Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Hansard source

I move:

(4)    Schedule 1, item 110, page 48 (lines 20-26), omit subsection 44ZZCA, substitute:

44ZZCA Pricing principles for access disputes and access undertakings or codes

The principles relating to the price of access to a service are:

             (a)    that regulated access prices should:

                        (i)    be set so as to generate expected revenue for a regulated service or services that is sufficient to meet the efficient costs of providing access to the regulated service or services; and

                       (ii)    include a return on investment commensurate with the commercial risks involved;

             (b)    that the access price structures should:

                        (i)    allow multi-part pricing and price discrimination when it aids efficiency; and

                       (ii)    not allow a vertically integrated access provider to set terms and conditions that discriminate in favour of its downstream operations, except to the extent that the cost of providing access to other operators is higher; and

             (c)    that access pricing regimes should provide incentives to reduce costs or otherwise improve productivity.

Note:   The Commission must have regard to the principles in making a final determination under Division 3 and in deciding whether or not to accept an access undertaking or access code under Division 6

This has been a disappointing bill—disappointing both for what is contained within it and for what is not contained within it. The obvious omission was the government’s original unpreparedness to include the pricing principles within the bill per se. We welcome the government’s backdown and the fact that the minister has just moved an amendment, supported by us, that finally supports the view, after a very effective Senate committee inquiry, of the Productivity Commission that those pricing principles should be contained within the bill.

I say the bill has been disappointing for its omissions, and I want to quickly make two key points here. The first omission is the failure of the bill, and the PC report for that matter, to address the definition of ‘infrastructure facility’, as opposed to definitions like ‘supply of goods’, which was the main point of contention in the very well-known case involving Robe River and Hamersley Iron. I know that the shadow minister for mining and energy addressed that during his contribution to the second reading debate. That is still an unsettled part of the law. This is causing great concern and uncertainty for potential access seekers, including Fortescue, which is currently looking for access in the Pilbara. This would have been an opportunity to address that definition in the bill.

The second omission is the failure to address clause 6 and the ability of a publicly owned facility to avoid part IIIA. That is leading some access seekers to go down the path of section 46 rather than worry about part IIIA, because they know that the problem remains in place—the ability of state owned facilities to effectively avoid part IIIA. Again, that is not addressed in the bill.

I have distributed some detailed amendments. On the face of it, they are very minor. They contain very subtle word changes to the government’s bill. But as subtle as they might seem in word, they can and will make significant changes to the operation of the act, if supported. The first amendment takes two words out of 44ZZCA (a)(ii) in the government’s bill, which reads:

... be set so as to generate expected revenue for a regulated service or services that is sufficient to meet at least the efficient costs of providing access to the regulated service or services ...

We are taking out the words ‘at least’, because we do not understand why it needs to be more than sufficient. It is a point that the minister addressed during his contribution and it is a point that I am happy to respond to. We do not understand why it needs to be more than sufficient. We are concerned that, again, this is a swinging of the pendulum back in favour of monopoly infrastructure owners, to the detriment of access seekers and, therefore, to the detriment of consumers who rely on competition in upstream and downstream markets.

The second amendment is to part (ii) of the provision where the government wants to require the ACCC to take into account the concept of regulatory risk. I know that this issue has been pursued quite enthusiastically by a number of owners of infrastructure facilities. I can understand their concern about regulatory risk. I acknowledge the concept of regulatory risk. I acknowledge that it exists. I acknowledge that it is very real. On that basis I think the ACCC should, if it sees fit, take into account the concept of regulatory risk. But I do not think it should be such a subjective test that the ACCC is forced to take into account regulatory risk. My amendment allows the commission to take into account regulatory risk as part of the assessment of commercial risk, if it sees fit in the circumstances. I think that is a reasonable and responsible proposition. What we are doing today is appealing to the government to accept the opposition’s amendments as a means of making part IIIA a generally more effective and proficient provision.

Question put:

That the amendment (Mr Fitzgibbon’s) be agreed to.

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