Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

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 per annum—75 per cent of these transactions are business to business and 25 per cent are retail. While the Commonwealth has constitutional responsibility for weights and measures under section 51 of the Constitution, under the National Measurement Act 1960 the Australian government has responsibility only for defining measurement units and standards, traceability of measurement and patent approval of instruments used for trade or legal purposes. Inspection and enforcement powers, except for utility meters, and the setting of the various regulations surrounding trade measurement reside with the various state and territory governments, meaning that Australia has eight different sets of trade measurement regimes.

This bill will establish a national system of trade measurement which will formally commence on 1 July 2010 but which will commence on 1 July 2009 for transitional purposes. It will override state based legislation, which will eventually be repealed by the various states.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 in the Department of Innovation, Industry, Science and Research. All current regulation, licensing and enforcement measures surrounding trade measurement 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, as well as the transfer of existing trade measurement and associated enforcement equipment. This is a direct cost-shift from the states, which will no longer have any trade measurement costs. Funding of $31.65 billion was provided to the department of innovation for the transition to a national trade measurement system and for its first years of operation from 2007-08 to 2010-11. Ongoing funding of $23.653 million will be provided from 2011-12.

The majority of the bill is given over to setting out appropriate offences and penalties, and enforcement powers for Commonwealth trade measurement officers. According to the explanatory memorandum and the government, these various clauses reflect those found in the states’ and territories’ legislation. There are only two differences of significance: (1) inspectors will now be able to seize materials other than measurement equipment; and (2) the bill explicitly creates a ‘right to silence’ defence based on the grounds of self-incrimination. This is not present in some state based laws. The bill establishes three levels of offences: ‘fault’, ‘strict liability’ and ‘infringement notice’. The most common penalty amounts under this bill are 200 penalty units, or $22,000, for fault offences; 40 penalty units, or $4,400 for strict liability offences; and five penalty units, or $550, for infringement notice offences. This largely reflect the penalties in the state legislation.

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, or AQS, rather than the minimum quantity system currently used. The AQS is the international standard for international trade in prepacked goods and is used in nations including Canada, China, the EU, Japan, the Republic of 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, while the current NQS, and its associated testing regimes, requires many producers to overfill their products—albeit marginally—in order to meet minimum quantity requirements. Adopting AQS would increase efficiencies in production and measurement while ensuring consumers remain protected. It will also make Australian prepacked items more accessible to international trade. Making it voluntary enables those producers who wish to remain with the current system, for cost or other reasons, to do so.

It has been a long and winding road to get to the position of being on the cusp of establishing a national trade measurement system. On 13 April last year, the Council of Australian Governments, under the stewardship of former Prime Minister Howard, agreed to establish a national system of trade measurement, to be administered by the Commonwealth from 1 July 2010. This bill implements that agreement.

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 review. This review recommended that federal weights and measures legislation be amended. However, the Commonwealth, state and territory ministers, with the exception of Western Australia, instead decided that each jurisdiction should implement uniform trade measurement legislation.

In 1995, the Department of Industry, Science and Technology commissioned a review known as the Kean inquiry. Kean noted that the objectives of the uniform legislation had not been achieved. For example, fee structures differed between jurisdictions, industry was expected to meet varying requirements and the legislation had been implemented and applied inconsistently. As a result, Kean also recommended that the Commonwealth assume full responsibility for trade measurement.

In February 2006, COAG identified six priority regulatory hot spots where overlapping and inconsistent regulatory regimes were impeding economic activity. Trade measurement was one of these six hot spots. COAG requested the Ministerial Council on Consumer Affairs to develop a recommendation for a national system of trade measurement, which was subsequently agreed to by COAG on 13 April last year.

There is no doubt 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. However, in its 2006 report, relied upon by COAG, the MCCA undertook a series of cost-benefit analyses of implementing a national trade measurement system. Perhaps surprisingly, this analysis was unable to quantify significant benefits for the economy, with an overall net positive value to the economy of only $5.7 million: $16.2 million cost to government; $22 million benefit to business. It is in this context that it is disappointing that the government has failed to produce a regulatory impact statement for this bill. COAG principles for national standards setting and regulatory action hold that:

Proposals for new regulation that have the potential to restrict competition should include evidence that the competitive effects of the regulation have been considered, that the benefits outweigh the likely costs and that the restriction is no more restrictive than necessary in the public interest.

According to advice from the office of the Minister for Small Business, Independent Contractors and the Service Economy, Dr Emerson, 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 done by the MCCA in 2006, it is not clear that the national trade measurement system will have a significant net positive value. In this context it is surprising that further analysis was not done in the form of an RIS.

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, in 2007, to deliver this historic agreement. Labor is now merely implementing the coalition’s hard work. Labor has failed to provide a regulatory impact statement on the basis that this bill is merely a transfer of powers, not an extension. It is disappointing that, with such a major regulatory change, it has failed to provide such a statement. Nonetheless, the coalition is of the view that a national trade measurement system will be of benefit to all Australians and, 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 the weights and measures sector, we support the bill.

Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary Assisting the Prime Minister for Social Inclusion) Share this | Link to this | Hansard source

in reply—In summing up debate on the National Measurement Amendment Bill 2008, I would like to thank Senator Abetz for his comments. Of course, we all recognise that there are many things that we undertake in the parliament that are way beyond politics, and this is one of those. This is about setting a framework for a national system of trade measurement, and its intent is to replace each of the current state and territory based systems.

In a seamless national economy it makes no sense for our trade measurement system, a system which underpins commercial transactions across Australia and into our export markets, to be regulated by nine different jurisdictions. That is rail gauge economics and it belongs in the last century, or even the century before. It is what the government has been working so hard to change through the Council of Australian Governments’ Business Regulation and Competition Working Group, which is co-chaired by the Minister for Finance and Deregulation and the Minister Assisting the Minister for Finance and Deregulation. This national system that we have debated today builds on the experience of state and territory administrations, and it will remove current inconsistencies and definitely will help to reduce business costs. It will allow Australia to adopt the new technologies and processes that will help our industries to actually compete better internationally. The National Measurement Institute will be responsible for administering the new national trade measurement system and will offer employment to inspectors and others who are currently working in trade measurement in the states and territories.

The bill is the product of a COAG decision in February 2006. As I said, some things are beyond party politics. COAG identified trade measurement as a priority hot spot reform area where overlapping and inconsistent regulatory regimes were impeding economic activity. The bill has been developed through industry consultation and supported by a legislative working group of state and territory officials convened by the National Measurement Institute. It lays the basis for a new national system of trade measurement, which will provide a level playing field across Australia for all transactions that are based on measurement. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.