08-December-2005
Speeches, Workplace Relations
Mr ROBB (Goldstein) (1.40 p.m.)—The previous speaker, the member for Hunter, indicated quite correctly the importance of infrastructure spending and the need for any government to focus on an adequate strategy to maximise infrastructure spending which will promote growth and maintain the quality of life that we enjoy in our community. Of course, the best way to encourage infrastructure spending is to run a strong, stable, effective economy. It involves not only micro-economic settings but macro-economic settings.
The Howard government has a very proud record of running stable macro-economic settings. The budgetary approach of this government, as distinct from its predecessors, has been one of running a very responsible, sensible, balanced program of macro-economic settings in this country combined with a very high level of activity on micro-economic settings. The Howard government has pursued major micro-economic reform over the last 10 years, which has been an enormous encouragement to infrastructure spending and is a big driver of what we are seeing emerge in the economy at the moment—this movement from consumer led activity to one based on investment. A lot of that has been driven by the determination of the Howard government over the last 10 years to put in place very significant micro-economic reform.
Waterfront reform is a reform you never hear about from the other side of the House, but it has played an enormous part in increasing the efficiency of a lot of our export and import performance and has created an opportunity for us as a country to weather many international economic storms over the last few years far better than all of our peers in other countries. Two rounds of workplace relations reform have been a most significant factor in the robustness of our economy over the last few years.
I acknowledge that significant micro-economic reform has been put in place by successive governments over the last 20 years, but, as the member for Hunter indicated, the difference in the last 10 years is that we as a government have introduced major reforms in the face of trenchant opposition to all those reforms from the other side of the House. They sought to die in a ditch over waterfront reform. Furthermore, a lot of hysteria has gone on, in 1996 and again this year, about our proposed workplace relations reform. But these are essential reforms if we are to encourage infrastructure. There have also been major tax initiatives and privatisation—all of these things have been stringently opposed by our opponents on the other side of the House. The big difference is that in earlier years, when they had the privilege of being in government and sought to introduce micro-economic reforms, in every instance they got the support of the opposition. So an important factor to be acknowledged and recognised is the raft of important micro-economic reforms put in place by this government.
To make those reforms work well, the effectiveness of regulation is important. Regulation can hinder or maximise the opportunities presented by the raft of micro-economic reforms that has been carried out over the last 10 or 20 years. The Trade Practices Amendment (National Access Regime) Bill 2005 addresses some of the regulation that is important to infrastructure. The bill amends part IIIA of the Trade Practices Act 1974. In particular, it looks at the national access regime which was initially established in 1995 by the former Labor government when the Commonwealth and the states signed intergovernmental agreements for competition policy reforms—important reforms supported by the opposition of the day. The national access regime is essentially responsible for ensuring that essential services such as gas pipelines, rail lines and other pieces of infrastructure, which by their nature are difficult and expensive to establish, are open to be accessed by other parties for reasonable prices.
The national access regime allows infrastructure such as rail networks, pipelines, water distribution networks and airport services to be declared as essential infrastructure facilities. Once declared, regulators can then make rulings about the prices that infrastructure owners can charge, about other businesses that use these facilities and about certain access conditions. Disputes over access pricing or access conditions can lead to underinvestment and damaging bottlenecks, as we have seen with the queues of ships at the Queensland port of Dalrymple Bay. In other words, regulation not properly effective in terms of pricing decisions and other access conditions can in fact be counterproductive.
This bill seeks to make amendments to the Trade Practices Act which will facilitate better pricing decisions and access conditions which do not discourage investment. Under the original agreement, back in 1995, the Productivity Commission was to conduct a follow-up inquiry into the regime to assess whether the regime had been successful in achieving its original goals. In 2001, the commission handed down its report of this follow-up inquiry into the regime. It made 33 recommendations. The key theme of that report was to provide a better balance between business access to significant infrastructure while encouraging new investment by owners of that infrastructure. In other words, there was a concern, a conclusion, which came through in the report that in seeking to encourage competition, which is a very important objective of these regulations, it must not at the same time discourage significant investment by the owners of the current infrastructure. It is very important that we do not get things out of balance. The amendments in this bill seek to address that issue.
The bill implements the recommendations made by the Productivity Commission. The bill went through a Senate inquiry, which resulted in some amendments. In particular, there were two recommendations by the Senate: (1) that this bill be passed quickly, which the government accepted, and (2) that the bill be amended so that the pricing principles are lifted out of the regulations and inserted into the bill. This was an initial recommendation by the Productivity Commission and the government has accepted that Senate recommendation. As distinct from what we heard from the member for Hunter, we on this side of the House are prepared to consider and accept sensible decisions and recommendations by Senate committees. The bill went to the Senate Economics Legislation Committee, they made a recommendation and that has been accepted. Again, contrary to the impression left by the member for Hunter, this decision was not recently made under duress. The decision to accept the amendment was in fact announced nearly three months ago, and it was seen as a sensible recommendation by the Senate.
The focus of this bill goes to three areas. The first is to improve the timeliness of decision making. In many instances, the time that has been taken to reach decisions, such as in Dalrymple Bay, has materially influenced in a detrimental way investment decisions. So anything that can be done to improve the timeliness of pricing decisions is important to the investment decisions to be made in infrastructure. Second, the bill seeks to enhance transparency and accountability. When potential investors in infrastructure understand the matters that guided the previous judgments of the commission and the ACCC, when they understand what is sitting behind the application of pricing principles—when you have that transparency—it aids decision making in a very significant way. Third, and finally, the focus of the bill is to encourage investment in infrastructure by a series of initiatives.
On the question of timeliness, the first focus of the bill, there are three or four significant amendments. Firstly, new target time limits are set. Non-binding timeliness will be applied to various decision makers such as the National Competition Council and the ACCC. While they are not binding, they will oblige the decision maker to publish notice of an extension of time. In the annual reports, where they have slipped on the timing of these decisions, it will put considerable onus and pressure on these bodies to stick to particular time limits and in due course that will also influence the certainty and confidence by which potential investors can make decisions on infrastructure—a very important part of the decision-making process.
Secondly, the bill will explicitly prevent the commission from accepting an access undertaking where a decision is already in force in relation to the access seeker, so that a possible decision or a condition, such as frequency of access, made by a state determination cannot be changed. If there is currently a condition applied by a state authority, then this amendment will avoid forum shopping where potential investors and those seeking access go to different levels of authority to find the most acceptable decision for their particular application. That has caused a lot of unnecessary workload, applications and frustration for the owners. These amendments will specifically preclude that occurring in the future, so that if there is already a decision in force they will not be able to go forum shopping looking for better decisions.
The third matter to do with timeliness is the new arbitration requirement. The commission will now be able to conduct multilateral arbitration hearings and grant arbitration orders. This ability to be able to get all parties into the one room and seek an appropriate solution to an application for access will greatly improve efficiency, and it will be an important part of improving the certainty and timeliness of this whole regulatory process.
The second focus of the bill is transparency and accountability. There are three or four significant components and amendments to improve transparency and accountability. Firstly, there will be an opportunity for a review by the Australian Competition Tribunal of the merits of decisions made by the ACCC on any proposed undertaking. Any persons whose interests are affected by an access undertaking will be able to apply for a review of the decisions. This is a really important opportunity to understand the thinking of the ACCC and the authorities in making particular determinations, and it will not only improve the fairness and the appropriateness of individual decisions but help guide the future decisions of companies and organisations.
Secondly, the bill will also enhance and formalise procedures for the contribution of public input to the decision-making processes under the regime. Where the public wishes to voice an opinion about potential impacts of access, new access or denied access, those opportunities will now be enhanced and formalised under the amendments that are before the House. The key, though, in this transparency and accountability is the publication of reasons. The ministers, the council and the commission will have to publish reasons for decisions or recommendations, and this will greatly enhance the understanding by potential investors, by those that own the infrastructure and by those that are seeking access and will help them make judgments now and in the future about their likelihood of succeeding in applications, the merit of making major investment decisions and the certainty surrounding that. It is a very important amendment that sits within this body of amendments in front of the House.
Finally, the third focus of this bill is to encourage infrastructure spending. As I said at the outset, the major factors influencing infrastructure spending are a sensible, balanced, stable approach to macro-economic settings and aggressively introducing further and further micro-economic improvements in the economy. We in this government have a proud history of doing that, but matters of regulations can discourage infrastructure spending. Under this series of amendments the legislation will include a new objects clause. There was no objects clause in part IIIA of the Trade Practices Act in relation to these matters. This objects clause will restore a balance. It will increase the emphasis on competition which has created serious doubt in the minds of owners of essential services infrastructure about future returns when they seek to expand existing infrastructure. These objectives will make it clear that, in making determinations about access, the potential impact on future investment by access owners must be a very serious consideration by those making these decisions.
Secondly, to encourage infrastructure spending pricing principles will be introduced. As I mentioned, there is an amendment before the House to include those pricing principles within the legislation—an amendment we accepted from the Senate and that will be voted on at the conclusion of this debate. Finally, this bill will change the declaration threshold and make it tougher. Access declarations now will only be granted where the increase to competition upstream or downstream is not trivial.
In trying to improve the regulation, we have had the support of the opposition for these amendments, but the factors that drive infrastructure expenditure and decisions in this country are major micro-economic decisions—things that we have done over the last 10 years: major reforms such as the waterfront reform, privatisations, two rounds of major workplace relations reform, major water initiatives with the states and major tax initiatives. We as a government have acted on so many fronts. All of these fronts are so important to encouraging infrastructure expenditure, but in every case we have sought to improve investment decision making in infrastructure in this country in the last 10 years we have faced blanket opposition from those on the other side of the House. This stands in stark contrast to the approach taken by the coalition when we were in opposition. When they introduced micro-economic reforms, when they sought to improve competition policy, they got the full support of the coalition parties. And now the country is benefiting from that commonsense approach to decision making. Yet, over the last 10 years, every time this government has sought to introduce something constructive, such as essential reform on the waterfront and workplace relations reform—the package of reforms that is so important to the future of this country—we have faced hysteria, opposition and scaremongering in this House.
Interjection
The ACTING SPEAKER—Order! It being 2 pm, it is normal that we proceed to question time, but as the Prime Minister is delayed with the Prime Minister of Turkey, is it the wish of the House that we continue with the debate until he returns? That being so, the debate may continue.
Continue
Mr ROBB—As I was saying, in conclusion— (Time expired)