ensure they provid e the best legislative fram ew ork to und ertake hum an quarantine activity in the year 2000 and beyond . Government response On 2 July 1998, the then Minister for H ealth and Fam ily Services approved the report and end orsed the proposal for a second phase review of the hum an quarantine provisions. A d iscussion paper w as d eveloped d raw ing on four ind epend ent research papers, and an ad vertisem ent w as placed in the national press on 11 April 2000 ad vising of its availability and calling for subm issions from any interested party. The public consultation process closed on 15 May 2000. Responses from the targeted consultation process and the national ad vertising cam paign num bered 30. On 20 Decem ber 2000, the then Minister for H ealth and Aged Care approved the H um an Quarantine Legislation Review Final Report. This Report recom m end ed m inor and technical am end m ents to upd ate the legislation, rem ove current inconsistencies and to bet ter align existing provisions w ith current policy and practice regard ing hum an quarantine control m easures. The Qu arantine Am end m ent (H ealth) Act 2003 has been passed in response to these recom m end ations. The Act cam e into effect on 26 March 2004. The consequential am end m ents to the Act w hich includ es the Quarantine Am endm ent Regulations 2004, Quarantine Am end m ent Proclam ation 2004 and the Declaration also cam e into effect on 26 March 2004. 50 Radiocommunications Act 1992 and related Acts (Department of Communications, Information Technology and the Arts) The review of the Radiocommunications A ct 1992 com m enced in 1997. H ow ever, the N CP principles aspects of the review w ere not com pleted . Consequently, the N CP review of the Rad iocom m unications Act and related Acts has been subsum ed into the review of m arket based reform s and activities und ertaken by the Spectrum Marketing Authority (now the Australian Com m unications Authority) (see follow ing entry). Review of market-based reforms and activities currently undertaken by the Spectrum Management Agency (now Australian Communications Authority) (Department of Communications, Information Technology and the Arts) The review of m arket based reform s and activities und ertaken by the Spectrum Managem ent Agency (now the A CA) has been com bined w ith the review of the Radiocom m unications Act and related Acts. The m ain objective of the Rad iocom m unications Act and related legislation is to m axim ise the public benefit by the efficient allocation and use of the rad iofrequency spectrum . The legislation also provid es for allocation of spectrum for public or com m unity services and an equitable charging system w hile supporting the Governm ent‘s com m unication policy objectives and Australia‘s international interests in the consistent and efficient use of the rad iofrequency spectrum . The review com m enced on 16 July 2001 and w as cond ucted by the Prod uctivity Com m ission. Review progress The Prod uctivity 5 Decem ber 2002. Government response Com m ission‘s final report w as released on The form er Minister for Com m unications, Inform ation Technology and the Arts issued a Joint Med ia Release w ith the Treasurer on 51 5 Decem ber 2002 announcing the tabling in the Parliament of the reports of the Rad iocom m unications Review (June 2001) and the Prod uctivity Com m ission‘s Rad iocom m unications Inquiry (July 2002) and the Governm ent‘s responses to the reports. The tw o review s w ere established to assess the appropriateness, effectiveness and efficiency of the rad iocomm unications legislation includ ing w hether it is restricting com petition betw een, or im posing costs or benefits on, business. The Governm ent accepted 35 out of the 47 recom m end ations contained in the tw o reports. A total of nine of the 35 accepted by the Governm ent require legislative action to am end the Act. Work has comm enced on im plementing am ending legislation. Superannuation Acts including: Superannuation (Self Managed Superannuation Funds) Taxation Act 1987, Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991, Superannuation (Resolution of Complaints) Act 1993, Superannuation (Industry) Supervision Act 1993, Occupational Superannuation Standards Regulations Applications Act 1992, Superannuation (Financial Assistance Funding) Levy Act 1993. (Department of the Treasury) This legislation variously provid es for the prud ential regulation and supervision of the superannuation ind ustry and the im position of certain levies on superannuation fund s and approved deposit funds. The review com m enced in February 2001 and w as und ertaken by the Prod uctivity Com m ission. Review progress The final report w as received by Governm ent in Decem ber 2001. Government response An interim response w as released by the Minister for Revenue and the Assistant Treasurer on 17 April 2002 (it is available at: 52 http:/ / assistant.treasurer.gov.au ) and on 20 June 2003 the Governm ent‘s final response w as released by the Minister. The press release and final response are available at: http:/ / assistant.treasurer.gov.au/ atr/ content/ pressreleases/ 2003 / 059.asp). The Governm ent introduced the Superannuation Safety Am end ment Bill 2003 to im plem ent recom m end ations that all superannuation fund trustees be licensed and required to subm it a risk m anagem ent plan to APRA. It is also agreed to im plem ent m ost of the report‘s other recom m end ations (or take action that is largely consistent w ith those recom m end ations). 2D exemptions (local government activities) of the Trade Practices Act (Department of the Treasury) Section 2D of the TPA exem pts the licensing d ecisions and internal transactions of local governm ent bod ies from Part IV of the TPA. Part IV of the TPA regulates restrictive trad e practices. Follow ing consultations w ith State Prem iers and Territory Chief Ministers, the term s of reference w ere sent to the Prod uctivity Com m ission on 2 October 2001. Review progress The final report w as released on 12 Decem ber 2002. Government response The Governm ent released its response in December 2003, accepting the recom m end ations. Work has com m enced on d rafting a Bill to give effect to these recomm end ations. 53 Part IIIA (access regime) of the Trade Practices Act (including exemptions) (Department of the Treasury) Part IIIA of the TPA provid es a regim e for third party access to services provid ed by significant infrastructure facilities. The overall objective of the TPA is to enhance the w elfare of Australians by prom oting com petition and fair-trad ing and provid ing appropriate safeguard s to consum ers. The review com m enced in June 2000 and w as und ertaken by the Prod uctivity Com m ission. Review progress The final report w as received by the Governm ent on 3 October 2001. Government response The Governm ent released its interim response and tabled the report on 17 Septem ber 2002. The Governm ent released its final response to the report on 17 February 2004. Wheat Marketing Act 1989 (Department of Agriculture, Fisheries and Forestry) The W heat M arketing A ct 1989 (WMA) d oes not specify its objectives, but in accord ance w ith N CP guid elines, the review report set out the inferred objectives as being ‗for the Australian Government to use its control of w heat exports to ensure (i) d irect grow er access to m arketing services and export m arkets, and (ii) that grow ers receive the highest net return from sales in export m arkets.‘ The term s of reference for this review w ere approved in April 2000. The review , w ith secretariat support provid ed by the Departm ent of AFFA, w as cond ucted by the follow ing three person com m ittee:  Mr Malcolm Irving, Chair: Chairm an of Caltex Australia and the Australian Ind ustry Developm ent Corporation. H e is also a d irector 54 w ith Telstra, a m em ber of the Superm arket to Asia Council and w as Chair of the Australian H orticultural Corporation for nine years;  Professor Bob Lind ner: Executive Dean of the University of Western Australia‘s Faculty of Agriculture. H e w as also the faculty‘s inaugural Professor of Agricultural Economics. H e is Chair of the Western Australian H erbicid e Resistance Initiative Board and a m em ber of the Export Grains Centre Advisory Council; and  Mr Jeff Arney: South Australian grain grow er, Chair of the South Australian Farm ers Fed eration Grains Council and a past Presid ent of the Grains Council of Australia. Review progress The com m ittee d elivered its final report to the Minister for Agriculture, Fisheries and Forestry on 22 December 2000. It w as m ad e public on the sam e d ay. Government response The Governm ent response to the review recom m end ations w as announced on 4 April 2001. The principal outcom e w as that the w heat single d esk held by the AWBI is to rem ain, but w ith im provem ents m ad e to the export consent system operated by the WEA. The WMA w as not to be am end ed so as to avoid any potential for ad verse structural changes to im pact on AWB Ltd ‘s then proposed listing on the Australian Stock Exchange. A revised export consent system w hich allow s for longer term consents, particularly to niche m arkets; incorporates criteria in the WEA‘s guid elines to assess exporters; provid es for m arket allocation/ forw ard prospects statem ents; and eases the ad m inistrative burd en by red ucing the frequency of applications, w as put in place from 1 October 2001. The Governm ent d id not ad opt the report‘s recom m end ations for the rem oval of AWBI‘s role in the consent process for export of w heat in containers and bags, or for d urum w heat in bulk, as it w ould have m eant am end ing the WMA and changing significantly the balance betw een the 55 operations of the WEA and AWBI. Consistent w ith assurances given by AWB Ltd , im proved d urum m arketing arrangements w ere announced in July 2001. The Governm ent d ecid ed that the term s of the WEA 2004 review required und er the WMA should not be altered to incorpor ate N CP principles, to avoid further uncertainty in the ind ustry and for w heat grow ers. Rigorous perform ance indicators w ere announced on 4 Septem ber 2001 for on-going m onitoring of AWBI as m anagers of the single d esk, and for the 2004 review , and are available on the Wheat Export Authority w ebsite at w w w .w ea.gov.au . The review term s of reference required an exam ination of relevant m atters in Clause 4 of the CPA (see page 117). The Governm ent‘s response w as that there w ould be no legislative or significant structural change to the current arrangem ents. The recom m end ation from the report for a joint ind ustry forum w as not ad opted by the Governm ent as such an initiative w as seen to be mainly an issue for ind ustry t o bring forw ard , if it considers there is a need for new consultative arrangem ents. Another review of the legislation governing the arrangem ents is required to be cond uced before 2010. single d esk 56 1.2.2 Reviews completed, recommendations under consideration Aboriginal Land Rights (Northern Territory) Act 1976 (Department of Immigration and Multicultural and Indigenous Affairs) The A boriginal Land Rights (N orthern Territory) A ct 1976 provid es for the granting of land to trad itional Aboriginal ow ners in the N orthern Territory. It further provid es trad itional Aboriginal ow ners w ith certain rights over granted land, includ ing the right to give consent to m ineral exploration (contained in Part IV). The term s of reference for the review w ere approved on 26 October 1998. The Aboriginal and Torres Strait Island er Com m ission contracted Dr Ian Manning from the N ational Institute of Econom ics and Ind ustries to und ertake the review . Review progress The review report w as publicly released in August 1999. It contains tw elve recom m endations ad d ressing the processes in Part IV pertaining to m ining and exploration perm its. Government response The Australian Governm ent is consid ering its response to three review s: the national com petition policy review ; the review of the Land Rights Act by John Reeves QC; and the report of the inquiry into the Reeves review by the H ouse of Representatives Stand ing Com m ittee on Aboriginal and Torres Strait Island er Affairs. The Governm ent released an options paper on possible reform s in April 2002, and in response, the N orthern Territory Governm ent and the N orthern Territory Land Councils released a joint submission in Septem ber 2003 proposing reform s to the Act. Other stakehold ers respond ed in 2002. The Australian Governm ent is now consid ering the final form of a reform package to the Act. 57 Agricultural and Veterinary Chemicals Act 1994 (Department of Agriculture, Fisheries and Forestry) The review of this Act w as includ ed in the national review of Agricultural and Veterinary Chem icals Legislation (see page 71). Bankruptcy Act 1966 and Bankruptcy Rules — Trustee Registration Provisions (Attorney-General’s Department) The review of the provisions of the Bankruptcy A ct 1966, the Bankruptcy Regulations and the Bankruptcy (Registration Charges) A ct 1997 relating to the registration of private sector bankruptcy trustees com m enced in June 1998. Review progress The review report w as finalised on 9 Decem ber 1998. The review recom m end ed that the Insolvency and Trustee Service Australia (ITSA) continue to register bankruptcy trustees; and that a hand -over of the trustee registration function to the private sector be consid ered if and w hen that sector has an appropriate and ad equate infrastructure in place. Government response There is no Governm ent response to the review report. The Minister approved the recom m end ations in late January 1999, subject to the com m ents of the then Minister for Financial Services and Regulation. On 24 June 1999, the then Minister for Financial Services and Regulation ad vised that he had no com m ents on the m atter. ITSA is continuing to register bankruptcy trustees as there is no private sector infrastructure in place. Bills of Exchange Act 1909 (Department of the Treasury) The objectives of the Bills of Exchange A ct 1909 are to provid e uniform ity of law across Australia in relation to bills of exchange and prom issory 58 notes, to provid e legal certainty by confirm ing the nature of bills of exchange and prom issory notes as negotiable instrum ents, and to prom ote efficiency in the m arket place w hich utilises bills of exchange and prom issory notes as financial instrum ents. The review of the Act com m enced in April 1997. It w as und ertaken by a taskforce of officials, com prising representatives of the Departm ent of the Treasury, the Reserve Bank of Australia and the Attorney-General‘s Departm ent. Review progress A final report w as released in August 2003. Government response Treasury expects to und ertake further consultations w ith ind ustry to inform the Australian Governm ent‘s response to th e review recom m end ations. Broadcasting Services Act 1992, Broadcasting Services (Transitional Provisions and Consequential Amendments) Act 1992, Radio Licence Fees Act 1964, Television Licence Fees Act 1964 (Department of Communications, Information Technology and the Arts) The Broadcasting Services A ct 1992 and the Broadcasting Services (Transitional Provisions and Consequential A mendments) A ct 1992 govern a d iverse range of rad io and television services for entertainm ent, ed ucational and informational purposes. The Acts seek to provid e a regulatory environm ent that varies accord ing to the d egree of influence of certain services upon society and w hich facilitates the developm ent of an efficient and com petitive m arket that is responsive to aud ience need s and technological d evelopm ents. The Acts also seek to protect certain social and cultural values, includ ing prom oting a sense of Australian id entity, character and cultural d iversity; encouraging plurality of opinion and fair and accurate coverage of m atters of national and local significance; respecting com m unity standard s concerning program me 59 m aterial; and protecting child ren from program m e m aterial that m ay be harm ful to them . The Radio Licence Fees Act 1964 and the Television Licence Fees A ct 1964 seek to recover som e of the value inherent in com m ercial broad casting licences from com m ercial broad casters and provid e a return to the public for their use of scarce rad io frequency spectrum . Fees are based on the ad vertising revenues of com m ercial broadcaster s. The review com m enced in March 1999. Review progress The Prod uctivity Com m ission presented its final report to the Governm ent on 6 March 2000. The report w as publicly released on 11 April 2000. Government response The Governm ent w ill respond to the review ‘s recom m end ations in d ue course. The Governm ent has continued to introd uce reform s, in the broadcasting sector, that relate to the review recom m end ations. These includ e:  structural d iversity in Australian broad casting. The Broad casting Am endm ent Bill (N o 2) 2002 w as passed in N ovem ber 2002. As w ell as provid ing a new licensing fram ew ork for comm unity television, the Act m akes related comm unity broad casting am end m ents that w ill improve the general community broadcasting licensing regime.  ow nership and control. The Governm ent introduced the Broad casting Services Am end m ent (Med ia Ow nership) Bill 2002 to Parliam ent originally in March 2002. The Bill w as re-introd uced into the H ouse of Representatives in N ovem ber 2003 and passed by the H ouse in Decem ber 2003. It w as re-introd uced to the Senate in Decem ber 2003. The Bill repeals specific restrictions on foreign ow nership and control of Australian m edia in the Broad casting Services Act. The Bill also em pow ers the Australian Broad casting Authority (ABA) to issue an exem ption certificate granting an exem ption to the cross-m ed ia rules. 60  Australian Content Regulation. The ABA, in Decem ber 2002, varied the Australian Content Stand ard (ACS) to raise the sub -quota for ad ult d ram a; provid e new incentives for high -cost and ind epend ently prod uced program m ing; and provided new incentives for child ren‘s d ram a.  The Online Content Co-Regulatory Schem e com m enced in January 2001. The statutory review of the Scheme com m enced in May 2002 and is expected to report in early 2004. Commerce (Trade Descriptions) Act 1905 and Commerce (Imports) Regulations (Attorney-General’s Department) The legislation w as originally introd uced to protect public health by requiring d isclosure of accurate inform ation on ingredients and to protect the repu tation of Australian exports from trad ers w ho falsely label good s. Review progress The review of the Commerce (Trade Descriptions) A ct 1905 and the Com m erce (Im ports) Regulations com m enced on 3 July 2001. The com mittee of officials cond ucting the review com prises officers from the Departm ent of Ind ustry, Tourism and Resources, the Departm ent of the Treasury, the ACCC and the Australian Custom s Service. The Com m ittee‘s report w as presented to the Minister for Justice and Custom s on 1 N ovember 2002. Government response The Governm ent response to the rep ort is currently being co-ord inated . Financial Transactions Reports Act 1988 and regulations (Attorney-General’s Department) The objective of the Financial Transactions Reports A ct 1988 is to facilitate the ad ministration and enforcem ent of taxation law s, and law s of the Com m onw ealth and the Territories other than taxation law s, and to 61 m ake inform ation collected for these purposes available to State authorities to facilitate the ad m inistration and enforcem ent of the law s of the States. The Review w as cond ucted by a taskforce of Com m onw ealth officials, com prising representatives of the Attorney -General‘s Departm ent, the Australian Transaction Reports and Analysis Centre (AUSTRAC), the Australian Fed eral Police, the Australian Taxation Office and the Financial Institutions Division of the Departm ent of the Treasury. A reference group of tw o non -government persons, Mr Tom Sherm an and Mr Alan Cullen oversaw the review . Review progress The taskforce provided its rep ort to the Minister for Justice and Custom s on 6 Septem ber 2000. The taskforce report recom m end s a num ber of am end m ents to the Act and the Regulations. Those recom m end ations, together w ith a num ber of other legislative am end m ent proposals, have been the s ubject of continuing consultations. Government response The Recom m end ations of the taskforce report w ill be considered as part of Australia's w id er consid eration of im plementing the Financial Action Task Force on Anti-Money Laundering international anti-m oney laund ering and counter-terrorist financing stand ard s. On 8 Decem ber 2003 the Minister for Justice and Custom s announced the Governm ent's end orsem ent of those international stand ard s. Im plem enting the stand ard s in Australia w ill require a significant r eview of Australia's anti-m oney laund ering system and includ e som e new m easures intended to counter terrorist financing. Com m onw ealth agencies w ill consult and w ork w ith ind ustry to d esign a cost effective anti-m oney laund ering system that w ill meet international standard s and at the same time be responsive to th e need s of Australian ind ustry. Higher Education Funding Act 1988, Vocational Education & Training Funding Act 1992 and any other regulation with similar effect to the 62 Higher Education Funding Act 1988 (Department of Education, Science and Training) This review w as subsum ed into the Review of H igher Ed ucation Financing and Policy (West Review ) announced in January 1996. Review progress The review com m ittee reported to the Minister for Employm ent, Ed ucation, Training and Youth Affairs in April 1998. The West Review report recom m end ations d id not explicitly ad d ress com petition principles. H ow ever, the follow ing issues of relevance w ere id entified :  the Governm ent, w orking w ith State and Territory govern m ents, should ensure that consistent criteria and processes exist for recognising university level qualifications offered by provid ers of higher ed ucation, such as ‗bachelor d egree‘, and for using the titles ‗university‘ and ‗higher ed ucation institution‘ (Recom m end ation 6);  the Governm ent, w orking w ith State and Territory governm ents, should ensure that accred itation arrangem ents enable private provid ers of higher ed ucation to becom e self-accred iting bodies w ith the sam e pow ers in this respect as universit ies w hich operate und er their ow n Acts of Parliam ent (Recom m endation 7);  the capital assets of universities should be liable for the sam e taxes and charges that apply to private higher ed ucation provid ers, once ow nership and control issues are rationalised ; and  as d etailed in Stage 4: A Lifelong Entitlem ent to Post Second ary Ed ucation and Training, stud ents should be allow ed use of an ‗entitlem ent to fund ing‘ to m eet the costs of approved stud ies or services lead ing to a post second ary aw ard at an approved private or public post second ary ed ucation provid er in either the vocational ed ucation and training or higher ed ucation sectors. Government response 63 While the Government d id not respond form ally to the recom m end ations of the West Review it has recently introd uced similar reform s encouraging greater d iversity of provision and com petition in the higher ed ucation sector. These are d etailed below . During 2002 the Governm ent cond ucted a broad ranging review of its higher ed ucation policy and funding arrangem ents. The outcom es of the review , Our Universities: Backing A ustralia’s Future, w ere announced as part of the 2003-04 Bud get. Legislation w as introd uced into Parliam ent in Septem ber 2003 to give effect to the reform s and the Higher Education Support A ct 2003 received Royal Assent on 19 Decem ber 2003. The reform outcom es w ill achieve a sustainable, quality higher ed ucation sector prom oting equity of participation for all Australians, d iversity in m ission and greater com petition and collaboration across the higher ed ucation sector. Und er the new arrangem ents, institutions w ill set their ow n stud ent contribution s for Com m onw ealth supported places w ithin a range from $0 to a m axim um set by the Australian Governm ent w hich is no m ore than 25 per cent above curren t levels. Fees for nursing and teaching courses, w hich cover about 14 per cent of stud ents, w ill be exem pt from any increase. Every d ollar of stud ent contributions w ill go directly to institutions to im prove quality and red uce class sizes. As stud ent contribution levels vary betw een courses and institutions, institutions w ill becom e com petitive in term s of cost and course quality and w ill focus m ore on w hat is im portant to stud ents. This w ill see stud ents becom e m uch m ore central to the university experience than they m ight be now . Und er the reform s the Australian Governm ent w ill allow institutions to increase the m axim um num ber of d omestic full fee paying stud ents in any und ergrad uate course from the current 25 per cent to 35 per cent if stud ents w ant to take up these ad d itional places. The intention of this policy is to enable institutions to better respond to stud ent d em and in particular areas, and to provid e ad d itional ed ucational opportunities and choices for stud ents, w hich w ould otherw ise not be availa ble. 64 The reform s w ill give universities access to the fund ing they need to d eliver w orld -class higher ed ucation, w ith a focus on quality learning outcom es. Laying the found ation for this w ill be an increase in public investm ent in the sector of around $2.6 billion over the next five years. Over the next ten years, the Australian Governm ent w ill provid e som e $11 billion in new support for higher ed ucation. There w ill be m ore than 34,000 new Com m onw ealth supported stud ent places and m ore fund ing for each Com m onw ealth supported stud ent, linked to im provements in how universities are managed . Vocational education and training funding The Act sets the m inim um am ount of vocational ed ucation and training fund ing to be d istributed by the Australian N ational Trainin g Authority (AN TA) to the States and Territories for capital and recurrent purposes and for N ational Projects. The am ount to be paid to AN TA for d istribution is d eterm ined by the Minister in accord ance w ith the A ustralian N ational Training A uthority A ct 1992 (AN TA Act) and the AN TA Agreem ent w hich is provid ed for in the AN TA Act, up to the m axim um am ount set by the Act in one year. Every three years the Australian Governm ent negotiates a new AN TA Agreem ent w ith the States and Territories w hich d eterm ines the term s, cond itions and the level of Australian Governm ent funding for vocational ed ucation and training for the next triennium . Cabinet approves the fram ew ork for the Australian Governm ent‘s negotiating position. The AN TA Agreement for 2001 – 2003 ceased on 31 Decem ber 2003. N egotiations betw een the Australian Government and the States and Territories for a new Agreem ent conclud ed w ith agreem ent to a roll over arrangem ent for 2004. In ad d ition to these negotiations, AN TA has, in conjunction w ith th e Australian Governm ent and the States and Territories, review ed m ajor com ponents fund ed under the Act. An exam ple is the 2003 review of the accountability arrangements for Australian Governm ent assistance for VET infrastructure, for w hich around $600 million w as provid ed for the 2001 – 2003 triennium . 65 As Com m onw ealth–State fund ing legislation, the Act d oes not d irectly affect business or restrict com petition. N either d oes the Act have a significant ind irect effect on business. Land Acquisition Acts (Land Acquisition Act 1989 & regulations; Land Acquisitions (Defence) Act 1968 and Land Acquisition (Northern Territory Pastoral Leases) Act 1981) (Department of Finance and Administration) The Land A cquisition A ct 1989 sets out the processes that the Com m onw ealth and its agencies m ust follow w hen acquiring or d isposing of an interest in land . It also deals w ith related m atters, such as entry on private land by Com m onw ealth officers and the regulation of m ining on Com m onw ealth land . The Act includ es provisions for com pulsorily acquiring an interest in land and for the arrangem ents for consequential paym ent of com pensation. The Land A cquisitions (Defence) A ct 1986 facilitated the acquisition of public park land in N ew South Wales for d efence purposes and the Land A cquisition (N orthern Territory Pastoral Leases) A ct 1981 w as used to com pulsorily acquire tw o pastoral leases (Mud ginberri and Munm arlary) for subsequent inclusion in Kakad u N ational Park. The review w as conducted by the Departm ent of Finance and Ad m inistration. It w as ad vertised nationally and public com m ent sought from interested parties. Review progress The review id entified som e m inor operational and ad m inistrative issues relating to N CP but conclud ed that the legislation com plies w ith the com petition policy principles. Government response There is no Governm ent response to the report, how ever, the review found that the legislation d oes not significantly restrict com petition. 66 Marine Insurance Act 1909 (Attorney-General’s Department) The M arine Insurance A ct 1909 sets out the legal requirem ents surround ing contracts for and policies of m arine insurance. It w as d esigned to sim plify and cod ify som e aspects of the com m on law d ealing w ith m arine insurance. This legislation w as add ed to the CLRS for review in 1998-99 and the review com menced in October 1999. The review w as cond ucted by the Australian Law Reform Com m ission . Review progress The report w as subm itted to the Attorney-General prior to 30 April 2001, and w as tabled in Parliam ent on 22 May 2001. Government response The report conclud ed that there are no significant com petition policy im plications, either in the existing Act or in relation to proposed reform s. Generally, the Marine Insurance Act d oes not constrain the practice of m arine insurance by im posing requirem ents on insurers or insured parties and m ost of the provisions of the Act can be varied by contract. There are no legislative requirem ents placed on insurers of m arine risk beyond those required of insurers of other types of general insurance. Therefore, no further action on com petition m atters is required in relation to the Act. Part VI of the Navigation Act 1912 (Department of Transport and Regional Services) The N avigation A ct 1912 provid es a legislative basis for m any of the Com m onw ealth‘s responsibilities for m aritim e m atters includ ing ship safety, coasting trad e, em ploym ent of seafarers and shipboard aspects of the protection of the m aritim e environm ent. It also regulates w reck and salvage operations, passengers, tonnage m easurem ents of ships and a range of adm inistrative m easures relating to ships and seafarers. 67 The coastal trad e provisions of Part VI of the Act w ere sched uled for review in 1998-99 and the Shipping Reform Group consid ered these provisions in its report and a com prehensiv e review of the other parts of the Act w as substituted for Part VI review . In December 1997, the Governm ent d ecided to review the N avigation Act in tw o stages. The first stage consid ered repeal of m atters that im ped e shipping reform or are inconsistent w ith the concept of com pany em ploym ent. This review stage w as com pleted in 1998 and resulted in the N avigation Am endm ent (Em ploym ent of Seafarers) Bill 1998, w hich w as introd uced into Parliam ent on 25 June 1998 and passed by the H ouse of Representatives on 31 March 1999. During the Senate d ebate on the Bill, a significant num ber of item s in the Bill w ere rejected. The Minister d ecid ed that further action on the Bill should be taken in conjunction w ith action on the Stage 2 review . The second stage review com m enced in August 1999 and w as com pleted in June 2000. The Review w as cond ucted by officials of the Departm ent of Transport and Regional Services (DOTARS) and the Australian Maritim e Safety Authority. The review team operated und er the guid ance of an ind epend ent Steering Group, w hich provid ed d irection to the review team and acted as an external reference for the cond uct of the review , ensuring that it w as strategic and reflected as broad ly as possible the view s of stakehold ers. The steering group com prised th e chairm an, Mr Rae Taylor AO; Mr Lachlan Payne, Chief Executive Officer, Australian Shipping Fed eration; Mr Barry Vellnagel, Deputy Director, Minerals Council of Australia; Mr Clive David son, Chief Executive, Australian Maritim e Safety Authority; and Ms Joanne Blackburn, Assistant Secretary, DOTARS. Review progress The final report w as presented to the Minister for Transport and Regional Services on 15 June 2000. It w as released for publication on 20 August 2000 and copies w ere d istributed to persons and or ganisations m aking subm issions. The report is also published on DOTARS w ebsite. 68 Government response The Government is currently consulting w ith ind ustry on proposed am end m ents to the N avigation Act, to im plem ent som e of the recom m end ations of the review . The Government is also continuing to consid er shipping policy m atters on a broad er basis. Shipping Registration Act 1981 (Department of Transport and Regional Services) The Shipping Registration A ct 1981, replacing the system created by the United Kingd om M erchant Shipping A ct 1894, provid es for an Australian national system for registering ships and m ortgages on ships. In turn it creates a system und er w hich ships, their ow ners and those w ith a financial stake in ships, can be id entified . Review progress This review com menced in February 1997. A taskforce of second ed officials from the then Departm ent of Transport and Regional Developm ent, the Australian Maritim e Safety Authority (AMSA) and the Bureau of Transport and Com m unications Econom ics und ertook the review . A steering com m ittee, com prised of a senior executive from both the Departm ent and AMSA, w as established to oversee the review . An ind epend ent reference com m ittee acted as an external referee of the cond uct of the review . The report on the Review of the Shipping Registration Act w as released in 1997. The review conclud ed that Australia should continue to legislate in ord er to fix cond itions for the grant of nationality to its ships in accord ance w ith international conventions. A range of m easures to facilitate this objective w ere recom m end ed . Government response 69 The Government is consid ering the recom m endations of the Review as part of an on-going exam ination of this Act and the N avigation A ct 1912 as part of the consid eration of shipping policy issues. Torres Strait Fisheries Act 1984 and related Acts (Department of Agriculture, Fisheries and Forestry) This legislation regulates all fishing w ithin the Australian jurisd iction of the Torres Strait Protected Zone established by the Torres Strait Tre aty betw een Australia and Papua N ew Guinea. It provid es the pow ers for the Com m onw ealth to und ertake fisheries m anagem ent in the Torres Strait Protected Zone and the m echanism for the recovery of the Com m onw ealth‘s costs and the im position and collection o f a research and d evelopm ent levy. The then Departm ent of Prim ary Ind ustries and Energy established a com m ittee of officials in March 1998. The comm ittee of officials w ere from : Australian Fisheries Managem ent Authority, Environm ent Australia, The Thursd ay Island Coord inating Council, The Torres Strait Regional Authority, The Queensland Com m ercial Fishing Organisation, The Australian Seafood Ind ustry Council, The Queensland Fisheries Management Authority, Torres Strait Fisheries, Thursd ay Island , and Queensland Departm ent of Primary Ind ustries. Review progress The com m ittee of officials reported its recom m end ations to the Com m onw ealth Minister for Resources and Energy in August 1999. The report w as presented to the IDC in March 2000. The Protected Zone Joint Authority (PZJA) noted the find ings and recom m end ations of the review and referred these to the Torres Strait fisheries consultative and ad visory com m ittees for further consid eration. Government response The review report recom m end ed little change to curr ent arrangem ents, w hich the Governm ent is continuing to consid er. At this stage the Governm ent is not expected to respond to the Review recom m end ations. 70 The N CC assessed in its 2003 assessment that the Australian Governm ent has m et its CPA clause 5 obligations in relation to the Torres Strait Fisheries Act, because all key restrictions have been foun d to be in the public interest. Trade Practices Act 1974 — subsections 51(2) and 51(3) exemption provisions (Department of the Treasury) Subsections 51(2) and 51(3) of the TPA provid e exem ptions for a variety of activities concerning intellectual property rights, em ploym ent regulations, export arrangem ents and approved stand ard s for m any of the com petition law s contained w ithin Part IV of the Act. This Part prohibits a num ber of anti-com petitive trade practices includ ing: anti-com petitive arrangem ents and exclusionary provisions; second ary boycotts; m isuse of market pow er; exclusive d ealing; resale price m aintenance and m ergers that w ould have the effect or like ly effect of substantially lessening com petition in the substantial m arket. The review com m enced in June 1998. It w as conducted by the N CC. Review progress The review report w as released on 21 June 1999. Government response The Governm ent is consid ering its response to the review of section 51(2) of the TPA. On 28 August 2001, the Governm ent announced changes to section 51(3) of the Act in its response to the report of the Intellectual Property and Com petition Review Com m ittee (the Ergas Com m ittee) report o f Decem ber 2000, w hich also exam ined section 51(3) (see page 31). The Governm ent w ill am end the TPA by applying m od ified com petitive cond uct rules in Part IV (Restrictive Trad e Practices) to intellectual property licensing transactions, and to exem pt the Plant Breeders' Rights 71 A ct 1994 (Cth) from the m od ified com petitive cond uct rules. Passage of the Bill is expected in 2004. 1.2.3 Reviews commenced but not completed Disability Discrimination Act 1992 (Attorney-General’s Department) The objectives of the Disability Discrim ination Act 1992 are:  to assist in elim inating discrim ination against people w ith d isabilities in a range of areas of public life;  to ensure, as far as practicable, that people w ith d isabilities have the sam e rights to equality before the law as the rest of the com m unity; and  to prom ote recognition and acceptance w ithin the com m unity that people w ith d isabilities have the sam e fund amental rights as the rest of the com m unity. This Act w as ad d ed to the CLRS for review in 1998-99, how ever, it w as d eferred to 1999-2000. The Office of Regulatory Review approved term s of reference for the review on the 9 Decem ber 2002. Review Progress The Parliamentary Secretary to the Treasurer announced the review and provid ed term s of reference to the Prod uctivity Com m ission on 5 February 2003. Follow ing a public consultation process, the Prod uctivity Com m ission released its d raft report on 31 October 2003. The d raft report has been follow ed by a further round of public consultations in January and February 2004. A final report is expected by 30 April 2004. 72 The d raft report ind icates that the legislation seem s to m eet t he tests of the Com petition Principles Agreem ent and has had a lim ited im pact on com petition. The report recom m end s a num ber of reform s to the Act to m ake it m ore effective in m eeting its objective of elim inating d iscrim ination. The Governm ent‘s final response is to be tabled in Parliam ent w ithin six m onths of receipt of the final report. The Governm ent w ill m ake the final d ecision on acceptance and im plem entation of the Com m ission‘s recom m end ations. Defence Housing Authority Act 1987 (Department of Defence) The term s of reference for this review w ere agreed to in June 1998. Since then, how ever, extensive com petitive neutrality reform s have been applied progressively to the Defence H ousing Authority (DH A), includ ing a com m ercial rate of return, d ebt neutrality and a tax equivalent regim e. In add ition, a Services Agreem ent has been instituted to set DH A relations w ith Defence on a commercial footing, and this Agreem ent d oes not oblige Defence to exclusively use the services of the DH A. A com prehensive external review of the Defence Housing A uthority A ct 1987 w as com missioned by the DH A and reported in N ovem ber 2000. Consid eration is being given to w hether the Act contains any further restrictions on com petition that w ould require review . Pig Industry Act 1986 and related Acts (Department of Agriculture, Fisheries and Forestry) This Act established the Australian Pork Corporation w hose function s includ e im proving the prod uction, consumption, prom otion and m arketing of pigs and pork both in Australia and overseas. Review progress 73 Work on the review comm enced und er the d irection of the com mittee of officials w ith a nationally ad vertised call for subm issions in the second half of 1998. Work on the review w as suspend ed follow ing advice from ind ustry on a restructure of ind ustry bod ies includ ing the Australian Pork Corporation. The Pig Industry A ct 1986 w as repealed in 2001 und er the Pig Industry A ct 2001, w hich provided legislative authority for new pig ind ustry arrangem ents. The new Act w as d eveloped giving consid eration to N CP principles and thus the need for a further review is negated . Quarantine Act 1908 (Department of Agriculture, Fisheries and Forestry) The review of the Quarantine Act 1908 (N airn Review ) w as und erw ay prior to its listing on the CLRS. AQIS is proposing to com m ence a com prehensive re-exam ination of the Quarantine Act and any am end m ents arising from this review w ill be subject to the RIS process. This re-exam ination of the Act w ill also includ e a review of those elem ents of the Act that w ere unchanged follow ing the N airn Review for com pliance w ith CPA legislation review principles. The exam ination has been d elayed pending the resolution of the challenges concerning Australia's quarantine regim e in the World Trad e Organisation and assessm ent of any ad ministrative and legislative actions that m ight become necessary as a result. 74 1.2.4 Reviews not commenced Anti-dumping legislation, Customs Act 1901 Part XVB and Customs Tariff (Anti-dumping) Act 1975 (Attorney-General’s Department) A review of the Customs A ct 1901 Part XVB and the Customs Tariff (A ntidumping) A ct 1975 w as deferred to allow im plementation of Governm ent reform s im proving Australia‘s anti-d um ping and countervailing d uty m echanisms. To d ate, the governm ent has not finalised the tim ing or m anner of a review of the legislation relevant to anti-d um ping and countervailing m atters. Reference to the A nti-dumping A uthority A ct 1988 has been d eleted , as this Act w as repealed in Decem ber 1998 follow ing changes to the ad m inistration of the anti-d um ping and countervailing investigations. Commerce Prohibited Imports Regulations (Attorney-General’s Department) The Governm ent is consid ering w hether the regulations contain restrictions on com petition and should be review ed . If not, it w ill be consid ered w hether the regulations should be rem oved from the CLRS. Dairy Industry Legislation (Department of Agriculture, Fisheries and Forestry) At the time the Com petition Principles Agreement w as established , the Dairy Produce A ct 1986 specified the objectives, functions and ad m inistrative requirements of the Australian Dairy Corporation (ADC) (includ ing licensing of dairy exports to m arkets w it h access restrictions), and provid ed for the operation of the Australian Governm ents‘s Dom estic Market Support schem e. Since this tim e, the Australian d airy ind ustry has und ergone significant reform and the Act has substantially evolved . On 30 June 2000, farm gate prices for d rinking m ilk w ere d eregulated and the Australian Governm ent Dom estic Market Support schem e ceased to exist. On 1 July 2003, am endm ents to the Act facilitated the m erger of the Dairy Research and Developm ent Corporation and the 75 ADC into one Corporations Act com pany, Dairy Australia . The Act d oes not provid e for the new privatised entity to und ertake any single d esk selling arrangem ents. Export control functions transferred from the ADC are now the responsibility of the Departm ent. Regulations governing certain types of cheese prod ucts entering the regulated m arkets of the European Union and United States cam e into effect from 1 January 2004. A review of the Act w as sched uled to take place in 1998/ 99. H ow ever, on the basis of these substantial legislative changes occurring over tim e, the Prim e Minister and the Parliam entary Secretary to the Treasurer agreed to d efer the review of the Act until all ind ustry reform s had been com pleted in m id 2003. It is anticipated that the review , should it be required , w ill take place in 2004. Defence Act 1903 (Army and Airforce Canteen Services Regulations) (Department of Defence) This review had not com m enced by 31 March 2004. The regulations d o not raise any com petitive neutrality issues. Defence Force (Home Loans Assistance) Act 1990 (Department of Defence) The review had not comm enced by 31 March 2004. Dried Vine Fruits Legislation (Department of Agriculture, Fisheries and Forestry) Ministers have agreed to the d eletion of the follow ing legislat ion from the CLRS:  Dried V ine Fruits Equalization A ct 1978;  Dried Sultana Production Underwriting A ct 1982 (upon the repeal of the A ct); and  Dried Vine Fruits Legislation A mendment A ct 1991 (upon repeal of the above A ct). The rem aining regulations relevan t to the CLRS w ere: 76  Australian Dried Fruits Board Regulation und er the A ustralian Horticultural Corporation A ct 1987 (AH C Act); and  Dried Fruit Export Control Regulations 1991 und er the AH C Act. H ow ever, the Australian H orticultural Corporation (Dried Fruits Export Control) Regulations 1991 ceased to be in effect from 31 January 2003 and new H orticulture Marketing and Research and Developm ent Services (Export Efficiency) Regulations 2002 took effect from 1 February 2003. They provid e for the industry export control body H orticulture Australia Lim ited (H AL) to ad m inister export efficiency pow ers beyond 31 January 2003 w hen the previous regulation expired . These export efficiency regulations carry over the export control pow ers includ ing the Corporate Perm ission and Export Licences that w ere in operation und er the Australian H orticultural Corporation (Export Control Regulations) 1990 and the Australian H orticultural Corporation (Dried Fruits Export Control) Regulations 1991, respectively. These new export efficiency regulations have been subject to a RIS (w hich is publicly available) and involves the ind ustry export control bod y follow ing a process (as id entified in the Deed of Agreem ent betw een the Com m onw ealth and H AL). The process requires a sector of the horticultural ind ustry to d evelop a prima facie case for the use of export efficiency pow ers w hich is then review ed by the Board of H AL. H AL ad m inisters these arrangem ents, and includ es annual perform ance review s, a three-year net public benefit review , w hich w ill includ e a RIS, and a ten-year legislation review in accord ance w ith the CPA. Environmental Protection (Nuclear Codes) Act 1978 (Department of Health and Ageing) The A ustralian Radiation Protection and N uclear Safety (Consequential A mendments) A ct 1998 repealed the Environmental Protection (N uclear Codes) A ct 1978. Of the three Cod es previously created und er the repealed Act, one, the Cod e of Practice for the Safe Transport of Rad ioactive Substances 1990, has alread y been reissued as the Cod e of Pract ice for the Safe Transport of Rad ioactive Material 2001, w hilst the rem aining tw o, the Cod e of Practice on the Managem ent of Rad ioactive Wastes from the Mining and 77 Milling of Rad ioactive Ores 1982 and the Cod e of Practice on Rad iation Protection in the Min ing and Milling of Rad ioactive Ores 1987, w ill be reissued shortly as one revised cod e, the Cod e of Practice and Safety guid e for Rad iation Protection and Rad ioactive Waste Managem ent in Mining and Mineral Processing. A d raft of this cod e has been prepared . The accom panying d raft Regulatory Im pact Statem ent (RIS) w as forw ard ed to the ORR in March 2004, and there is further w ork to be und ertaken before the RIS is cleared for public com m ent. At this stage, it is anticipated that the Cod e and Safety Guid e w ill be published in the fourth quarter of 2004 or first quarter of 2005. Insurance (Agents & Brokers) Act 1984 (Department of the Treasury) The Insurance (A gents & Brokers) A ct 1984 w as repealed from March 2002 by the Financial Services Reform (Consequential Provisions) A ct 2001. Those entities w hich w ere regulated und er the Insur ance (Agents & Brokers) Act had until March 2004 (a tw o-year transition period ) to ad opt the new regim e. A RIS w as prepared at the tabling stage for the Financial Services Reform Bill, w hich the ORR assessed as ad equate. Native Title Act 1993 & regulations (Attorney-General’s Department) This review had not com m enced by 31 March 2004. The Departm ent is exam ining w hether the review of the Act is required . Petroleum Retail Marketing Sites Act 1980 & Petroleum Retail Marketing Franchise Act 1980 (Department of Industry, Tourism and Resources) The Petroleum Retail M arketing Sites A ct 1980 and the Petroleum M arketing Franchise A ct 1980 w ill be repealed as part of the im plem entation of th e d ow nstream petroleum reform package. Treatment Principles (under section 90 of the Veterans’ Entitlement Act 1986 (VEA)) & Repatriation Private Patient Principles (under section 90A of the VEA) (Department of Veterans’ Affairs) This review had not comm enced by 31 March 2004. 78 1.2.5 Legislation deleted from the CLRS This section id entifies legislation d eleted from the CLRS d uring the period 1 April 2003 to 31 March 2004. Inform ation on review s d eleted in previous reporting period s is available in earlier a nnual reports (available at: w w w .treasury.gov.au). N o legislation w as d eleted from the CLRS d uring this tim e period . 79 1.3 Legislation subject to national review The CPA provid es that w here a review raises issues w ith a national d im ension or effect on com petition (or both), the party responsible for the review w ill consid er w hether the review should be und ertaken on a national (inter-jurisd ictional) basis. Where this is consid ered appropriate, other interested parties m ust be consulted prior to d eterm ining the term s of reference and the appropriate bod y to cond uct the review . N ational review s d o not require the involvem ent of all jurisd ictions. The sched uled review s of the follow ing Australian Governm ent legislation have been incorporated into national review s. Agricultural and Veterinary Chemicals Act 1994 (Department of Agriculture, Fisheries and Forestry) The N CP review covers legislation that created the N ational Registration Schem e for Agricultural and Veterinary Chem icals and legislation controlling the use of agricultural and veterinary chemicals in Victoria, Queensland , Western Australia and Tasmania. Separate to that review , the jurisdictions of N ew South Wales, South Australia and the N orthern Territory cond ucted review s of their ow n control of use legislation to be aggregated w ith the N CP review . The review w as com missioned by the Victorian Minister for Agriculture and Resources on behalf of Australian Government, State and Territory Ministers for Agriculture/ Prim ary Ind ustries follow ing a d ecision by the Agriculture and Resource Managem ent Council of Australia and N ew Zealand (ARMCAN Z). Review progress The consultant‘s final report w as presented on 13 January 1999.10 The Steering Com m ittee accepted that the r eport fulfilled the term s of reference. 10 See the 1997-98 Commonwealth N ational Competition Policy A nnual Report (pp 114-117) for term s of reference. 80 Government response On 3 March 1999 the then Standing Com mittee on Agricultural Resource Management (SCARM) agreed to publicly release the Report and established a jurisd ictional Signatories (to the N ational Registr ation Schem e for Agricultural and Veterinary Chemicals) Working Group (SWG) to prepare an inter-governm ental response to the Report‘s recom m end ations. SCARM/ ARMCAN Z end orsed the inter governm ental response to the review in January 2000. The COAG Com m ittee on Regulatory Reform cleared the response. Follow ing on from consid eration of the recom m end ations in the review and preparation of the inter-governmental response, a num ber of processes w ere com m enced to m ore closely exam ine issues of concern. An interju risd ictional taskforce w as established by SCARM to exam ine how best to regulate low risk chemicals in response to the review recom m end ations on that issue. Based on the d eliberations of the taskforce, am end m ents to the Agvet Chem ical Legislation w ere enacted in February 2003, w ith the Act com ing into operation in October 2003. Working groups w ere established to further exam ine and progress the review recom m end ations relating to m anufacturer licensing, cost recovery and use of alternative assessm ent provid ers. Reports of these w orking groups have been finalised , w ith the outcom es/ recom m end ations of the investigations into cost recovery and use of alternative assessm ent provid ers being end orsed by Primary Ind ustries Standing Com m ittee (PISC, form erly know n a s SCARM) in late 2002. The final report of the Manufacturers Licensing Working Group recom m end ed the Australian Pesticid es and Veterinary Med icines Authority (APVMA - previously know n as the N ational Registration Authority for Agricultural and Veterinary Chem icals), d evelop and ad opt other m eans to ensure the quality of active constituents and agricultural chem ical prod ucts. In Decem ber 2003, the APVMA released for public com ment, the Regulatory Im pact Statem ent for Quality A ssurance of A ctive Constituents and A gricultural Chemical Products. Im plem entation is currently sched uled for 1 March 2004. 81 A revised fee and levy structure for the APVMA has been d eveloped , based on the cost recovery fram ew ork d eveloped by the Cost Recovery Working Group and end orsed by PISC. A d raft Cost Recovery Im pact Statem ent on the proposed fee structure w as released for public com m ent in Decem ber 2003. It is proposed to introd uce the necessary am end m ent Bill in the 2004 autum n sittings of Parliam ent and for the new fee structure to comm ence on 1 July 2004. In Septem ber 2002, PISC end orsed the final report of the Assessm ent Services Working Group . The Australian Governm ent Departm ents of Agriculture, Fisheries and Forestry and H ealth and Ageing subsequently d eveloped an operating fram ew ork for the provision of hum an health assessm ents and ad vice on hum an health risk m anagem ent to the APVMA. The fram ew ork includ es provision for contestability of som e w ork subject to certain cond itions. The fram ew ork w as end orsed by Fed eral Cabinet in the context of its December 2003 response to the Review of A dministrative A rrangements for Commonwealth Public Health and Safety Regulation. In ad d ition to these w orking groups, the Control of Use Taskforce w as established by ARMCAN Z to further exam ine the review recom m end ations covering m atters relating to off-label chemical use, veterinary surgeons exem ptions and control of use licensing. The Taskforce, com prising Fed eral, State and Territory representatives, has respond ed to the recom m end ations, m ost of w hich have been im plem ented . The rem aining recom m end ations are being progressed through PISC‘s Prod uct Safety and Integrity Com m ittee. The final report of the Taskforce w as endorsed by PISC (out of session) in March 2003. The Governm ent has consid ered the Report‘s recom m end ations in relation to com pensation for third party access to chem ical assessm ent d ata and agrees that there should be an enhanced d ata protection m echanism . A policy reform d ocum ent has subsequently been d eveloped by government and agreed w ith ind ustry. Initial d rafting instructions for legislation are being prepared for further consultations w ith ind ustry. The Intergovernm ental Response rejected the Report‘s recom m end ation w ith respect to efficacy and d ecid ed to retain, as part of the registration process, an assessment of w hether the efficacy claim ed by a supplier is 82 appropriate. In its 2003 assessm ent report, the N ational Com petition Council conclud ed that, ―…the risks involved in using chem icals w ith inad equate efficacy m ay be consid erable, and that the requirem ent for ‗appropriateness‘ assessm ent d oes not appear to be a costly restriction, the Council consid ers that there is a net public interest case for retaining ‗appropriateness‘ assessm ent.‖ Review of the Mutual Recognition Agreement and the Mutual Recognition (Commonwealth) Act 1992 (Department of the Prime Minister and Cabinet, Department of Education, Science and Training, Department of Industry, Tourism and Resources) The Mutual Recognition Agreem ent (MRA) establishes a national schem e und er w hich good s w hich are legally saleable in one jurisd iction can be sold throughout the country, and people w ho w ork in a registered occupation in one jurisdiction can freely enter an equivalent occupation in another jurisd iction. Several jurisd ictions w ere obliged to cond uct N CP legislation review s of their m utual recognition legislation. In ad d ition, the MRA required that it (the MRA) be review ed in its fifth year of operation; that is betw een 1 March 1997 and 1 March 1998. As the MRA is a national schem e, all jurisd ictions agreed to a national review by the CoAG Com m ittee on Regulatory Reform , w ith representatives from Queensland (Chair), the Australian Governm ent, N ew South Wales and Western Australia. Review progress The review w as cond ucted betw een October 1997 and June 1998.11 The report, w hich covers both the N CP and MRA aspects of the review , is available on the Internet at w w w .pm c.gov.au. The review found that the schem e is generally w orking w ell to m inim ise the im ped im ents to freed om of trad e in good s and services and to establish a truly national m arket in good s and services in Australia. The review d ata indicated that 11 See the 1997-98 Commonwealth N ational Competition Policy A nnual Report (pp 117-118) for term s of reference. 83 the MRA has increased com petition and consum er choice, and red uced business costs. In relation to the N CP review , it w as recom m end ed that all existing (potentially anti-com petitive) exceptions to the MRA be retained (see recom m end ations 14 to 25 of the review ). Government response Jurisd ictions generally support the review ‘s recom m end ations. In relation to the N CP aspect of the review , Queensland had concerns about recom m end ations 17 (pornographic m aterial), 23 (m anner of sale of good s) and 27 (packaging and labelling requirem ents relating to transport, storage and handling). Victoria expressed concerns about recom m end ation 24 (packaging and labelling for d rugs and poisons). The recom m end ations of the review , and the concerns expressed by Queensland and Victoria are being taken up in the 2003 review of the MRA. The 2003 review is to be cond ucted in tw o stages, w ith the Prod uctivity Com m ission provid ing a com m issioned research paper assessing the benefits of the agreem ents and scope for im provem ents. This is then to be consid ered by an officers group of the COAG Com m ittee for Regulatory Reform (CRR), includ ing N ew Zealand representatives, and a report provid ed to COAG and the N ew Zealand Governm ent. The Prod uctivity Com mission stud y aim s to assess w hether the TTMRA and MRA are:  Fostering and enhancing trad e and w orkforce m obility betw een the Com m onw ealth, States and Territories and N ew Zealand ;  Enhancing the international com petitiveness of both Australian and N ew Zealand business; and  Enhancing the capacity of Australia and N ew Zealand to influence international stand ard s relating to prod uct d escriptions and registration of occupations. The Prod uctivity Com m ission released its final paper on 17 October 2003 and an interim report on the Com m ission's find ings w as subsequently provid ed by the CoAG CRR to COAG and the N ew Zealand 84 Governm ent. COAG has asked for a final r eport from CRR by the end of Septem ber 2004. Review of Petroleum (Submerged Lands) Acts (Department of Industry, Tourism and Resources) The objective of the Petroleum (Subm erged Land s) Acts is to provid e a licensing and regulatory regim e to enable explorat ion, d evelopm ent and prod uction of petroleum resources w ithin Australia‘s m arine jurisd iction. In N ovember 1999 the Australian and N ew Zealand Minerals and Energy Council (AN ZMEC) com m issioned a national review , against com petition policy principles, of th e Australian Governm ent, State and N orthern Territory legislation w hich governs exploration and d evelopm ent of Australia‘s offshore petroleum resources. Review progress The review ‘s term s of reference w ere approved by the ORR on 28 October 1999. A review com m ittee of five m em bers w as d raw n from the Australian Governm ent Departm ent of Ind ustry, Tourism and Resources, the Victorian Departm ent of N atural Resources and the Environm ent, the N orthern Territory Departm ent of Mines a nd Energy and the Australian Bureau of Agricultural and Resource Econom ics. At the AN ZMEC Ministerial Council m eeting held on 25 August 2000, the Council considered the review reports and resolved to ad opt the review recom m end ations. These contained proposed responses to recom m end ations put forw ard in an April 2000 ind epend ent consultant‘s report by ACIL Consulting Pty Ltd . The m ain conclusion of the Review Com m ittee w as that the legislation is essentially pro-com petitive and , to the extent that there are restrictions on com petition (for exam ple, in relation to safety, the environm ent, resource m anagem ent or other issues), these are appropriate given the net benefits to the com munity. The final report w as m ad e public on 27 March 2001, follow ing consid eration by CoAG‘s Com m ittee on Regulatory Reform . Government response 85 All Governm ents (Australian , State and the N orthern Territory) respond ed to the review by accepting the recomm end ations of the final report at the AN ZMEC Ministerial Council m eeting of 25 August 2000. Tw o specific legislative am end m ents flow from the review . One w ill ad d ress potential com pliance costs associated w ith retention leases and the other w ill exped ite the rate at w hich exploration acreage can be mad e available to subsequent explorers. The required am end m ents to the Australian Governm ent's legislation w ere effected und er the Petroleum (Submerged Lands) Amendment A ct 2002. Am endm ent and rew rites of the counterpart State and Northern Territory legislation w ill follow . 1.3.1 Other national reviews with Commonwealth involvement The Australian Governm ent is also participating in various national review s that d o not involve Australian Government legislation currently sched uled for review or for w hich there is no applicable Australian Governm ent legislation. These review s are d etailed below . Drugs, poisons and controlled substances legislation The State, Territory and Australian Governments com m issioned a review to exam ine legislation and regulation w hich im poses controls over access to, and supply of d rugs, poisons and controlled substances. An ind epend ent Chair, Ms Rhond a Galbally, undertook the review , w ith ad vice from a steering com m ittee representing all jurisd ictions. The objectives of the legislation are to protect and prom ote public health by preventing poisoning, m ed icinal m isad venture and d iversion of these substances to the illicit drug m arket. Subm issions against the term s of reference w ere invited and these inform ed the d evelopm ent of the options paper, w hich w as released for com m ent in February 2000. A d raft report w as released in Septem ber 2000 and provid ed a further opportunity for interested parties to com m ent. Review progress 86 The review ‘s report has been finalised and presented to the Australian H ealth Ministers Conference (AH MC) w hich is required by the review ‘s term s of reference to forw ard the report to CoAG w ith their com m ents. 12 The final report w as publicly released in January 2001. A w orking party of the Australian H ealth Ministers‘ A dvisory Council (AH MAC) w as established to assist the preparation of com m ents on the report for CoAG. Government response As a num ber of the Galbally Review recomm end ations potentially im pact on the m anagement of agricultural and veterinary chemicals, the Working Party‘s d raft response w as considered by the Prim ary Ind ustries Ministerial Council (PIMC) for comm ent. The d raft response w as upd ated to take into account the PIMC comm ents. The Governm ent response to the Report of the Galbally review w hich exam ined legislation and regulation im posing controls over access to, and supply of d rugs, poisons and controlled substances w as forw ard ed to the Council of Australian Governm ent through the Australian H ealth Ministers‘ Conference in late 2003. H ow ever, since the release of the Report of the Galbally review , the Australian and N ew Zealand governm ents have agreed to establish a joint agency for the regulation of therapeutic prod ucts. Australia‘s Therapeutic Good s Ad m inistration (TGA) and the N ew Zealand Med icines and Med ical Devices Safety Authority (Med safe) w ill be replaced by a single agency accountable to both the N ew Zealand and Australian governm ents. It is anticipated that these new arrangem ents w ill com m ence on 1 July 2005. A project team of Australian and N ew Zealand officials is continuing to d evelop the final d etails of the regulatory fram ew ork and the legislation to regulate therapeutic prod ucts in both countries. Rather than review ing and reform ing the Therapeutic Good s legislation, w hich is likely to be 12 See the 1997-98 Commonwealth N ational Competition Policy A nnual Report (pp 120-127) for term s of reference. 87 repealed in 2005, the Governm ent response therefore proposes that the Galbally review recom m end ations w hich require Com m onw ealth legislative change, be im plem ented as part of the new trans -Tasm an legislation. The TGA is continuing to w ork w ith relevant health officials in the Australian States and Territories and N ew Zealand to co-ord inate those changes required to State / Territory legislation to im plem ent relevant Galbally recom m end ations and the d evelopment of the new trans Tasm an legislation. Food Acts The legislation for review com prises the Food Acts in each State and Territory and N ew Zealand . The objectives of the Food Acts are to ensure com pliance and enforce food stand ard s in each jurisd iction. The review w as established in 1996 at the request of the Australia N ew Zealand Food Standard s Council (the Ministerial Cou ncil). AN ZFA coord inated the review , on behalf of the other jurisd ictions and includ ed representatives of the jurisd ictions on the review panel. Review progress The review report w as released in May 1999 by AN ZFA and recom m end ed rem oval of som e restrictive provisions of the Food Acts, for exam ple opening up food inspections to third party aud itors. The review conclud ed that certain other pow ers should be retained as exclusive to governm ent in recognition of the appropriateness of governm ent‘s enforcem ent role. Government response On 3 N ovem ber 2000, CoAG agreed to the food regulatory reform package, of w hich the Mod el Food Act is part. In ad d ition, CoAG signed off on an Inter-Governmental Agreem ent on Food Regulation agreeing to im plem ent the new food regulation system . 88 All jurisdictions agreed to use their best end eavours to introd uce into their respective Parliam ents legislation based on the Mod el Food Act by 3 N ovem ber 2001. Pharmacy regulation In 1999, the N CP Review of Pharm acy Regulation exam ined State and Territory legislation relating to pharm acy ow nership and registration of pharm acists, together w ith Australian Governm ent legislation relating to regulation of the location of prem ises for pharm acists approved to supply pharm aceutical benefits. Legislative regulation of the ow nership of pharm acies applies currently in all States. The nature of these restrictions varies from jurisdiction to jurisd iction. The State Pharm acy Acts generally prohibit ow nership or any pecuniary interest of pharm acies by anyb od y other than a pharm acist. All States and Territories require registration of pharm acists. Legislation covers requirem ents regard ing initial registration of both Australian-trained pharm acists and overseas-trained pharm acists, renew al of registration, rem oval of registration, com plaints against regulated pharm acists and d isciplinary processes. A m inisterial d eterm ination m ad e pursuant to section 99L of the Com m onw ealth N ational Health A ct 1953 im poses strict cond itions on granting Pharm aceutical Benefits Schem e (PBS) d ispensing approvals to a new pharmacy (the applicant m ust satisfy a set of ‗d efinite com m unity need ‘ criteria set out in the d eterm ination) and approving the location of a PBS-approved pharm acy from one locality to another. Review progress In February 2000, the review released its final report. 13 In 2000, CoAG referred the final report to Senior Officials for consid eration by a w orking group. The w orking group w as asked to 13 See the 1998-99 Commonwealth N ational Competition Policy A nnual Report (pp 158-162) for term s of reference. 89 consid er the review report m ind ful of factors unique to the practice and regulation of pharm acy in Australia. In August 2002 the Governm ent released the CoAG Working Group‘s response to the final report w hich is available at w w w .pm .gov.au/ new s/ m ed ia_releases/ 2002/ med ia_release1768.htm The full response of the CoAG Working Group can be accessed at: w w w .health.gov.au / haf/ pharm rev/ ind ex/ htm . 90 1.4 New and amended regulation (enacted since April 1995) The CPA requires all new and am end ed legislation that restricts com petition to be accompanied by analysis illustrating that the benefits of the restriction to the com m unity as a w hole outw eigh the costs and that the objectives of the legislation can only be achieved by restricting com petition. The Prim e Minister‘s 1997 M ore Time for Business14 policy statem ent, prepared in response to the recomm end ations of the Sm all Business Deregulation Taskforce, expand ed this requirem ent to apply to a ll Australian Governm ent regu lation that im poses costs or confers benefits on business. 1.4.1 Regulation Impact Statements In ord er to m eet CPA obligations, prom ote effective and efficient regulation and m ake transparent the possible im pact of proposed legislation, a Regulation Im pact Statem ent (RIS) m ust be prepared for all proposed new and am end ed Australian Governm ent regulation w ith the potential to restrict competition, or im pose costs or confer benefits on business (Box 1). The RIS m ust clearly id entify a problem and relevant policy objective and assess the costs and benefits of alternative m eans of fulfilling the objective. A function of the Office of Regulation Review (ORR) w hich is part of the Prod uctivity Comm ission is to advise on w hether the Governm ent‘s RIS process requ irem ents have been met. This includ es ad vising Governm ent on w hether the RIS provid es an ad equate level of analysis. The ORR is also responsible for provid ing guid ance and training to Australian Governm ent d epartments and agencies in preparing a RIS. RIS requirem ents are d etailed in A Guide to Regulation (Decem ber 1998) w hich is available from the ORR (w w w .pc.gov.au). 14 Com m onw ealth of Australia, M ore Time for Business, Statem ent by the Prim e Minister, the H on John H ow ard MP, 24 March 1997, Canberra. 91 Box 4: What is the purpose of the RIS process? The objective of the RIS process is to im prove the quality of regulations, so that regulations provid e the m ost efficient and effective m eans of achieving objectives. The RIS helps achieve this by ensuring that a com prehensive assessm ent of all policy options, and the associated costs and benefits, is und ertaken. The inform ation is then used to inform the d ecision -m aking processes. In this regard , it provid es a com prehensive checklist that outlines public policy d ecision m aking best practice. The RIS process is used to d evelop the appropriate and best policy solution, w hich d oes not im pose unnecessary costs on business and the com m unity. Where a regulatory solution is intended , a form al RIS m ust accom pany the proposed legislation on introd uction to Parliam ent. This provid es a public statem ent of the decision m aking process. The Australian Governm ent‘s overall performance against the RIS requirem ents, incorporating com pliance for new or am end ed prim ary legislation, subord inate legislation, quasi-regulation and treaties, is assessed in d etail in the Prod uctivity Com mission report Regulation and its Review 2002-03. In 2002-03, 139 regulatory proposals introd uced by the Australian Governm ent required a RIS. In 120 cases a RIS w as prepared , of w hich 113 w ere assessed by the ORR as being of an ad equate stand ard . Accord ingly, the RIS process com pliance rate at the d ecision -m aking stage w as 81 per cent. This rate w as low er than that achieved in the previous three years. Of the RISs prepared at the d ecision -m aking stage for regulatory proposals introd uced via Bills, 67 per cent w ere ad equate (com pared w ith 84 per cent in 2001-02). At the tabling stage, 93 per cent w ere ad equate (com pared w ith 95 per cent in 2001-02). 15 In the case of d isallow able instrum ents (subord inate legislation and regulation), 89 per cent of the RISs prepared at the d ecision -making stage w ere ad equate (com pared w ith 87 per cent in 2001-02) and 97 per cent 15 Prod uctivity Com m ission 2002, Regulation and its Review 2001-02, Annual Report Series, Prod uctivity Com m ission, Canberra, pp. 5-17. 92 w ere ad equate at the tabling stage (com pared w ith 94 per cent in 2001-02). 1.4.2 Legislation enacted since 1 July 2002 that may restrict competition Tw enty tw o proposals introd uced via Australian Governm ent legislation introd uced in the period 1 July 2002 to 30 June 2003 w ere id entified by the ORR as having the potential to restrict com petition (see Table 1). The potential im pact on the com m unity of these regulations varies from m od est to significant. The im pact is d iscussed in published RISs and w ill d epend in part on how the various legislative provisions are im plem ented and ad m inistered by regulators. Table 1.1: Selected Australian Government legislation introduced into Parliament between 1 July 2002 and 30 June 2003 having the potential to restrict competition ACIF C564: Deployment of Radiocommunications Infrastructure ACIF C580: Short Message Service (SMS) Issues Amendments to the Defence and Strategic Goods List Pursuant to s112(2A) of the Customs Act 1901 ASIC Guide on use of past performance in promotional material Australian Meat and Live-stock Industry (Beef Export to the United States of America Quota Year 2003) Order 2002 Australian Meat and Livestock Industry (Live Cattle Exports to Republic of Korea) Order 2002 Bass Strait Central Zone Scallop Fishery Management Plan Carrier Licence Conditions (Telstra Corporation Limited) Declaration 1997 (Amendment No. 4 of 2002) Consumer Protection Notice No. 7 of 2002 Customs (Prohibited Exports) Amendment Regulations 2003 (No. 1) 2003 No. 17 Customs (Prohibited Imports) Amendment Regulations 2003 (No. 1) 2003 No. 18 Grain, Plants and Plant Products Amendment Orders 2003 (No 1) Health Insurance (Accredited Pathology Laboratories - Approval) Principles 2002 HS/11/2002 Horticulture Marketing and Research and Development Services (Export Efficiency) Regulations 2002 International Undertaking on Plant Genetic Resources Monitoring and Reporting on Competition in the Telecommunications Industry Determination 2003 (No. 1). Postal Services Legislation Amendment Bill 2003 Proclamation of the Heard Island and McDonald Islands Marine Reserve Radiocommunications (Transmitter Licence Tax) Amendment Determination 2002 (No. 1) Radiocommunications Licence Conditions (Broadcasting Licence) Amendment Determination 2002 (No. 1) 93 Telecommunications Competition Bill 2002 Trade Practices Legislation Amendment Bill 2003 94 2 2.1 Competitive neutrality Why implement competitive neutrality? The Competition Principles A greement (CPA) establishes a policy of com petitive neutrality. This requires that governm ent businesses operating in a m arket in w hich there are actual or potent ial com petitors should not enjoy any net com petitive ad vantages sim ply as a consequence of their public ow nership. The objective of this policy is to eliminate potential resource allocation d istortions arising from the public ow nership of significant busin ess activities operating in a contestable environm ent, and to encourage fair and effective com petition in the supply of good s and services. The ability of governm ent ow ned business activities to com pete ‘unfairly’ can have significant econom ic efficiency a nd equity im plications. This is because pricing d ecisions taken by governm ent businesses m ay not fully reflect actual prod uction costs or other business costs borne by their private sector com petitors. This may result from a lack of m arket pressure and d iscipline, such as that applied through the requirem ent for private sector firm s to earn a com m ercial rate of return and m ake d ivid end paym ents to sharehold ers, or special planning regulations. Such ad vantages m ay enable a governm ent business to und ercut private sector com petitors, and provide an effective barrier to entry for potential com petitors. If consum ers choose to purchase from the low er priced governm ent provid er, the prod uction and investm ent d ecisions of that business and actual and potential com petitors w ill be influenced . If the governm ent business is not the least cost prod ucer (once costs are m easured on an equivalent basis), the allocation of resources tow ard s prod uction by this business w ould be inefficient. As a result, rem oving those ad vantages enabling und er-pricing should encourage m ore econom ically efficient outcomes, and ensure resources are allocated to their best uses. 85 It also m eans that w here public fund s continue to be used to provid e significant business activities, increased competitive pressures and perform ance m onitoring should result in m ore efficient operations. Consum ers w ill benefit from m ore com petitive pricing practices and im proved quality of governm ent services. Furtherm ore, w here public funds are rem oved from the provision of good s and services consid ered best left to the private sector, and those rem aining activities are provid ed m ore efficiently, a greater proportion of total public fund s can be d irected tow ard s the provision of social policy priorities such as health, ed ucation and w elfare. This im proved government business com petitiveness d oes not com e at the expense of satisfying legitim ate Com m unity Service Obligations (CSOs). H ow ever, as d iscussed in section 2.1.3, com petitive neutrality d oes encourage greater transpa rency and efficiency in their provision. 2.1.1 Which Government activities are subject to competitive neutrality? The A ustralian Government Competitive N eutrality Policy Statement (June 1996) (CNPS) d eem s all Governm ent Business Enterprises (GBEs) and their subsid iaries, Com m onw ealth Com panies (form erly referred to as Com m onw ealth Share-Lim ited Com panies) and business units to be significant business activities and , consequently, required to apply com petitive neutrality.  GBEs are either Com m onw ealth Authorities or Com m onw ealth Com panies prescribed by the regulations under the Commonwealth A uthorities and Companies A ct 1997 (CAC Act) (see section 2.2.1).  Com m onw ealth Companies (previously referred to as Com m onw ealth Share-Lim ited Com panies) are com panies established und er the Corporations A ct 2001 in w hich the Australian Governm ent has a controlling interest (see section 2.2.1). H ow ever, it d oes not includ e a com pany in w hich the Australian Governm ent has a controlling interest through one or m ore interposed C om m onw ealth Authorities or Com monw ealth Com panies. A Com m onw ealth 86 Com pany is governed by the CAC Act, and is referred to as a CAC Act bod y.  Business units are id entifiable parts of a Financial M anagement and A ccountability A ct 1997 (FMA Act) Agency that have the primary objective of trad ing good s and services in the market, for the purpose of earning a com m ercial return (see section 2.2.2). The m anagem ent and accounting structures of business units are separate from other parts of the overall organisation . The follow ing activities are also consid ered significant for the purposes of com petitive neutrality:  other com m ercial activities und ertaken by non -GBE agencies prescribed by regulation under the FMA Act, Com m onw ealth Authorities or Departments, w ith a com m ercial turnover of a least $10 m illion per annum (see section 2.2.3);  baseline costing for activities und ertaken for m arket testing purposes (see section 2.2.4); and  public sector bid s (see section 2.2.4). To be consid ered a business the follow ing criter ia m ust be m et:  there m ust be charging for good s and services;  there m ust be an actual or potential com petitor either in the private or public sector, that is, users are not restricted by law or policy from choosing alternative sources of supply; and  m anagers of the activity m ust have a d egree of ind epend ence in relation to the prod uction or supply of the good or service and the price at w hich it is provid ed . Other business activities (not listed above) are subject to the com plaints m echanism and m ay be required to apply com petitive neutrality if a com plaint against them is upheld (see section 2.2.5). These business activities m ay choose to apply com petitive neutrality on a notional basis, to preclud e com plaints. 87 Com petitive neutrality is required to be im plem ented only w here the costs of this course of action d o not exceed the benefits. 2.1.2 What does the application of competitive neutrality require? The A ustralian Government Competitive N eutrality Guidelines for M anagers (February 2004) provid es assistance w ith the practical application of the com petitive neutrality principles, as id entified in the CNPS, to a w id e range of Australian Governm ent business activities. In general term s, com petitive neutrality im plem entation involves:  ad option of a corporatisation m od el for significant GBEs;  paym ent of all relevant Com m onw ealth and State d irect and ind irect taxes or tax equivalents;  paym ent of d ebt neutrality charges or com mercial interest rates, d irected tow ard s offsetting com petitive advantages provid ed by explicit or im plicit governm ent guarantees on com m ercial or public loans;  attainm ent of a pre-tax com m ercial rate of return on assets (to ensure, am ong other things, paym ent of com petitive neutrality com ponents is not sim ply accom m odated through a red uction in profit m argin);  com pliance w ith those regulations to w hich private sector com petitors are norm ally subject, for exam ple, planning and approvals processes; and  pricing of good s and services provid ed in contestable m arkets to take account of all d irect costs attributable to the activity and the applicable com petitive neutrality com ponents. The actual application of com petitive neutrality varies significantly, d epend ing on the nature of the business activity to w hich it is being applied and the specific operating cond itions being assessed . Exam ples of this flexibility are d etailed below . 88 Example 1 Governm ent businesses m ay com pete pred om inantly against private or other governm ent organisations that are recipients of special arrangem ents in relation to the p aym ent of taxes. In these circum stances, the Governm ent business is only required to calculate its tax liability in a com parable m anner to its com petitors. Example 2 Where com m ercial activities are und ertaken w ithin a non -GBE authority prescribed by regulation under the FMA Act, com petitive neutrality policy requires as a first best solution the structural (legal) separation of those activities from the parent bod y. H ow ever, if this is not cost effective, strict accounting separation betw een contestable and non-contestable services is acceptable. Where neither of these options can be im plem ented in a satisfactory manner, com petitive neutrality is to be applied across the board . This ensures that entities d o not cross subsidise contestable services from their non-contestable or reserved business activities. Box 5 clarifies som e comm on misconceptions w ith regard to com petitive neutrality. 89 Box 5: Competitive neutrality some misconceptions  Com petitive neutrality d oes not apply to non -business, non-profit activities of publicly ow ned entities. It also d oes not prevent activities being cond ucted as CSOs.  Com petitive neutrality d oes not have to be applied to Australian Governm ent business activities w here the costs of im plem entation w ould outw eigh the expected ben efits.  Com petitive neutrality is neutral w ith respect to the nature and form of ow nership of business enterprises. It d oes not require privatisation of Australian Governm ent business activities, only corporatisation. Where the Governm ent d ecid es to privatise a form er public m onopoly, the requirem ents of Clause 4 of the CPA m ust be m et (see Chapter 3).  Com petitive neutrality d oes not require outsourcing of Australian Governm ent activities — but w hen public bid s are m ad e und er m arket testing arrangem ents, they m ust com ply w ith com petitive neutrality. As a result, in -house units should not have an unfair ad vantage over other bidd ers.  Regulatory neutrality d oes not require the rem oval of legislation that applies only to the GBE or agency (and not to its private sector com petitors) w here the regulation is consid ered to be appropriate. H ow ever, anti-com petitive legislation m ay be review ed und er the Com m onw ealth legislation review program (see Chapter 1). 90 2.1.3 Community Service Obligations A CSO arises w hen the Governm ent specifically requires a business to carry out an activity or process that:  the organisation w ould not elect to d o on a comm ercial basis, or that it w ould only d o com m ercially at higher prices; and  the Governm ent d oes not, or w ould not, require other organisations in the public or private sectors to fund . CSOs are often established to m eet governm ent social policy objectives. A w ell know n exam ple is the requirem ent that Australia Post provid e a stand ard letter d elivery service throughout Australia for a uniform postage rate (currently 50 cents). Com petitive neutrality d oes not prevent the provision of CSOs, but it d oes establish certain requirem ents in term s of their costing, fund ing and interaction w ith other com petitive neutrality obligations. The intention is to encourage m ore effective and transparent provision of such services, w ith m inim al im pact on the efficient provision of other com m ercial services. At the N ovember 2000 Council of Australian Governm ents (CoAG) m eeting it w as d ecid ed that parties should be free to d eterm ine w ho should receive a CSO paym ent or subsidy w hen im plem enting com petitive neutrality requirem ents und er the CPA, and that such paym ents should be transparent, appropriately costed and fund ed d irectly by governm ent. It w as also d ecid ed that there w as no requirem ent for a competitive process in d elivering CSOs. Where an organisation w ishes to have an activity recognised as a CSO, it m ust be d irected explicitly to carry out that activity on a non -com m ercial basis in legislation , government d ecision or publicly available d irections from sharehold er Ministers (for exam ple, id entified in the annual report of the relevant Australian Governm ent departm ent or authority annual report). CSOs should be fund ed from the purchasing portfolio’s bud get, w ith costs d eterm ined as part of a com m ercially negotiated agreem ent. CSO agreem ents should includ e sim ilar requirem ents as applied to other 91 activities, that is, these activities should be able to pay taxes and earn a com m ercial rate of return (as if contracted out). Where direct fund ing of CSOs entails unreasonably large transaction costs, portfolio Ministers m ay choose to purchase CSOs by notionally ad d ing to the provid er organisation’s revenue result, for the purpose of calculating the achieved rate of return. CSOs should be costed as if d irectly fund ed . The notional adjustm ent should be transparently record ed in an aud itable m anner. Und er com petitive neutrality arrangements, no ad justm ent should be m ad e to the com m ercial rate of return target applied to the service provid er to accom m od ate CSOs. 2.2 Australian Government entities and activities subject to competitive neutrality Portfolio Ministers are responsible for ensuring that all significant business activities w ithin their portfolio com ply w ith established com petitive neutrality requirem ents. Com petitive neutrality arrangem ents w ere required to be im plem ented by 1 July 1998. Detailed inform ation concerning the application of com petitive neutrality to specific organisations or activities is provid ed below . 92 2.2.1 Government Business Enterprises and Commonwealth Companies GBEs and Com m onw ealth Com panies are required to have their com petitive neutrality arrangem ents approved by the Minister for Finance and Ad ministration and the responsible po rtfolio Minister. Com petitive neutrality requires that GBEs, inter alia:  pay all Com m onw ealth d irect and indirect taxes, and State indirect taxes or tax equivalents;  for GBEs, earn a com m ercial rate of return on assets as d eterm ined by the Minister for Fin ance and Ad m inistration and the responsible portfolio Minister (the Treasurer m ay also be consulted );  For Com m onw ealth Com panies, financial targets are to be established and m onitored by the responsible parties;  w here borrow ing from private financial markets, have a d ebt neutrality charge set by their sharehold er Minister(s) based on stand alone cred it rating ad vice; and  General Governm ent Sector agencies that borrow fund s are usually required to borrow from the Bud get. Bud get d ebt is sourced from the Departm ent of Finance and Ad m inistration, and in general, w ill not require any d ebt neutrality ad justm ents. H ow ever, if the d ebt is provid ed to the portfolio d epartm ent then a CN ad justm ent may be required . 2.2.2 Business Units Com petitive neutrality arran gem ents applied to business u nits are to be approved by the responsible portfolio Minister. Com petitive neutrality requires business units to, inter alia:  pay Fringe Benefits Tax (FBT) and the Good s and Services Tax (GST), as specific legislation makes the Com m onw ealth notionally subject to these, unless an exem ption is available for reasons other than their public ow nership; 93  operate und er a tax equivalent regim e for rem aining Com m onw ealth and State taxes by calculating their tax liability in a com parable m anner to their com petitors and m ake an equivalent paym ent to the Official Public Account (OPA);  achieve financial targets for som e activities;  w here borrow ing from private financial m arkets, have any d ebt neutrality charge set by the relevant portfolio Minist er based on stand alone cred it rating ad vice; and  General Governm ent Sector agencies that borrow fund s are usually required to borrow from the Bud get. Bud get d ebt is sourced from the Departm ent of Finance and Ad m inistration, and in general, w ill not require any d ebt neutrality ad justm ents. H ow ever, if the d ebt is provid ed to the portfolio d epartm ent then a CN ad justm ent may be required . 2.2.3 Other commercial business activities (over $10 million per annum) Com petitive neutrality arrangem ents applying to significant com m ercial business activities provid ed by non -GBE agencies prescribed by regulation und er the FMA Act, Com m onw ealth Authorities or Departm ents w ith a com m ercial turnover of at least $10 m illion per annum are to be approved by the relevant portfolio Minister. The com petitive neutrality guid elines require significant business activities to, inter alia:  operate und er a tax equivalent regim e by calculating their tax liability in a com parable manner to their com petitors and m ake an equivalent paym ent to the OPA;  for non-GBE Authorities, m eet the required comm ercial rate of return on assets target set by the responsible portfolio Minister in consultation w ith the Minister for Finance and Ad m inistration (the Treasurer m ay also be consulted );  other significant business activities subject to CN are also required to achieve financial targets; 94  w here borrow ing from private financial m arkets, have any d ebt neutrality charge set by the relevant portfolio Minister based on stand alone cred it rating ad vice; and  General Governm ent Sector agencies that borrow fund s are usually required to borrow from the Bud get. Bud get d ebt is sourced from the Departm ent of Finance and Ad m inistration, and in general, w ill not require any d ebt neutrality ad justm ents. H ow ever, if the d ebt is provid ed to the portfolio d epartm ent then a CN ad justm ent may be required . 2.2.4 Market testing Market testing (previously referred to as Competitive Tend ering and Contracting) involves inviting tend ers for the provision of relevant services an d evaluating those tend ers against pred eterm ined selection criteria. Com p etitive neutrality arrangements should be applied to all public sector bid s and baseline costing exercises for activities subject to m arket testing arrangements. In practice this m ean s:  w hen und ertaking m arket testing to d eterm ine w hether or not to com petitively tend er for the supply of a particular good or service, com petitive neutrality requirem ents are to be incorporated w hen und ertaking baseline costing exercises;  com petitively ten d ering for the supply of a good or service is to be regard ed as a com m ercial activity. Any baseline costing exercise needs to reflect the full cost of provid ing the good or service: this includ es attribution for: any appropriate costs; paym ent of FBT and GST (on d irect purchases); rem aining Com m onw ealth and State taxes; d ebt neutrality charges; regulatory neutrality charges and a notional am ount equivalent to any public liability insurance prem ium s a private sector contractor m ay be required to pay; and incorporate a com mercial pre-tax rate of return on assets. Where plant and facilities are to be m ad e available to all bid d ers as Governm ent furnished , baseline costing exercises d o not need to includ e a rate of return on such capital. 95 Should a public sector bid be successful, the business activity w ould need to assess the application of CN in accord ance w ith the A ustralian Government Competitive N eutrality Guidelines for M anagers. N on-com pliance could result in a com plaint being m ad e to the Australian Governm ent Com petitive N eutrality Com plaints Office (AGCN CO) (see section 2.3). 2.2.5 Other Australian Government business activities There are a num ber of sm aller Australian Governm ent business activities for w hich the application of com petitive neutrality principles is being consid ered or und ertaken. They m ay also be required to im plem ent com petitive neutrality as a result of a com plaint to the AGCN CO (see Section 2.3). These business activities have to earn a com m ercial rate of return (set by their parent agency), pay GST and FBT (unless exem ptions are available for reasons other than governm ent ow nership) and m ake a notional ad justm ent to their cost base for rem aining Com m onw ealth and State ind irect taxes. Other com petitive neutrality costs m ay be incurred on an (aud itable) notional basis, for exam ple, d ebt neutrality charges. 96 2.3 Complaints alleging non compliance with competitive neutrality principles The AGCN CO is an autonom ous unit w ithin the Prod uctivity Com m ission. It w as established und er the Productivity Commission A ct 1998 to receive com plaints, und ertake com plaint investigation and ad vise the Treasurer on the application of com petitive neutrality to governm ent business activities. Contact d etails are provid ed below : Australian Governm ent Com petitive N eutrality Com plaints Office PO Box 80 BELCON N EN ACT 2616 Telephone: (02) 6240 3377 Facsim ile: (02) 6253 0049 Website: w w w .pc.gov.au/ ccnco/ Any ind ivid ual, organisation or governm ent bod y m ay lod ge a form al w ritten com plaint w ith the AGCN CO on the ground s that:  an Australian Government business activity has not been exposed to com petitive neutrality arrangem ents (includ ing a com m ercial activity below the $10 m illion per annum turnover threshold );  an Australian Government business activity is not com plying w ith com petitive neutrality arrangem ents that apply to it; or  current com petitive neutrality arrangem ents are not effective in rem oving an Australian Governm ent business activity’s net com petitive ad vantage, w hich arises d ue to governm ent ow nership. Where the AGCN CO consid ers that com petitive neutrality arrangem ents are not being follow ed , it m ay d irectly ad vise governm ent business entities as to the id entified inad equacies and actions to im prove com pliance. If a suitable resolution to a com plaint cannot b e achieved in this m anner, the AGCNCO m ay recom m end appropriate rem ed ial action or that the Treasurer undertake a form al public inquiry into the m atter. Any person contem plating a com plaint should d iscuss their concerns w ith the governm ent business involv ed and/ or the AGCN CO prior to initiating a form al com plaint investigation process. 97 2.3.1 Complaints received in 2002-03 In the period 1 July 2002 to 31 March 2004, the AGCN CO has received tw o w ritten com plaints concerning the Ind ustry Capability N etw ork Lim ited (ICN L) and the Australian Valuation Office (AVO). Progress w ith im plem enting recom m end ations from earlier com petitive neutrality investigations is also detailed . Industry Capability Network Ltd (ICNL) ICN L consists of a netw ork of State and Australian government organisations that provid es consultancy services to the Australian ind ustry on foreign investm ent. The activity that w as the subject of the com plaint w as State based ; therefore the AGCN CO referred the com plainant to the relevant State’s com petitive neutrality m echanism s. As a result, form al investigation w as not cond ucted . H ow ever, the com plainant ind icated that the AGCN CO raising the issues w ith the ICN L had led to consid erable progress on a num ber of m atters. The AGCN CO continues to m onitor the progress of the m atter. Australian Valuation Office (AVO) The AVO is a business unit operated by the Australian Taxation Office. The AVO provid es valuation services to governm ent d epartm ents and the private sector. These includ e appraisals of property and other assets; special purpose valuations of property for capital or rental value; plant and equipment valuations; and corporate valuations for consolid ation and taxation purposes. The AVO has been subject to CN since 1996. On 4 N ovem ber 2003, H erron Tod d White Pty Ltd (H erron) lod ged a com plaint w ith the AGCN CO alleging that the pricing regim e used by the AVO in tend ering fails to reflect the full costs of service provision for the follow ing reasons:  It fails to ad just for a num ber of cost ad vantages as a result of its relationship w ith the ATO includ ing access to resources at red uced rates; red uced com m ercial rents, accom m od ation search costs and fitout costs; and d im inished search and com pliance costs for professional ind emnity insurance; and  The pricing regim e used by the AVO is pred atory, and fails to include a tax equivalent com ponent. 98 The AGCN CO is currently investigating the complaint. The AGCN CO's investigation relates to w hether the AVO has applied the CN requirem ents effectively. Earlier AGCNCO competitive neutrality investigations ARRB Transport Research Limited On 30 October 2000, Capricorn Capital Lim ited (on behalf of other parties) lod ged a com petitive neutrality com plaint against ARRB Transport Research Lim ited (ARRB). ARRB is a public com pany, w hose 10 m em bers are the State and Territory road m anagem ent authorities, the Australian Governm ent Departm ent of Transport and Regional Services and the Australian Local Governm ent Association. ARRB’s business is to cond uct research into road s. The com plaint covered a num ber of areas includ ing ARRB’s tax-free status, low rate of return, privileged access to governm ent assets and existence of governm ent guarantees. The AGCN CO found no evid ence that com petitive neutrality principles had been breached . H ow ever, the AGCN CO d rew attention to the potential for non -comm ercial public interest research und ertaken by ARRB to conflict w ith its capacity to operate successfully as a com m ercial entity. It suggests the m em ber governm ents of ARRB m ight consid er explicitly specifying this d em and and how funding for these non-com m ercial activities should be negotiated . ARRB m em ber governm ents have ad d ressed this issue and have requested ARRB to clearly id entify the scope of public interest research that should be cond ucted by ARRB on a non -com petitive basis, and to ensure appropriate separation of th at function from any pursuit of com petitive w ork. Meteorological Services to Aviation On 10 February 2000, Metra Inform ation Lim ited — a subsid iary of the governm ent ow ned Meteorological Services of N ew Zealand Lim ited lod ged a complaint w ith the AGCN CO alleging that the Civil Aviation Safety Authority’s (CASA’s) ad ministration of aviation regulations confers a regulatory ad vantage on the Bureau of Meteorology 99 (the Bureau) by preventing Metra from com peting in the m arket for m eteorological services in the aviation ind ustry. At Metra’s request, in April 2000, the com plaint w as put on hold pend ing the outcome of d iscussions betw een Metra and CASA. On 2 May 2001, Metra requested that the AGCN CO resum e its consid eration of its com plaint. The AGCN CO consid ers that a com ponent of the Bureau’s aviation m eteorological services, specifically those w hich are in ad d ition to the activities that are necessary to m eet Australia’s internatio nal obligations, constitute a ‘business activity’ for the purposes of com petitive neutrality. Further, it d oes not consid er that there is a case for restricting com petition in the provision of these value-ad d ed services. The AGCN CO und erstand s that opening the Bureau’s services to com petition is und er consid eration by the Governm ent. Accord ingly, it recom m end s that the Governm ent should com plete its consid eration of the option for introd ucing com petition in the provision of m eteorological services to aviation as soon as possible. If no other m od el is likely to d eliver greater net benefits to the com m unity than com petitive provision of value ad d ed services, the AGCN CO suggests that this approach should be im plem ented forthw ith. In its consid eration of the options, the Governm ent has decid ed to ad d ress the issue of aviation w eather service provision in its ongoing aviation reform program. At this stage, this is expected to be 2004/ 2005. Provision of Customs Services to Australia Post In February 2000, the Conference of Asia Pacific Express Couriers (CAPEC) lod ged a com plaint against Australia Post. CAPEC claim s that Australia Post enjoys a com petitive ad vantage on com peting for business because of the d ifferences in the regulatory arrangem ents for postal and non postal item s. Specifically, these d ifferences are higher d ollar threshold s for incoming and outgoing postal item s before form al Custom s screening requirem ents take effect; and exem ption for postal item s from recently introd uced reporting and cost recovery charges for ‘high volum e, low value’ consignm ents. 100 The AGCN CO found that som e of the current Custom s arrangem ents d id breach com petitive neutrality principles. The AGCN CO’s report of June 2000 recom m end ed that the value threshold s for form al screening by Custom s of incom ing and outgoing postal and non -postal items be aligned ; the Governm ent give further consid eration to im posing cost recovery charges for inform al Custom s screening of incom ing postal item s and the concerns raised w ith respect to the high vo lum e/ low value charging schem e be ad d ressed as part of the Governm ent’s consid eration of the cost recovery issue. The Customs Legislation A mendment and Repeal (International Trade M odernisation) A ct 2001 provid es a m od ern legal fram ew ork for Custom s’ m anagem ent of im port and export cargo. This legislation includ es changes necessary to control low er value consignm ents w ithin the export perm it and licence system as w ell as provid ing for the introd uction of an electronic clearance system to replace the current paper based system for low er value im ported consignm ents. The legislation is being progressively com m enced in line w ith the release of the new Integrated Cargo System w hich is currently und er d evelopm ent. For outgoing postal and non -postal item s, the valu e threshold s w ere harm onised on 1 July 2002 w hen the first part of the Act com m enced . The harm onisation of the value threshold for incoming postal and non-postal good s w ill occur w hen the legislation is introd uced to support the im port d eclarations phase of the Integrated Cargo System , in 2004/ 2005. The appropriate charging regim e for the full range of im port entries is being ad d ressed as part of the im plem entation of the International Trad e Mod ernisation changes. 2.4 Australian Government actions to assist competitive neutrality implementation 2.4.1 Policy measures It is general Governm ent policy not to issue a Australian Governm ent Guarantee on new borrow ings. Where these are to be provid ed , there is a statutory requirem ent that loan guarantees not be iss ued w ithout the authorisation of the Minister for Finance and Adm inistration. 101 2.4.2 Publications The A ustralian Government Competitive N eutrality Guidelines for M anagers w ere released in February 2004, to assist in the application of com petitive neutrality principles to the w id e range of Australian Governm ent significant business activities. Copies of the guid elines (w hich contain com petitive neutrality inform ation and ad vice) are available from the Departm ent of Finance and Adm inistration or the Finance w ebsite (w w w .finance.gov.au). The AGCN CO released its research paper Cost A llocation and Pricing in October 1998. The paper exam ines these issues in the context of significant business activities operating w ithin non -GBE Com m onw ealth authorities or d epartm ents m eeting their com petitive neutrality obligations. A second paper, Rate of Return Issues, w as released in February 1999. This paper provid es general ad vice on establishing a com m ercial rate of return on assets targets, particularly for sm all governm ent business activities, and those factors the AGCN CO w ill take into account w hen rate of return issues arise in a com plaint. A third paper, Competitive N eutrality in Forestry w as released on 22 May 2001. The research paper investigates into the application of com petitive neutrality principles to States and Territories’ forestry operations and associated log pricing issues. These publications are available from the AGCN CO or their w ebsite (w w w .pc.gov.au/ ccnco/ ). 102 Table 2.1: Agencies that applied competitive neutrality on a voluntary basis during 2002-03 Name Activity Entity Assessed subject to CN No Full cost recovery Commercial rate of return Tax or tax equivalent payments Federal tax applied, but not State tax Federal tax applied, but not State tax No No No No Debt neutralit y charge No Regulatory neutrality allowance n/a Delivers community service obligations No 103 Australian Electoral Commission Conduct of local government elections Other Yes No Australian Electoral Commission Conduct of certified agreement/other ballots Other No Yes No No n/a No *Australian Radiation Protection and Nuclear Safety Agency *Australian Radiation Protection and Nuclear Safety Agency *Australian Radiation Protection and Nuclear Safety Agency Bureau of Meteorology Personal radiation monitoring services Various testing and calibration services Surveys Special Services Unit PA PA PA BU No No No No Yes Yes Yes Yes No No No Yes No No No No No No No No No No No No n/a Not Applicable BU Business Unit PA Prescribed Agency Other – Other Australian Government Business Activities * These entities are in transition, currently working towards CN. Table 2.2: Agencies that applied competitive neutrality during 2002-03 Name Activity Entity Assessed subject to CN Yes Full cost recovery Commercial rate of return Tax or tax equivalent payments No Debt neutrality charge No Regulatory neutrality allowance n/a Delivers community service obligations No Anindilyakwa Land Council Administration In- Yes No 104 Australia Post Australian Federal Police Australian Government Analytical Laboratories Australian Government Solicitor Australian Hearing Services Protective Security Services Analytical Laboratory services with the goal of the provision of an internationally recognised chemical and biological measurement and infrastructure Legal and related services Government hearing programs house CTC Unit GBE Other BU Yes Yes Yes n/a Yes Yes Yes Yes No Yes Yes Yes No1 No Yes No n/a Yes Yes No Yes Australian Rail Track Corporation Ltd Australian Securities and Investments Commission Australian Submarine Corporation Pty Ltd Australian Taxation Office Australian Technology Group Limited GBE CA (nonGBE) GBE CA (nonGBE) GBE BU GBE Yes Yes n/a Yes Yes Yes Yes Yes n/a No Yes n/a No Yes Yes Yes n/a Yes Yes Yes Yes Yes n/a No n/a No No No Printing/Imaging Submarine Maintenance Valuation Services Yes Yes Yes Yes Yes n/a Yes Yes Yes Yes Yes n/a No No n/a Yes n/a n/a No No No 1 While Australia Post und ertakes borrow ings, it d oes not receive a concessional borrow ing rate d ue to Australian Governm ent ow nership . Table 2.2: Agencies that applied competitive neutrality during 2002-03 (continued) Name Activity Entity Assessed subject to CN Yes Full cost recovery Commercial rate of return Tax or tax equivalent payments Yes Debt neutrality charge No Regulatory neutrality allowance n/a Delivers community service obligations No Centrelink Passport Call Centre Centrelink Carelink Centrelink Family Law Assistance Gateway Centrepay Centrelink Centrelink Australian Greenhouse Office Comland Limited Comsuper CRS Australia CSIRO Defence Housing Authority Superannuation Administration Services Commercial Vocational Rehabilitation Services Research, technical and consulting services CA (nonGBE) CA (nonGBE) CA (nonGBE) CA (nonGBE) CA (nonGBE) GBE PA BU Other GBE Yes Yes Yes Yes Yes Yes No n/a No Yes Yes Yes Yes No n/a No Yes Yes Yes Yes No n/a No Yes Yes Yes Yes No No2 No No No No3 n/a No Yes Yes Yes Yes Yes n/a Yes Yes Yes n/a Yes Yes No Yes Yes Yes Yes Yes Yes Yes No n/a Yes n/a n/a No No No No No Table 2.2: Agencies that applied competitive neutrality during 2002-03 (continued) 2 3 While Com land Lim ited und ertakes borrow ings, it d oes not receive a concessional borrow ing rate d u e to Australian Governm ent ow nership. While Defence H ousing Authority und ertakes borrow ings, it d oes not receive a concessional borrow ing rate d ue to Australian Governm ent ow nership . 105 106 Name Activity Entity Assessed subject to CN Yes Yes Yes Yes Full cost recovery Commercial rate of return Tax or tax equivalent payments No Yes No Yes Debt neutrality charge No No No No Regulatory neutrality allowance No Yes No Yes Department of Agriculture, Fisheries and Forestry Department of Finance and Administration Department of Finance and Administration Export Finance and Insurance Corporation Health Services Australia Medibank Private Limited National Capital Authority Bureau of Rural Sciences Corncover Property Management Credit Insurance BU BU DS CA (nonGBE) GBE GBE Other BU BU Other Other GBE Yes Yes Yes Yes No Yes Yes Yes Delivers community service obligations No No No Yes Reserve Bank of Australia Reserve Bank of Australia Royal Australian Mint Special Broadcasting Service Corporation Telstra Corporation GBE Government Business Enterprise BU Business Unit DS Department of State CA Commonwealth Authority CC Commonwealth Company PA Prescribed Agency National Capital Exhibition Shop (Regatta Point ACT) Transactional Banking Registry Sales of Coins On air advertising and sponsorship Yes Yes Yes Yes Yes Yes Yes Yes n/a n/a Yes Yes Yes Yes Yes n/a Yes Yes No Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes No Yes n/a n/a No No No No No No4 n/a n/a n/a Yes n/a Yes n/a n/a No No Yes No No Yes No Yes 4 While Telstra Corporation und ertakes borrow ings, it d oes not receive a concessional borrow ing rate d ue to Australian Governm ent ow nership. n/r No response or insufficient information received n/a Not applicable Note: Commonwealth Authorities, Departments of State and Prescribed Agencies are Other Commercial Business Activities (over $10m per annum) 107 3 3.1 Structural reform of public monopolies Australian Government management of the structural reform process The Competition Principles A greement (CPA) d oes not prescribe an agend a for the reform of public m onopolies, nor d oes it require privatisation. Clause 4 of the CPA d oes, how ever, require that before the Australian Governm ent introd uces com petition into a sector trad itionally supplied by a public m onopoly, it m ust rem ove from the public m onopoly any responsibilities for ind ustry regulation. The relo cation of these functions is intend ed to prevent the form er m onopolist from establishing a regulatory ad vantage over its existing and potential com petitors. Furtherm ore, prior to introd ucing com petition into a m arket trad itionally supplied by and/ or privatising a public m onopoly, the Australian Governm ent m ust und ertake a review into:  the appropriate com mercial objectives for the public m onopoly;  the m erits of separating any natural m onopoly elem ents from potentially com petitive elem ents of the public m onop oly;  the m erits of separating potentially com petitive elem ents of the public m onopoly;  the m ost effective m eans of separating regulatory functions from com m ercial functions of the public m onopoly;  the m ost effective m eans of im plem enting the com petitive ne utrality principles set out in the CPA;  the m erits of any Com munity Service Obligations (CSOs) und ertaken by the public m onopoly and the best m eans of fund ing and d elivering any m and ated CSOs;  the price and service regulations to be applied to the ind ustry ; and 109  the appropriate financial relationships betw een the ow ner of the public m onopoly and the public m onopoly, includ ing rate of return targets, d ividend s and capital structure. The review requirem ent acknow led ges that the rem oval of regulatory restrictions on entry to a m arketplace may not be sufficient to foster effective com petition in sectors currently d om inated by public m onopolies. Effective com petition requires com petitive m arket structures. The public m onopoly m ust be restructured on a com petitively neutral basis to rem ove any unfair com petitive advantages resulting from governm ent ow nership. H ow ever, the new organisation m ust also be sufficiently flexible to be able to respond efficiently in a changing environm ent. This m ay require that the organisation be restructured . Structural reform of public m onopolies is often linked w ith the provision of access rights to essential infrastructure services previously und er their sole control (see Chapter 4). During the reporting period , the Australian Governm ent consid ered Clause 4 matters in relation to telecom m unications, aviation services and w heat m arketing arrangem ents. 3.1.1 Telecommunications industry sector The telecomm unications sector has been open to full com petition since 1 July 1997. It is regulated by legislation, pred om inantly the Telecommunications A ct 1997 and Parts XIB and XIC of the Trade Practices A ct 1974 (TPA). The Australian Com m unications Authority, an ind epend ent statutory authority, is generally responsible for ensuring ind ustry com plia nce w ith legislative requirem ents. The Australian Com petition and Consum er Com m ission (ACCC) is responsible for ad m inistering the telecom m unications competition regim e in Parts XIB and XIC of the TPA. Telstra Corporation Lim ited , the previous m onopoly supp lier of telecom m unications services, has no regulatory functions. 110 The Australian Governm ent’s review obligations und er Clause 4 w ere broad ly satisfied through a series of related review s prior to the partial privatisation of Telstra in 1997. The pre 1997 r eview of telecom m unications regulatory arrangem ents ran over an extend ed period , involved extensive public consultation and taking of subm issions. The review ’s issues paper canvassed regulatory arrangem ents relating to ind ustry structure. In light of the r eview , the Governm ent ad opted the current approach to competition regulation. In 1997, the ACCC established a telecom m unications w orking group to review Telstra’s accounting and cost allocation arrangem ents, to assist the d evelopm ent of an enhanced accounting separation m od el for Telstra businesses. In May 2001 the ACCC released the Telecom m unications Ind ustry Regulatory Accounting Fram ew ork. This fram ew ork has been enhanced further though the Governm ent’s d ecision t o require Telstra to prepare regulatory accounts and reports for the ACCC w hich provid e transparency of its w holesale and retail operations, particularly in relation to the core interconnection services provid ed over Telstra’s netw ork. This m easure w as im plem ented through the Telecommunications Competition A ct 2002, w hich enables the Government to direct the ACCC to require Telstra to publish regulatory record s. The ACCC published the first accounting separation reports in Decem ber 2003. The Prod uctivity Com m ission cond ucted a review of Parts XIB and XIC of the TPA. The final report w as released on 21 December 2001. The Governm ent’s response to the report w as released on 4 March 2003. The Governm ent is largely supportive of the recom m end ations. The m ain recom m end ations of the Prod uctivity Com m ission’s report have been ad d ressed in the Telecommunications Competition A ct 2002. 3.1.1.1 Competition in provision of USO services The Governm ent has had a longstand ing view that the provision of services und er the Universal Service Obligation (USO) by Telstr a should be efficient and should prom ote the d evelopm ent of a com petitive m arket. 111 On 1 December 2003, the Government com menced a review of the operation of Parts 2 and 5 of the Telecommunications (Consumer Protection and Service Standards) Act 1999. In relation to Part 2 and in accord ance w ith the Regional Telecom m unications Inquiry’s recom m endation 2.2, the review is consid ering the efficacy of present costing and fund ing arrangem ents for the USO, includ ing w hether current arrangem ents are im ped ing the d evelopment of com petition in regional, rural and rem ote Australia. The review is also consid ering w hether the contestability regim e introd uced in 2000 has resulted in an im provem ent in technologies and services available to people in rural and rem ote Australia com pared w ith w hat is on offer to people in m etropolitan Australia. The Departm ent of Com m unications, Inform ation Technology and the Arts is und ertaking the review , w hich has involved public consultation w ith a w id e range of ind ustry participants, con sum er groups and other interested stakehold ers. The Departm ent is to report to the Minister for Com m unications, Inform ation Technology and the Arts by 7 April 2004. 3.1.2 Federal airports In 1997-98 the Governm ent granted long-term leases for all of the Fed eral airports previously operated by the Fed eral Airports Corporation to private sector com panies, w ith the exception of the Syd ney Basin airports and Essend on Airport in Melbourne. Sydney Airport Corporation Lim ited (SACL) and Essend on Airport Lim ited (EAL), both w holly Australian Governm ent ow ned public m onopolies, leased the Syd ney Basin and Essend on airports sites from the Australian Government. As part of the Fed eral airports privatisation process, regulatory functions w ere separated from com m ercial functions. The airport lessee com panies and businesses on the airport sites are subject to all of the applicable State law s, taxes and charges, except in som e specific areas. The areas in w hich Australian Governm ent law s and regulations apply to the airports are:  environm ental m anagement;  land use planning and developm ent controls; 112  build ing and construction approvals; and  price and quality of service m onitoring. On 13 Decem ber 2000, the Governm ent announced that Syd ney Airport w ould be able to hand le air passenger d em and over the next ten years and that it w ould , therefore, be prem ature to build a second airport in the city. The Governm ent d ecid ed instead to make Bankstow n Airport available as an overflow airport for Sydney. The Governm ent announced that SACL w ould continue to operate Kingsford Sm ith Airport only and that the airport w ould be sold in 2001. Bankstow n, Cam d en and H oxton airports w ere intend ed to be privatised in late 2002 and their m anagem ent w ould be by a separate com pany com peting w ith Syd ney Airp ort. Bankstow n Airport Lim ited (BAL), Cam d en Airport Lim ited (CAL) and H oxton Park Airport Lim ited (H PAL), previously subsid iaries of SACL, w ere separated from SACL on 29 June 2001 and are also be privatised . All of the shares in EAL w ere sold to a private sector com pany in Septem ber 2001. The airport sale process for Syd ney Airport began in early 2001 and binding bid s w ere originally d ue by 17 September 2001. Follow ing the terrorist attacks on the United States of Am erica on 11 Septem ber 2001 and the subsequent level of disruption in the global financial m arkets and aviation sectors, the Government d eferred the sale until 2002. On 25 June 2002, the Minister for Finance and Ad m inistration and the Deputy Prim e Minister and Minister for Transport and Regional Services announced the sale of Syd ney Airport. In accord ance w ith the privatisation tim etable, the Departm ent of Finance and Ad m inistration und ertook a Clause 4 review of SACL. The review w as com pleted in June 2002. At the tim e the Governm ent began privatising Fed eral airports, it established a com prehensive econom ic regulatory fram ew ork to apply to airport lessees. The arrangem ents w ere intend ed to prom ote operation of the airports in an efficient and com m ercial m anner, w hile at the sam e tim e protecting airport users from any potential abuse of m arket pow er by airport operators. These arrangem ents includ ed prices m onitoring and a Consum er Price Ind ex (CPI-X) cap on aeronautical charges at 113 Ad elaid e, Brisbane, Canberra, Coolangatta, Darw in, H obart, Launceston, Melbourne, Perth and Tow nsville airports. Prices m onitoring of aeronautical related charges, transparency m easures covering airport specific financial reporting, quality of service reporting and airport specific access arrangements w ere also part of the arrangem ents. When Syd ney Airport w as leased to the Governm ent ow ned SACL, it w as also subjected to prices notification and m onitoring of aeronautical and aeronautical related charges, respectively. Before privatisation, SACL w as a com pany subject to the Australian Governm ent Business Enterprise accountability guid elines and w as required to earn a fair and reasonable return on investm ent for its ow ners, the Australian Governm ent. Unlike the privatised airports, the Governm ent d id not place a price cap on SACL’s aeronautical charges d ue to significant recent re-developm ent and continued governm ent ow nership. In setting out its sale objectives for Syd ney Airport, the Governm ent announced that the ACCC w ould ensure that prices for regional carriers at Syd ney Airport w ould be m aintained through the sale process and w ould not increase in any year in excess of increases in the CPI-X. In early October 2001, the then Minister for Financial Services and Regulation signed new instrum ents in relation to the existing re gim e for price oversight at Fed eral airports. The revised regim e retained price caps in Brisbane, Melbourne and Perth airports but allow ed for a once only price increase up to specified am ounts. This w as to allow the airport lessees to better m anage the m ajor structural ad justm ents taking place in the d om estic aviation market. Form al m onitoring of the prices, costs and profits related to the supply of aeronautical related services w as retained for Ad elaid e, Brisbane, Canberra, Darw in, Melbourne, Perth and Sydney airports. The Prod uctivity Com m ission began a review of price regulation of airport services in Decem ber 2000 and presented its final report to Governm ent on 25 January 2002. The purpose of this inquiry w as to exam ine w hether new regulatory arrangem ents w ere need ed to ensure that the exercise of m arket pow er m ay be appropriately counteracted in relation to those airport services or prod ucts w here airport operators are id entified as having m ost potential to abuse m arket pow er. The Comm ission’s recom m en d ations includ e five years of price m onitoring (but no price caps) at Syd ney, Melbourne, Brisbane, Perth, Ad elaid e, Canberra, and Darw in airports. The Com mission recom m end ed that alterations to such a regime only be consid ered after 114 five years (at w hich tim e the regim e w ould be ind epend ently review ed). A second option of retaining a CPI-X price cap on a limited num ber of airports w as also consid ered d uring the review . The Governm ent released the report, and its response, on 13 May 2002. The Governm ent accep ted the recom m endation that Sydney, Melbourne, Brisbane, Perth, Ad elaide, Canberra and Darw in airports be subject to price m onitoring for five years, to take effect from 1 July 2002. Tow ard the end of the five-year period an ind epend ent review is to be car ried out to ascertain the need for future airport price regulation. 3.1.2.1 Access arrangements for significant infrastructure facilities Section 192 of the A irports A ct 1996 created an airport specific access regim e as part of the economic regulatory regim e for the larger privatised Fed eral airports. These arrangem ents provid ed for the d eclaration of airport services und er Part IIIA of the TPA tw elve m onths after private sector com panies began operating the airports, except to the extent to w hich each airp ort service is the subject of an access und ertaking in operation und er Part IIIA. Airport services are d efined by the Airports Act as services provid ed by m eans of significant facilities at the airport necessary for the purposes of operating and / or m aintaining civil aviation services at the airport. The Prod uctivity Comm ission provid ed its report on the Price Regulation of Airport Services on 25 January 2002. The Com m ission recom m end ed that there w ere insufficient ground s for an airport -specific access regim e as the general access provisions available under Part IIIA of the TPA (and Part IV) provid e sufficient safeguard s for those seeking access to airport facilitites. The Governm ent has accepted the Prod uctivity Com mission’s recom m end ation and the access provisions of section 192 of the Airports Act have been repealed . 3.1.3 Former Australian Wheat Board On 1 July 1999, the form er statutory Australian Wheat Board w as privatised as a grow er ow ned and controlled com pany (AWB Ltd) und er Corporations Law . 115 The form er Wheat Board ’s export control pow ers w ere transferred to an ind epend ent statutory Wheat Export Authority (WEA) in ord er to separate the com m ercial w heat m arketing operations (through AWB (International) Ltd (AWBI), a subsidiary of AWB Ltd ), from the regulatory aspects associated w ith the export w heat single d esk arrangem ents. AWBI has been given an autom atic right to export w heat through the legislation. The WEA’s functions includ e issuing export consents to persons other than AWBI and m onitoring and reporting on AWBI’s perform ance in relation to the export of w heat and the resultant benefits to grow ers. The W heat M arketing A ct 1989 (WMA), the legislation governing these arrangem ents, w as review ed in 2000 und er N CP. The term s of reference for the review required an exam ination of relevant m atters in Clause 4 of the CPA regard ing structural reform of public m onopolies. The Governm ent’s response to the review w as that there w ould be no legislative or significant structural change to the then w heat single d esk arrangem ents. Follow ing an inquiry and report by the Senate Rural and Regional Affairs and Transport Legislation Com m ittee on the W heat M arketing A mendment Bill 2002, the WMA w as am end ed in July 2003. Am ongst other m atters, changes w ere m ad e to the scheduled 2004 review process to ensure that the review is transparent and grow ers and other stakeholders can have confidence in the outcom e. The 2004 review w ill now be cond ucted by an ind epend ent panel (rather than by the WEA), but w ith assistance from the WEA. The review is to assess AWBI’s performance as the com m ercial m anager of the single d esk and also the effectiveness of the WEA as its regulator. The review m ust assess w hether benefits to grow ers have resulted from the perform ance of AWBI in relation to the export of w heat. The review is to provid e a report to the Minister (by 1 August 2004) and a report for grow ers (by 1 Septem ber 2004), the latter to be tabled in Parliam ent . The term s of reference for the 2004 Review d o not ad d ress w hether or not the single d esk should continue and the review is not intend ed to fulfil N CP requirem ents (see page 45[w ill upd ate w hen page num ber for Legislative Review chapter upd ated ] 116 4 4.1 Access to essential infrastructure The importance of access to infrastructure Fair and reasonable access for third parties to essential infrastructure facilities such as electricity grid s, gas pipelines, rail tracks, airports and com m unications netw orks is im portant for effective com petition. Many infrastructure facilities exhibit natural monopoly characteristics that inhibit com petition in related ind ustries. For exam ple, restrictions on access to rail track m ay prevent com petition betw een d ifferent com panies seeking to provid e rail freight services. Sim ilarly, w here a gas prod ucer cannot m ake use of an existing gas d istribution netw ork to reach potential clients, it m ay be d ifficult to com pete in or even enter the w holesale and retail gas supply m arkets. It is generally not econom ically feasible to d uplicate such infrastructure, and given the historic likelihood of vertically integrated ow ners, it can be d ifficult for actual and potential com petitors in d ow nstream and upstream ind ustries to gain access to these often vital infrastructure services. Even if access is technically available, there m ay be an im balance in bargaining pow er betw een the infrastructure ow ner and potential third party users, influencing the term s and cost of access and m aking entry potentially prohibitive for com petitors. The outputs of these industries are significant inputs to a w id e range of econom ic activities. Where restricted , access arrangem ents result in higher prices or low er service quality, and w hether through red uced com petition and / or lim ited supply, the im pact is felt by businesses and consum ers alike. As a result, governm ents have given increasing attention to establishing a right of access to these facilities, und er established term s and cond itions, w here privately negotiated access is not expected to be a viable option. 117 4.2 Part IIIA of the Trade Practices Act 1974 Clause 6 of the Competition Principles A greement (CPA) requires the Australian Governm ent to establish a legislative regim e for third party access to services provid ed by m eans of significant infrastructure facilities w here:  the facility is of national significance having regard to the size of the facility, its im portance to constitutional trad e or com m erce or its im portance to the national econom y;  it w ou ld not be economically feasible to d uplicate the facility; and  access to the service is necessary in ord er to perm it effective com petition in a d ow nstream or upstream m arket. Further, this regim e is not to cover a service provid ed by m eans of a facility located in a State or Territory that has established an access regim e that both covers the facility and conforms w ith the principles set out in Clause 6, unless the N ational Com petition Council (N CC) d eterm ines that regim e to be ineffective in relation to th e interjurisd ictional im pact or nature of the facility. To give effect to this com m itm ent, Part IIIA w as inserted into the Trade Practices A ct 1974 (TPA). This part is referred to as the national access regim e, and is intend ed to provid e for minim um interv ention by the Australian Governm ent in determ ining actual term s and cond itions of access. The national access regim e establishes three m eans by w hich parties m ay seek access to nationally significant infrastructure services. These are:  d eclaration of a service provid ed by an infrastructure facility A person can apply through the N CC to have a service provid ed by a significant infrastructure facility ‘d eclared ’ by d ecision of the relevant Minister. Where a service is d eclared , access to the service m ay be negotiated on a com m ercial basis betw een the service provid er and an access seeker. 118 If agreem ent cannot be reached , the term s and cond itions of access can be d etermined by the Australian Com petition and Consum er Com m ission (ACCC) through a legally binding arbitration process. In m aking an access determ ination, the ACCC m ust take into account a range of factors, includ ing the legitim ate business interests of the service provid er, the provid er’s investm ent in the facility and the public interest. A Minister’s d ecision on an application for d eclaration and an ACCC d eterm ination on a post-d eclaration arbitration can be review ed by the Australian Com petition Tribunal (ACT) upon application w ithin 21 d ays;  through an und ertaking to the ACCC The operator of an infrastructure service can give a voluntary und ertaking to the ACCC, setting out the term s and cond itions on w hich access to that service w ill be provid ed . If an und ertaking is accepted , this provid es a legally bind ing m eans by w hich third parties can obtain access to the infrastructure service. A service that is subject to an und ertaking cannot be d eclared as d escribed above; and  certification of a State or Territory access regim e as an ‘effective regim e’ State or Territory governm ents m ay apply through the N CC to have an access regim e certified as effective in relation to a particular service. The N CC then m akes a recom m end ation to the relevant Australian Governm ent Minister on w hether or not to certify the regim e as effective. On receiving a recom m end ation from the N CC, the Minister m ust d ecid e w hether the access regime is an effective regim e by applying relevant principles und er the CPA. Where an effective State or Territory access regim e is in place the relevant infrastructure service cannot be d eclared und er Part IIIA. A d ecision on an application for certification can be review ed by the ACT upon application w ithin 21 d ays of publication of the Minister’s decision. 119 Specific access regim es have also been established for particular infrastructure facilities. Ap art from the sector-specific telecom m unications access regim e, the access regim es for airport services provid ed at core regulated Australian Governm ent airports and for natural gas transmission and d istribution pipelines interact w ith the national access regim e. The Prod uctivity Com m ission cond ucted a legislation review of Part IIIA of the TPA. The Governm ent tabled the report on 17 Septem ber 2002 (see page 44). The Governm ent released its final response to the report on 20 February 2004. 4.3 Australian Government activity under Part IIIA This section identifies those actions und er Part IIIA of the TPA involving infrastructure facilities und er Australian Governm ent jurisdiction or requiring a d ecision by a Australian Governm ent Minister d uring 2002-03, and to the end of March 2004. 4.3.1 Application for declaration of airside services at Sydney Airport In October 2001 the NCC received an application from Virgin Blue Airlines for d eclaration of airsid e services at Syd ney Airport. On 29 January 2004, the Parliam entary Secretary to the Treasurer accepted a recom m end ation from the N CC and d ecid ed not to d eclare the services. Virgin Blue has applied to the ACT for a review of the decision. 4.3.2 Application for declaration of rail network services On 1 May 2001 the N CC received an application from Freight Australia seeking d eclaration of rail netw ork services. On 1 February 2002, the Parliamentary Secretary to the Treasurer accepted the N CC’s recom m end ation and decid ed not to d eclare the services. Freight Australia applied to the ACT for a review of the d ecision, how ever, this application w as w ithd raw n. 120 4.3.3 Wirrida to Tarcoola rail line declaration The N CC received an application from AuIron Energy Pty Ltd for d eclaration of services provid ed by the Wirrida -Tarcoola rail track on 12 Septem ber 2001. On recom m end ation from the N CC, the Parliamentary Secretary to the Treasurer d eclared the service for five years effective from 27 Septem ber 2002. On 24 Septem ber 2002, the access provid er, Asia Pacific Transport Pty Lim ited , applied to the ACT for a review of the d eclaration. On 10 March 2003, the ACT set asid e the d eclaration, on the ground s that no evid ence w as put before the Tribunal for it to be satisfied of each of the required statutory elements for d eclaration. AuIron had previously w ithd raw n from the proceed ings. 121 5 Government Business Enterprises prices oversight The purpose of prices oversight Prices oversight activities serve to id entify and discourage unacceptable price increases occurring w here firm s have excessive m arket pow er, such as from a legislated natural m onopoly, or w here the necessary cond itions for effective com petition are not otherw ise m et. The Australian Governm ent has had its current prices oversight arrangem ents for public and private sector business activities und er Australian Governm ent jurisd iction in place since 1983. H ow ever, there has been no com prehensive prices oversight of other jurisd ictions’ governm ent enterprises. N ational Com petition Policy (N CP) aim s to fill this void by encouraging the establishm ent of ind epend ent State and Territory prices oversight bod ies. Prices oversight of Governm ent Business Enterprises (GBEs) is raised in Clause 2 of the Competition Principles A greement (CPA). This requires that each State and Territory consid er the establishment of an ind ependent source of prices oversight w here this d oes not exist alread y. All States and Territories have now established such a body. An ind ependent source of prices oversight should have the follow ing characteristics:  it should be ind ependent from the GBE w hose prices are being assessed ;  its prim e objective should be one of efficient resource allocation but w ith regard to any explicitly id entified and d efined Com m unity Service Obligations (CSOs) im posed on a business enterprise by the governm ent or legislature of the jurisd iction that ow ns the enterprise;  it should apply to all significant GBEs that are m onopoly or near m onopoly suppliers of good s or services (or both);  it should permit subm issions by interested parties; and 5.1 123  its pricing recom m end ations, and the reasons for them , should be published. 5.2 Australian Government prices oversight The Australian Governm ent has a range of existing prices surveillance and m onitoring arrangem ents. Their objective is to prom ote com petitive pricing, and restrain price rises in those m a rkets w here com petition is less than effective. They apply across both the private and public sector, subject to Constitutional lim itations. The Australian Com petition and Consum er Com m ission (ACCC), an ind epend ent Australian Governm ent authority, is responsible for prices oversight. Follow ing recom mend ations from the Prod uctivity Com m ission review into the Prices Surveillance A ct 1983 (PSA) com pleted in August 2001, prices surveillance provisions w ere m oved from the PSA into Part VIIA of the Trade Practices A ct 1974 follow ing passage of Sched ule 2 of the Trad e Practices Legislation Am end m ent Bill 2003. The am end m ents preserve prices surveillance pow ers but enable bod ies other than the ACCC to cond uct a price inquiry. Both the TPA, (and previously the PSA) enable the ACCC to und ertake prices surveillance, price inquires or price m onitoring of selected good s and services in the Australian econom y. These pow ers can be applied to business activities of the Australian Governm ent, State and Territory authorities, as w ell as trad ing, financial and foreign corporations and people or firm s w ithin the Australian Capital Territory and across State and Territory bound aries. Once the responsible Australian Government Minister form ally d eclares an organisation, good or service subject to prices surveillance, the price of a d eclared prod uct is not perm itted to increase above its end orsed price or its highest price in the previous 12 m onths w ithout notification to the ACCC. Prices surveillance for Australian Governm ent entities w as applied to aeronautical services for regional airlines at Syd ney Airport, charges m ad e by Airservices Australia for term inal navigation, en -route 124 navigation and rescue and firefighting services and services reserved to Australia Post. Price inquiries involve stud ies of limited d uration into pricing practices and related matters concerning the supply of particular good s and services, follow ing direction from the responsible Australian Governm ent Minister. During the period of the inquiry, the price und er exam ination may not increase beyond its peak price in the previous 12 m onths w ithout the approval of the ACCC. The find ings of the inquiry are then reported to the Minister. The responsible Australian Governm ent Minister m ay also request ongoing m onitoring of prices, costs and profits in any ind ustry or business. For exam ple, the ACCC w as required to und ertake prices m onitoring of aeronautically related charges at Australia’s seven m ajor airports, and collect price, cost and profit d ata for container term inal operator com panies in Australia’s m ajor ports. The find ings are also reported to the Minister. 5.2.1 Matters referred to the ACCC While recognising prices oversight of State and Territory GBEs is prim arily the responsibility of the State or Territ ory that ow ns the enterprise, Clause 2 d oes provid e that a State or Territory m ay generally or on a case by case basis, and w ith the approval of the Australian Governm ent, subject its GBEs to a prices oversight m echanism ad m inistered by the ACCC. H ow ever, in the absence of the consent of the relevant State or Territory, a GBE may only be subject to prices oversight by the ACCC if:  it is not alread y subject to a source of ind epend ent prices oversight ad vice;  a jurisd iction w hich consid ers it is ad versely affected by the lack of prices oversight has consulted the State or Territory that ow ns the GBE, and the m atter has not been resolved to its satisfaction;  the affected jurisd iction has then brought the m atter to the attention of the N ational Com petition Council w ho has d ecided that the cond ition 125 in the first point exists and that the pricing of the GBE has a significant d irect or ind irect im pact on constitutional trad e or com m erce;  the N CC has then recom m end ed that the responsible Australian Governm ent Minister d eclare the GBE for prices surveillance by the ACCC; and  the responsible Australian Governm ent Minister has consulted the State or Territory that ow ns the enterprise. N o m atters w ere referred to the ACCC under these arrangem ents d uring 2002-03. 126 6 6.1 Conduct Code Agreement Competitive conduct rules The Conduct Code A greement (CCA) com mits the States and Territories to passing application legislation extend ing the com petitive cond uct rules of Part IV of the Trade Practices A ct 1974 (TPA) to bod ies w ithin their Constitutional com petence, and provid es for its ad m inistration by the Australian Com petition and Consum er Com m ission (ACCC). It also d efines a process for excepting (by legislation) cond uct from Part IV of the TPA, m odifying the com petitive cond uct rules and m aking appointm ents to the ACCC. Part IV of the TPA prohibits a range of anti-competitive cond uct, as w ell as provid ing for exceptions from the requirem ent to com ply w ith all or part of the restrictive trad e practices provisions. In particular, it prohibits:  anti-com petitive agreem ents; arrangem ents, primary boycotts and price  second ary boycotts;  m isuse of m arket pow er by a business w here the purpose is to d am age or prevent a com petitor from com peting;  third line forcing as w ell as exclusiv e d ealing cond uct that is anti-com petitive;  resale price m aintenance; and  anti-com petitive acquisitions and m ergers. The ACCC has the pow er to authorise arrangem ents that technically breach these provisions, provid ed these arrangem ents satisfy the public benefit test und er Part VII of the TPA. Authorisation, w hich m ust be sought in ad vance by a party, operates to im m unise arrangem ents from court action (except for section 46 cond uct relating to m isuse of m arket 127 pow er). ACCC d ecisions in relation to authorisations are subject to review by the Australian Com petition Tribunal. Section 51(1) provid es general exceptions from Part IV of the TPA for:  things d one or authorised or approved by Fed eral or Territorial legislation other than legislation relating to paten ts, trad em arks, d esigns or copyrights; and  things d one in any State or Territory specified in and specifically authorised by State or Territory legislation, so long as the State or Territory is a party to the CCA and the Competition Principles A greement (CPA). The exem ption provisions in sections 51(2) and 51(3) w ere subject to a legislation review und er the CPA (see page 60). 6.2 Commonwealth exceptions under section 51(1) of the Trade Practices Act 1974 Any Com m onw ealth legislation reliant on a section 51(1) exception need s to be approved by the Treasurer. The CCA requires that w ritten notification be provid ed to the ACCC of all legislation enacted in reliance on section 51(1). This m ust occur w ithin 30 d ays of the legislation being enacted . Proposed legislation that em bod ies restrictions on com petition m ust also satisfy the requirem ents of the CPA in relation to net com m unity benefit and includ e a Regulation Im pact Statem ent (RIS). 6.2.1 Existing legislation reliant on section 51(1) The follow ing legislation containing exception provisions has been previously id entified :  A ustralian Postal Corporation A ct 1989 (subsection 33A(6A));  Trade Practices A ct 1974 (Part X, Division 5 and section 173); 128  W heat M arketing A ct 1989 (section 57(6)); and  Y ear 2000 Information Disclosure A ct 1999 (section 17). 6.2.2 New legislation: exceptions made in 2002-03 There w ere no notifications of Com m onw ealth legislation m ad e in reliance on section 51(1) in the period of 1 July 2002 to 31 March 2004. 129 7 CoAG related reforms (electricity, gas, water, road transport) The m ajor infrastructure areas of electricity, gas, w ater and road transport are subject to reform requirem ents set out in separate Inter-Governm ental Agreem ents end orsed by the Council of Au stralian Governm ents (CoAG). Satisfactory progress in achieving these reform s is a condition for receipt of com petition paym ents, as outlined in the A greement to Implement the N ational Competition Policy and Related Reforms. While these com m itm ents are largely the responsibility of the States a nd Territories, the Australian Governm ent d oes have som e specific responsibilities (particularly in the area of gas reform ). The Australian Governm ent also seeks to assist the States and Territories in m eeting their obligations. The follow ing sections outline reform progress in each of the targeted areas, w ith em phasis on the role of the Australian Governm ent. 7.1 CoAG consideration of energy market reform In June 2001, CoAG charged the Ministerial Council on Energy (MCE) to ad d ress a series of tasks aim ed at establishing an open and com petitive national energy m arket w hich contributes to econom ic and environm ental performance, and d elivers benefits to energy users includ ing those in regional areas. The MCE com prises Energ y Ministers from all States and Territories and is chaired by the Fed eral Minister for Ind ustry, Tourism and Resources. At the sam e tim e, CoAG agreed to an ind epend ent review (chaired by the H on Warw ick Parer) of energy m arket directions to id entify the strategic issues for Australian energy m arkets and the policies required from Fed eral and State and Territory Governm ents. CoAG requested the MCE to oversee the Parer review . Parer reported on 20 Decem ber 2002, and the MCE respond ed com prehensively to the Parer review in its report to CoAG of 11 Decem ber 2003. The report recom m end s a package of reform s in six key areas: 131 Governance and institutions Strengthen the quality, tim eliness and national character of governance of the energy m arkets:  The N ational Electricity Market (N EM) Ministers Forum w ill be subsum ed by MCE on 1 July 2004.  A national legislative fram ew ork w ill be d eveloped on a collaborative basis by 1 July 2004, under a new inter-governm ental agreem ent. Econom ic regulation Stream line and im prove the quality of econom ic regulation across energy m arkets:  A new Australian Energy Market Com m ission (AEMC, w ith responsibility for rule-m aking and market developm ent) w ill be established , together w ith a new Australian Energy Regulator (AER, w ith responsibility for market regulation) on 1 July 2004.  With the establishm ent of AEMC and AER, the N ational Electricity Cod e Ad m inistrator (N ECA) w ill be abolished .  Agreem ent in -principle to d eveloping a national approach to energy access und er the Trad e Practices Act, covering electricity and gas transm ission and distribution, to be consid ered by MCE in 2004.  Agreem ent that AER w ill be responsible for the regulation of d istribution and retailing (other than retail pricing) by 2006, follow ing d evelopm ent of an agreed national fram ew ork. Any jurisd iction m ay, at their d iscretion, opt to transfer responsibility for retail pricing to AER once it has assum ed d istribution and retail responsibilities. Electricity transm ission Im prove the planning and d evelopm ent of electricity transm ission netw orks:  A new N EM transm ission planning function to be d eveloped , includ ing an Annual N ational Transm ission Statem ent (com m encing 132 in 2004) and a last resort pow er to d irect that a project be subjected to the regulatory test.  A new regulatory test for transm ission to includ e the full econom ic benefits of increased com petition to be com pleted in July 2004.  A new process to be d eveloped for assessing w holesale market regional bound aries w hile m aintaining jurisd ictional bound aries for retail custom er pricing – initial report in June 2004.  Im provem ents to inter-regional financial trad ing arrangem ents to be evaluated in conjunction w ith future arrangem ents for regional bound aries.  Market-based incentives d eveloped by July 2004. for transm ission perform ance to be  Conclud e the review of transm ission pricing arrangem ents for im plem entation in 2004.  Rem oval of existing biases in favour of unregulated transmission investm ent in m id 2004 – the cod e changes to recognise and protect the rights of existing investors in market transm ission services. User participation Enhance the participation of energy users in the m arkets, includ ing through d em and sid e managem ent and the further introd uction of retail com petition:  In jurisdictions w here full retail com petition is operating, each jurisd iction to align their retail price caps w ith costs, and period ically review the need for price caps.  MCE to exam ine options for a d em and -side response pool in N EM, and consid er the costs and benefits of introd ucing interval m etering. Gas m arket d evelopm ent Further increase the penetration of natural gas: 133  MCE to respond , in 2004, to the Prod uctivity Com m ission Review of the N ational Gas Access Regim e.  MCE noted the direction of the CoAG review to preclud e future state exem ptions from joint m arketing provisions. Proponents of future arrangem ents for the joint m arketing of gas, w hich raise com petition concerns, m ay seek authorisation by the ACCC on a case-by-case basis. The Ministerial Council on Mineral and Petroleum Resources (MCMPR) is consid ering this issue.  MCMPR is also consid ering the appropriate treatm ent of unprod uced areas in existing prod uction licenses that are d ue for renew al and the gas ind ustry’s principles for third -party access to upstream facilities, and w ill ad vise MCE of its conclusions. Greenhouse emissions MCE w ill w ork closely w ith the CoAG H igh Level Group on Greenhouse to ad d ress greenhouse gas em issions from the energy sector on a national basis. With these policy d ecisions taken by MCE, the national energy market reform (EMR) program has m oved to the im plem entation phase. Im plem entation w ill span three years, from 2004 to 2006, but is heavily front-load ed . The MCE Standing Comm ittee of Officials (SCO) agreed to engage Price Waterhouse Coopers as the EMR program m anagem ent consultants, com m encing 2 February 2004. The consultants are tasked w ith coord inating the various EMR im plem entation projects, troubleshooting and facilitating the resolution of issues as they arise. Furtherm ore, MCE Ministers have asked that a fortnightly progress report be provid ed by the Com m onw ealth, on behalf of SCO. 7.2 Electricity In July 1991, CoAG agreed to d evelop a com petitive electricity market in southern and eastern Australia. The Com m onw ealth has taken a lead ing role to ensure the d evelopm ent and im plem entation of electricity reform s 134 on a national basis. To d ate, com petition reform in the electricity sector has d elivered structural reform of publicly ow ned utilities, com petition am ong electricity generators, a com petitive w holesale spot m arket for electricity (N EM), an efficient financial contracts m arket, third -party access to, and econom ic regulation of, netw ork services, and custom er choice for contestable large electricity consum ers and all retail consum ers in som e jurisd ictions. The N EM com m enced on 12 Decem ber 1998 and has operated effectively w ith only minor operational problem s. Market participants have been generally pleased w ith the m arket arrangem ents. Key d evelopm ents in electricity m arket reform d uring 2002-03 and subsequently includ ed the follow ing: Wholesale m arket developm ent The N ational Electricity Cod e Ad m inistrator (N ECA), the N ational Electricity Market Managem ent Com pany (N EMMCO), the N EM Ministers Forum and the Ministerial Council on Energy (MCE) have progressed a range of activities to prom ote m ore efficient m arket d evelopm ent. These range from regulatory structures and institutional m echanisms, to increased system interconnection and security and im proved custom er choice, as w ell as m ore specific issues relating to greater efficiency in prud ential and settlem ents processes, bid d ing practices in the N EM, potential for regulatory consolid ation and harm onisation, and policy oversight in the N EM. Governm ents continue to progress agreed MCE outcom es of 11 Decem ber 2003, includ ing the establishm ent of the AER and AEMC by 1 July 2004. N etw ork d evelopm ent Several new transm ission proposals and projects w ere ad vanced d uring 2003 includ ing:  The Basslink Project (a 480 MW non -regulated line betw een Tasmania and Victoria);  The SN OVIC upgrad e (regulated , ad d itional 400 MW betw een Snow y and Victoria) w as com pleted in early 2003. A further upgrad e of the 135 transfer capacity betw een N SW and Victoria at Wagga is planned for 2004;  Murraylink (a 220 MW line betw een Victoria and South Australia ow ned and operated by TransEnergie) w as converted from unregulated to regulated status and ceased operating as a m arket netw ork service provider on 8 October 2003; and  The planned SN I (a 240 MW regulated line betw een N SW and South Australia proposed by TransGrid ). The proposal is subject to the appeal of the Victorian Suprem e Court d ecision of 24 July 2003 in favour of TransEnergie. The appeal is expected to be heard in the second half of 2004. Legal action over SN I suggests that m arket rules and proced ures require review . This w ork is progressing as part of the raft of reform s agreed by the MCE on 11 Decem ber 2003. Retail contestability Full retail contestability (FRC) for electricity w as introd uced in the ACT in July 2003. The Queensland Governm ent has delayed the introd uction of FRC for electricity. Financial m arket d evelopm ent The Australian Governm ent has been facilitating ind ustry d riven d evelopm ent of mechanism s to m anage financial risk in the capital-atrisk electricity ind ustry. The Australian Governm ent continues to encourage the m aturing and d evelopm ent of financial m arkets. Several transparency and ed ucation initiatives for the N EM and related financial market w ere progressed over the period, includ ing:  The Syd ney Futures Exchange (SFE) and Australian Stock Exchange (ASX) com m enced trad ing electricity futures in the second half of 2002. Exchange trad ed futures provid e a stand ard ised and cost effective m echanism to trad e and m anage risk in the N EM and d eliver price transparency to industry and end -users through price d iscovery. 136  The launch of the Wholesale Electricity Price Ind ex on 13 N ovem ber 2003. The ind ex provid es a sim ple, easily reportable value w hich reflects d aily changes to contract and spot m arket co nd itions and their effect on the stability of the und erlying w holesale price for electricity in the N EM. The ind ex is calculated d aily for each region of the N EM.  The launch of electricity options on 13 N ovem ber 2003. The options are trad ed on the Syd ney Futures Exchange and provid e a further layer of sophistication to m aturing physical and financial m arkets for electricity. 7.3 Gas The Australian natural gas m arket has trad itionally com prised State based m arket structures, in w hich m onopolies opera ted at the prod uction, d istribution and retailing stages. The supply chain w as highly integrated , w ith legislative and regulatory barriers restricting interstate trad e. These characteristics, in the absence of links betw een the States’ pipeline system s, served to perpetuate low levels of com petitive behaviour in the m arket place. In February 1994, CoAG agreed to facilitate d evelopm ents aim ed at stim ulating com petition, and prom oting ‘free and fair trad e’ in the natural gas sector. These com m itm ents w ere in tegrated into the N ational Com petition Policy (N CP) reform s. Governm ents and ind ustry are required to:  rem ove policy and regulatory im ped im ents to retail com petition in the natural gas sector;  rem ove a num ber of restrictions on interstate trade; and  d evelop a nationally integrated com petitive natural gas m arket by: establishing a national regulatory fram ew ork for third party access to natural gas pipelines; and facilitating the inter-connection of pipeline system s. 137 Governm ents and ind ustry, through the Gas Reform Im plem entation Group and its pred ecessor, the Gas Reform Task Force, have focused prim arily on d eveloping and im plementing national arrangem ents for third party access to natural gas pipelines. In N ovem ber 1997, the Australian Governm ent, States and Territories agreed to enact legislation to apply a uniform national fram ew ork for third party access to all gas pipelines. To realise the benefits of third party access in the natural gas retail m arket, a d egree of separation betw een the m onopoly pipelin e transportation business and other potentially contestable businesses is required . The access regim e includ es ‘ring fencing’ provisions that require the m onopoly transportation business to be separated from the retail business of the com pany, includ ing separate accounts, staff and custom er inform ation. Over the past 12 m onths governm ents and ind ustry have focused prim arily on d eveloping and im plementing national arrangem ents for third party access to natural gas pipelines. 7.2.1 Review of Gas Access Regime On 29 N ovem ber 2002, the Ministerial Council on Energy agreed to proceed w ith a review of the Gas Access Regim e. The Regim e consists of the N atural Gas Pipelines Access Agreement, Gas Pipelines Access Law and the N ational Third Party Access Cod e for N atu ral Gas Pipeline System s. The Prod uctivity Com m ission launched the Review on 13 June 2003. An Issues paper w as released on 25 July 2003, seeking subm issions by 29 August 2003. A total of 76 subm issions w ere received from ind ustry, regulatory, governm ent and other interested parties. The Prod uctivity Com m ission released its Draft Report on 15 Decem ber 2003, and is d ue to present its Final Report to the Governm ent in June 2004. A first round of public hearings w as cond ucted in Septem ber 2003. Participants have the opportunity to make further subm issions and to com m ent on the Draft Report at a second round of hearings to be held in 138 late February and early March 2004. The Prod uctivity Com mission w ill then prepare its Final Report. The prim ary aim of the Review is to exam ine the extent to w hich current gas access arrangem ents balance the interests of relevant parties, provid e a relevant framew ork that enables efficient investm ent in new pipeline and netw ork infrastructure and w hich can assist in facilitating a com petitive m arket for natural gas. The Prod uctivity Com m ission has been asked to take into account in its d eliberations of the governm ent response to the Prod uctivity Com m ission Review of the N ational Access Regim e, the N ational Energy Policy Fram ew ork agreed by CoAG in June 2001, and the outcom es arising from the CoAG Ind epend ent Review of Energy Market Directions. 7.2.2 Code changes The N ational Gas Pipelines Ad visory Com m ittee (N GPAC) m onitors and review s the operation of the Cod e and m akes recom m enda tions to Ministers on changes to the Cod e. The Australian Governm ent, through the Departm ent of Ind ustry, Tourism and Resources is represented on N GPAC. As required by the Cod e, N GPAC prepared an inform ation m em orand um and und ertook public consultation for significant proposed Cod e changes. N GPAC consid ered the submission received before m aking recom mend ations to the Ministers. The Cod e changes approved by Ministers in 2002-03 are:  enable a single Access Arrangem ent to regulate tw o or m ore separate gas pipelines (the Sixth Am ending Agreem ent); and  clarify the d efinition of capital expend iture in relation to N ew Facilities Investm ent and the provision of pipeline services (the Seventh Amending Agreem ent). 139 7.2.3 Retail reform FRC has com m enced in N ew South Wales, Victoria, South Australia and the Australian Capital Territory. Queensland has d elayed the introd uction of FRC for gas. 7.2.4 Access arrangements Und er the Cod e, pipeline operators are required to subm it an ‘Access Arrangem ent’ to the relevant regulator for approval. An Access Arrangem ent specifies the m axim um tariff that can be charged for transporting gas along a regulated pipeline. Such reference tariffs are d eterm ined by the regulator, based on the initial capital base of the pipeline infrastructure and other param eters, follow ing a public consultation process. All first round access arrangem ents for d istribution netw orks have been com pleted . Access arrangem ents for the Moom ba to Syd ney Pipeline, the Am ed eus Basin to Darw in Pipeline and the Dam pier t o Bunbury N atural Gas Pipeline have been approved . All first round access arrangem ents for transmission pipelines have now been approved by the relevant regulator. 7.4 Water Water reform is a key national priority in the m anagem ent of natural resources. In particular, jurisd ictional d elivery on w ater property right related reform s is of key im portance in Austra lia and rem ains a priority for governm ents to resolve. Australia’s w ater reform initiatives have been form ulated against the background of consid erab le concern about the state of the nation’s w ater resources and a recognition that an im portant part of the solution relies on significant policy and institutional change. With states and territories having constitutional responsibility for w ater resource m anagem ent, they are responsible for d riving on -ground change. H ow ever, the Australian Governm ent aim s to facilitate the d elivery of w ater reform through a variety of m echanism s. 140 7.4.1 Water reform framework In 1994, CoAG agreed to a fram ew ork for im proving the econom ic viability and ecological sustainability of Australia’s w ater resources. The fram ew ork’s m ain elem ents includ e a range of interlinked m arket based m easures involving pricing w ater for full cost recovery, establishing secure property rights for w ater separate from land rights and provid ing for perm anent trad ing in w ater entitlem ents. The fram ew ork also includ es the specific provision of w ater for the environm ent and im proved arrangem ents for public consultation and ed ucation. In light of the im portance of these reform s, CoAG d ecid ed in 1995 that im plem entation of the reform s w ould be includ ed und er the umbrella of N ational Com petition Policy (N CP). Jurisd ictional progress w ith im plem entation of these reform s is assessed by the N ational Com petit ion Council (N CC) to d eterm ine eligibility for N CP paym ents. 7.4.2 Overview and progress All States and Territories have m ad e significant progress tow ard s im plem enting the 1994 CoAG w ater reform fram ew ork. For exam ple, jurisd ictions have im plem ented a ran ge of reform s to separate w ater access entitlem ents from land titles and to separate functions betw een w ater provision and w ater regulation, as w ell as allow ing clear provisions for environmental w ater. H ow ever, the 2003 N CP assessm ent id entified a num ber of areas w here further w ork w as required . These areas includ e intrastate trad ing, urban w ater and w astew ater pricing and institutional reform . These issues w ill be consid ered in the 2004 N CP assessm ent. The 2004 N CP assessm ent w ill also exam ine governm ents’ progress w ith im plem enting reform s relating to rural w ater pricing, environm ental w ater allocations and the conversion of existing w ater allocations for new w ater entitlem ents system s. 7.4.3 Co-ordination of water reform In 2002, the Chief Executive Officers’ Group on Water (CEOGW) w as convened to provid e strategic input to assist jurisd ictions in the transition 141 to m ore sustainable w ater m anagem ent, in p articular in im plem enting the CoAG Water Reform Fram ew ork. In April 2003, the CEOWG reported that there w ere im ped im ents that prevented m arkets from d elivering their full potential. In particular, CEOGW reported that investm ent in new , m ore efficient, prod uction system s is being ham pered by uncertainty over the long-term access to w ater in som e areas. In ad d ition, CEOGW expressed concerns over the pace of securing ad equate environm ental flow s to ensure ecosystem health in our river system s. In August 2003, CoAG agreed that there is a pressing need to refresh its 1994 w ater reform agend a to increase the prod uctivity and efficiency of w ater use, sustain rural and urban com m unities, and to ensure the health of river and ground w ater system s. CoAG therefore agreed to the d evelopm ent of a N ational Water Initiative to:  im prove the security of w ater access entitlem ents, includ ing by clear assignment of risks of red uctions in future w ater availability and by returning overallocated system s to sustainable allocation levels;  ensure ecosystem health by im plem enting regim es to protect environm ental assets at a w hole-of-basin, aquifer or catchm ent scale;  ensure w ater is put to best use by encouraging the expansion of w ater m arkets and trad ing across and betw een d istricts and States (w here w ater system s are physically shared), involving clear rules for trad ing, robust w ater accounting arrangem ents and pricing based on full cost recovery principles; and  encourage w ater conservation in our cities, includ ing better use of storm w ater and recycled w ater. A Senior Officials Group on Water (SOGW) has been established to d evelop an Intergovernm ental Agreem ent (IGA) for the N ational Water Initiative. SOGW is tasked w ith consulting peak stakehold ers and has created various Task Team s to provid e the analysis and d etail necessary to specify the com m itments und er the IGA. It is intended that CoAG w ill consid er a d raft IGA in m id -2004. 142 7.5 Road transport The N ational Road Transport Com m ission (NRTC) w as established in 1991 to oversee developm ent and im plem entation of the road transport reform program und er the d irection of a Ministerial Council. In April 1995, road transport reform w as integrated into the N CP process, in recognition that full im plem entation w ould boost national w elfare and red uce the cost of road transport services. This involved all governm ents com m itting to the effective observance of agreed road transport reform s. The N RTC w as initially to d evelop the reform s progressively through six separate m od ules:  uniform heavy vehicle charges;  uniform arrangem ents for transportation by road of d angerous good s;  vehicle operation reform s covering national vehicle stand ard s, road w orthiness, mass and loading law s, oversize and overm ass vehicles and road rules;  a national heavy vehicle registration schem e;  a national d river licensing schem e; and  a consistent and equitable approach to com pliance and enforcem ent w ith road transport law s. To also allow m ore tim ely im plem entation of reform s, the six initial reform m od ules w ere broken into eleven parts. Ad d itionally, the Australian Transport Council (ATC) agreed tw o ten point ‘fast track ’ packages of reform in 1994 and 1997 know n as the First and Second H eavy Vehicle Reform Packages. These reform s, taken together, form the original N RTC reform agend a of 31 reform s. One reform , H eavy Vehicle Charges, w as assessed und er the first tranche in 1997, w hile 19 reform s w ere assessed in 1999. 143 Throughout 1999-2000 a w orking group, the Stand ing Com m ittee on Transport, d eveloped a fram ew ork for assessm ent, includ ing consulting ind ustry. The ATC and CoAG agreed on the fram ew ork and it w as provid ed to the N CC to serve as the basis for its June 2001 third tranche assessm ent of road transport reform s. Six reform s w ere includ ed in this assessm ent fram ew ork. Only one of these reform s, a second -generation of H eavy Vehicle Charges, w as relevant to the Australian Governm ent, and it w as im plem ented on 1 July 2001. Of the 19 reform s in the second tranche assessm ent fram ew ork, the Australian Governm ent w as required to im plement nine in relation to heavy vehicles registered in the Fed eral Interstate Registration Sch em e (FIRS). Most of these w ere im plem ented previously. H ow ever, som e aspects of one reform relating to heavy vehicle registration have been d elayed pend ing the broad er review of the FIRS. This is the only outstand ing item on the Australian Governm ent’s agend a. 144 Appendix A Commonwealth Legislation Review Schedule (as at 30 March 2004) — by scheduled commencement date Table A1: Commonwealth Legislation Review Schedule Name of legislation Underway in 1996 Aboriginal and Torres Strait Islander Heritage Protection Act 1984 Bounty (Books) Act 1986 Bounty (Fuel Ethanol) Act 1994 Bounty (Machine Tools & Robots) Act 1985 Census & Statistics Act 1905 Commerce (Imports) Regulations, Customs Prohibited Imports Regulations and Commerce (Trade Descriptions) Act 1905 Corporations Act 1989 Education Services for Overseas Students (Registration of Providers and Financial Regulation) Act 1991 Financial system — comprehensive review of the regulatory framework Industrial Relations Act 1988 Patents Act 1990, sections 198-202 (Patent Attorney registration) Protection of Movable Cultural Heritage Act 1986 Quarantine Act 1908 Environment and Heritage Industry, Tourism and Resources Industry, Tourism and Resources Industry, Tourism and Resources Treasury Attorney-General’s Responsible department Treasury Education, Science and Training Treasury Employment and Workplace Relations Industry, Tourism and Resources Communications, Information Technology and the Arts Agriculture, Fisheries and Forestry 141 Table A1: Commonwealth legislation review schedule (continued) Name of legislation 1996-97 Aboriginal Land Rights (Northern Territory) Act 1976 Australian Maritime Safety Authority Act 1990 Australian Postal Corporation Act 1989 Bills of Exchange Act 1909 Customs Tariff Act 1995 — Automotive Industry Arrangements Customs Tariff Act 1995 — Textiles Clothing and Footwear Arrangements Duty Drawback (Customs Regulations 129 to 136B) and TEXCO (Tariff Export Concession Scheme) — Customs Tariff Act 1995, Schedule 4, Item 21, Treatment Code 421 Foreign Investment Policy, including associated regulation Income Equalisation Deposits (Interest Adjustment) Act 1984 and Loan (Income Equalisation Deposits ) Act 1976 International Arbitration Act 1974 Migration Act 1958 — sub-classes 120 and 121 (business visas) Migration Act 1958 — sub-classes 560, 562 and 563 (student visas) Migration Act 1958, Part 3 (Migration Agents and Immigration Assistance) and related regulations Migration Agents Registration (Application) Levy Act 1992 and Migration Agents Registration (Renewal) Levy Act 1992 National Road Transport Commission Act 1991 and related Acts Nuclear Safeguards (Producers of Uranium Ore Concentrates) Charge Act 1993 and regulations Pooled Development Funds Act 1992 Immigration and Multicultural and Indigenous Affairs Transport and Regional Services Communications, Information Technology and the Arts Treasury Industry, Tourism and Resources Industry, Tourism and Resources Attorney-General’s Responsible department Treasury Agriculture, Fisheries and Forestry Attorney-General’s Immigration and Multicultural and Indigenous Affairs Immigration and Multicultural and Indigenous Affairs Immigration and Multicultural and Indigenous Affairs Immigration and Multicultural and Indigenous Affairs Transport and Regional Services Foreign Affairs and Trade Industry, Tourism and Resources 142 Table A1: Commonwealth legislation review schedule (continued) Name of legislation 1996-97 Quarantine Act 1908, in relation to human quarantine Radiocommunications Act 1992 and related Acts Rural Adjustment Act 1992 and States and Northern Territory Grants (Rural Adjustment) Acts Shipping Registration Act 1981 Trade Practices (Consumer Product Information Standards) (Care for clothing and other textile products labelling) Regulations Tradesmen’s Rights Regulation Act 1946 Health and Ageing Communications, Information Technology and the Arts Agriculture, Fisheries and Forestry Transport and Regional Services Treasury Responsible department Employment and Workplace Relations 1997-98 Affirmative Action (Equal Employment Opportunity for Women) Act 1986 Agricultural and Veterinary Chemicals Act 1994 Bankruptcy Act 1966 and Bankruptcy Rules — trustee registration provisions Customs Act 1901 Sections 154-161L Defence Housing Authority Act 1987 Environmental Protection (Nuclear Codes) Act 1978 Higher Education Funding Act 1988 plus include: Vocational Education & Training Funding Act 1992 and any other regulation with similar effects to the Higher Education Funding Act 1988 Imported Food Control Act 1992 and regulations International Air Services Commission Act 1992 and International Air Service Agreements Motor Vehicle Standards Act 1989 Mutual Recognition Act 1992 Employment and Workplace Relations Agriculture, Fisheries and Forestry Attorney-General’s Attorney-General’s Defence Health and Ageing Education, Science and Training National Health Act 1953 (Part 6 & Schedule 1) and Health Insurance Act 1973 (Part 3) Agriculture, Fisheries and Forestry Transport and Regional Services Transport and Regional Services Education, Science and Training and Prime Minister and Cabinet Health and Ageing 143 Table A1: Commonwealth legislation review schedule (continued) Name of legislation 1997-98 National Residue Survey Administration Act 1992 and related Acts Petroleum Retail Marketing Franchise Act 1980 Petroleum Retail Marketing Sites Act 1980 Pig Industry Act 1986 and related Acts Primary Industries Levies Acts and related Collection Acts Torres Strait Fisheries Act 1984 and related Acts Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations Trade Practices Act 1974 (s 51(2) and s 51(3) exemption provisions) Agriculture, Fisheries and Forestry Industry, Tourism and Resources Industry, Tourism and Resources Agriculture, Fisheries and Forestry Agriculture, Fisheries and Forestry Agriculture, Fisheries and Forestry Treasury Treasury Responsible department 1998-99 Anti-dumping legislation, Customs Act 1901 Pt XVB and Customs Tariff (Anti-dumping) Act 1975 Australia New Zealand Food Authority Act 1991 Food Standards Code Broadcasting Services Act 1992, Broadcasting Services (Transitional Provisions and Consequential Amendments) Act 1992, Radio Licence Fees Act 1964 and Television Licence Fees Act 1964 Defence Force (Home Loans Assistance) Act 1990 Export Control Act 1982 (fish, grains, dairy, processed foods etc) Financial Transactions Reports Act 1988 and regulations Fisheries Legislation Health Insurance Act 1973 — Part IIA Intellectual property protection legislation (Designs Act 1906, Patents Act 1990, Trade Marks Act 1995, Copyright Act 1968 and possibly the Circuit Layouts Act 1989) Attorney-General’s Health and Ageing Communications, Information Technology and the Arts Defence Agriculture, Fisheries and Forestry Attorney-General’s Agriculture, Fisheries and Forestry Health and Ageing Attorney-General’s and Industry, Tourism and Resources 144 Table A1: Commonwealth legislation review schedule (continued) Name of legislation 1998-99 Land Acquisition Acts: a) Land Acquisition Act 1989 and regulations; b) Land Acquisitions (Defence) Act 1968; c) Land Acquisition (Northern Territory Pastoral Leases) Act 1981 Marine Insurance Act 1909 Navigation Act 1912 Proceeds of Crime Act 1987 and regulations Review of market-based reforms and activities currently undertaken by the Spectrum Management Agency (now Australian Communications Authority). Trade Practices Act 1974 — Part X (shipping lines) Veterans’ Entitlement Act 1986 — Treatment Principles (section 90) and Repatriation Private Patient Principles (section 90A) Finance and Administration Responsible department Attorney-General’s Transport and Regional Services Attorney-General’s Communications, Information Technology and the Arts Transport and Regional Services Veterans’ Affairs 1999-00 Dairy Industry Legislation Defence Act 1903 (Army and Airforce Canteen Services Regulations) Disability Discrimination Act 1992 Dried Vine Fruits Legislation Export Control Act 1982 — Export Control (Unprocessed Wood) Regulations Export Finance & Insurance Corporation Act 1991 and Export Finance & Insurance Corporation (Transitional Provisions and Consequential Amendments) Act 1991 Hazardous Waste (Regulation of Exports and Imports) Act 1989, Hazardous Waste (Regulation of Exports and Imports) Amendment Bill 1995 and related regulations Insurance (Agents & Brokers) Act 1984 Native Title Act 1993 and regulations Ozone Protection Act 1989 and Ozone Protection (Amendment) Act 1995 Petroleum (Submerged Lands) Act 1967 Agriculture, Fisheries and Forestry Defence Attorney-General’s Agriculture, Fisheries and Forestry Agriculture, Fisheries and Forestry Foreign Affairs and Trade Environment and Heritage Treasury Prime Minister and Cabinet Environment and Heritage Industry, Tourism and Resources 145 Table A1: Commonwealth legislation review schedule (continued) Name of legislation 1999-00 Prices Surveillance Act 1983 Superannuation Acts including: Superannuation (Self Managed Superannuation Funds) Taxation Act 1987, Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991, Superannuation (Resolution of Complaints) Act 1993, Superannuation Industry (Supervision) Act 1993, Occupational Superannuation Standards Regulations Applications Act 1992, Superannuation (Financial Assistance Funding) Levy Act 1993 Trade Practices Act 1994 (including exemptions) — Part IIIA (access regime) Trade Practices Act 1974 — 2D exemptions (local government activities) Trade Practices Act 1974 — fees charged Wheat Marketing Act 1989 Treasury Treasury Responsible department Treasury Treasury Treasury Agriculture, Fisheries and Forestry 146