The Treasurer today released the Productivity Commission's inquiry report "Review of the Prices Surveillance Act 1983" and also announced the Government's response to the report.
The Government has accepted the Commission's recommendation that the Prices Surveillance Act 1983 (PSA) be repealed and a new part inserted into the Trade Practices Act 1974 (TPA). The new part will preserve the existing powers of price surveillance.
The PSA was legislated in 1983 as part of the then Government's prices and incomes policy. The economic environment has, however, changed considerably and transferring these powers to the TPA is consistent with establishing a uniform competition policy administered by the Australian Competition and Consumer Commission.
The Government agrees that the proposed new part of the TPA should include an objects clause specifying the objectives of the new part. The objects clause will be drafted to be consistent with the Treasurer's statement in September 1996 that prices surveillance will only be applied in those markets where competitive pressures are not sufficient to achieve efficient prices and protect consumers.
The Government believes that its prices surveillance powers should be available in circumstances that the Minister considers important and where the public interest is involved. Most significantly, the Government wishes to retain its ability to respond promptly, if needed, to public concerns about price rises.
The Government is also aware that price controls can worsen existing inefficiencies and deter investment. Competition, rather than regulation, remains the best means of lowering prices and improving choices for consumers.
The Government's response to the report is available at http://www.treasurer.gov.au. Copies of the report are available from Government Info Shops, or may be downloaded from the Productivity Commission website at www.pc.gov.au.