Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Hansard source

I rise today to speak on the National Measurement Amendment Bill 2008. This bill seeks to amend the National Measurement Act 1960 and will establish a single trade measurement system for Australia. The Commonwealth has the responsibility for weights and measures under section 51(xv) of the Constitution. Under the National Measurement Act 1960 the Australian government has responsibility for defining measurement units and standards, traceability of measurement, and pattern approval of instruments used for trade or legal purposes. Inspection and enforcement powers, except for utility meters, reside with the various state and territory governments, as do the setting of various regulations surrounding trade measurement.

The trade measurement system in Australia refers to all activities carried out by government and authorised private sector bodies in the application and enforcement of state and territory trade measurement acts and regulations. The system covers the approval and usage of measuring instruments for trade, such as weight scales, flow meters, tanks and beverage dispensers; the sale of goods by measurement, of quantity or quality; packaging and labelling of prepackaged articles; licensing of operators for public weighbridges; licensing of measuring instrument servicing organisations that have personnel nominated to certify measuring instruments; and inspection of trade measuring instruments and prepackages, and penalties for breaches of the law. Presently each state has had a separate system of measurements which has created a disjointed structure of interstate relations. On 13 April 2007, under the Howard government, COAG agreed to establish a national system of trade measurement, administered by the Commonwealth, from 1 July 2010. This bill implements that agreement. This is a project very dear to my heart. I was sworn in as the Parliamentary Secretary to the Minister for Industry, Tourism and Resources on 27 January 2006. One of my areas of responsibility as part of that portfolio was the National Measurement Institute.

I would like to reflect on the work of the former CEO of the National Measurement Institute, Dr Barry Inglis, who gave me an education in measurement. Having been a fitter and toolmaker apprentice and having studied metrology, I thought I had an understanding of measurement but, after meeting Barry Inglis and going through the whole metric system of measurement, I realised how little I understood. You see, a kilo is not necessarily a kilo. Our kilo, a round sphere, is one of many by which comparative measurements are done. Those measurements of that sphere relate back to a sphere which sits in Paris in a controlled environment. Every so often our sphere has to travel to Paris to be compared against the sphere in Paris. But, on a more local issue, I think about the area of the Hunter and the coal exports that leave our ports. One of the things that were put to me that I had not thought about is how we sell coal. We think about coal in tonnage, but tonnage is not necessarily the unit of measurement, because, if it has been raining, are purchasers paying for water or are they paying for dry coal? And what of the calorific value of the coal? So there is a composite measurement to make sure that we do not undersell Australia or, more importantly, that we do not overcharge for the products we export. We had further discussions about the measurement of time and the measurement of length. Dr Inglis is quite a fascinating gentleman and, when I had listened to his revelation of facts, it brought a deep understanding of how critical people involved in the measurement system are to the economic viability of Australia.

However, the issue of establishing a single national system of trade measurement has been on the agenda for more than 20 years. In 1985 the Department of Science commissioned a review of the trade management system, known as the Scott report. The review recommended that federal weights and measures legislation be amended. However, the Commonwealth, state and territory ministers, with the exception of Western Australia, decided instead that each jurisdiction should implement uniform trade measurement legislation.

In February 2006 the Council of Australian Governments, COAG, identified six priority regulation hot spots where overlapping and inconsistent regulatory regimes were impeding economic activity. Trade measurement was one of those six hot spots. COAG requested the Ministerial Council on Consumer Affairs develop a recommendation for a national system of trade measurement, which was subsequently agreed to by COAG on 13 April 2007. Labor talks a lot about cooperative federalism, yet it tried twice, in the 1980s and 1990s, to deliver national trade measurement and failed. It took the coalition in government to deliver this historic agreement in 2007. Labor is merely implementing the coalition’s hard work.

I support the National Measurement Amendment Bill 2008, which is important when considering Australia’s industry and export potential. It will provide a truly national approach to measurement and will give confidence to buyers and sellers that measurements are accurate. Given that an estimated $400 billion worth of trade based on some kind of measurement takes place in Australia annually, this bill is in the interests of Australia, the trade industry and the farmers and manufacturers in the Paterson electorate that I represent. During the Howard government’s term, we played a key role in increasing prosperity for all Australians through creating internationally competitive and sustainable business opportunities. The National Measurement Amendment Bill 2008 is most certainly an initiative of the Howard coalition government, and I am passionate about having this bill passed as it will benefit all Australians. The benefits will include eradicating costs to businesses that operate across borders, different cost recovery procedures in different jurisdictions, different processes for licensing private sector verifiers of trade measuring instruments and inconsistent advice being provided about trade measurement requirements.

As well as implementing a national system, for the first time in Australia the bill introduces, on a voluntary basis, the option for manufacturers to use the average quantity system rather than the current minimum quantity system. The AQS is the international standard in international trade in prepackaged goods, used in nations including Canada, China, the EU, Japan, the Republic of Korea, the Russian Federation and the USA. The AQS provides a statistical measure that a batch of goods would be, on average, within statistical normal distribution, while the current minimum quantity system and its associated testing regimes require many producers to overfill their products in order to meet the minimum quantity requirements. Adopting AQS would increase efficiencies in production and measurement while ensuring consumers remain protected. It would also make Australian prepacked items more accessible to international trade—and making it voluntary enables those producers who wish to remain with the current system, for cost or other reasons, to do so.

On 14 November 2006, as the Parliamentary Secretary for Industry, Tourism and Resources, I opened the new National Measurement Institute laboratory in Western Australia. The NMI laboratory had been based in Cottesloe, Western Australia, since 1954 and was relocated to the Australian Resources Research Centre in Kensington, WA. The relocation of the NMI to the ARRC and the refocusing of the NMI’s WA business plan and activities towards the needs of the resources industry were undertaken within the broader context of maximising the return to Australia from the investment in the NMI. Western Australia is the leading exporting state in Australia, accounting for more than 25 per cent of Australia’s total exports. Resources and commodities are major components of these exports. The relocation to the ARRC provided the NMI with the opportunity to build on its relationships with the main players in the resources industry. The then CEO of the National Measurement Institute, Dr Barry Inglis, oversaw the relocation. Ernest—also known as Ernie—Bartels, a dedicated laboratory analyst, unveiled the plaque on that day. The NMI’s vital role in Australia’s future cannot be understated and it gives confidence to buyers and sellers that measurements are accurate and can be relied upon.

I have seen firsthand the valuable work done by the NMI and support the bill’s intention to streamline this system. However, I do raise a number of concerns regarding the administration of the bill and the cost shifting from the states to the Commonwealth. Under this new agreement, the Commonwealth will take responsibility for the existing 140 state trade measurement inspectors and officials, as well as state based trade measurement instruments of a yet to be defined value. Administration of the national trade measurement system will be the responsibility of the Department of Innovation, Industry, Science and Research, with powers exercised by or under the delegation of the secretary. The administrative functions will be implemented by a division of the department, the National Measurement Institute.

Funding of $31.65 million was provided to the department of innovation for the transition to a national trade measurement system and its first year of operation, 2007-08 to 2010-11. The bill provides for ongoing funding of $23.653 million, which will be provided from 2011-12. This is a direct cost shift from the states, who will no longer have any trade measurement costs. These costs, which I understand are significant, will now be directly borne by the taxpayers of Australia.

The bill proposes that, from 1 July 2010, NMI will maintain a national system to licence appropriately qualified businesses and individuals to verify compliance of measuring instruments, and one licence will be valid for use across Australia. The bill further proposes that the current inconsistent fee regimes will be replaced by one licence fee based on cost recovery principles. I understand that the processes for licensees to report on verification of trade measuring instruments will be unified and streamlined. Licensees will be encouraged to use internet based submission of data to achieve best productivity, but other forms of submission will be provided for. The bill provides that NMI will conduct compliance monitoring activities through a national network of inspectors who will carry out marketplace audit and inspection activities like those currently carried out by the states and territories. As of 1 July 2010, the inspectors will be trade measurement staff who have transferred from state and territory employment.

The bill sets out that, under the national trade measurement system, the compliance strategy will employ a variety of mechanisms. I am told that emphasis will be placed on informing traders, licensees and the public about the practices that ensure fair measure and on securing compliance through education. Further, minor noncompliance, typically because a trader was unaware of an inappropriate measurement practice, will initially be dealt with by a warning. I am advised that continuing offences or failure to heed an official warning will result in an infringement notice and escalation in risk based monitoring and that intentional, persistent and serious offences will lead to the most severe prosecutions.

I have previously raised concerns about which court or tribunal has jurisdiction to enforce and which court will be the appellate court. I am told the enforcement options will depend on the circumstances of the offences and that the court used will be a matter for the Commonwealth Director of Public Prosecutions. Further, the appellate court will depend on the jurisdiction in which the original court proceedings were launched. Under proposed section 19K, jurisdiction is conferred on the Federal Court of Australia and the Federal Magistrates Court in respect of enforceable undertakings and injunctions.

I have also raised my concern about the need for arms-length separation of the enforcement and compliance arms of NMI itself, which I believe is necessary for the successful implementation of this bill. I am apprehensive to support having the standards and enforcement in the same body. Whilst I can appreciate that the functions of inspectors in checking measuring instruments require technical skills and support from specialised laboratories which are linked to NMI, I am uneasy about the actual operation of this system and the confidence the industry will have, given the perceived potential conflict of interest. There will need to be—pardon the pun—a number of checks and balances in place to ensure a smooth transition to this new scheme and due diligence applied to the transparency of the operational system. I will be taking a watching brief on this issue into the future and look forward to the implementation of a system that benefits all Australians.

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