Bills Digest 13 1996-97 Trade Practices Amendment (Industry Access Codes) Bill 1996


Numerical Index | Alphabetical Index

WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments.

This Digest was available from 2 August 1996.

CONTENTS

Passage History

Trade Practices Amendment (Industry Access Codes) Bill 1996

Date Introduced: 27 June 1996
House: Senate
Portfolio: Treasurer
Commencement: Royal Assent

Purpose

To streamline the formal procedures for granting access to third parties (under the national competition policy reforms) to infrastructure facilities and networks of national significance. The Bill amends the Trade Practices Act 1974.

Background

On 29 March 1995, the Competition Policy Reform Bill 1995 was introduced into Parliament for debate. The Bill implemented the then Government's response to the Hilmer proposals for national competition reform. That Bill was passed and received the Royal Assent on 20 July 1995. Essentially, the Competition Policy Reform Act 1995 brings all business activity in Australia under the same rules of competition that apply to restrictive trade practices (Part IV of the Trade Practices Act 1974).

Another aspect of the Competition Policy Reform Act 1995 was to open-up, by way of third party access, competition with major business enterprises of national significance, such as electricity suppliers and gas pipeline operators. These large-scale enterprises have natural monopoly characteristics which involve both positive or negative aspects for consumers. Positive in the sense that they can deliver services more efficiently but negative in that consumers can become captive to one single supplier. These aspects apply whether the monopoly is private or public. National competition policy promotes competition in a free market to the benefit of consumers and business users. When competition requires access to networks, it is necessary to allow third parties access to existing large scale infrastructure, such as electricity grids, pipelines and rail lines on fair terms and conditions. As an example, electricity users are able to benefit if they can purchase electricity, via the existing grid, from innovative low cost generators. This process is referred to in the Trade Practices Act 1974 as Access to Services (new Part 111A of the Trade Practices Act 1974).

This new access regime operates in a way that will allow significant services to be 'declared' by the relevant Minister (see further comment, below) after recommendations from the National Competition Council. The declaration of a service means that it is considered that it will promote competition if third parties have access. Additional factors which must be considered in relation to a declaration include that a parallel infrastructure would be uneconomical to establish, that third party access will not cause undue risk to health or safety and that access is not against the public interest. If the significant service is a State or Territory owned enterprise, the relevant Minister is the State or Territory Minister.

Once a service is declared, parties are free to negotiate their own terms and conditions of access. If there is a dispute, the matter can be referred to the Australian Competition and Consumer Commission (ACCC) for determination. An alternative is for the service operator to first approach the ACCC and establish, by way of an access undertaking, the terms and conditions it would require of a third party applicant. If the ACCC accepts the undertaking then Ministerial declaration is avoided.

Under the present legislation, the ACCC is required to consult publicly on each of the voluntary access undertakings lodged by an operator of a significant service. In some cases, the access undertaking may be similar to other major players in the industry e.g. the various State electricity grids. The Bill proposes that the procedure for access undertakings be streamlined so that there is one round of public consultation to establish a single industry-wide access code. Any subsequent access undertakings are then measured against the single industry-wide access code without the need for another round of public consultations and submissions to the ACCC.

Apart from avoiding duplication this proposal provides a more coherent approach in assessing the key terms and conditions in any access undertaking, thus enhancing the access regime as a whole.

Main Provisions

The Bill implements the proposed amendments by way of a Schedule to the Bill. This means that the Main Provisions will be referred to as items in the Schedule rather than clauses in the Bill.

Item 3 provides an exemption for the ACCC from the existing obligation under section 44ZZA(4) of the Trade Practices Act 1974 to engage in a round of public consultation. This exemption is only available when an access undertaking complies with the accepted industry-wide access code. This exemption is expressed as a proposed new subsection 44ZZA(4A).

Item 4 inserts a proposed new section 44ZZAA into the Trade Practices Act 1974. This section provides the procedures for the acceptance of an industry-wide access code by the ACCC. The ACCC is obliged to engage in public consultation before it accepts a particular industry-wide access code.

Item 5 establishes a public register of access undertakings and access codes. The public register is maintained by the ACCC.

Contact Officer and Copyright Details

Brendan Bailey Ph. 06 277 2434
1 August 1996
Bills Digest Service
Parliamentary Research Service

This Digest does not have any official legal status. Other sources should be consulted to determine whether the Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.

PRS staff are available to discuss the paper's contents with Senators and Members and their staff but not with members of the public.

ISSN 1323-9032
Commonwealth of Australia 1996

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1996.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 5 August 1996



Back to top


Facebook LinkedIn Twitter Add | Email Print
Back to top