Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Hansard source

The National Measurement Amendment Bill 2008 is not an exciting piece of legislation but it is a piece of legislation that is, all the same, very important and one that I have a strong attachment to from my previous life. It has been around in various guises for many years and it was the previous coalition government that finally got this issue into a shape such that it could be brought to this House.

The objective of the National Measurement Amendment Bill 2008 is to introduce a national system of trade measurement. Annually, the trade measurement system in Australia underpins transactions worth more than $400 billion, 75 per cent of which are business to business. While the Commonwealth has constitutional responsibility for weights and measures, the Australian government has responsibility only for defining measurement units and standards, traceability of measurement, and the pattern approval of instruments used for trade or legal purposes.

Inspection and enforcement powers and the setting of the various regulations surrounding trade measurement reside with the various state and territory governments, and therein begins the problem that needed addressing because we then saw eight different sets of trade measurement regimes. This bill will establish a national system of trade measurement to formally commence on 1 July 2010. It will override state based legislation which will eventually be repealed by the various states.

The national trade measurement system will be run by the National Measurement Institute, or NMI, in the Department of Innovation, Industry, Science and Research. All current regulation, licensing and enforcement measures surrounding trade measurements will be run by the Australian government from 1 July 2010. This will entail some 240 state based inspectors formally being transferred to the Commonwealth and made APS employees. This is a direct cost-shift from the states, which will no longer have any trade measurement costs. Funding of $31.65 million was provided to the department of innovation for the transition to a national trade measurement system.

The majority of the bill is given over to setting out appropriate offences, penalties and enforcement powers for Commonwealth trade measurement offences. According to the EM and the government, these various clauses reflect those which already exist in the states and territories. There are only two differences of significance. The first is that inspectors will now be able to seize materials other than measuring equipment. Second, the bill explicitly creates a right to silence defence based on the grounds of self-incrimination which did not previously exist.

The bill establishes three levels of offences: fault, strict liability and infringement notices for all offences. Penalties under this bill are most commonly 200 penalty units or around $22,000 for fault offences, 40 penalty units or around $4,400 for strict liability and five penalty units or $550 for infringement notices. These penalties largely reflect existing state legislation.

As well as implementing a national system in Australia for the first time this bill introduces the option for manufacturers to use on a voluntary basis the average quantity system rather than the current minimum quantity system. The AQS is the international standard in trade in prepacked goods and is used in nations that are important trading partners of Australia such as Canada, China, the EU, Japan, Korea, the Russian Federation and the United States of America. The AQS provides a statistical measure that a batch of goods would be on average within statistical normal distribution. Adopting the AQS will increase efficiencies in production and measurement while ensuring that customers remain protected. It will also make Australian prepacked items more accessible to international trade. By making this voluntary, those producers who wish to remain within the current system, for cost or other reasons, will still be able to do so.

It has been a long and winding road to get to the cusp of establishing the national trade measurement system. As I indicated in my opening comments, this has been a very long process. It started to reach its conclusion in April 2007, when I was the Minister for Industry, Tourism and Resources. COAG agreed, under the stewardship of then Prime Minister, John Howard, to establish a national system of trade measurement to be administered by the Commonwealth to start from 1 July 2010. This bill implements that agreement.

That may seem fairly simple as I say it, but establishing a single national system of trade measurement has been on the agenda for more than 20 years. In 1995 under the last Labor government the Kean inquiry was established. That review recommended that the Commonwealth assume full responsibility for trade measurement. But it took until February 2006 for COAG to identify six priority regulatory hot spots, of which trade measurement was one. COAG requested that the Ministerial Council on Consumer Affairs, which is known as the MCCA, develop a recommendation for a national system of trade measurement. That was subsequently agreed to in April 2007.

There is no doubt that a national system of trade measurement will eliminate common and difficult to quantify business concerns such as legislative differences, the need for multiple licences and different enforcement regimes. It is in this context, though, that we need to understand that in a 2006 report relied on by COAG, the MCCA undertook a series of cost-benefit analyses of implementing a national trade measurement system. Perhaps surprisingly it was unable to quantify significant benefits for the economy, with an overall net positive value to the economy of $5.7 million and with a $16.2 million cost to government and a $22 million cost to business. In view of this, it is disappointing that this government has failed to produce a regulatory impact statement for this bill.

According to advice from the Minister for Small Business, Independent Contractors and the Service Economy, the Office of Best Practice Regulation review determined that an RIS was not required as this bill does not change the regulatory burden on business—it merely transfers powers from state and territory governments to the Commonwealth and in some cases the burden is reduced. However, as seen from the cost-benefit analysis that I mentioned earlier, it is not clear that the national trade measurement system will have a significant net positive value. In this context, it is therefore surprising that further analysis was not done through an RIS.

Labor talks a lot about cooperative federalism, yet it tried twice in the 1980s and then again in the 1990s to deliver a national trade measurement system and it failed on both occasions. It took the coalition in government to deliver this historic agreement in 2007. As the minister responsible I am proud of that achievement. Labor is now implementing the coalition’s hard work. Labor has failed to provide a regulatory impact statement on the basis that this bill merely transfers powers. This is disappointing seeing that there is not a clear indication of the benefit that may come from the implementation of this legislation. Nonetheless, the coalition are of the view that the national trade measurement system will be of benefit to all Australians. On the basis of assurances given by the government that this bill does accurately replicate existing state laws and does provide sufficient safeguards to individuals involved in weights and measures, we support this bill.

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