Review of Part IIIA (Access Regime) of the Trade Practices ACT

The Assistant Treasurer, Senator Rod Kemp today announced that the Productivity Commission has been asked to undertake a review of Part IIIA of the Trade Practices Act 1974 (TPA) and Clause 6 of the Competition Principles Agreement 1995 (CPA) and report within twelve months.

Part IIIA of the TPA establishes a regime for third party access to essential infrastructure facilities. Clause 6 of the CPA requires the Commonwealth Government to establish legislation granting third party access to essential infrastructure facilities and sets out principles for State and Territory access regimes.

Part IIIA of the TPA and Clause 6 of the CPA give effect to an important strand of the Hilmer competition reforms introduced in the mid-1990s; that is to create an effective regime to provide third party access to infrastructure facilities of national significance.

The review is intended to examine how well current access arrangements meet this objective and ways of improving those arrangements.

The Commission will shortly release an issues paper and invite expressions of interest from anyone wanting to participate in the review.

Senator Kemp encouraged all interested parties to make submissions to the Commission and attend its public hearings.

In anticipation of this inquiry, the Commission has sought, and Senator Kemp has agreed, an amendment to the reporting date for its current inquiry into the Prices Surveillance Act 1983 (PSA). This will allow the parties involved in these inquiries to coordinate the presentation of their views better, and the Government will be able to consider the outcomes of the two inquiries together.

The revised reporting date for the PSA review is 14 August 2001 (originally 14 November 2000).

The Commission has underway an inquiry into Telecommunications-Specific Competition Regulation, which also deals with access issues. The Commission will seek to coordinate release of its draft report on telecommunications with those for the other two related inquiries.

CANBERRA
10 October, 2000

Media inquiries: Richard Allsop Assistant Treasurer’s Office (02) 6277 7360 Robert Kerr Productivity Commission (03) 9653 2293

Legislation Review of Clause 6 of the Competition Principles Agreement and Part IIIA of the Trade Practices Act 1974

PRODUCTIVITY COMMISSION ACT 1998

I, ROD KEMP, Assistant Treasurer, pursuant to Parts 2 & 3 of the Productivity Commission Act 1998, hereby refer Clause 6 of the Competition Principles Agreement (CPA) and Part IIIA of the Trade Practices Act 1974 (TPA) to the Commission for inquiry and report within twelve months of receipt of this reference. The Commission is to focus on those parts of the legislation that restrict competition, or that impose costs or confer benefits on business. The Commission is to hold hearings for the purpose of the inquiry.

Background

2. In April 1995 the Commonwealth, States and Territories signed three Inter-governmental Agreements, including the CPA, which established the framework for competition policy reforms. The CPA requires that its own terms and operation be reviewed after five years of operation. Terms of Reference for that review specify that the review of Clause 6 of the CPA be incorporated into the competition policy review of Part IIIA of the TPA.
3. Clause 6 requires the Commonwealth to establish an access regime with certain characteristics, explains the circumstances in which this regime will be utilised, and details the principles to which an effective State/Territory access regime must conform. Part IIIA of the TPA discharges the Commonwealth’s obligation under Clause 6. There is no intention that the review lead to reconsideration of existing or pending certifications, declarations or undertakings agreed or accepted under Part IIIA.

Scope of Inquiry

4. The Commission is to report on current arrangements established by Clause 6 and Part IIIA for regulation of access to significant infrastructure facilities, and ways of improving them, taking into account the following:

1. legislation or regulation that restricts competition or that may be costly to business should be retained only if the benefits to the community as a whole outweigh the costs; and if the objectives of the legislation or regulation can be achieved only by restricting competition or by imposing costs on business;
2. where relevant, the effects of Clause 6 and Part IIIA on the environment, welfare and equity, occupational health and safety, economic and regional development, consumer interests, the competitiveness of business (including small business), investment and efficient resource allocation;
3. the need to promote consistency between regulatory regimes and efficient regulatory administration through improved coordination to eliminate unnecessary duplication; and
4. mechanisms that may improve Clause 6 and/or Part IIIA processes for achieving third party access to essential infrastructure, or that may engender greater certainty, transparency and accountability in the decision making process in Clause 6 and Part IIIA.

5. In making assessments in relation to the matters in 4, the Commission is to have regard to the analytical requirements for regulation assessment by the Commonwealth, including those set out in the CPA. The report of the Commission should:

1. identify the nature and magnitude of the problem(s) that Clause 6 and Part IIIA seek to address;
2. clarify the objectives of Clause 6 and Part IIIA;
3. identify whether, and to what extent, Clause 6 and Part IIIA restrict competition or impose costs on businesses;
4. consider any alternative means of achieving the objectives of Clause 6 and Part IIIA, including non-legislative approaches;
5. analyse and, as far as reasonably practical, quantify the benefits, costs and overall effects of Clause 6 and Part IIIA and alternatives identified in 0, including the impact of Clause 6 and Part IIIA on investment in infrastructure;
6. identify the different groups likely to be affected by Clause 6 and Part IIIA and each of the alternatives in 0 above;
7. list the individuals and groups consulted during the review and outline their views;
8. determine a preferred option for regulation, if any, in light of the objectives set out in (d)(b);
9. examine measures to engender greater certainty, transparency and accountability in the decision making processes in Clause 6 and Part IIIA;
10. examine mechanisms for improving Clause 6 and Part IIIA processes for achieving third party access to significant infrastructure facilities, including measures to improve flexibility, reduce complexity, costs and time for all participants and, where the mechanisms differ, determine a preferred mechanism; and
11. examine the roles of the National Competition Council, the Australian Competition and Consumer Commission and the Australian Competition Tribunal in the administration of the access provisions in Clause 6 and Part IIIA, and the relationship between the institutions.

6. The Commission is to take into account any recent relevant studies undertaken.
7. In undertaking the review, the Commission is to advertise nationally, consult with key interest groups and affected parties, and produce a report.
8. The Government will consider the Commission’s recommendations and consult as appropriate, and the Government’s response to matters affecting Part IIIA, and the response of parties to the CPA to matters affecting Clause 6 of the CPA, will be announced as soon as possible after the receipt of the Commission’s report.

ROD KEMP