Danna Vale (Hughes, Liberal Party) Share this | Hansard source

I appreciate the opportunity to speak on the Trade Practices Amendment (National Access Regime) Bill 2005. I note the comments of the honourable member for Hotham. I would like to add and point out to him—and I am sure he is very much aware of this—that a government entity does not have to own an organisation or an entity to control it. We are the legislators, and we can determine the size of the ballpark and the activity by our regulations and legislation. However, this particular bill—the purpose of which is to make practical amendments to the Trade Practices Act 1974—will implement many of the recommendations that were made by the Productivity Commission in its review of the national access regime. A national access regime that promotes competition is essential for Australia’s infrastructure facilities such as natural gas pipelines, the electricity grid and the rail track, all of which play a key role in Australia’s economic and social development.

A separate regime, part XIC of the Trade Practices Act, applies to the telecommunications sector. The efficient use of and continued investment in facilities such as these is of strategic importance to our country. Accordingly, the government’s policy is to assist realising the potential contribution of such services to economic growth and the improved wellbeing of all Australians. An important element of national competition policy reforms was the establishment of a national access regime, allowing third parties to seek access to the services of certain essential infrastructure facilities on reasonable terms and conditions, if commercial negotiations fail. This ensures that facilities with natural monopoly characteristics do not create barriers to competition. This promotes competition in upstream and downstream markets, which is essential for sustaining strong economic growth and job creation, and contributes significantly to efficiency and innovation. Importantly, the national access regime is not intended to replace commercial negotiations between access seekers and providers but seeks to support the legitimate interests of essential infrastructure owners.

The national access regime was introduced following the Hilmer report’s recommendations. The Commonwealth, state and territory governments proceeded to implement the reform measures. All became signatories to the competition principles agreement, and the Commonwealth inserted part IIIA into the Trade Practices Act. Clause 6 of the competition principles agreement sets down the operating principles for the national access regime. It specifies for the Commonwealth to establish a generic access regime, and part IIIA of the Trade Practices Act puts this generic access regime in place. It also makes provision for state and territory access regimes to operate alongside the Commonwealth regime so that, where a state or territory regime has been certified as operating in accordance with the principles of clause 6 of the competition principles agreement, access to this regime cannot be sought under part IIIA of the Trade Practices Act.

So, with access regimes operating at both the Commonwealth and the state and territory level, access seekers may have to rely on accessing a facility under part IIIA of the Trade Practices Act, through a state and territory based industry scheme which may or may not have the support of legislation, or through a Commonwealth scheme that falls outside the scope of part IIIA of the Trade Practices Act—such as the telecommunications scheme in part 11C of the Trade Practices Act or the airport scheme in the Airports Act 1996.

The amendments contained in this bill all relate to part IIIA of the Trade Practices Act. The provisions of part IIIA give individuals and businesses the opportunity to seek access to services supplied by certain publicly and privately owned infrastructure facilities on reasonable terms and conditions and fair prices. Part IIIA provides three paths to gaining access to an eligible infrastructure service: (1) having a service declared; (2) using an existing access regime which has been deemed to be effective; and (3) seeking access under the terms and conditions specified in an undertaking given by the service provider and accepted by the Australian Competition and Consumer Commission.

Access through declaration of a service can occur where an individual or business has been denied access to a facility and they apply to have the National Competition Council declare the service. The National Competition Council makes a recommendation to the minister on whether or not the service should be declared. In making its recommendation, the National Competition Council must consider whether it would be economical for anyone to develop another facility that could provide part of the service. The National Competition Council must not recommend declaration of a service unless access or increased access to the service would promote competition in at least one market other than the market for the service; it would be uneconomical for anyone to develop another facility to provide the service; the facility is of national significance; access to the service can be provided without undue risk to human health and safety; access to the service is not already the subject of an effective access regime; or access or increased access to the service would not be contrary to the public interest.

Once the National Competition Council has made a recommendation to the minister regarding the declaration, the minister must then make a decision on whether the infrastructure should be declared. The minister must make and publish that decision within 60 days of receiving the National Competition Council’s recommendation. Importantly, at the same time, the minister must notify the applicant and the infrastructure owner of the decision and provide both parties with a statement of reasons. There have been only two declarations to date, both covering cargo handling services at Sydney and Melbourne airports. The Productivity Commission report notes that, even though there have been few declarations, the threat of declaration has helped shape the access regime at state and territory level. Once a declaration has been made, the applicant who has applied for access has a legal right to negotiate on the terms and conditions of access and, if those negotiations are unsuccessful, the parties can seek to have the matter arbitrated by the Australian Competition and Consumer Commission.

Section 44M-44Q of the Trade Practices Act sets out a process whereby an access regime can be certified as ‘effective’. A party cannot seek access to a facility through part IIIA if the facility is an effective access regime. The only regimes that can be certified as ‘effective’ are state and territory government access regimes. The Trade Practices Act does not provide a certification process for Commonwealth government and non-government access regimes. For a regime to be certified, the minister in the responsible state or territory must apply to the National Competition Council for a recommendation about whether the regime is effective. The council must make a recommendation to the designated Commonwealth minister. Section 44M provides that the minister must then decide whether to certify the state or territory access regime as effective. The minister’s certification decision is reviewable by the National Competition Tribunal. If a facility has been certified ‘effective’, the party seeking access to the facility must use the state or territory access regime. If the facility has not been certified ‘effective’, the access seeker may either rely upon the state or territory access regime or apply for the facility to be declared and access negotiated under part IIIA.

Certification provides all parties with certainty about how access will be regulated. While this benefits access seekers, it is also crucial for infrastructure operators and developers, particularly in relation to new investment. It is noteworthy that certification can only be used by state and territory governments. Other entities wishing to achieve certainty in the status of their access regime must lodge an undertaking with the Australian Competition and Consumer Commission.

A new objects clause is inserted into part IIIA to provide for greater certainty for infrastructure owners, access seekers, investors and other interested parties. The bill also requires decision makers under part IIIA to have regard to the objects clause when making their respective decisions. This will help promote consistency and provide guidance in relation to each decision maker’s approach, thereby enhancing regulatory accountability. The government has also agreed that statutory pricing principles should be established in relation to part IIIA to provide guidance for pricing decisions and to contribute to consistent and transparent regulatory outcomes over time as well as certainty for investors and access seekers. This bill enables pricing principles to be determined by the Commonwealth minister.

The Australian Competition and Consumer Commission will be required to take into account those principles when making a final determination on an access dispute, when assessing a proposed new access undertaking access code and when considering whether to vary the terms of or extend the expiry date of an existing access undertaking or access code. The commission may also take such principles into account when making an interim determination on an access dispute. On review, the Australian Competition Tribunal will also be required to take the pricing principles into account where the tribunal is required to reconsider a decision of the Australian Competition and Consumer Commission. To ensure consistency in all three access routes under part IIIA, the Australian government will also work with participating jurisdictions to include the same pricing principles in clause 6 of the competition principles agreement for the purposes of assessing certification applications.

A number of changes will be made to the existing arbitration requirements in part IIIA. The Australian Competition and Consumer Commission will be given the discretion to conduct multilateral hearings in arbitrations following notification to the parties to the dispute. Such processes will allow the commission to consider the service in its entirety and could streamline administrative requirements and reduce costs. Provisions to allow parties to safeguard commercially confidential information and to require the commission to explain its reasons for conducting multilateral hearings against the wishes of the parties will enhance regulatory transparency and provide guidance for future multilateral arbitration hearings.

Consistent with provisions contained in the telecommunications access regime in part XIC of the Trade Practices Act, the Australian Competition and Consumer Commission will also be given the discretion to grant interim arbitration determinations. This change will ensure that appropriate outcomes, including the access seeker gaining access to the service, can be realised in the period leading up to the final determination by preventing an access provider from using the arbitration process as a strategy to delay providing access or to delay providing access on fair terms and conditions.

In another improvement, this bill enables access providers to lodge access undertakings and access codes with the Australian Competition and Consumer Commission after a service has been declared, which will provide a means for achieving certainty on access terms and conditions, thereby facilitating negotiations between access providers and access seekers. By increasing the incentive to negotiate for both parties, post-declaration undertakings should reduce recourse to arbitration, thereby reducing the burden on the regulator and the industry.

This bill also applies a number of non-binding target time limits to various decisions under part IIIA. While the time limits are not binding on the decision maker concerned, they oblige the decision maker to publish a notice of any extension beyond the target time limit, thereby providing regulatory transparency as well as increasing incentives for timely decision making. The new target time limits are: four months for the National Competition Council to assess an application and to make a recommendation to the designated minister that the service be declared or not be declared; 60 days for a ministerial decision to revoke a declaration; six months for the National Competition Council to assess an application and to make a recommendation to the Commonwealth minister that a state or territory regime for access to a service or proposed services is or is not an effective access regime or that the period for which a decision is in force be extended; 60 days for the Commonwealth minister to decide that a state or territory regime for access to a service or proposed service is or is not an effective access regime or that the period for which a decision is in force be extended; six months for the Australian Competition and Consumer Commission to assess a new access undertaking or access code or an application to vary, extend or withdraw an access undertaking or access code or an application to approve a tender process as a competitive tender process; six months for a final arbitration determination for a declared service by the Australian Competition and Consumer Commission; and four months for the processing of an appeal by the Australian Competition Tribunal.

This bill will also place additional obligations on ministers, the National Competition Council and the Australian Competition and Consumer Commission to publish reasons for their decisions or recommendations. This will enhance procedural transparency and regulatory accountability and will facilitate informed consideration of whether there are grounds to challenge a decision by way of merit review before the Australian Competition Tribunal or judicial review by the courts. The Australian Competition and Consumer Commission will also be required to publish reports on completed arbitrations for services declared under part IIIA. This bill sets out a range of minimum requirements to be included in the reports, but the specification of minimum requirements will not preclude the commission from reporting on a matter relevant to an arbitration, subject to the exclusion of confidential commercial information. Publication of arbitration reports will enhance regulatory transparency and may provide guidance for future cases.

As the government’s key adviser on the National Access Regime, the National Competition Council will be required to report annually on the operation and effects of the regimes, including on specific matters identified in this bill. The Australian Competition and Consumer Commission will also be required to include information in its annual report regarding the time it took to make certain decisions and to include information about decisions made under the new provisions in existing public registers.

In conclusion, this bill will improve the operation of the national access regime. Whilst many of the amendments are procedural in nature, they have scope to make the decision making process more efficient and effective. Many of the procedures will bring greater certainty and clarity to both access seekers and access providers, especially those initiatives dealing with the determination of access prices. Opportunities for delaying access through delaying techniques will also be curtailed by the imposition of time limits on certain decisions. This is a practical amendment which seeks to provide practical outcomes. I commend this bill to the House.

See this speech in context