Commonwealth National Competition Policy Annual Report 1999-2000 © Commonwealth of Australia 2002 ISBN 0 642 74086 0 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth available from Info Products. Requests and inquiries concerning reproduction and rights should be addressed to The Manager, Legislative Services, Info Products, Finance GPO Box 1920 CANBERRA ACT 2601. A copy of this document appears on the Treasury website: http://www.treasury.gov.au Printed by CanPrint Communications Pty Ltd Contents ,QWURGXFWLRQ   7KH VLJQLILFDQFH RI &RPSHWLWLRQ 3ROLF\ IRU $XVWUDOLD   1DWLRQDO &RPSHWLWLRQ 3ROLF\ IUDPHZRUN   3XEOLF LQWHUHVW WHVW  7KH QHHG IRU VDIHJXDUGV  7KH &RPPRQZHDOWK¶V UHSRUWLQJ UHTXLUHPHQW  1DWLRQDO &RPSHWLWLRQ 3ROLF\ 3D\PHQWV  &R$* FKDQJHV WR 1DWLRQDO &RPSHWLWLRQ 3ROLF\  &KDQJHV WR 1DWLRQDO &RPSHWLWLRQ 3ROLF\ DUUDQJHPHQWV   5HYLHZ RI WKH 1&3 DJUHHPHQWV   7UHDVXU\ LQWHUQHW VLWH   /HJLVODWLRQ UHYLHZ    :K\ LV OHJLVODWLRQ UHYLHZ QHFHVVDU\"    &RPPRQZHDOWK OHJLVODWLRQ UHYLHZ VFKHGXOH   5HSRUWLQJ UHTXLUHPHQWV IRU OHJLVODWLRQ UHYLHZV   &RPSOH[LW\ RI WKH UHYLHZ DQG GHWDLOV RI WKH UHYLHZ SDQHO   7HUPV RI UHIHUHQFH  ([WHQW RI SXEOLF FRQVXOWDWLRQ   5HYLHZ SURJUHVV RU UHFRPPHQGDWLRQV DQG JRYHUQPHQW UHVSRQVH   /HJLVODWLRQ 6FKHGXOHG IRU 5HYLHZ LQ    5HYLHZV FRPSOHWHG UHFRPPHQGDWLRQV XQGHU FRQVLGHUDWLRQ    5HYLHZV FRPPHQFHG EXW QRW FRPSOHWHG   ([SRUW &RQWURO 8QSURFHVVHG :RRG 5HJXODWLRQV XQGHU WKH ([SRUW &RQWURO $FW    )HHV FKDUJHG XQGHU WKH 7UDGH 3UDFWLFHV $FW   +D]DUGRXV :DVWH 5HJXODWLRQ RI ,PSRUWV ([SRUWV $FW  +D]DUGRXV :DVWH 5HJXODWLRQ RI ,PSRUWV ([SRUWV $PHQGPHQW %LOO  DOVR UHODWHG UHJXODWLRQV  2]RQH 3URWHFWLRQ $FW  2]RQH 3URWHFWLRQ $PHQGPHQW $FW    3DUW ,,,$ DFFHVV UHJLPH RI WKH 7UDGH 3UDFWLFHV $FW LQFOXGLQJ H[HPSWLRQV   3HWUROHXP 6XEPHUJHG /DQGV $FW    . . .iii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²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² 3DUW ; VKLSSLQJ OLQHV   iv ....  5HYLHZV FRPPHQFHG EXW QRW FRPSOHWHG   $XVWUDOLD 1HZ =HDODQG )RRG $XWKRULW\ $FW  )RRG 6WDQGDUGV &RGH   )LVKHULHV /HJLVODWLRQ   +HDOWK ,QVXUDQFH $FW  3DUW ,,$   0DULQH ,QVXUDQFH $FW   3URFHHGV RI &ULPH $FW  UHJXODWLRQV   'DLU\ ,QGXVWU\ /HJLVODWLRQ   'HIHQFH )RUFH +RPH /RDQV $VVLVWDQFH $FW    3DUW 9, RI WKH 1DYLJDWLRQ $FW    7UHDWPHQW 3ULQFLSOHV XQGHU VHFWLRQ  RI WKH 9HWHUDQV¶ (QWLWOHPHQW $FW  9($ 5HSDWULDWLRQ 3ULYDWH 3DWLHQW 3ULQFLSOHV XQGHU VHFWLRQ $ RI WKH 9($   DQG /DQG $FTXLVLWLRQ 1RUWKHUQ 7HUULWRU\ 3DVWRUDO /HDVHV $FW     5HYLHZV QRW FRPPHQFHG    /HJLVODWLRQ VFKHGXOHG IRU UHYLHZ LQ  ² 5HIRUP QRW ILQDOLVHG E\  -XQH    5HYLHZV FRPSOHWHG DQG UHIRUP RXWFRPHV DQQRXQFHG  $IILUPDWLYH $FWLRQ (TXDO (PSOR\PHQW 2SSRUWXQLW\ IRU :RPHQ $FW   ,PSRUWHG )RRG &RQWURO $FW  DQG 5HJXODWLRQV   0RWRU 9HKLFOH 6WDQGDUGV $FW     5HYLHZV FRPSOHWHG UHFRPPHQGDWLRQV XQGHU FRQVLGHUDWLRQ   &XVWRPV $FW  ² VHFWLRQV  ² /   +LJKHU (GXFDWLRQ )XQGLQJ $FW  9RFDWLRQDO (GXFDWLRQ 7UDLQLQJ )XQGLQJ $FW  DQG DQ\ RWKHU UHJXODWLRQ ZLWK VLPLODU HIIHFW WR WKH +LJKHU (GXFDWLRQ )XQGLQJ $FW    1DWLRQDO 5HVLGXH 6XUYH\ $GPLQLVWUDWLRQ $FW  DQG UHODWHG $FWV   7UDGH 3UDFWLFHV $FW  ² VXEVHFWLRQV   DQG   H[FHSWLRQ SURYLVLRQV   7RUUHV 6WUDLW )LVKHULHV $FW  DQG UHODWHG $FWV  'HIHQFH +RXVLQJ $XWKRULW\ $FW   3LJ ,QGXVWU\ $FW  DQG UHODWHG $FWV   3ULPDU\ ,QGXVWULHV /HYLHV $FW DQG UHODWHG &ROOHFWLRQ $FWV    5HYLHZV FRPPHQFHG EXW QRW FRPSOHWHG    5HYLHZV QRW FRPPHQFHG   (QYLURQPHQWDO 3URWHFWLRQ 1XFOHDU &RGHV $FW    ,QVXUDQFH $JHQWV %URNHUV $FW    3HWUROHXP 5HWDLO 0DUNHWLQJ 6LWHV $FW  3HWUROHXP 5HWDLO 0DUNHWLQJ )UDQFKLVH $FW    v .... 6SHFWUXP 0DQDJHPHQW $JHQF\ 60$ ² 5HYLHZ RI 60$¶V PDUNHWEDVHG UHIRUPV DQG DFWLYLWLHV    /HJLVODWLRQ VFKHGXOHG IRU UHYLHZ LQ  DQG  ² 5HIRUP QRW ILQDOLVHG E\  -XQH    5HYLHZV FRPSOHWHG DQG UHIRUP RXWFRPHV DQQRXQFHG  $XVWUDOLDQ 3RVWDO &RUSRUDWLRQ $FW    1XFOHDU 6DIHJXDUGV 3URGXFHUV RI 8UDQLXP 2UH &RQFHQWUDWHV &KDUJH $FW  5HJXODWLRQV   6KLSSLQJ 5HJLVWUDWLRQ $FW    7UDGHVPHQ¶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vi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vii .... ([SRUW )LQDQFH DQG ,QVXUDQFH &RUSRUDWLRQ  1DWLRQDO 5DLO &RUSRUDWLRQ  5HVHUYH %DQN RI $XVWUDOLD  6SHFLDO %URDGFDVWLQJ 6HUYLFH   2WKHU &RPPRQZHDOWK DFWLYLWLHV  %XUHDX RI 0HWHRURORJ\  $ERULJLQDO +RVWHOV /LPLWHG  &RPSHWLWLYH 7HQGHULQJ DQG &RQWUDFWLQJ  $XVWUDOLDQ &XVWRPV 6HUYLFH   &RPSODLQWV DOOHJLQJ QRQ FRPSOLDQFH ZLWK &1 SULQFLSOHV   &RPSODLQWV UHFHLYHG LQ    &RPPRQZHDOWK DFWLRQV WR DVVLVW &1 LPSOHPHQWDWLRQ   3ROLF\ PHDVXUHV  3XEOLFDWLRQV  6WUXFWXUDO 5HIRUP RI 3XEOLF 0RQRSROLHV   &RPPRQZHDOWK PDQDJHPHQW RI WKH VWUXFWXUDO UHIRUP SURFHVV  7HOHFRPPXQLFDWLRQV LQGXVWU\ VHFWRU   &RPSHWLWLRQ LQ SURYLVLRQ RI 862 VHUYLFHV   )HGHUDO $LUSRUWV &RUSRUDWLRQ  $LUSRUW ,QGXVWU\ 5HJXODWLRQ   ,QWURGXFLQJ FRPSHWLWLRQ WR DLUSRUWV   )RUPHU $XVWUDOLDQ :KHDW %RDUG   $FFHVV WR (VVHQWLDO ,QIUDVWUXFWXUH    7KH LPSRUWDQFH RI DFFHVV WR LQIUDVWUXFWXUH   3DUW ,,,$ RI WKH 7UDGH 3UDFWLFHV $FW    &RPPRQZHDOWK DFWLYLW\ XQGHU 3DUW ,,,$   :HVWHUQ $XVWUDOLDQ DFFHVV UHJLPH IRU QDWXUDO JDV SLSHOLQHV   *RYHUQPHQW %XVLQHVV (QWHUSULVHV ² 3ULFHV 2YHUVLJKW   7KH SXUSRVH RI SULFHV RYHUVLJKW   &RPPRQZHDOWK SULFHV RYHUVLJKW   0DWWHUV UHIHUUHG WR WKH $&&&  &RQGXFW &RGH $JUHHPHQW    &RPSHWLWLYH FRQGXFW UXOHV viii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² 3DUW ,,$ 3DWKRORJ\ &ROOHFWLRQ &HQWUH /LFHQVLQJ 6FKHPH  ,QWHOOHFWXDO 3URSHUW\ 3URWHFWLRQ /HJLVODWLRQ 'HVLJQV $FW  3DWHQWV $FW  7UDGH 0DUNV $FW  &RS\ULJKW $FW  DQG &LUFXLW /D\RXWV $FW   5HYLHZ RI WKH 2]RQH 3URWHFWLRQ $FW  DQG $VVRFLDWHG $FWV DQG 5HJXODWLRQV 0DULQH ,QVXUDQFH $FW   1DYLJDWLRQ $FW   1XFOHDU 6DIHJXDUGV 3URGXFHUV RI 8UDQLXP 2UH &RQFHQWUDWHV &KDUJH $FW  5HJXODWLRQV  3URFHHGV RI &ULPH $FW   . . .ix . ²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x .... ,QWURGXFWLRQ 7KHVLJQLILFDQFHRI&RPSHWLWLRQ3ROLF\ IRU$XVWUDOLD Continuing improvement in the living standards of Australians is dependent on the productivity performance of the economy. Increasing national productivity will, over the long term, boost economic growth, employment opportunities, export competitiveness and real household income. This, in turn, will influence our capacity as a society to provide essential services to the community. The Productivity Commission (PC) has estimated that National Competition Policy (NCP) reforms could potentially result in a 2.5 per cent increase in Gross Domestic Product (GDP) above what would otherwise occur in the absence of these reforms. Also, lower domestic production costs arising from NCP reforms enhance the competitiveness of exporters, with the PC estimating export levels being 3.4 per cent above what would otherwise occur in the absence of reforms. 1 Clear evidence exists of improving productivity growth rates in Australia, with growth rates improving across all measures of productivity (labour, capital and multifactor) in the 1990s, and particularly in the second half of the 1990s. 2 General sources of productivity gains are the development and adoption of new technology and innovations, better organisation of production within firms, more efficient allocation of resources across industries and improvement of international competitiveness. The freeing up of resources as a result of productivity improvements provides scope for their investment in more efficient uses, creating employment opportunities. 1 2 Productivity Commission, 1999, Impact of Competition Policy Reforms on Rural and Regional Australia, Report No 8, AusInfo, Canberra. Commonwealth of Australia, Budget Strategy and Outlook 2001-02, Budget Paper No. 1, AusInfo, Canberra, pp.4-15. 1 To ensure continued increases in the level of productivity growth, an ongoing commitment to reducing structural rigidities and developing and maintaining competitive markets is required. The PC has indicated that a significant contributory factor has been the sustained microeconomic reform over the last two decades. Ultimately, a competitive economy provides both the flexibility and incentives to adjust in a more rapid and less costly manner to changes in the domestic and international environment. This includes any structural changes. Structural change refers to changes in the size and composition of an economy in terms of the distribution of activities and resources among firms, industries and regions. This may be the result of technological advances, changes in domestic and international consumption patterns and trade or changes in the provision of infrastructure or labour market services. These factors will have different impacts on different sectors of the community and regions, and over time. It is important that the economy can effectively adjust to these changes. This requires flexible economic structures capable of taking advantage of emerging opportunities by facilitating the movement of resources (product, labour and capital) between and within industries. Competition reforms assist this process. Effective competition in markets for goods and services provides the main impetus for firms to seek productivity improvements, and ensure that a greater proportion of these gains are distributed in the form of lower product prices rather than retained by firms as higher profits. This reduces operating costs and prices to business and consumers. It also encourages a wider range and improved quality of goods and services. A PC research paper found that much of the productivity growth in high performing industries has been passed on in the form of lower prices. This is particularly true in the 1990s, suggesting that increased competitive pressures have been at work and have limited the scope for wage and profit growth differentials to emerge across industries. 3 3 Parham, D., Barnes, P., Roberts, P. and Kennett, S. 2000, Distribution of the Economic Gains of the 1990s, Productivity Commission Staff Research Paper, AusInfo, Canberra, pp. XIII-XIV. 2 In seeking productivity gains, competition also provides a spur to innovation in product design, production processes and management practices. The manner in which resources are managed within the workplace, the rate of adoption of innovation and the development of associated skills play an important role in productivity growth. Competition policy is a critical component of the broader structural reform agenda. It involves continuing efforts to reduce barriers to market entry and exit, reform of anti-competitive regulations and expose government owned businesses to competitive market forces in a competitively neutral manner. Competition reform also offers a further means to reduce market transaction costs — principally through a comprehensive program of regulatory reform and increase the information available to consumers to make informed choices.  1DWLRQDO&RPSHWLWLRQ3ROLF\IUDPHZRUN In April 1995, the Commonwealth, States and Territories entered into three Inter-Governmental Agreements. These agreements are the Conduct Code Agreement; the Competition Principles Agreement; and the Agreement to Implement the National Competition Policy and Related Reforms. These Agreements aim to provide a timely, coordinated and comprehensive approach across all levels of government. The commitments embodied in these agreements effectively underpin National Competition Policy (NCP) in Australia. These reforms perform a mutually reinforcing role with other competition policy initiatives, such as the limitations on anti-competitive conduct established by the Trade Practices Act 1974 and the Prices Surveillance Act 1983. 4 The NCP framework targets particular opportunities for governments to encourage competitive outcomes. These include: 4 The 1995 Agreements also resulted in the establishment of the National Competition Council (NCC), an inter-jurisdictional body funded by the Commonwealth. The NCC has statutory responsibilities under the Commonwealth Trade Practices Act 1974 and Prices Surveillance Act 1983, as well as specified roles under the Agreements aimed at ensuring the effective introduction of NCP. 3 S the review and, where necessary, reform of legislation that is anti-competitive, with the requirement that where such legislation is to be retained or introduced it must be demonstrably in the community interest (Chapter 1); the implementation of competitive neutrality for all government business activities operating in a contestable market, which requires that such businesses not benefit commercially simply by virtue of their public ownership. For example, they should be liable for the same taxes and charges, rate of return and dividend requirements as their private sector competitors (Chapter 2); the structural reform of public monopolies, where their markets are to be opened to competition or they are to be privatised, to ensure they have no residual advantages over potential competitors (Chapter 3); the provision of access arrangements to services provided by significant infrastructure facilities (such as electricity grids, airports and communications networks) that would be uneconomic to duplicate, to encourage competition in upstream and downstream markets and reduced prices for related products (Chapter 4); independent oversight by State and Territory governments of the pricing policies of government business enterprises, to ensure that price rises are not excessive (the Commonwealth already has prices oversight provisions) (Chapter 5); the application of Competition Laws across all jurisdictions, (including the scope for exceptions in certain circumstances), centrally administered by the Australian Competition and Consumer Commission (ACCC) (Chapter 6); and ensuring commitment to related reforms in the key infrastructure areas of electricity, gas, water and road transport with a view to improving efficiency, implementing nationwide markets and standards, and protecting the environment (Chapter 7). S S S S S S Governments have made significant progress in implementing reform in the five years since the commencement of NCP. The benefits to the community from this process are becoming more evident, particularly in terms of lower prices to consumers. 4 NCP reforms have contributed to reductions in costs and prices across most infrastructure services that have been subject to reform. These include electricity, gas, rail, ports and telecommunications. For example, the PC has estimated that in the period 1994 to 1998 there has been a 22 per cent reduction in gas prices for industrial and residential customers; between 1989-90 and 1997-98 national rail freight rates (in real terms) fell 18 per cent and port authority charges fell by 23 per cent. Further, stevedoring charges fell 15 per cent between 1995 and 2000. In telecommunications, the introduction of full competition in 1997, has reduced prices and improved choice for consumers and business, with consumers international call prices falling by over 80 per cent in some cases and national long distance calls by up to 40 per cent. However, it is important to recognise that this is a long-term process. Ongoing commitment by all levels of government to effective reform will be necessary to realise significant returns. 5 %R[:KDWLV1DWLRQDO&RPSHWLWLRQ3ROLF\" National Competition Policy (NCP) is part of a broader structural reform program aimed at increasing living standards, productivity and employment. It involves reducing business costs (including red tape), providing lower prices and greater choice for consumers and more efficient delivery of public services. The NCP framework enables competition reform to be undertaken in a structured, transparent and comprehensive manner — seeking to ensure all costs and benefits to the community and the distributional impacts of a particular course of action are identified and made available to decision makers for consideration. While seeking to encourage more efficient use of resources, particularly in the public sector, NCP does not: S S mandate the privatisation of government businesses; force competitive tendering and contracting out of government services; require the end of cooperative marketing by farmers; ignore social, regional or environmental considerations; or prohibit consideration of transitional adjustment assistance programs. S S S 3XEOLFLQWHUHVWWHVW NCP, microeconomic reform and globalisation have been claimed to result in adverse social outcomes. 5 NCP is not concerned with reform or competition for its own sake. Rather, the focus is on competition reform that is in the ‘public interest’. To this end, the Competition Principles Agreement (CPA) provides a 5 Senate Select Committee on the Socio-Economic Consequences of the National Competition Policy, Riding the Waves of Changes, February 2000, p xiii. 6 mechanism — the public interest test — to examine the relationship between the overall interests of the community, competition and desirable economic and social outcomes. These factors are broader than the economic benefits and costs of a proposed reform (see Box 3). 6 Further, the Council of Australian Governments at its 3 November 2000 meeting agreed, inter alia, to enhancements to the public interest test (see below). 7KHQHHGIRUVDIHJXDUGV Competition policy is not about the pursuit of competition for its own sake, but creating an environment that encourages effective competition in the interest of efficient resource use and maximum community benefit — a major factor being lower prices and better choice and quality for consumers. However, situations may occur where competition does not achieve this outcome (due to market failure) or conflicts with other social objectives. In many instances, reforms will be complemented by a regulatory framework that provides a safety net against market structures failing to deliver adequate competitive outcomes, addresses markets that are in transition towards competitive structures, or enables the delivery of community service obligations. Furthermore, reforms will often result in short-term adjustment costs — potentially concentrated on specific sectors or geographical regions. While greater than the costs, the benefits usually accrue over the longer term and are more widely spread across the community. In addition, the gains from competition reforms will only be fully realised where resources can effectively move to more efficient uses. As a consequence, in certain circumstances, consideration needs to be given to the assistance necessary to facilitate the adjustment to reforms. 6 The matters listed in clause 1(3) of the CPA are relevant when undertaking reviews of anti-competitive regulation, introducing competitive neutrality and reforming government businesses. 7 In most cases, generally available assistance measures are the most appropriate form of assistance. General assistance measures have a number of advantages, including treating all people adversely affected by changed circumstances equally, addressing the net effects of reforms, concentrating on those in genuine need, supporting individuals and families rather than a particular industry, and being generally widely understood and already in place. The advantages of a universal and general approach to meeting the needs of people adversely affected by change constitute a clear in-principle case for continued reliance upon the ‘safety net’. Where general assistance measures are not considered effective, targeted assistance may be necessary to facilitate change. This should be designed to assist individuals make the transition to the new environment, smoothing the path for the adoption and integration of the reforms, not to maintain the status quo or to hinder or distort the desired outcome. In general, specific assistance should be temporary, for special cases, transparent and inexpensive to administer. 7KH&RPPRQZHDOWK¶VUHSRUWLQJUHTXLUHPHQW Under the CPA, the Commonwealth is required to publish an annual report outlining its progress towards: S achieving the review and, where appropriate, reform of all existing legislation that restricts competition (as outlined in the Commonwealth Legislation Review Schedule) ; 7 S implementing competitive neutrality principles (including allegations of non-compliance). 7 In November 2000, CoAG agreed to extend the deadline for this commitment from the end of the year 2000 to 30 June 2002 (see page 14). 8 However, to recognise fully the range of Commonwealth commitments established by the NCP Agreements, all areas of Commonwealth involvement have been reported. 8 This report formally covers the period 1 July 1999 to 30 June 2000, although, where available, more recent information is provided in certain cases. 1DWLRQDO&RPSHWLWLRQ3ROLF\3D\PHQWV Under the Agreement to Implement the National Competition Policy and Related Reforms (Implementation Agreement), the Commonwealth agreed to make competition payments to those States and Territories assessed as making satisfactory progress towards implementation of specified competition and related reforms. These payments represent the States and Territories’ share of the additional revenue raised by the Commonwealth as a result of effective competition reform, and are worth approximately $5 billion (between 1997-98 and 2005-06). The competition payments originally comprised three tranches of competition payments and the real per capita component of the annual Financial Assistance Grants. However, the grants component ceased on 1 July 2000, as agreed to by all States and Territories, with the signing of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations. S The first tranche of the competition payments commenced in 1997-98, and involved a maximum annual payment of $200 million (in 1994-95 prices). The second tranche of the competition payments commenced in 1999-2000, and involved a maximum annual payment of $400 million (in 1994-95 prices). S 8 The commitments contained within the NCP Agreements apply to both Commonwealth and State and Territory Governments. This report discusses these commitments from the Commonwealth perspective. 9 S The third tranche of the competition payments commences in 2001-02, and involves a maximum annual payment of $600 million (in 1994-95 prices). The Implementation Agreement specifies the commitments States and Territories must meet in order to receive the maximum competition payment. The National Competition Council (NCC) assesses each jurisdiction’s performance in implementing the required reforms prior to the commencement of the three competition payments tranche periods — 1 July 1997, 1 July 1999 and 1 July 2001. This assessment forms the basis for determining State and Territory eligibility for payment. In response to the NCC’s June 1999 second tranche assessment of jurisdictions’ progress in implementing NCP and related reforms, the Commonwealth made competition payments to the States and Territories amounting to more than $439.4 million. All States and Territories received their full allocation in 1999-2000, with the exception of Queensland. The Commonwealth accepted the NCC’s recommendation that payments of approximately $14.8 million of its total 1999-2000 payment allocation of $81.5 million be suspended, pending a supplementary assessment by the NCC before the end of 1999. The suspension was based on Queensland’s inability to adequately demonstrate its commitment to a specific water reform measure, part of an agreed package of water reforms agreed to by all States and Territories. The supplementary assessment allowed Queensland time to demonstrate its implementation of this reform, and have the suspended payment fully restored. The use of supplementary assessments recognises that while many jurisdictions are genuinely committed to reform, implementation is a complex and time-consuming process. This approach provides an incentive to continue reform rather than arbitrarily penalising States and Territories. In February 2000, following the NCC’s supplementary assessment recommending the removal of the penalty, the Commonwealth reinstated the suspended NCP payments to Queensland. 10 In response to the NCC’s June and September 2000 supplementary assessments, the Commonwealth made NCP payments to the States and Territories for the period 2000-01, amounting to approximately $448.0 million. These assessments determined whether the States and Territories addressed second tranche NCP commitments identified as outstanding in the NCC’s initial assessment in June 1999. For the period 2000-01 all States and Territories received their full allocation of payments, with the exception of Queensland and the Northern Territory. In relation to Queensland, the Commonwealth accepted the Council’s recommendations and suspended 10 per cent in relation to its failure to put in place an adequate Community Service Obligation framework to address competitive neutrality concerns arising from the operation of Queensland Rail, and a further 5 per cent in relation to insufficient progress in implementing two part tariffs for urban water charges. These suspensions amount to approximately $12.9 million of Queensland’s maximum competition payments for 2000-01 of approximately $85.9 million. The Northern Territory has had 5 per cent of its NCP payments suspended in relation to its failure to introduce the national driver demerits point scheme. This suspension amounts to approximately $235,614 of the Northern Territory’s maximum NCP payment for 2000-01 of approximately $4.7 million. These amounts may, however, be restored depending on the Commonwealth’s response to further assessments by the NCC to be undertaken in the first half of 2001. &R$*FKDQJHVWR1DWLRQDO&RPSHWLWLRQ3ROLF\ At its 3 November 2000 meeting, the Council of Australian Governments (CoAG) confirmed the importance of NCP in sustaining the competitiveness and flexibility of the Australian economy and 11 contributing to higher living standards and agreed to several measures to clarify and fine-tune NCP implementation arrangements. Changes to the application of NCP are detailed in Attachment B of CoAG’s Communique, which are outlined below. &KDQJHV WR 1DWLRQDO &RPSHWLWLRQ 3ROLF\ DUUDQJHPHQWV 7UDQVSDUHQF\ S In meeting the requirements of sub-clauses 1(3)(a)(b) and (c) of the CPA, which relate to the application of the public interest test, Governments should document the public interest reasons supporting a decision or assessment and make them available to interested parties and the public. When examining those matters identified under clause 1(3) of the CPA, Governments should give consideration to explicitly identifying the likely impact of reform measures on specific industry sectors and communities, including expected costs in adjusting to change. CoAG to undertake an enhanced role in guiding the NCC in relation to its role in explaining and promoting NCP policy to the community. S S 1&& ZRUN SURJUDP S The NCC will determine its forward work program in consultation with CoAG Senior Officials. The NCC will provide a six monthly report to Senior Officials detailing its draft forward work program and current activities, including its communications and future assessment activities. Senior Officials will continue to provide guidance to the NCC to clarify CoAG’s requirements in relation to the interpretation of reform commitments under the NCP and related reform agreements, including appropriate assessment benchmarks, as required. S S 12 :9:70 ,880882039 574.08808 S The NCC’s assessment as to whether jurisdictions have met their commitments under clause 5(1) of the CPA will be guided by the following amendment to the CPA. ‘In assessing whether the threshold requirement of Clause 5 has been achieved, the NCC should consider whether the conclusion reached in the report is within a range of outcomes that could reasonably be reached based on the information available to a properly constituted review process. Within the range of outcomes that could reasonably be reached, it is a matter for Government to determine what policy is in the public interest.’ Following the third tranche assessment to be conducted before 1 July 2001, the NCC will undertake an annual assessment of each party’s performance in meeting its reform obligations, as specified in the Agreement to Implement the National Competition Policy and Related Reforms or as subsequently advised by CoAG, and provide a recommendation on the level of competition payments to be received by each State and Territory. In making a recommendation that a penalty be applied to a particular State or Territory, the NCC is to have regard to the following statement: When assessing the nature and level of any financial penalty or suspension, the NCC must take into account: S S S - the extent of overall commitment to the implementation of NCP by the relevant jurisdiction; - the effect of one jurisdiction’s reform efforts on other jurisdictions; and - the impact of failure to undertake a particular reform. S Where the NCC recommends a penalty, a statement of reasons identifying the basis for this penalty is to be published in the NCC’s annual assessment. Commencing in 2001, the assessments should be provided to the Commonwealth Treasurer and each State and Territory at the same 13 S time, but will remain confidential until a decision has been made by the Commonwealth on the level of competition payments. S Where an assessment recommends a penalty be applied to a State or Territory, the Commonwealth will provide a period of one month following receipt of the assessment before making a decision on the level of competition payments to be received by that jurisdiction. This will allow the relevant jurisdiction to respond to the Commonwealth on the recommendation made by the NCC. The timing of the imposition of any penalty will be discussed on a bilateral basis between the Commonwealth and the affected jurisdiction. S /HJLVODWLRQ UHYLHZ VFKHGXOH S The deadline for legislation reviews conducted under clause 5(3) of the CPA is extended so that all jurisdictions must complete all legislation reviews and implement appropriate reforms by 30 June 2002. Satisfactory implementation of reforms may include, where justified by a public interest assessment, having in place a firm transitional arrangement that may extend beyond the revised deadline. The revision to the deadline does not alter the schedule of competition payments. S S &RPSHWLWLYH QHXWUDOLW\ ² DVVHVVPHQW The assessment of a party’s compliance with the competitive neutrality requirements under clause 3 of the CPA should have regard to: S the adoption of a ‘best endeavours’ approach to assessment, in those circumstances where a government business is not subject to the executive control of a party. This would require parties, at a minimum, to provide a transparent statement of CN obligations to the entity in question; the term ‘full cost attribution’ accommodating a range of costing methodologies, including fully distributed cost, marginal cost, avoidable cost etc., as appropriate in each particular case; S 14 S there being no requirement for parties to undertake a competitive process for the delivery of Community Service Obligations (CSO); and parties being free to determine who should receive a CSO payment or subsidy, which should be transparent, appropriately costed and directly funded by government. This position refers directly to the implementation of CN requirements under the CPA, and is not intended to impact on consideration of CSO matters arising in the context of the related reform agreements. S 5HYLHZ S The terms and operation of the Conduct Code Agreement, the Competition Principles Agreement and the Agreement to Implement National Competition Policy and Related Reforms, and the NCC’s assessment role, will be reviewed before September 2005. The Commonwealth and States give early consideration to the best means of ensuring NCP commitments arising from the CCA continue to be met in light of the High Court case re: Hughes. S 3URSRVHG DPHQGPHQWV WR WKH &RQGXFW &RGH $JUHHPHQW S The reference in clause 2(2) of the CCA to paragraph 51(1B)(f) of the Trade Practices Act 1974 should be changed to paragraph 51(1C)(f), to correct a previous drafting error. References in clause 7 of the CCA to ‘the Parties’ should be replaced with ‘fully participating jurisdictions’; the words ‘the Party initiating the consultation’ should be replaced with ‘the Commonwealth’; and the words ‘or some of them’ should be deleted. S 3URSRVHG DPHQGPHQWV WR WKH $JUHHPHQW WR ,PSOHPHQW WKH 1DWLRQDO &RPSHWLWLRQ 3ROLF\ DQG 5HODWHG 5HIRUPV S References to the per capita Financial Assistance Grants (FAGs) component of the NCP payments to be removed, and ‘States’ to be replaced with ‘States and Territories’; The payments table attached to the Agreement to be deleted. S 15 5HYLHZRIWKH1&3DJUHHPHQWV The Conduct Code Agreement and the Competition Principles Agreement (CPA) required the Commonwealth, State and Territory Governments to review the operation and terms of each Agreement once it had operated for five years. The CPA also requires the review of the need for and the operation of the NCC once it has been in place for five years. A working group was established by CoAG Senior Officials to undertake the review. It was chaired by the Commonwealth Treasury, and included a representative of the Australian Local Government Association. The working group was required to report, through CoAG Senior Officials, to CoAG. CoAG Senior Officials considered the working group’s report in the second half of 2000. The working group’s recommendations were aimed at fine-tuning and clarifying the operation of the NCC and several NCP reform commitments. Subsequently, at the 3 November 2000 meeting of CoAG, these measures were adopted. 7UHDVXU\LQWHUQHWVLWH Various Commonwealth publications relating to NCP matters are available from the Commonwealth Department of the Treasury website — www.treasury.gov.au. Other relevant sites include the Department of Finance and Administration (www.finance.gov.au); National Competition Council (www.ncc.gov.au); the Productivity Commission (www.pc.gov.au); the Commonwealth Competitive Neutrality Complaints Office (www.ccnco.gov.au); and the Australian Competition and Consumer Commission (www.accc.gov.au). 16   /HJLVODWLRQUHYLHZ :K\LVOHJLVODWLRQUHYLHZQHFHVVDU\" Restrictions imposed on markets by government regulation, for example, through the creation of legislated monopolies or the imposition of particular pricing practices, can be a major impediment to competitive outcomes. Compliance with these regulations can also impose significant costs to business. In recognition of this, the CPA states that legislation (including Acts, enactments, ordinances or regulations) should not restrict competition unless it can be demonstrated that: S the benefits of the restriction to the community as a whole outweigh the costs; and the objectives of the legislation can only be achieved by restricting competition. S This is generally referred to as the ‘public interest test’ (see also Box 3). The CPA further states that all existing anti-competitive legislation (enacted prior to 1996) should be reviewed against these criteria and modified or repealed where there is no net community benefit to its retention. The requirement to demonstrate net community benefit also applies to the introduction of new or amended legislation that restricts competition. To satisfy this commitment the Commonwealth introduced its regulation impact assessment process (see Section 1.4). Importantly, this process also provides that legislation that restricts competition may be retained or introduced where it is demonstrably in the public interest. However, recognising the continually changing economic environment and social objectives, legislation subjected to the public interest test must be reviewed at least every ten years after its initial review or introduction. This requirement also applies to anti-competitive 17 legislation reliant on a section 51(1) exemption under the Trade Practices Act 1974 (see Chapter 6). %R[:KHQLVOHJLVODWLRQDQWLFRPSHWLWLYH" While almost no regulatory activity is completely neutral in its implications for competition, legislation may be regarded as affecting competition where it directly or indirectly: S governs the entry and exit of firms or individuals into or out of markets; controls price or production levels; restricts the quality, level or location of goods and services available; restricts advertising and promotional activities; restricts price or type of inputs used in the production process; confers significant costs on business; or provides advantages to some firms over others by, for example, sheltering some activities from the pressures of competition. 9 S S S S S S The objective of the CPA legislation reform program is to remove restrictions on competition that are demonstrated not to be in the interest of the community as a whole. However, following the Prime Minister’s policy statement More Time for Business (1997), the Commonwealth legislation review requirement was expanded to include the assessment of legislation that imposes costs or confers benefits on business. The aim is to reduce compliance costs and paperwork burden for business. A critical component 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 considered in examining any particular piece of legislation. These issues are set out in Box 3, and include social, regional and environmental factors. 9 Hilmer, F., M. Rayner and G. Taperell (The Independent Committee of Inquiry into a National Competition Policy), 1993, National Competition Policy, Australian Government Publishing Services, Canberra, p. 191. 18 In many cases, it may be difficult to quantify all the costs and/or benefits of specific regulation to the community as a whole. The requirement to identify non-quantifiable effects and a particular course of action means that these can be explicitly considered in the decision making process, rather then excluded due to the lack of an agreed ‘dollar value’. A clear identification of the costs, benefits and distributional impacts resulting from the removal of a regulation on wider public interest grounds will also assist government to introduce targeted adjustment mechanisms. Such assistance may be considered necessary to mitigate the impact of transitional costs of reform on particular sectors of the community. %R[$VVHVVLQJWKH3XEOLF,QWHUHVW Without limiting the matters to be taken into account, in assessing the costs and benefits, the following matters should be taken into account: S government legislation and policies relating to ecologically sustainable development; social welfare and equity considerations, including community service obligations; government legislation and policies relating to matters such as occupational health and safety, industrial relations, access and equity; economic and regional development, including employment and investment growth; the interests of consumers generally or of a class of consumers; the competitiveness of Australian businesses; and the efficient allocation of resources. 10 S S S S S S Commonwealth compliance with its 1999-2000 legislation review requirements is independently assessed by the Productivity 10 Competition Principles Agreement, 1995, sub-clause 1(3). 19 Commission and reported in Regulation and its Review 1999-2000 and by the NCC. 11 A detailed examination of Commonwealth progress during 1999-2000 in the review and reform of existing anti-competitive legislation is contained in section 1.2.1. A summary of compliance with regulation impact assessment requirements for legislation introduced or amended after 1995 is in Section 1.4. Where Commonwealth legislation is complemented or matched by State or Territory regulation, a coordinated ‘national review’ may be undertaken. Commonwealth participation in national reviews for the period 1999-2000 is examined in Section 1.3.  &RPPRQZHDOWKOHJLVODWLRQUHYLHZVFKHGXOH The Commonwealth Legislation Review Schedule (CLRS) details the Commonwealth’s timetable for the review and, where appropriate, reform of all existing legislation that restricts competition or imposes costs or confers benefits on business, by the year 2000. 12 The original Schedule, prepared in June 1996, listed a total of 98 separate legislation reviews. However, changing circumstances have resulted in some reviews being added, rescheduled or deleted. 13 Legislation may be deleted from the Schedule if it is not considered cost effective to review — where the competition effects are small relative to the cost of implementing new arrangements — or it is repealed as a consequence of changes to Government policy. Any changes to the CLRS requires the approval of the Prime Minister, Treasurer and the responsible Portfolio Minister(s). Within the Treasury portfolio, the Treasurer’s CLRS role is normally performed by the Minister for Financial Services and Regulation. This function is undertaken by the Office of Regulation Review, an independent office located within the Productivity Commission. CoAG at its meeting of 3 November 2000, decided that this deadline would be extended to 30 June 2002. This includes the extension of the CLRS to incorporate reviews scheduled on the basis of direct or significant indirect impacts on business. 11 12 13 20 The CLRS as at 30 June 2000 is at Appendix A. 5HSRUWLQJUHTXLUHPHQWVIRUOHJLVODWLRQUHYLHZV The following sections provide information on Commonwealth progress during 1999-2000 in meeting its scheduled legislation review commitments. The reviews have been organised to reflect both the scheduled commencement date, and the degree of progress made to date. For each individual review, information is provided on the following: &RPSOH[LW\RIWKHUHYLHZDQGGHWDLOVRIWKHUHYLHZSDQHO The priority and importance of the legislation being reviewed varies. Accordingly, the method of review for the legislation takes into account its significance and the extent of expected benefits from reform. More significant pieces of legislation are reviewed by an independent committee of inquiry or the Productivity Commission. Where such review costs are not considered warranted, reviews are generally undertaken by a committee of officials. The ministerial portfolio with current responsibility for the legislation, and the commencement date of the review, is also identified. 14 7HUPVRIUHIHUHQFH The scope and structure of each review is outlined in its terms of reference. Without limiting the terms of reference for each review, the CPA establishes that scheduled reviews should: S S clarify the objectives of the legislation; identify the nature of the restriction on competition; 14 In some cases, ministerial responsibility for particular legislation may have changed during the reporting period. Similarly, Department titles referred to in connection with various reviews may differ over time. 21 S analyse the likely effect of the restriction on competition and on the economy in general; assess and balance the costs and benefits of the restriction; and consider alternative means of achieving the same result including non-legislative approaches. S S The Office of Regulation Review (ORR) is required to approve the terms of reference for any scheduled Commonwealth review. To assist this process, and to ensure a consistent approach and focus to reviews, the ORR has developed a template terms of reference to be tailored to suit each piece of legislation to be reviewed. 15 A copy of each review’s terms of reference is included in an attachment to this report (see page 199). ([WHQWRISXEOLFFRQVXOWDWLRQ Public consultation is a required part of all Commonwealth legislation reviews. This obligation was stipulated by the Commonwealth in the release of the CLRS. The NCC has recommended that, to meet this obligation, all reviews should be conducted in an independent, open and transparent way, against clear terms of reference, and in a manner that allows interested parties to participate. The review terms of reference set out the minimum public consultation to be undertaken. In the interest of transparent decision making and ensuring the broadest range of views on the matter under consideration are received, this generally involves advertising the review and seeking written submissions on a national basis. There may also be more targeted consultations with specific stakeholders. 5HYLHZSURJUHVVRUUHFRPPHQGDWLRQVDQGJRYHUQPHQW UHVSRQVH Further information is reported depending on the extent of progress of the review. Where the review has been completed, if possible, a 15 Productivity Commission (1999), Regulation and its Review 1998-99, AusInfo, Canberra, p. 49. 22 summary of the main review recommendations is provided. The final report of each review is to be made publicly available, although for particularly sensitive reviews this may not occur immediately. A summary of the Government’s response recommendations is included, where applicable. to the review 23  /HJLVODWLRQ6FKHGXOHGIRU5HYLHZLQ This section outlines progress in those legislation reviews scheduled to commence in 1999-2000. The reviews are grouped according to the extent of progress made. 16  5HYLHZVFRPSOHWHGUHFRPPHQGDWLRQVXQGHU FRQVLGHUDWLRQ 3HWUROHXP 6XEPHUJHG /DQGV $FW  'HSDUWPHQW RI ,QGXVWU\ 6FLHQFH DQG 5HVRXUFHV The review of this Act was included in the National Review of Petroleum (Submerged Lands) Acts (see page 98).  5HYLHZVFRPPHQFHGEXWQRWFRPSOHWHG ([SRUW &RQWURO 8QSURFHVVHG :RRG 5HJXODWLRQV XQGHU WKH ([SRUW &RQWURO $FW  'HSDUWPHQW RI $JULFXOWXUH )LVKHULHV DQG )RUHVWU\ The objective of the Export Control (Unprocessed Wood) Regulations under the Export Control Act 1982 is to control the export of unprocessed wood (including woodchips and logs). Subsequent amendments to the regulations have lifted export controls on plantation sourced wood in all States and Territories except Queensland and the Northern Territory, and to wood sourced from native forests in regions covered by Regional Forest Agreements. The review of the Export Control (Unprocessed Wood) Regulations under the Export Control Act 1982 was originally scheduled for review in 1997-98 however, it was deferred to 1999-2000. The terms of reference for this review were approved on 8 March 2000. 16 Information on progress has been provided by the responsible portfolio department or agency. 24 The review panel is composed of: Rob Rawson, General Manager, Forestry Industry, AFFA; Chris Sant, Office of Legislative Drafting; Richard Sisson, Innovation and Operating Environment, AFFA. AFFA is providing secretariat support. 5HYLHZ SURJUHVV The review is expected to commence in the second half of 2000 and be completed in 2001. )HHV FKDUJHG XQGHU WKH 7UDGH 3UDFWLFHV $FW 'HSDUWPHQW RI WKH 7UHDVXU\ The overall objective of the of the Trade Practices Act (TPA) is to enhance the welfare of Australians by promoting competition and fair trading, and providing appropriate safeguards to consumers. The fees charged under the Act attempt to offset some of the costs of providing these services through user charges. This review has been included in the twelve month Productivity Commission inquiry ‘Cost Recovery by Regulatory, Administrative and Information Agencies — including Fees charged under the Trade Practices Act’, which commenced in August 2000. 5HYLHZ SURJUHVV The Productivity Commission (PC) has released an issues paper. Public hearings were held in late November and early December. A draft report was released in April 2001 and the final report is due by 16 August 2001. +D]DUGRXV :DVWH 5HJXODWLRQ RI ,PSRUWV ([SRUWV $FW  +D]DUGRXV :DVWH 5HJXODWLRQ RI ,PSRUWV ([SRUWV $PHQGPHQW %LOO  DOVR UHODWHG UHJXODWLRQV 'HSDUWPHQW RI (QYLURQPHQW DQG +HULWDJH The legislation implements Australia’s international environmental obligations with regard to the import or export of hazardous wastes. 25 This review was originally scheduled for 1998-99 however, it was deferred to 1999-2000. The terms of reference were approved on 28 February 2000. The review is being undertaken by a taskforce, which comprises seconded officials from Environment Australia, the Attorney-General’s Department, the Department of Foreign Affairs and Trade, the Department of Industry, Science and Resources and the Department of Health and Aged Care. The taskforce is supported by the Hazardous Waste Act Policy Reference Group, acting as a reference group of independent members. 5HYLHZ SURJUHVV An Issues and Options paper has been prepared which formed the basis of a call for submissions, advertised on 28 and 29 July 2000. Submissions were due by 3 October 2000, and a consultant’s report based on the submission was received by the taskforce on 18 October 2000. The taskforce’s report is due on 30 November 2000. 2]RQH 3URWHFWLRQ $FW  2]RQH 3URWHFWLRQ $PHQGPHQW $FW  'HSDUWPHQW RI (QYLURQPHQW DQG +HULWDJH The Ozone Protection Act 1989 implements the provisions of the Montreal Protocol on Substances that Deplete the Ozone Layer. The Act regulates the phase out of ozone depleting substances, in some cases ahead of the Protocol requirements where consultations with industry determined a faster phase out was possible. The terms of reference were agreed to in early 2000. The review panel is made up of representatives from Environment Australia, the Australian Greenhouse Office and the Attorney-General’s Department, and is assisted by PricewaterhouseCoopers. 5HYLHZ SURJUHVV An issues paper was released in April 2000, seeking submissions on the impact and effectiveness of the current regime by 23 May. A draft report 26 was released in September 2000, along with a discussion paper canvassing reforms and alternatives to the current legislation. The draft report identifies various possible avenues for anti-competitive effects arising from the legislated phase out of ozone depleting substances, however none of the submissions indicated that anti-competitive behaviour was perceived as a problem. Submissions on the basis of the draft report and discussion paper were due by 1 November 2000. The final report, based on the submissions and a series of public consultations in October, is due out in December 2000. A government response will be made after the release of the final report. The papers identified above are available on the Internet at: www.environment.gov.au/epg/ozone. 3DUW ,,,$ DFFHVV UHJLPH RI WKH 7UDGH 3UDFWLFHV $FW LQFOXGLQJ H[HPSWLRQV 'HSDUWPHQW RI WKH 7UHDVXU\ Part IIIA of the TPA provides a regime for third party access to services provided by significant infrastructure facilities. The overall objective of the TPA is to enhance the welfare of Australians by promoting competition and fair trading, and providing appropriate safeguards to consumers. The review commenced in June 2000 and is being undertaken by the PC. 5HYLHZ SURJUHVV The PC released an issues paper on 11 October 2000. A position paper was released in March 2001. The final report is due in October 2001. 3ULFHV 6XUYHLOODQFH $FW  'HSDUWPHQW RI WKH 7UHDVXU\ The Prices Surveillance Act (PSA) assigns three specific functions to the Australian Competition and Consumer Commission (ACCC). These are: to review price rises notified to the ACCC by certain organisations (this 27 function is commonly referred to as ‘prices surveillance’); undertake monitoring of prices or other matters for particular organisations, products or services (called the monitoring function); and to hold inquiries into price and other matters as directed by the Commonwealth Government (the inquiries function). The Productivity Commission (PC) commenced a nine month inquiry on 14 February 2000, for which the reporting date was later extended to August 2001. This extension was so that the inquiry could be conducted in tandem with a review of the National Access Regime (see page 27), to accommodate overlapping issues. 5HYLHZ SURJUHVV The Productivity Commission released an issues paper in March 2000, an interim report in October 2000 and a draft report in March 2001. :KHDW 0DUNHWLQJ $FW  'HSDUWPHQW RI $JULFXOWXUH )LVKHULHV DQG )RUHVWU\ The objective of the Wheat Marketing Act 1989 is for the Australian government to use its control of wheat exports to ensure direct grower access to marketing services and export markets, and that growers receive the highest net return from sales in export markets. The terms of reference for this review were approved on 4 April 2000. The review, with secretariat support provided by the Department of Agriculture, Fisheries and Forestry, was conducted by the following three person committee: S Mr Malcolm Irving, Chair: Chairman of Caltex Australia and the Australian Industry Development Corporation. He is also a director with Telstra, a member of the Supermarket to Asia Council and was Chair of the Australian Horticultural Corporation for nine years; Professor Bob Lindner: Executive Dean of the University of Western Australia’s Faculty of Agriculture. He was also the faculty’s inaugural Professor of Agricultural Economics. He is Chair of the Western Australian Herbicide Resistance Initiative Board and a member of the Export Grains Centre Advisory Council; and S 28 S Mr Jeff Arney: South Australian grain grower, Chair of the South Australian Farmers Federation Grains Council and a past President of the Grains Council in Australia. 5HYLHZ SURJUHVV The review released a draft report in October 2000. A final report was provided to the Minister for Agriculture, Fisheries and Forestry before the end of December 2000.  5HYLHZVQRWFRPPHQFHG ' H[HPSWLRQV ORFDO JRYHUQPHQW DFWLYLWLHV RI WKH 7UDGH 3UDFWLFHV $FW 'HSDUWPHQW RI WKH 7UHDVXU\ Section 2D of the Trade Practices Act 1974 (TPA) exempts the licensing decisions and internal transactions of local government bodies from Part IV of the TPA. Part IV of the TPA regulates restrictive trade practices. This review had not commenced by 30 June 2000. Subsequently, the terms of reference for a twelve month review were approved at the Commonwealth level on 9 October 2000. The Commonwealth intends to forward the terms of reference to the Productivity Commission in 2001 after consultations with State Premiers and Territory Chief Ministers and subject to the work load of the Productivity Commission. $QWLGXPSLQJ $XWKRULW\ $FW  &XVWRPV $FW  3DUW ;9% DQG &XVWRPV 7DULII $QWLGXPSLQJ $FW  $WWRUQH\*HQHUDO¶V 'HSDUWPHQW This review was deferred to 1999 and had not commenced by 30 June 2000. Reference to the Anti-dumping Authority Act 1988 has been deleted, as this Act was repealed in December 1998 following changes to the administration of the anti-dumping and countervailing investigations. 29 The Government has not finalised the timing or manner of review of the legislation relevant to anti-dumping and countervailing matters. 'HIHQFH $FW  $UP\ DQG $LUIRUFH &DQWHHQ 6HUYLFHV 5HJXODWLRQV 'HSDUWPHQW RI 'HIHQFH This review had not commenced by 30 June 2000. The Department is discussing the terms of reference with the ORR. 'LVDELOLW\ 'LVFULPLQDWLRQ $FW  $WWRUQH\*HQHUDO¶V 'HSDUWPHQW This Act was added to the CLRS for review in 1998-99, however, it was deferred to 1999-2000. This review had not commenced by 30 June 2000. Discussions are taking place to determine an appropriate body to carry out the review, the terms of reference and to reach agreement on a revised time frame. 'ULHG 9LQH )UXLWV /HJLVODWLRQ 'HSDUWPHQW RI $JULFXOWXUH )LVKHULHV DQG )RUHVWU\ On 24 August 1999, the Minister for Financial Services & Regulation agreed to defer this review until the second half of 2000. The Minister also agreed to the deletion of the following acts from the CLRS: Dried Vine Fruits Equalization Act 1978, Dried Sultana Production Underwriting Act 1982 (upon the repeal of the Act) and Dried Vine Fruits Legislation Amendment Act 1991 (upon repeal of the Dried Sultana Production Underwriting Act). In 1998, a major review was initiated by the horticultural industry, the Australian Horticultural Corporation (AHC) and the Horticulture Research and Development Corporation, with a view to creating a single entity delivering both marketing and research and development services. The Horticultural Industry Alliance Steering Committee (HIASC) was subsequently formed to drive the process. Given only two regulations under the Australian Horticultural Corporation Act 1987 (AHC Act) relevant to dried fruits remain on the CLRS, and given this Act and its 30 regulations were reviewed as part of the major horticultural industry review, the scheduled review of dried vine fruits legislation has been deferred until the completion of the major horticultural industry review. As a result of the review process, legislation to effect the repeal of the dried vine fruit regulations under the AHC Act is before Parliament. ([SRUW )LQDQFH ,QVXUDQFH &RUSRUDWLRQ $FW  ([SRUW )LQDQFH ,QVXUDQFH &RUSRUDWLRQ 7UDQVLWLRQDO 3URYLVLRQV DQG &RQVHTXHQWLDO $PHQGPHQWV $FW  'HSDUWPHQW RI )RUHLJQ $IIDLUV DQG 7UDGH This review has been deferred pending the outcome of a separate review process required by the Government, and expected to address similar issues. +RPH DQG &RPPXQLW\ &DUH $FW  'HSDUWPHQW RI +HDOWK DQG $JHG &DUH This review had not commenced by 30 June 2000. In October 2000, the Minister for Aged Care wrote to the Prime Minister and the Minister for Financial Services and Regulation seeking agreement to the deferral of the review pending an assessment of the degree to which the Regulation Impact Statement process for the National Program Guidelines for the Home and Community Care Program met the intended objectives of the review. 1DWLYH 7LWOH $FW  UHJXODWLRQV $WWRUQH\*HQHUDO¶V 'HSDUWPHQW This review had not commenced by 30 June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his legislation variously provides for the prudential regulation and supervision of the superannuation industry and the imposition of certain levies on superannuation funds and approved deposit funds. This review was originally scheduled to commence in 1997-98 but has been deferred twice. It was scheduled to commence in 1999-2000. The review had not commenced by 30 June 2000. The review commenced in 2001 and is being conducted by the Productivity Commission. 32 /HJLVODWLRQ6FKHGXOHGIRU5HYLHZLQ² 5HIRUPQRWILQDOLVHGE\-XQH Previous Annual Reports outlined the progress of those legislation reviews scheduled to commence within that year (or earlier). Many of the reviews have not reached the reform implementation stage by the end of the reporting period. This section updates the progress of these reviews and any reforms that have consequently been implemented.  5HYLHZVFRPSOHWHGDQGUHIRUPRXWFRPHV DQQRXQFHG 7UDGH 3UDFWLFHV $FW  ² 3DUW ; VKLSSLQJ OLQHV 'HSDUWPHQW RI 7UDQVSRUW DQG 5HJLRQDO 6HUYLFHV Part X of the Trade Practices Act 1974 (TPA) regulates the conditions under which international liner shipping companies are permitted to collaborate as conferences in Australia in order to provide joint liner services. Part X provides certain exemptions from Part IV of the TPA, which in relation to outwards liner shipping services involve various obligations towards Australian exporters. 5HYLHZ SURJUHVV The review of Part X by the Productivity Commission commenced in March 1999 and the resulting report was provided to the Government in September 1999. *RYHUQPHQW UHVSRQVH In December 1999, the Government announced its decision to retain Part X and make various enhancements, as recommended by the Productivity Commission, together with some further amendments to bring Part X more into line with NCP principles. Subsequently the Trade Practices Amendment (International Liner Cargo Shipping) Act 2000 was granted Royal Assent on 5 October 2000. Part 1 of the amending Act entered into force on 2 November 2000, and Part 2 33 (dealing with inwards liner cargo shipping) entered into force on 2 March 2001. The Trade Practices Amendment (International Liner Cargo Shipping) Act 2000 amends Part X in the following ways: S the Part X exemptions (from the competition rules in sections 45 and 47 of the TPA) are now limited to liner shipping activities covering ocean transport and loading and discharge operations at cargo terminals, including inland terminals used for assembling export cargo for delivery to a port, or delivering cargo to importers; the protection afforded to exporters under Part X is extended to importers (from 2 March 2001) as far as practicable. This includes requirements that parties to an inwards conference agreement register their agreements and negotiate with the relevant designated body representing importers in respect of charges for land-based services in Australia, and for other matters in cases where the contract for shipping the cargo is made in Australia; there is a procedure for avoiding conflicts of jurisdiction with the country of export through a system of Ministerial Exemption Orders to deal with problems that may arise from overlapping jurisdictions. Exemption orders are instruments disallowable by Parliament; the Minister for Transport and Regional Services and the ACCC have increased powers to deal with conduct likely to result in an unreasonable increase in freight rates and/or an unreasonable decrease in services; the increased powers are to be used only in exceptional circumstances such as those where an agreement covers most carriers or capacity on a trade route; actions under the additional powers are appealable to the Australian Competition Tribunal; the Minister and ACCC are now empowered to accept court enforceable undertakings, given by shipping lines; section 10.17A and 10.18A have been replaced by sections (with the same numbers) that clarify the requirement that liner shipping companies are not allowed to collectively agree on freight rates unless they have a registered conference agreement to which those freight rates apply. S S S 34 The Australian Government Solicitor advised that there was some ambiguity about this in the previous sections 10.17A and 10.18A; S liner conference will not be permitted to unreasonably restrict entry of new parties; a national interest test is included in assessing conduct by parties to an outwards liner shipping agreement that might unreasonably hinder Australian flag shipping; and Section 10.05 prohibiting discrimination between shippers was repealed. The Productivity Commission recommended this on the grounds that the provision served no useful purpose, and could be harmful if it discourages efficient price discrimination. S S  5HYLHZVFRPSOHWHGUHFRPPHQGDWLRQVXQGHU FRQVLGHUDWLRQ %URDGFDVWLQJ 6HUYLFHV $FW  %URDGFDVWLQJ 6HUYLFHV 7UDQVLWLRQDO 3URYLVLRQV DQG &RQVHTXHQWLDO $PHQGPHQWV $FW  5DGLR /LFHQFH )HHV $FW  7HOHYLVLRQ /LFHQFH )HHV $FW  'HSDUWPHQW RI &RPPXQLFDWLRQV ,QIRUPDWLRQ 7HFKQRORJ\ DQG WKH $UWV This review was originally scheduled to commence in 1997-98. However, it was rescheduled to commence in 1998-99 due to changes in the work program of the reviewer, the Productivity Commission. The review commenced in March 1999. 5HYLHZ 3URJUHVV The Productivity Commission presented its final report to the Government on 6 March 2000. The report was publicly released on 11 April 2000. The review’s recommendations are: 35 Managing broadcasting spectrum 5HFRPPHQGDWLRQ  Licences granting access to spectrum should be separated from content related licences that grant permission to broadcast. 5HFRPPHQGDWLRQ  Spectrum for new broadcasts should be sold competitively, subject to ongoing licence fees. The level of ongoing fees should be adjusted to reflect significant changes in the value of spectrum. 5HFRPPHQGDWLRQ  Licence fees for existing commercial radio and television broadcasters should be converted to fees that reflect the opportunity cost of spectrum used. Revenue based licence fees for each service type (television, FM radio and AM radio) in each licence area should be converted to spectrum-based licence fees. These fees should be revenue neutral in the first year and set thereafter on a basis similar to the fees for other spectrum. 5HFRPPHQGDWLRQ  During the digital television conversion period, existing television broadcasters should be levied additional fees on any of the spectrum used for digital services other than digital simulcast of the analog program, consistent with those paid by other digital broadcasters. 5HFRPPHQGDWLRQ  If a government wishes to ensure community access to commercial digital broadcasting services in areas where they are not commercially viable, this should be achieved through explicit subsidy arrangements allocated through the tender of a community service obligation that does not specify the means of delivery. 5HFRPPHQGDWLRQ  The ABA, in consultation with the broadcasting industry and the public, should develop a series of templates for licence areas with different 36 characteristics, setting out the number of national, community and Indigenous services for which spectrum should be reserved. All unreserved broadcasting spectrum should be made available for commercial broadcasting. 5HFRPPHQGDWLRQ  The value of broadcasting services bands spectrum reserved for non-commercial broadcasting services should be estimated and reported publicly. 5HFRPPHQGDWLRQ  The planning criteria for the broadcasting service bands, currently found in s. 23 of the BSA, should, for commercial broadcasting, be restricted to those relevant to the technical planning of the spectrum. 5HFRPPHQGDWLRQ  The ABA should retain responsibility for issuing licenses to broadcast, and for determining the number of non-commercial broadcasting licences in an area. It should also retain responsibility for regulating content, enforcing codes of practice and monitoring ownership. 5HFRPPHQGDWLRQ  Responsibility for planning and licensing the broadcasting services bands of the spectrum should be transferred to the Australian Communications Authority and managed under the provisions of the Radiocommunications Act. 5HFRPPHQGDWLRQ  Spectrum used for commercial narrowcasting should be made available using the same processes and on the same terms (including renewability) as those for spectrum for commercial broadcasters. From analog to digital 5HFRPPHQGDWLRQ  Prior to the commencement of digital terrestrial television on 2001, the digital television conversion plan should be modified: 37 S The Government should set a firm and final date of 1 January 2009 for the end of the simulcast period. The final date should apply to metropolitan and regional areas; Necessary amendments should be made to provide for shorter simulcasting period, enabling the switch-off of analog services earlier than 2009 in areas where that proves feasible; and The Government should formulate and publish specific criteria suitable for approving the early switch-off of analog services. S S 5HFRPPHQGDWLRQ  The digital television conversion plan should be further modified: S Prior to the sale of any spectrum in the broadcasting services bands in 2000, the Government should announce its intention to release and sell any spectrum which becomes available for digital broadcasting during the conversion period; Within two years of the commencement of digital broadcasting in a licence area, unassigned channels should be identified and sold for new digital broadcasting services; Within two years of the commencement of digital broadcasting in a licence area, channels suitable for low cost spectrum clearance should be identified. The channels should be sold for new digital broadcasting services, subject to clearance of the spectrum by the purchaser; and Two years prior to the termination of the simulcast period, the spectrum manager should plan and sell for new digital services all remaining spectrum used for analog television broadcasting, with possession after analog switch-off. S S S 5HFRPPHQGDWLRQ  As the digital switch-off proceeds, the Government should design appropriate policies to ensure switch-off of analog services on 1 January 2009 in areas of slow take-up. 38 5HFRPPHQGDWLRQ  A new digital regulatory framework will facilitate consumers’ adoption of digital television: S High definition transmission will facilitate consumers’ adoption of digital television; Datacasting services should be defined as digital broadcasting services; and Multichannelling and the provision of interactive services by commercial and national broadcasters should be permitted. The proposed reviews of multichannelling and subscription broadcasting by free to air services should be cancelled. S S 5HFRPPHQGDWLRQ  Digital radio policy should be modified: S Analog radio broadcasting licences should not be converted without a charge to digital licences; Spectrum for new commercial digital radio services should be sold by a competitive process; and Existing commercial radio broadcasters should not be constrained from participating in the new medium. S S Structural diversity in Australian broadcasting 5HFRPPHQGDWLRQ  The ABA should conduct regular research on the demand for community radio and television programming. 5HFRPPHQGDWLRQ  The ABA should conduct evaluations of existing community licences before renewal every five years to assess whether licensees are meeting the objectives of the licence. The licence should be offered for reallocation if a licensee has not succeeded in meeting its objectives. 39 5HFRPPHQGDWLRQ  The ABA should review the allocation of each community broadcasting licence every 10 years. 5HFRPPHQGDWLRQ  If demand exists for non-profit television services in a licence area, a standard definition channel should be made available by the digital broadcaster that tenders for the lowest Government subsidy to do so. The tender should be let prior to the switch-off of analog television. 5HFRPPHQGDWLRQ  A new licence category for Indigenous broadcasters should be created, with appropriate conditions relating to advertising. 5HFRPPHQGDWLRQ  Spectrum should be reserved for Indigenous broadcasters to provide a primary service for Indigenous communities, where appropriate. 5HFRPPHQGDWLRQ  The Government should examine the need for, and feasibility of, establishing an Indigenous broadcasting service, including: S S S S who should provide the service; how the service should be provided; the additional government resources required; and a timetable for implementation. 5HFRPPHQGDWLRQ  The restrictions on advertising and sponsorship on subscription television services should be removed. 5HFRPPHQGDWLRQ  Subscription television channel providers should be licensed separately from the subscription television carrier. 40 5HFRPPHQGDWLRQ  Education providers and government agencies should share access with community groups to a standard definition digital television channel which could be made available in each licence area where there is sufficient demand. Concentration, diversity and regulatory barriers to entry in Australian media 5HFRPPHQGDWLRQ  When the non-technical criteria in s. 23 are removed, spectrum plans should be reviewed to make any unallocated spectrum available for sale. 5HFRPPHQGDWLRQ  Section 28 of the BSA, which prevents any new commercial television licences being allocated before 31 December 2006, should be repealed immediately. Ownership and control 5HFRPPHQGDWLRQ  Foreign investment in broadcasting should be covered by Australia’s general foreign investment policy. All restrictions on foreign investment, ownership and control in the BSA should be repealed. 5HFRPPHQGDWLRQ  If recommendation 10.1 is not adopted, the BSA should be amended immediately to remove restrictions on investment by foreign managed, but Australian sourced, funds in Australian commercial television businesses. 5HFRPPHQGDWLRQ  The Trade Practices Act 1974 should be amended immediately to include a media-specific public interest test which would apply to all proposed media mergers. The test would be administered by the Australian Competition and Consumer Commission, (ACCC) and require that the commission seek ABA input on social, cultural and political dimensions of the public interest. 41 5HFRPPHQGDWLRQ  After the following conditions have been met: S removal of regulatory barriers to entry in broadcasting (s. 28 and the s. 23 non-technical criteria), together with the availability of spectrum for new broadcasters; repeal of BSA restrictions on foreign investment, ownership and control; and amendment to the Trade Practices Act 1974 to provide for a media-specific public interest test to apply to mergers and acquisitions; S S the cross-media rules should be removed. 5HFRPPHQGDWLRQ  The retention of the audience reach rule should be reviewed in the light of developments in new digital broadcasting and information services. 5HFRPPHQGDWLRQ  As the normal competition provisions of the Trade Practices Act 1974 would apply to mergers of commercial broadcasting licences within a licence area, ss. 54 and 53(2) of the BSA should be repealed. Australian content regulation 5HFRPPHQGDWLRQ  The Australian content quota of 80 per cent for advertisements on all commercial television stations should be removed immediately. 5HFRPPHQGDWLRQ  The Australian production expenditure quota of 10 per cent for subscription adult and children’s drama channels should be removed immediately. 42 5HFRPPHQGDWLRQ  For all current and future policies and regulations aimed at achieving the social and cultural objectives of broadcasting, the ABA should conduct regular, public evaluations against the stated policy objectives. 5HFRPPHQGDWLRQ  To ensure that the social and cultural objectives of broadcasting continue to be addressed in the future digital media environment, the Government should: S commission an independent, public inquiry into Australian audiovisual industry and cultural policy, to be completed by 2004; and following this review, but prior to the final switch-off of analog services, implement a new framework of audiovisual industry and cultural policy. S Until this new policy is implemented, the following quotas for free to air commercial broadcasters should be retained in their current form and at their current levels: S the overall transmission quota of 55 per cent for Australian programming; the Australian first release drama quota; and all quotas for children’s ‘C’ and preschool ‘P’ programs. S S Broadcasting of sport 5HFRPPHQGDWLRQ  Broadcasters in one form of broadcasting should be allowed to acquire the broadcast rights of sporting events of major national significance to the exclusion of those in other forms of broadcasting. 43 5HFRPPHQGDWLRQ  Criteria for a new and much shorter anti-siphoning provisions should include: S S demonstrated national significance, such as Australian involvement; events that have been consistently broadcast by free to air television stations in the past five years; and events that have received a high level of viewing by Australian audiences, as determined by ratings. S 5HFRPPHQGDWLRQ  Responsibility for administration of the anti-siphoning provisions should be transferred from the Minister to the ABA, and procedures should be streamlined to reduce the time taken for decisions and to improve their certainty and transparency. Codes, conditions and compliance 5HFRPPHQGDWLRQ  The ABA should undertake or commission research into the influence of the various forms of media on Australian society. 5HFRPPHQGDWLRQ  A further objective ‘to promote freedom of expression’ should be added to the objectives in s. 3 of the BSA. 5HFRPPHQGDWLRQ  Schedule 2 of the BSA should be amended to impose the following conditions on broadcasters’ licences. Broadcasters must take reasonable steps to: S prevent the broadcasting of programs that, in accordance with community standards, are not suitable for their section of the industry to broadcast; 44 S ensure the protection of children from exposure to potentially harmful program material; and provide methods for handling complaints. S Compliance with a relevant, registered code of practice covering these matters would be deemed to be evidence of having taken ‘reasonable steps’. However, compliance with a code need not be the only means of satisfying these requirements. 5HFRPPHQGDWLRQ  The ABA should actively promote ethical practices in broadcasting. It should develop standards dealing with fair and accurate coverage and ethical news gathering and reporting practices. Among other provisions, these standards should provide that: S such complaints may be made to either the ABA or the licensee in the first instance; licensees must inform the ABA of such complaints and their proposed action as soon as practicable; the ABA must actively monitor the actions of the licensee in response to the complaint; and the ABA must exercise its powers to direct licensees to take certain actions (including broadcasting retractions and corrections) in response to complaints about fair and accurate coverage. S S S 5HFRPPHQGDWLRQ  The mechanisms for consultation on the development of codes of practices should be amended such that: S a requirement for general support from within the relevant section of the industry replaces the requirement that a majority of broadcasters within the relevant section of broadcasting endorse a proposed code of practice; 45 S the ABA, in consultation with industry, develops guidelines on how it will assess whether a code has ‘general support from within the relevant sections of the industry’; and the ABA, in consultation with industry and the community, develops guidelines on ‘adequate opportunity to comment’ to support community consultation on a proposed code of practice. S 5HFRPPHQGDWLRQ  The co-regulatory scheme should be amended such that: S all codes of practice include the requirement for community service announcements about the complaints mechanism to be broadcast at peak or other appropriate audience times; the ABA undertakes ongoing monitoring of community awareness of complaints mechanisms; licensees are required to accept e-mailed complaints as well as written and faxed complaints; and each industry group covered by a code of practice is required to institute a telephone complaints system which would advise complainants of their rights and on which complainants may record telephone complaints. These complaints should be forwarded promptly to the relevant broadcaster, and a summary of these complaints should be provided to the ABA. S S S 5HFRPPHQGDWLRQ  The co-regulatory scheme should be amended such that, in addition to existing sanctions: S licensees found to be in breach of a relevant licence condition are required to broadcast an on-air announcement of the breach finding and subsequent action during the relevant program or time slot; and the ABA is given the power to issue directions for action to broadcasters found in breach of a relevant licence condition. S 46 5HFRPPHQGDWLRQ  The regulatory scheme for controlling access to online content, including the legislative requirements on Internet content hosts and Internet service providers, the associated codes of practice, and the NetAltert initiative, associated hotline and community education campaigns, should be reviewed after one year of operation. The review should encompass: S S the scheme’s success in regulating access to objectionable material; the scheme’s effect on Internet service providers, Internet content hosts and online commerce; the scheme’s effect on freedom of expression and access to educational, artistic and political material; and the scheme’s compliance and administrative costs. S S *RYHUQPHQW UHVSRQVH The Government will respond to the review’s recommendations in due course. ([SRUW &RQWURO $FW  VXFK DV ILVK JUDLQV GDLU\ SURFHVVHG IRRGV HWF 'HSDUWPHQW RI $JULFXOWXUH )LVKHULHV DQG )RUHVWU\ The Export Control Act 1982 provides a comprehensive legislative base for the export inspection and control responsibilities for certain goods. The review (in relation to goods such as fish, grains, dairy, and processed foods) commenced in January 1999. The review was undertaken by a review committee, chaired by Mr Peter Frawley, formerly Executive General Manager of CSR and Chairman of Livecorp; Mr Raoul Nieper, previosuly Head of the Queensland Department of Primary Industries, now an independent consultant; Mr Lyndsay Makin, an independent consultant, previously General Manager, Export for Nestlé and Ms Barbara Wilson, Assistant Director, Technical Services and Operations in the Australian Quarantine and Inspection Service (AQIS). 47 5HYLHZ SURJUHVV The report was finalised on 23 December 1999, and released to the public in February 2000. The review recommendations are: 5HFRPPHQGDWLRQ  5HWHQWLRQ RI WKH $FW The Review Committee recommends that: S the Export Control Act be retained, in its current form, and with its current general structure; the title of the Act to be changed to the ‘Export Assurance Act’; and specific amendments be made in the areas of: the objectives of the Act; the scope of the legislation; adoption of a three-tier system of export assurance; and, legislative monitoring, as outlined in other Recommendations in this Report, to ensure that the Act properly conforms to the NCP and is relevant to current export requirements. S S 5HFRPPHQGDWLRQ  2EMHFWLYHV RI WKH /HJLVODWLRQ The Review Committee recommends that the Act be amended to include a statement of specific objectives. 5HFRPPHQGDWLRQ  $GRSWLRQ RI DQ ,QWHJUDWHG ([SRUW $VVXUDQFH 6\VWHP 7KUHH 7LHU 0RGHO The Review Committee recommends that programs established under the Export Control Act be administered under a three tier model comprising: S S Australian Standards (Tier 1); standards set by overseas governments for access to their markets (Tier 2); and market-specific requirements determined by government and industry (Tier 3). S 48 5HFRPPHQGDWLRQ  +DUPRQLVDWLRQ RI 'RPHVWLF DQG ([SRUW 6WDQGDUGV The Review Committee recommends that domestic and export standards for the production of food and agriculture products in Australia be harmonised, and that they be consistent with relevant international standards. 5HFRPPHQGDWLRQ  &HUWLILFDWLRQ E\ D 6LQJOH $XWKRULW\ The Review Committee recommends that certification of Australian export products continue to be administered by a single government based agency. 5HFRPPHQGDWLRQ  &RQWHVWDELOLW\ RI 0RQLWRULQJ $XGLWLQJ DQG ,QVSHFWLRQ The Review Committee recommends that monitoring and inspection arrangements be made fully contestable under all programs as soon as third party arrangements are acceptable to overseas governments. 5HFRPPHQGDWLRQ  6FRSH RI WKH /HJLVODWLRQ The Review Committee recommends that the focus of the Act extend through the entire food chain and not rely primarily on the product preparation stages immediately prior to export, as occurs at present. 5HFRPPHQGDWLRQ  &ULWHULD IRU $SSOLFDWLRQ RI /HJLVODWLRQ The Review Committee recommends that specific criteria for the application of the Act be prepared in consultation with industry. 5HFRPPHQGDWLRQ  &HUWLILFDWLRQ RI 1RQ3UHVFULEHG *RRGV The Review Committee recommends that only prescribed goods be certified under the Act. 5HFRPPHQGDWLRQ  5HYLHZ RI ,QGLYLGXDO 3URJUDPV DJDLQVW 1&3 3ULQFLSOHV The Review Committee recommends that QEAC establish a program of periodic monitoring of the operation of regulation, particularly in economic terms, ensuring that: 49 S the activity under the Act and its administration are measurable against its objectives; the Act be periodically monitored in relation to the net benefit it confers. S 5HFRPPHQGDWLRQ  $FFHOHUDWH WKH &XUUHQW 5HYLHZ RI ([LVWLQJ 6XERUGLQDWH /HJLVODWLRQ The Review Committee recommends that the current review of subordinate legislation should be accelerated, and conducted with reference to the principles expressed in this Report, in particular, reflecting the partnership between government and industry, and the assumption of greater industry responsibility. 5HFRPPHQGDWLRQ  &RUHVSRQVLELOLW\ IRU 6WUDWHJ\ DQG 3URJUDP 'HOLYHU\ The Review Committee recommends: S S a Development Committee be established for each program; membership of the Committee comprise representatives of AQIS and industry; the Committee operate independently and be charged with specific responsibility to: S - determine strategies; - establish priorities; and - approve plans for their implementation; S QEAC review the performance of these committees biennially and report to the Minister against the adoption plans. 5HFRPPHQGDWLRQ  (OHFWURQLF &RPPHUFH The Review Committee recommends that AQIS move quickly to align the administration of the regulation with current Government policy on electronic commerce, recognising in particular: 50 S advantages in establishing more easily accessible information bases and information services for stakeholders on such issues as importing requirements and microbiological testing; and the benefits of placing a greater emphasis on electronic commerce, particularly given government policy on this issue. S 5HFRPPHQGDWLRQ  ,PSOHPHQWDWLRQ The Review Committee recommends that the outcome of this Review and its Recommendations be included as part of the CoAG policy on the reform of food regulation, and further that: S AFFA/AQIS progress the recommendations in this context by developing an implementation plan with milestones for achievement over the next five years. The plan must show substantial changes occurring within 18 months; The Minister establishes a reporting framework for progress on implementation of recommendations taking into account the role of other government bodies, apart from AQIS. Implementation of the Committee’s vision depends on securing commitment from Commonwealth bodies such as ANZFA and all State and Territory Governments; and ARMCANZ oversee implementation of the Three Tier model and facilitate harmonisation of State/Commonwealth standards for each industry or program area encompassed by the Export Control Act. S S *RYHUQPHQW UHVSRQVH Material supporting the Government response is in preparation and, due to the diverse nature of industry and the need to consult in detail, the final Government response is not expected until early 2001. )LQDQFLDO 7UDQVDFWLRQV 5HSRUWV $FW  DQG UHJXODWLRQV $WWRUQH\*HQHUDO¶V 'HSDUWPHQW The objective of the Financial Transactions Reports Act 1988 is to facilitate the administration and enforcement of taxation laws, and laws of the Commonwealth and the Territories other than taxation laws, and to make information collected for these purposes available to State 51 authorities to facilitate the administration and enforcement of the laws of the States. The Review was conducted by a taskforce of Commonwealth officials, comprising representatives of the Attorney-General’s Department, the Australian Transaction Reports and Analysis Centre (AUSTRAC), the Australian Federal Police, the Australian Taxation Office and the Financial Institutions Division of the Department of the Treasury. A reference group of two non-government persons, Mr Tom Sherman and Mr Alan Cullen oversaw the review. 5HYLHZ SURJUHVV The taskforce provided its report to the Minister for Justice and Customs on 6 September 2000. ,QWHOOHFWXDO 3URSHUW\ 3URWHFWLRQ /HJLVODWLRQ 'HVLJQV $FW  3DWHQWV $FW  7UDGH 0DUNV $FW  &RS\ULJKW $FW  DQG &LUFXLW /D\RXWV $FW  'HSDUWPHQW RI ,QGXVWU\ 6FLHQFH DQG 5HVRXUFHV $WWRUQH\*HQHUDO¶V 'HSDUWPHQW The objective of each of these Acts is to encourage investment in innovation and creative effort for the benefit of society. Without intellectual property rights, it will be possible for free-riders to easily copy work by others and so the original creators will not receive appropriate rewards for their investment; thus there will be little incentive to invest in creative effort. The review of the intellectual property protection legislation (Designs Act 1906, Patents Act 1990, Trade Marks Act 1995, Copyright Act 1968 and Circuit Layouts Act 1989) commenced in June 1999. The review was undertaken by an independent committee of review comprising Mr Henry Ergas (Chairman), Associate Professor Jill McKeough and Mr John Stonier. The review was announced in national newspapers on 17 July 1999 and expressions of interest were sought from interested parties by 1 November 1999. Additional announcements were made in selected regional and capital city newspapers on 23 October 1999. 52 After preliminary consultation and research, the committee released and Issues Paper in September 1999, to stimulate public discussion on the issues being examined by the review. This paper raised potential issues for consideration and invited further comments and written submissions from interested parties. The Committee met with groups and individuals to discuss issues of concern. It received 83 written submissions. The committee produced and invited further comment on an Interim Report released in April 2000. This report identified perceived problems requiring further consideration, provided description and background on areas of concern, set out broad policy objectives which the Committee believed should be pursued, and presented the committee’s preliminary views on options for achieving the objectives. Following the Interim Report, a further 56 written submissions were received. A number of further public consultations were also held in Canberra, and seminars were held in Melbourne and Sydney during April and May 2000. In addition, the Committee sought input from experts invited to round-table discussions on issues relating to patents, copyright and section 51(3) of the Trade Practices Act. 5HYLHZ SURJUHVV The committee received a significant number of representations from interested parties stating that they found it difficult, or impossible, to meet the advertised timeframes for providing written submissions on the Interim Report. As a consequence, the committee sought an extension of time to deliver its final report. Additional time was granted on some, but not all, issues. The committee was asked by Ministers to report on the parallel importation of copyright material by 30 June 2000 and on all other issues, on or before 30 September 2000. The review committee presented its Report on Parallel Importing under the Copyright Act 1968 in June 2000 and its final report, Review of Intellectual Property Legislation under the Competition Principles Agreement, dated September 2000. The earlier report was published in August 2000. The Ministers to whom the final report was made have yet to decide when it will be published. 53 *RYHUQPHQW UHVSRQVH The Government response to the final report is still to be determined. In June 2000, the Government announced the decision to allow parallel imports of books, periodicals, printed music and software products (with the decision being informed, inter alia, by the June 2000 report noted above). /DQG $FTXLVLWLRQ $FWV /DQG $FTXLVLWLRQ $FW  UHJXODWLRQV /DQG $FTXLVLWLRQV 'HIHQFH $FW  DQG /DQG $FTXLVLWLRQ 1RUWKHUQ 7HUULWRU\ 3DVWRUDO /HDVHV $FW  'HSDUWPHQW RI )LQDQFH DQG $GPLQLVWUDWLRQ The Land Acquisition Act 1989 sets out the processes that the Commonwealth and its agencies must follow when acquiring or disposing of an interest in land. It also deals with related matters, such as entry on private land by Commonwealth officers and the regulation of mining on Commonwealth land. The Act includes provisions for compulsorily acquiring an interest in land and for the arrangements for consequential payment of compensation. The Land Acquisition (Defence) Act 1986 facilitated the acquisition of public park land in New South Wales for defence purposes and the Land Acquisitions (Northern Territory Pastoral Leases) Act 1981 was used to compulsorily acquire two pastoral leases (Mudginberri and Munmarlary) for subsequent inclusion in Kakadu National Park. Officers from within the Department of Finance and Administration undertook the review and reported to an internal Steering Committee. The review was advertised nationally and public comment sought from interested persons. 5HYLHZ SURJUHVV The review identified some operational and administrative issues but concluded that the legislation substantially complies with competition policy principles. A report of the review has been submitted to the Minister for Finance and Administration and is under consideration. 54  5HYLHZVFRPPHQFHGEXWQRWFRPSOHWHG $XVWUDOLD 1HZ =HDODQG )RRG $XWKRULW\ $FW  )RRG 6WDQGDUGV &RGH 'HSDUWPHQW RI +HDOWK DQG $JHG &DUH The review of the Food Standards Code commenced in May 2000. It is being undertaken by a Review Committee representatives from the Department of the Treasury, the Department of Agriculture, Fisheries and Forestry, the Department of Industry, Science and Resources, the Department of Health and Aged Care and the Office of Small Business. ANZFA advised stakeholders of the NCP legislation review through a notice on its website posted on 26 May 2000, and an advertisement in national newspapers, in accordance with the requirements of the terms of reference. In addition, ANZFA included the notice and call for submissions in a mail-out to over 200 stakeholders. The notice and advertisement provided background on the Review, and invited all interested persons to make submissions by 7 July and comments on the likely effects on competition and business of the legislative restrictions imposed by the Code, including the potential regulatory impact on consumers, industry, government and the wider community. Ten organisations made submissions. None of the submissions addressed the NCP Review of the existing Code, but rather, they largely rehashed issues relating to the proposed draft Joint code which had arisen in the earlier consultation on the standard by standard review of the existing Code. 5HYLHZ SURJUHVV The Review is expected to be completed in 2001. )LVKHULHV /HJLVODWLRQ 'HSDUWPHQW RI $JULFXOWXUH )LVKHULHV DQG )RUHVWU\ The review encompasses a number of Commonwealth Acts that govern fisheries management in Australian waters. The most significant being the Fisheries Management Act 1991 and the Fisheries Administration Act 1991, which set out the objectives of the Commonwealth’s 55 involvement in fisheries management and the methods by which these objectives may be pursued. These objectives include the pursuit of efficient and cost-effective practices, the need to preserve the long-term sustainability of the marine environment and accountability to the fishing industry and the broader Australian community. Apart from the management of Australia’s fisheries, other issues regulated under the Acts, which are the subject of the review, include the imposition of levies and the issue of foreign fishing licences. The review commenced in October 1998. It is being conducted by a committee of officials, chaired by Mr Fred Woodhouse; Mr Angus Horwood, RECFISH, Mr Frank Meere, Acting General Manager, Australian Fisheries Management Authority; Mr Bill Nagle, Chief Executive Officer, Australian Seafood Industry Council; Dr Connall O’Connell, First Assistant Secretary, Environment Australia; Dr Ian Poiner, Program Manager, Marine Research, CSIRO and Mr Andrew Pearson, Director, Fisheries Policy and Trade Section, AFFA. An issues paper was released in April 1999, and submissions called for by 8 June 1999. A total of 12 submissions were received. 5HYLHZ SURJUHVV It is expected that this review will be completed in November 2000. The Government response is expected in 2001. +HDOWK ,QVXUDQFH $FW  3DUW ,,$ 'HSDUWPHQW RI +HDOWK DQG $JHG &DUH The Pathology Quality and Outlays Agreement is the second co-operative agreement between the Commonwealth Government, the Royal College of Pathologists of Australasia and the Australian Association of Pathology Practices Inc. to manage pathology expenditure under Medicare, facilitate structural reform in the pathology sector and improve quality in pathology testing, use and practice. One of the key elements of this agreement is for a comprehensive review of the regulatory framework for pathology under the Medicare agreements to be conducted within the life of this agreement. 56 This review was added to the CLRS for review in 1998-99 and commenced in January 2000. The review is being overseen by a steering committee comprised of Mr David Borthwick, Deputy Secretary, Department of Health and Aged Care (Chair); Mr John Jepsen, General Manager, Structural Reform Division, Department of the Treasury and Ms Christianna Cobbold, Assistant Secretary, Health Capacity Development Branch, Health Industry Investment Division, Department of Health and Aged Care. The review has undertaken a two-stage consultation process. Over 1000 written invitations for submissions were sent to a range of stakeholder groups including medical colleges, medical and scientific representative organisations, advisory committees, State and Territory health authorities, pathology providers, pathology representatives, general practitioner representative organisations and consumer groups. An advertisement was placed in major metropolitan newspapers throughout Australia and in medial publications seeking written submissions for the review. The initial deadline for the receipt of submissions was extended by one month in response to requests from a number of stakeholders. The review received 59 written submissions from a range of groups and individuals including the major pathology representatives, the Australian Medical Association (AMA), the Royal Australian College of General Practitioners (RACGP), medical practitioners, divisions of general practice and other specific issue representatives. In addition to seeking written submissions, the steering committee met with a range of stakeholders. Prior to lodging their final submissions, the Royal College of Pathologists of Australasia (RCPA) and the Australian Association of Pathology Practices Incorporated (AAPP) met with the steering committee. Following the lodgement of the submissions, the steering committee met with: the AMA and the RACGP who had requested the opportunity to meet the steering committee together; the National Coalition of Public Pathology; the Western Australian Centre for Pathology and Medical 57 Research (PathCentre); the RCPA and AAPP who also attended together at their request; Queensland Health and NSW Health. A freecall telephone line was established to allow people to call from anywhere in Australia at no charge. A generic electronic mailbox was established to allow for electronic communication with the review. The address is pathreview@health.gov.au. A page was placed onto the Department of Health and Aged Care website that includes background information on the review, details of the process for the review and contract details for the review. In addition, the Chair of the steering committee sought the consent of authors of submissions for their submissions to be made available on the Department of Health and Aged Care internet site. In response, only nine authors refused their consent. The remaining submissions are available for viewing on the internet site developed for this review. 5HYLHZ SURJUHVV The review is in the process of preparing a draft report and was expected to report by the end of 2000. 0DULQH ,QVXUDQFH $FW  $WWRUQH\*HQHUDO¶V 'HSDUWPHQW The Marine Insurance Act 1909 sets out the legal requirements surrounding contracts for and policies of marine insurance. It was designed to simplify and codify some aspects of the common law dealing with marine insurance. This review was added to the CLRS for review in 1998-99 and commenced in October 1999. The review is being conducted by the Australian Law Reform Commission, which is also examining other legal and policy issues in relation to the Act. 5HYLHZ SURJUHVV The terms of reference require the review to report by 31 December 2000. Subsequently, the Attorney-General has agreed to an extension of the time for reporting to 30 April 2001. 58 3URFHHGV RI &ULPH $FW  UHJXODWLRQV $WWRUQH\*HQHUDO¶V 'HSDUWPHQW The principal objects of the Proceeds of Crime Act are: (a) to deprive persons of the proceeds of, and benefits derived from, the commission of offences against the laws of the Commonwealth or the Territories; (b) to provide for the forfeiture of property used in or in connection with the commission of such offences; and (c) to enable law enforcement authorities effectively to trace such proceeds, benefits and property. Additional objects of this Act include: (a) providing for the enforcement in the Territories of forfeiture orders, pecuniary penalty orders and restraining orders made in respect of offences against the laws of the States; (b) facilitating the enforcement in Australia, pursuant to the Mutual Assistance Act, of forfeiture orders, pecuniary penalty orders and restraining orders made in respect of foreign serious offences; and (c) assisting foreign countries, pursuant to the Mutual Assistance Act, to trace the proceeds of, benefits derived from and property used in or in connection with the commission of foreign serious offences. The Attorney-General tabled the report of the Australian Law Reform Commission Confiscation that Counts on 16 June 1999. The Commission has been unable to complete the national competition principles review and recommended that a working group be established to complete aspects of the Commission’s review and examine certain matters. 5HYLHZ SURJUHVV A working group was established in February 2000 (in conjunction with the NCP review of the Financial Transaction Reports Act and Regulations) and will finalise its report in 2000-01. 59  5HYLHZVQRWFRPPHQFHG 'DLU\ ,QGXVWU\ /HJLVODWLRQ 'HSDUWPHQW RI $JULFXOWXUH )LVKHULHV DQG )RUHVWU\ The Dairy Produce Act 1986 specifies the objectives, functions and administrative requirements for the Australian Dairy Corporation (ADC), and provides for the operation of the Commonwealth’s Domestic Market Support scheme. The review of the Dairy Produce Act 1986 was scheduled to be undertaken by the Productivity Commission in 1998-99 with the terms of reference cleared with the ORR in December 1998. However, against the background of the significant deregulation of the dairy industry in July 2000 (including the cessation of the Commonwealth Domestic Market Support scheme) and the further commitment of the Australian Dairy Industry Council and the industry to propose to Government a revised structure of industry support services post deregulation, the Government has agreed to defer this review. 'HIHQFH )RUFH +RPH /RDQV $VVLVWDQFH $FW  'HSDUWPHQW RI 'HIHQFH The Department of Defence has conducted an internal review of this legislation. Confirmation regarding its consistency with NCP legislation review requirements is being assessed. 3DUW 9, RI WKH 1DYLJDWLRQ $FW  'HSDUWPHQW RI 7UDQVSRUW DQG 5HJLRQDO 6HUYLFHV The Navigation Act 1912 provides a legislative basis for many of the Commonwealth’s responsibilities for maritime matters including ship safety, coasting trade, employment of seafarers and shipboard aspects of the protection of the maritime environment. It also regulates wreck and salvage operations, passengers, tonnage measurements of ships and a range of administrative measures relating to ships and seafarers. 60 The coastal trade provisions of Part VI of the Act were scheduled for review in 1998-99 and the Shipping Reform Group considered these provisions in its report. Accordingly, a comprehensive review of the other parts of the Act was substituted for Part VI review. In December 1997, the Government decided to review the Navigation Act in two stages. The first stage considered repeal of matters that impede shipping reform or are inconsistent with the concept of company employment. This review stage was completed in 1998 and resulted in the Navigation Amendment (Employment of Seafarers) Bill 1998, which was introduced into Parliament on 25 June 1998. On 8 March 2000 the Senate proposed significant amendments to the Bill. The Government has not yet indicated its response to the proposed amendments. The second stage review commenced in August 1999 and was completed in June 2000. The Review was conducted by officials of the Department of Transport and Regional Services and the Australian Maritime Safety Authority. The review team operated under the guidance of an independent Steering Group which provided direction to the review team and acted as an external reference for the conduct of the review, ensuring that it was strategic and reflected as broadly as possible the views of stakeholders. The steering group comprised of the chairman Mr Rae Taylor AO; Mr Lachlan Payne, Chief Executive Officer, Australian Shipping Federation; Mr Barry Vellnagel, Deputy Director, Minerals Council of Australia; Mr Clive Davidson, Chief Executive, Australian Maritime Safety Authority and Ms Joanne Blackburn, Assistant Secretary, Department of Transport and Regional Services. 5HYLHZ SURJUHVV The final report was presented to the Minister for Transport and Regional Services on 15 June 2000. It was released for publication on 20 August 2000 and copies were distributed to persons and organisations making submissions. The report is also published on the Department of Transport and Regional Services website. 61 *RYHUQPHQW UHVSRQVH The Government is yet to respond to the recommendations. Given the broad range of matters addressed within the legislation, the Minister for Transport and Regional Services and the Minister for Financial Services and Regulation have agreed to the development of a whole of government response, which will commence during 2000-01. 7UHDWPHQW 3ULQFLSOHV XQGHU VHFWLRQ  RI WKH 9HWHUDQV¶ (QWLWOHPHQW $FW  9($ 5HSDWULDWLRQ 3ULYDWH 3DWLHQW 3ULQFLSOHV XQGHU VHFWLRQ $ RI WKH 9($ 'HSDUWPHQW RI 9HWHUDQV¶ $IIDLUV This review had not commenced by 30 June 2000. 62 /HJLVODWLRQVFKHGXOHGIRUUHYLHZLQ² 5HIRUPQRWILQDOLVHGE\-XQH  5HYLHZVFRPSOHWHGDQGUHIRUPRXWFRPHV DQQRXQFHG $IILUPDWLYH $FWLRQ (TXDO (PSOR\PHQW 2SSRUWXQLW\ IRU :RPHQ $FW  'HSDUWPHQW RI (PSOR\PHQW :RUNSODFH 5HODWLRQV DQG 6PDOO %XVLQHVV The review of the Affirmative Action (Equal Employment Opportunity for Women) Act 1986 commenced in December 1997 and was conducted by a five member independent committee. 5HYLHZ SURJUHVV The review report Unfinished Business: Equity for Women in Australian Workplaces was presented to the then Minister for Workplace Relations and Small Business on 2 July 1998. *RYHUQPHQW UHVSRQVH The Government announced its response to the review on 16 December 1998, endorsing its main recommendations. Key changes to be implemented include the establishment of an Advisory Board and the introduction of a simpler reporting system to reduce the paperwork burden on business. Of those recommendations that were rejected, none were considered to be pro-competitive. To implement the endorsed recommendations from the report the revised and renamed Equal Employment Opportunity for Women in the Workplace Act 1999 came into effect from 1 January 2000. ,PSRUWHG )RRG &RQWURO $FW  DQG 5HJXODWLRQV 'HSDUWPHQW RI $JULFXOWXUH )LVKHULHV DQG )RUHVWU\ The Imported Food Control Act 1992 and its associated regulations comprise the legislation that enables AQIS to monitor and inspect imported foods. The legislation provides that the requirements with 63 which imports must comply are those contained in the Food Standards Code, which was developed by ANZFA. The Act, which was given Royal Assent in 1992, specifies (among other things): S S S the role of ANZFA in risk management; the Food Standards Codes as the applicable national standard; the power of the Minister of the Department of Agriculture, Fisheries and Forestry to make Orders which, for example, specify food considered risk categorised foods; the making of regulations and their coverage; control procedures relating to imported food; the certification and quality assurance arrangements that may be accepted in lieu of inspection; the treatment of failing food; and enforcement provisions and decision review. S S S S S The review commenced in March 1998. It was conducted by an independent committee, chaired by Carolyn Tanner, Chair, University of Sydney and member of the Quarantine and Export Advisory Council; Tony Beaver, Secretary of the Food and Beverage Importers Association, Member of the Imported Food Advisory Council, the AQIS Industry Cargo Consultative Committee and the Industry Working Group on Quarantine; Andy Carroll, Manager, Animal Programs Section, AQIS; and Elizabeth Flynn, Program Manager for Monitoring and Surveillance, ANZFA. 5HYLHZ SURJUHVV The report was finalised on 30 November 1998, and released to the public in February 1999. 64 The recommendations were: 5HFRPPHQGDWLRQ  The Review Committee recommends that the Act be amended in order to more clearly state its objectives. The following should be considered: S The objective of the Imported Food Control Act is to provide for the compliance of imported food with the Australian public health and food standards. 5HFRPPHQGDWLRQ  The Review Committee recommends that a new combined surveillance category be established in legislation for all food other than risk categorised foods. 5HFRPPHQGDWLRQ  The Review Committee recommends that: S assessment be undertaken by AQIS, in consultation with stakeholders, to determine appropriate inspection levels and strategies for risk and surveillance foods to achieve the objectives of the Act; and AQIS consult with stakeholders to develop and implement an assurance regime that is based on individual and collective performance in the imported food industry. S 5HFRPPHQGDWLRQ  The Review Committee recommends that: S S inspection rates not be detailed in the legislation; and legislation specify the factors to be taken into account when setting inspection strategies and rates. 5HFRPPHQGDWLRQ  The Review Committee recommends that the legislation includes provision for imported food to be tested specifically for the purpose of 65 policy development by ANZFA and AQIS, this testing, is now, to be funded by the government. 5HFRPPHQGDWLRQ  The Review Committee recommends that AQIS investigate the use of the tariff code system with a view to achieving more focussed referral of imported food. 5HFRPPHQGDWLRQ  The Review Committee recommends that AQIS and ANZFA allocate adequate resources to ensure operational effectiveness of the Imported Food Inspection Program. 5HFRPPHQGDWLRQ  The Review Committee recommends that suitably accredited laboratories be permitted to analyse imported food samples for both risk and surveillance categories of food. 5HFRPPHQGDWLRQ  The Review Committee recommends that AQIS provide notification of results and releases to importers food samples for both risk and surveillance categories of food. 5HFRPPHQGDWLRQ  The Review Committee recommends that AQIS facilitate the development and implementation of a system to verify the validity and accuracy of test results provided by laboratories. 5HFRPPHQGDWLRQ  The Review Committee recommends that: S the legislation specify that labelling conform to Australian requirements at the time of inspection or prior to the product leaving the importer’s premises (whichever comes first); the legislation specify that failures for labelling should be recorded and actioned against the importer, rather than the producer; S 66 S the use of Holding Orders against producers for minor labelling failures be discontinued; and AQIS, in consultation with relevant agencies and industry, develop a system to verify labelling compliance of imported foods, post border. S 5HFRPPHQGDWLRQ  The Review Committee recommends that AQIS continue the current policy of release on sampling for non-risk categorised foods. 5HFRPPHQGDWLRQ  The Review Committee recommends that legislation be amended to permit AQIS to expand the use of certification agreements with other countries’ food inspection authorities and that it build more rigour into the present certification system, by provision for: S S S review of agreements every three years; linking on-site audits to the country’s compliance history; improved flexibility in relation to inspection rates, including removing them from the legislation (as in Recommendation 4); and adoption of an appropriate charging structure to minimise cross-subsidisation, while encouraging uptake of certification. S 5HFRPPHQGDWLRQ  The Review Committee recommends that: S legislation be amended to clearly allow AQIS to enter into compliance agreements with importers based on approved quality assurance-type arrangements; AQIS develop a compliance agreement option that includes specifications for importers, and auditing functions consistent with other inspection systems’ functions conducted by AQIS; the compliance agreement option has the ability to cover the entire production chain and, where appropriate, the transport chain; and S S 67 S overseas suppliers be encouraged to enter into approved quality assurance arrangements with AQIS by permitting these arrangements, where appropriate, to be sourced from the importer’s own QA systems. 5HFRPPHQGDWLRQ  The Review Committee recommends that AQIS investigate and institute changes to AIMS that would ensure effective administration of IFIP, including: S S databases that are accurate; reporting modules which management requirements; provide information relevant to S reporting modules with improved flexibility to meet the need for queries and for changes to requirements; and a system which provides information to support field activities. S 5HFRPPHQGDWLRQ  The Review Committee recommends that AQIS define, develop and use performance indicators to ensure efficient and effective program delivery. 5HFRPPHQGDWLRQ  The Review Committee recommends that a competency-based, comprehensive training program, coordinated by a National IFIP Training Officer, be developed and delivered to all officers undertaking IFIP inspections. 5HFRPPHQGDWLRQ  The Review Committee recommends that a comprehensive review of all regional IFIP operations be undertaken as soon as practicable to identify and rectify present inconsistencies while the training package is being developed, and the monitoring of the quality of service should be an on-going function. 68 5HFRPPHQGDWLRQ  The Review Committee recommends that: S legislative sanctions should be reviewed for effectiveness, appropriateness and conformity with the Criminal Code Act 1995; the size of the penalty be struck with reference to analogous legislation (for example, State Food Acts, Quarantine Act 1908 etc), via the normal process of consultation with the drafters and the relevant areas in Attorney-General’s; appropriate sanctions be developed with the introduction and extension of certification and approved quality assurance arrangements; and legislative sanctions have a proper legislative basis and suitable avenues of appeal and redress, and that they are transparent, and imposed in an accountable manner. S S S 5HFRPPHQGDWLRQ  The Review Committee recommends that a formal Memorandum of Understanding or service level agreement with the Australian Customs Service be established for imported foods. 5HFRPPHQGDWLRQ  The Review Committee recommends that AQIS, together with ANZFA, reform the current consultative committee for the imported food program with a view to making it consistent with the consultative arrangements for its other programs, ensuring shared responsibility, transparency in decision making, broad based representation and full consultation among stakeholders. 5HFRPPHQGDWLRQ  The Review Committee recommends that AQIS develop and implement a communications strategy that: S provides all stakeholders with timely and detailed information; 69 S provides transparency in imported foods policy and operations; and that AQIS, in cooperation with other agencies: develop an overview booklet for food importers containing details of all relevant agencies and their requirements; and establish an inter-agency “shopfront” facility to disseminate information about the responsibilities of the various government agencies involved in food importing. S S 5HFRPPHQGDWLRQ  The Review Committee recommends that, in line with considerations descried in this Report, the Imported Food Control Act 1992 be retained, with: S timely amendment of legislation consistent with Recommendations 1, 2, 4, 5, 11, 13, 14 and 19 and; enhancement of administrative processes supporting the legislation consistent with the other recommendations in this Report. S *RYHUQPHQW UHVSRQVH The Government response was issued on 29 June 2000, which accepted all of the recommendations. Recommendations requiring amendment to the Act are being prepared for introduction to Parliament, and amendments to subordinate legislation are still under consideration. 0RWRU 9HKLFOH 6WDQGDUGV $FW  'HSDUWPHQW RI 7UDQVSRUW DQG 5HJLRQDO 6HUYLFHV The Motor Vehicle Standards Act 1989 provides a mechanism for setting national safety, emissions and anti-theft standards for road vehicles supplied to the Australian market. The Act applies to all new and imported vehicles. The review commenced in December 1997. It was undertaken by a taskforce of officials, headed by the Federal Office of Road Safety with representatives from the Department of Industry, Science and Resources, 70 the Australian Customs Service, the Commission and Environment Australia. National Road Transport An independent reference committee assisted the review process by ensuring the taskforce’s work was independent, strategic and effective by reflecting as broadly as possible the views of stakeholders. 5HYLHZ SURJUHVV The draft report of the review of the Motor Vehicle Standards Act and its associated recommendations were released by the Minister for Transport and Regional Services, the Hon John Anderson MP, on 12 May 1999 for consideration and comment before the report was finalised. This provided an opportunity for all interested parties to provide their views to the taskforce prior to the final report being considered by Government. The taskforce considered comments from more than 100 stakeholders. The taskforce made a number of recommendations concerning the eligibility arrangements for vehicles entering the market through the Low Volume Scheme (LVS) as specialist and enthusiast vehicles. Included in the recommendations were that consideration be given to revising the current eligibility criteria to make them less subjective and that vehicles with diesel engines or turbo-charged engines would be considered as a different model for the purposes of the LVS. *RYHUQPHQW UHVSRQVH The Government provided its response to the final report on 8 May 2000. In a joint media release issued by the Minister for Transport and Regional Services, the Hon John Anderson MP, and the Minister for Industry, Science and Resources, Senator the Hon Nick Minchin, the following new arrangements were announced for imported used vehicles: Introduction of a new Specialist and Enthusiast Vehicle Scheme (SEVS) with the following main criteria to determine the eligibility of a vehicle model: S S not marketed in full volume; supplied to world market for at least 18 months; 71 S S withdrawn from local market for at least 12 months; and meets at least two of four specialist and enthusiast criteria (that is, appearance, performance, featured in specialist publications, unusual design features); four wheel drives with single-cab and open work-tray; diesel/turbo variants of full volume models will no longer qualify for special treatment but will be considered against the criteria for SEVS; replace type (bulk) approval of Australian Design Rules compliance with vehicle-by-vehicle approval conducted by registered workshops; or increase the annual cap per approval holder from 25 to 100 used passenger motor vehicles, in line with the cap for four wheel drives. S S S S Transitional arrangements: S S two-year sunset on existing low volume scheme approvals; and new SEVS criteria to apply immediately to new applications. Non-LVS categories: S abolish complete vehicles for dismantling — importation of used vehicle components will still be allowed; extend personal import eligibility from 90 days ownership and use to 12 months; other measures aimed at improving the administration of used vehicle imports and reducing malpractices in the trade (for example, full-cost recovery, consumer awareness); S S The following amendments to the Regulations in relation to the non-LVS were gazetted on 25 July 2000: S to import a non standard road vehicle, the period of continuous ownership and use will be 12 months (Regulation 9D); and 72 S approvals to import road vehicles for dismantling has been discontinued (Regulation 9H). Drafting instructions for other legislative changes are currently being prepared.  5HYLHZVFRPSOHWHGUHFRPPHQGDWLRQVXQGHU FRQVLGHUDWLRQ &XVWRPV $FW  ² VHFWLRQV  ² / $WWRUQH\*HQHUDO¶V 'HSDUWPHQW The legislation provides the basis for determining the customs value of goods imported into Australia. Customs value is used to determine the duty payable on imported goods to compile import statistics and also contributes to the collection of sales tax where this is payable at the time of importation. Customs value will also contribute to the calculation of GST on imported goods after 1 July 2000. The legislation enacts Australia’s obligations under the World Trade Organisation Customs Valuation Agreement. The taskforce conducting the review comprised officers from the Department of Industry, Science and Resources, the Department of Foreign Affairs and Trade and the Australian Customs Service. Officers from the Australian Tax Office, Australian Bureau of Statistics and the Department of the Treasury acted as observers in the review process. 5HYLHZ SURJUHVV The report of the review was made public on 16 June 1999. The recommendations made in the report are: 5HFRPPHQGDWLRQ  Sections 154 to 161L of the Customs Act 1901 should be repealed and redrafted in a clear, straightforward and logically organised ‘plain English’ format that incorporates the language and terminology of the World Trade Organisation Agreement on Customs Valuation as far as possible and is consistent with that Agreement. 73 5HFRPPHQGDWLRQ  The redrafted legislation should contain clear statements of its purpose and objectives including primary purpose of specifying the methods for determining the value of all imported goods. 5HFRPPHQGDWLRQ  The proposed new legislation should make clear the statutory basis on which importers are required to self-assess the value of imported goods. 5HFRPPHQGDWLRQ  The legislation or its supporting material should clearly explain the principles which underpin Australia’s import valuation procedures and the intent behind each of the provisions in the legislation. 5HFRPPHQGDWLRQ  The Australian Customs Service should examine the feasibility of adopting a system of public valuation rulings. 5HFRPPHQGDWLRQ  The Australian Customs Service should introduce, at the same time as the new legislation comes into effect, a program to provide public information about the requirements for valuation of imports under the proposed new legislation. *RYHUQPHQW UHVSRQVH Customs has consulted widely with other government agencies and there is general support for the recommendations. The support of relevant Ministers is currently being sought at which time the Minister for Justice and Customs will write to the Prime Minister seeking approval to give effect to the recommendations, The proposed government response to the review is under preparation and is expected to be announced in the first half of 2001. 74 +LJKHU (GXFDWLRQ )XQGLQJ $FW  9RFDWLRQDO (GXFDWLRQ 7UDLQLQJ )XQGLQJ $FW  DQG DQ\ RWKHU UHJXODWLRQ ZLWK VLPLODU HIIHFW WR WKH +LJKHU (GXFDWLRQ )XQGLQJ $FW  'HSDUWPHQW RI (GXFDWLRQ 7UDLQLQJ DQG