Julie Owens (Parramatta, Australian Labor Party) Share this | Hansard source

Not bad. ‘Australian infrastructure—invest to inherit or delay to decay’. These are very wise words, but I think it is a problem in this parliament when we have people calling for suggestions for bumper stickers well ahead of the government acting on what is a very well known problem in this nation.

While the large scale infrastructure such as gas pipelines is not generally discussed in detail in lounge rooms, it certainly has been discussed at great length in the board room and among industry advocates in this country. On 11 separate occasions in the last four years we have seen the Reserve Bank refer to infrastructure capacity constraints as having a serious negative impact on our national economy. In the last 12 months we have seen the Reserve Bank, the Australian Competition and Consumer Commission, the OECD and the CEDA all voice their dissatisfaction on the state of our infrastructure and on the government’s inaction.

Recent analysis by the Business Council of Australia shows that there is a $90 billion shortfall in Australia’s infrastructure, which needs to be addressed immediately to prevent further capacity constraints and bottlenecks such as those we have been experiencing in critical industries. Our national freight industry, which moves around $2.2 billion tonnes of freight around the country every year by road, rail and sea, has been bottlenecked for years due to prolonged periods of underinvestment.

The national access regime bill is part of ensuring conditions that are conducive to investment in this crumbling infrastructure. All the screaming for the last four of five years has only been going on because this government has failed to act. The government’s job in the long run is to make sure these problems do not appear in the first place. It is evident in a country the size of Australia that infrastructure will always be a major issue, particularly the large physical infrastructure, and it is the government’s job to look ahead and ease the country along, not follow along after five years of constant arguing by our business community.

The national access regime was introduced back in 1995 as part of the national competition policy. The regime addressed natural monopolies in our national infrastructure, where the owner of nationally significant infrastructure had a natural monopoly. It covered access to national infrastructure by a third party where it is not really feasible to duplicate that large infrastructure. It was all about ensuring that owners of infrastructure where a natural monopoly exists could not put up barriers for third parties. For most of us, telecommunications is the most obvious example, although it is not covered by this bill. Again, people in the lounge rooms around Australia are familiar with the effects on both price and service where large-scale infrastructure is not openly available to competitors. The issue equally applies to the rail lines, gas pipelines, electricity and water infrastructure covered in this bill.

There are two parts to the national access regime. The first, agreed between state and federal levels of government, sets out principles underpinning access by third parties to nationally significant infrastructure. The second is in part IIIA of the Trade Practices Act 1974 and the reforms of relevance today are concerned with it.

Back in 1995, part IIIA put in place a legal regime to facilitate user access to services provided by essential facilities that operate as natural monopolies. It sought to ensure that, where infrastructure had a natural monopoly, it could not become a barrier to competition. Part IIIA of the act sets out three paths to gaining access to an eligible infrastructure service: (1) having a service ‘declared’ by the National Competition Council where an individual or business has been denied access to a facility, (2) using an existing state or territory access regime which has been certified as effective, and (3) seeking access under the terms and conditions specified in an undertaking given by the service provider and accepted by the ACCC.

The government commissioned a review of the national access regime in October 2000, some five years later. It was undertaken by the Productivity Commission and delivered in September 2001 but not released until a year later, in September 2002. That was in spite of its importance. The government then sat on the review for another 2½ years, until February 2004. It was finally put on the Notice Paper in the middle of last year, where it languished for months. Again it was a delay of nearly five years, in spite of constant calls by some of the most respected organisations in Australia for urgent action on our crumbling infrastructure.

All too often with this government we see a complete failure to act until the problem has manifested sufficiently for there to be loud calls for action. This government does not lead from the front—far from it. I am undecided whether it is incompetence or politics. If you solve the problem before anyone notices it, you do not get many votes for doing it. I have come to suspect that this government is very much about waiting for the problem to be noticeable so that it can get the biggest brownie points for acting. Unfortunately, every year delayed is a year in which we do not invest in our national infrastructure, and Australians and the country as a whole suffer because of government inaction. So today is a good day for us in this parliament to talk about national infrastructure, because a bill for which we have waited five years is finally in front of us. It is not as good a day as yesterday or if it had been last year, the year before that, the year before that or the one before that—all the way back to September 2002—but it is a good day nevertheless.

This bill is a step in the right direction. From the perspective of this side of the House it falls far short of the mark and, in spite of infrastructure being important, comes several years late. These are long-awaited amendments, particularly on our side of the House, which has such a strong track record in competition policy and support for the development of infrastructure. But it does move us closer towards achieving investment in national monopoly infrastructure and promoting competition for the nation’s future prosperity.

The bill comprises a piece of critical and long overdue legislation to amend part IIIA of the Trade Practices Act to implement many of the recommendations made by the Productivity Commission in its 2001 Review of the national access regime. These amendments will finetune the regime to allow third parties improved access to infrastructure of national significance. Labor welcomes the new section 44A, which inserts an objects clause: ‘to promote the economically efficient operation of, use of and investment in the infrastructure by which services are provided, thereby promoting effective competition in upstream and downstream markets, and provide a framework and guiding principles to encourage a consistent approach to access regulation in each industry’.

The new objects clause must be taken into account by the NCC, the minister and the tribunal with regard to declaring a service, certifying that a regime is effective, approving access undertakings and accepting access codes. The Labor Party supports this clause, although it could hardly be described as bringing a hard edge to the legislation. We would have preferred that it include much stronger pro-competitive language or a mention of restraint on monopoly behaviour. Nevertheless, Labor supports the improvement in regulatory certainty that the objectives provide in determining disputes and declarations.

Labor remains committed to going further to prevent the owners of crucial bottleneck infrastructure facilities from setting high prices or creating other impediments to accessing the monopoly infrastructure. One of the big differences between the beliefs of Labor and those of the government with regard to the national access regime is around the need to enshrine pricing principles in the legislation. It was the original preference of the Liberals to leave it to the minister, and it is Labor’s belief that they need to be enshrined.

The pricing principles are the prices that the ACCC will be required to arbitrate on, which access seekers must pay for access to a service, and set out in an access undertaking. Currently the legislation contains only very broad principles that the ACCC must consider when determining conditions of access, and they do not relate specifically to the issues of price. Again we see that the Howard government has been incredibly slow off the mark, and it only just made it to achieving the requirements set out in the 2001 Productivity Commission report.

After agreeing to establish statutory pricing principles in part IIIA, the government then wavered on enshrining these principles in legislation, proposing that they be determined by the Treasurer and specified in regulation. This marked a significant watering down of its initial preference in favour of the position of the ACCC over the position of the Productivity Commission. The pricing principles were recommended by the Productivity Commission to provide guidance for pricing decisions and to contribute to consistent and transparent regulatory outcomes over time, as well as providing certainty for investors and access seekers. But after four years of dithering and delays the government itself still could not provide any guidance or leadership about pricing principles. It is incredible that this government again almost missed the point completely when for years pricing principles have been at the core of the raging debate about infrastructure.

I note here the comments made on 15 August 2005 in the Australian Financial Review. In an article appropriately entitled ‘Plea for certainty’, in which AGL stated that it was ‘puzzled and concerned’ that the pricing principles were not in the bill and warned that this would create uncertainty among investors about the government’s plans for infrastructure regulation. However, following substantial pressure from Labor and significant media coverage on this issue, the government has finally decided to do something to unlock new investment in our country’s starving infrastructure, worth tens of billions of dollars.

Labor has regarded the pricing provisions of the bill, from its onset, as improvements which go some way towards promoting consistency and certainty for both users and providers of national infrastructure. Labor also believes that the provisions move towards providing some guidance to decision makers in their approaches to enhance regulatory accountability. Labor supports the increased certainty created by the pricing provisions of this bill. At the same time Labor also recognises the need to safeguard the regime against the owners of crucial bottleneck facilities setting high prices for commercial access which limit competition.

Following on from my earlier point of this government being slow off the mark, it is noteworthy that this bill also imposes new time frames when making access decisions, which Labor welcomes, particularly considering the Export infrastructure report’s criticism of the lack of timeliness in access decision making. There is some irony here, given the government’s delay in bringing about at all these important and pressing amendments. Labor believes that imposing time limits on certain decisions can curtail opportunities for delaying access through regulatory game planning—for example, stalling techniques. This in turn increases confidence and consistency in regulatory processes with a flow-on effect for service seekers and consumers.

Labor has a proud tradition of supporting and promoting competition and of building our national infrastructure. Former Prime Minister Paul Keating stated in 1992 that ‘the engine which drives efficiency is free and open competition’. Labor was the architect of competition policy reform in Australia, introducing the Trade Practices Act in 1974. Labor commenced a landmark period of reform during the eighties that included decisions such as floating the currency, deregulating the financial markets and reducing trade barriers. It was Labor that launched the national competition policy, which, amongst other things, reformed a range of legislation restricting competition and holding back key infrastructure. Labor oversaw the Hilmer review, which provided a road map for competition reform, including in the area of access to nationally significant infrastructure facilities. Through overseeing the Hilmer review and launching the national competition policy, Labor created a regulatory framework which promoted competition and access and balanced the wider needs of the public in accessing key infrastructure. All these reforms have contributed greatly to our recent economic success. It is with some sadness that we on this side have watched the delay over the last five years significantly slow down and even halt the reform which we carried out over many years. As Kim Beazley stated in his address to the AusRAIL conference on 24 November:

Labor will use competition policy to make sure competitive forces set infrastructure pricing so that there is enough investment and fair access.

Australia’s energy and water utilities need a fresh blast of the competition blowtorch—that means national markets, fair access regimes and realistic user-pricing.

Labor is committed to steadily and responsibly rebuilding the crumbling infrastructure of Australia, to locking in Australia’s future prosperity and to creating a much stronger economy and nation. We know that this needed to be done a few years ago, and it is certainly of great urgency now. That is why Labor has recently delivered its blueprint for infrastructure, which includes:

... the creation of Infrastructure Australia (a Commonwealth statutory authority reporting directly to COAG and through COAG to state and Commonwealth infrastructure ministers) ... which will function to analyse, monitor and report upon the delivery and operation of major infrastructure projects ...

Labor:

... Will conduct a national infrastructure audit which will see the development of a national infrastructure priority list.

... Will develop a co-ordinated approach in working with the states to give priority to the long range strategic planning of the nation’s infrastructure needs ...

... Will establish the Building Australia Fund ... to aid infrastructure financing ...

The provision and maintenance of our national infrastructure is an investment in our nation’s future, not something to be viewed only as an expense or a budgetary item. In short, good infrastructure is a national asset, not a national cost. However, after nearly 10 years in government the Howard government has done virtually nothing. It has taken five years to put these current amendments in place, and even then the Howard government almost missed the mark. Still there is much more that needs to be done to ensure that Australia gets back on the right track to strengthen and rebuild our nation’s infrastructure for the benefit of all Australians. This bill goes part of the way.

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