WARNING:
This Digest was prepared for debate. It reflects the legislation as
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Bill.
CONTENTS
Productivity Commission Bill 1996
Date Introduced: 4 December 1996
House: House of Representatives
Portfolio: Treasury
Commencement: The legislation commences
immediately after the commencement of the Productivity
Commission (Repeals, Transitional and Consequential Amendments) Act
1996. The latter was introduced into the House of
Representatives on 4 December 1996 and commences on Royal
Assent.
The Productivity Commission Bill 1996 (the Bill) provides for
the establishment of the Productivity Commission (the Commission)
and enumerates its functions, powers, activities and other related
matters.
The Productivity Commission is being formed through a merger of
the Industry Commission (IC), the Bureau of Industry Economics
(BIE) and the Economic Planning Advisory Commission (EPAC). The
Commission will come within the Treasury portfolio while the home
departments of the three present organisations are, respectively,
Treasury, the Department of Industry, Science and Tourism and Prime
Minister and Cabinet. The Treasurer, Hon Peter Costello, has
announced that Mr Bill Scales, currently Chairman of the Industry
Commission, will become the Chairman of the Commission. In
addition, the Commission will be based in Melbourne, where the IC
is presently located. Staff of the BIE and EPAC will be moved to
Melbourne.
The Industry Commission has a long history, as the Industries
Assistance Commission before 1990, and before 1973 the Tariff
Board. Since the early 1960s it has had a reputation of giving
consistent anti-protection, anti-government and free market advice.
Its critics allege that the IC's work often reflect its bias rather
than being the outcome of well-reasoned analysis. Possibly in
response to those perceptions of the IC, the 1993 decision to move
the IC to Melbourne was to enable it to 'be closer and more
accessible to industry.(1)The BIE and EPAC are more recent
creations and have offered competing views. The merger of the IC,
BIE and EPAC could well be seen as limiting competition in the
market place for ideas. In the future the policy/research areas of
the Department of Industry, Science and Tourism may have to be
boosted to compensate for the vacuum caused by the abolition of the
BIE.
The Commission has been described as the Governments principal
advisory body on all aspects of microeconomic reform.(2) Among
other things, it will focus on:
- areas which impact on Australias international
competitiveness;
- labour market practices that retard productivity;
- areas of Commonwealth, Territory and State responsibility that
affect industry efficiency and competitiveness;
- the investigation of complaints about the implementation of
competitive neutrality arrangements in relation to Commonwealth
government businesses and business activities.
Another view of the establishment of the Productivity Commission
can be found in an article entitled 'Treasury and the IC take over
the world' by the Sydney Morning Herald commentator, Ross
Gittins.(3)
Part 1 - Preliminary
Clause 4(2) states that the Crown is not liable
to prosecution for an offence against the legislation. However,
this protection does not apply to a Commonwealth authority
(clause 4(3)). A Commonwealth authority is defined
in clause 3 as a body established for a public
purpose under a Commonwealth or Territory law or a company or other
body corporate in which the Commonwealth, a Territory or a body
established for a public purpose under a Commonwealth or Territory
law has a controlling interest.
Part 2 - Establishment and functions of Productivity
Commission
The functions of the Productivity Commission are set out in
clause 6 of the Bill. With respect to matters
relating to industry and productivity', the Commission can:
- hold inquiries and report to the Minister on matters referred
to it by the Minister;
- provide advice when requested to do so by the Minister;
- conduct research on its own initiative.
The Commission can also receive, investigate and report to the
Minister on 'competitive neutrality complaints' about Commonwealth
Government businesses and business activities (see below). Of
competitive neutrality, a press release from the Treasurer
said:
... the operation of competitive neutrality will assist
Government decision making when the Government has a choice between
public or private sector providers. Competitive neutrality will
also improve economic efficiency and the allocation of resources.
Mr Costello has noted that there is still a role for government
business activities. However, where Government businesses compete
with private businesses they need to compete on their own merits
and not through unfair advantages provided by government
ownership.(4)
The expression matters relating to industry and productivity is
defined in clause 6(2). It includes the
productivity performance of industry or the economy, anything
affecting productivity including labour market practices, and
action by the Commonwealth, a State, a Territory or a local
government body that might affect the productivity performance of
industry or the economy.
Clause 8 provides that in performing its
functions, the Productivity Commission must take into account
certain matters - including the improvement of economic performance
through higher productivity as a means of achieving higher living
standards, facilitating adjustment to structural economic change
and easing resulting social and economic hardship, reducing
industry regulation in certain circumstances, and recognising the
social and environmental consequences of measures proposed by
it.
Clause 10 sets out the annual reporting
requirements of the Productivity Commission and the content of
those reports. An annual report must be made to the Minister as
soon as practicable after the end of each financial year. The
annual report must be tabled in each House of Parliament by the
Minister within 15 sitting days of the Minister receiving it.
Part 3 - Inquiries
Division 1 - Reference to Commission for inquiry and
report
Clause 11 provides that when the Minister
refers a matter to the Productivity Commission for inquiry, he or
she may require the Commission to do certain things - such as hold
hearings, report within a certain time, and make its draft report
public. Clause 11(2) provides that the Commission
must make a written report to the Minister unless he or she
withdraws the reference to the Commission. Clause
11(4) provides that when the Commission receives a
reference from the Minister, the Commission may also inquire into
and make recommendations on anything it considers relevant to the
reference.
Clause 12 provides that the Commission's report
on an inquiry must be tabled in Parliament within 25 sitting days
of the Minister receiving it. However, if the Commission recommends
that the tabling of the whole or part of its report be delayed for
a specified period, the report must be tabled within 25 sitting
days from the end of that period.
Division 2 - Conduct of inquiries
Clause 13 requires the Commission to publish a
notice of inquiry when the Minister has referred a matter to it for
inquiry. Clause 14 provides that if the Minister
requires the Commission to hold inquiry hearings, the Commission
must publish notice of those hearings. In either case, the
Commission decides how notices will be published.
Clause 15 sets out how Commission inquiry
hearings are to be held. They must be in public unless the
Commission is satisfied that, for reasons of confidentiality the
hearing or part of the hearing, should be held in private. Where a
hearing is held in private the Commission can decide who can be
present at the hearing.
Clause 16 provides that where a person gives
written evidence or a document to a Commission hearing, that
material must be made public unless the person objects to its
publication and the Commission would have taken the information in
private if it had been given orally at a hearing.
Part 4 - Other functions of the Commission
Division 1 - Advice, research and secretariat
functions
Clause 17 sets out how the Commission is to
respond to a Ministerial request for advice.
Clause 18 enables the Minister to publish
advice given to him or her by the Commission. Clause
18(3) provides that if, in the public interest, the
Minister publishes advice with deletions, the Minister must also
publish the fact that the advice is so published.
Clause 20 enables the Commission to undertake
research for persons or bodies other than government bodies, if the
Minister consents in writing.
Division 2 - Competitive neutrality complaints
From 1 July 1997, complaints can be lodged with the Commission
that Government businesses or Government business activities:
- are not meeting competitive neutrality arrangements; or
- that such arrangements should be applied to them
(clause 21).
Competitive neutrality arrangements are referred to in the
Commonwealth's Competitive Neutrality Policy. The Policy
aims to ensure that '... significant public sector business
activities do not enjoy net competitive advantage over their
competitors by virtue of their public sector ownership.'(5)
A fee may be required in relation to complaints made to the
Commission (clause 22). Fees will be set by
regulation.
Where the Commission receives a competitive neutrality
complaint, it must be investigated to determine whether there is a
strong possibility that the particular government business or
business activity is not being conducted in accordance with
competitive neutrality arrangements or whether it should be
required to apply competitive neutrality arrangements to its
business (clause 23).
If the Commission determines that a strong possibility exists,
then it must make a written report to the Minister. If the
Commission determines that a strong possibility does not exist, it
must give the complainant a written report (clause
23(2)).
The Commission can also recommend that the complaint be the
subject of a section 11 inquiry or that the Minister take other
action over the complaint (clause 23(4)).
Clause 24 provides that if the Minister
receives a section 23 report, then within 90 days of receiving the
report, the report and the Minister's response to it must be
published and copies given to the complainant. The report and the
response must also be tabled in Parliament by the Minister.
The Commission may decide not to investigate a competitive
neutrality complaint - if the complaint is frivolous or vexatious,
was not made in good faith, the complainant does not have
sufficient interest in the subject matter of the complaint, or an
investigation is not warranted in all the circumstances
(clause 26).
Part 5 - Constitution and operation of the Commission
Division 1 - Structure of the Commission
The structure of the Commission is set out in Division 1 of Part
5. It will consist of a full-time Chairman and between four and 11
other Commissioners. The other Commissioners may be appointed on a
full-time or part-time basis. Commissioners are appointed by the
Governor-General. There is also provision for Associate
Commissioners who are appointed by the Minister following
consultations with the Chairman.
Clause 31(1) provides that the Chairman,
full-time Commissioners and full-time Associate Commissioners
cannot engage in outside paid employment without Ministerial
consent. Clause 31(2) provides that a part-time
Commissioner or Associate Commissioner cannot engage in outside
paid employment if, in the Ministers view, it would conflict with
the proper performance of his or her duties.
Clause 39 sets out the circumstances in which
the appointment of a Commissioner(6) or Associate Commissioner can
be terminated. The Governor-General may terminate a Commissioner's
appointment for misbehaviour or physical or mental incapacity
(clause 39(1)). The Governor-General must
terminate a Commissioner's appointment in certain circumstances.
These circumstances are set out in clause 39(2)
and include bankruptcy, absence from duty without reasonable excuse
for a certain period, engagement in paid employment while a
full-time Commissioner without the Minister's consent, and engaging
in employment while a part-time Commissioner which conflicts with
the proper performance of duties. Similar provisions relating to
Associate Commissioners are set out in clause
39(4).
Division 2 - Operation of the Commission
Clause 43(1) provides that the Chairman is to
convene meetings of the Commission when he or she thinks is
necessary. Clause 43 also sets out the powers and
responsibilities of the Chairman at Commission meetings.
Clause 44 enables the Chairman to establish a
Division of the Commission to perform a function of the Commission.
By virtue of clause 44(6), 2 members constitute a
quorum when a Division of the Commission consisting of three or
more members is meeting. However, in exceptional circumstances - if
only one member is available for a meeting and the other members
are unavailable for reasons beyond their control - a Division
meeting may be held with only one member present (clause
45(1)).
Clause 47 deals with disclosure of interests.
Clause 47(1) requires the Chairman to give the
Minister written notice of all direct and indirect pecuniary
interests he or she has in a business. Clause
47(2) provides that if the Chairman has or acquires an
interest that could conflict with a performance of his or her
functions, that interest must be disclosed in the ways specified.
This includes disclosure in a Commission report - if a report
results from the performance of the particular function.
Clause 47(3) provides that if a member of the
Commission has or acquires an interest, including a pecuniary
interest, that could conflict with the performance of his or her
functions, the interest must be disclosed to the Chairman. If the
Chairman considers that a Commission member has an interest which
could conflict with the performance of the member's function, then
the Chairman must act in accordance with clause
47(4). Such action includes giving a direction to the
member that he or she not perform that function.
Part 6 - Staff and consultants
Commission staff are employed under the Public Service Act
1922 (clause 48(1)). The Chairman may engage
consultants under contract and negotiate the terms of those
contracts (clause 49).
Part 7 - Offences
It is an offence to hinder a Commission member who is performing
his or her functions or to disrupt a Commission hearing
(clause 50). Under clause 51, a
person must not threaten, intimidate or coerce another person or
cause damage, loss or disadvantage to another person because that
person gives information, evidence or assistance to the
Commission.
If the Commission holds an inquiry hearing or an inquiry in
relation to a competitive neutrality complaint and believes that a
person can provide it with relevant information or documents, then
the Commission can require the person by written notice to provide
the information or documents within a specified period of time
(clause 52). It is an offence to intentionally
fail to comply with such a requirement.
Clause 53 enables the Commission Chairman to
summon a person to appear at a hearing and give evidence or produce
documents. It is an offence to intentionally fail to appear when
summoned.
A person appearing at a hearing must answer questions or produce
documents as required (clause 54). However,
clause 55 provides that a person who is required
to provide information or a document under clause
52 or to answer a question or produce a document under
clause 54 can rely on the privilege against
self-incrimination. However, a person can choose to waive his or
herright to the privilege.
It is an offence to give false or misleading information to a
Commission inquiry or to give evidence at a hearing which is false
or misleading or send the Commission in response to a section 52
notice information which is false or misleading (clause
56).
If a Commission hearing is partly or wholly conducted in
private, the Commission can direct that publication of evidence or
documents given to the hearing is prohibited or restricted.
Contravention of such a direction is an offence (clause
57).
The maximum penalty is six months' imprisonment for an offence
under Part 7. Under the Crimes Act 1914 (Cwlth), a court
may impose a fine instead of or in addition to imprisonment.
The Commission's powers to give notice to give evidence or
produce documents (clause 52), its powers of
summons (clause 53), its power to require a
witness to answer questions (clause 54(a)), its
directions on the publication of evidence (clause
57) and its powers to possess documents (clause
58) are limited by clause 60. Those
powers can only be exercised in relation to:
- a person holding an office or appointment under a Commonwealth
or Territory law (clause 60(2)(a));
- a Commonwealth authority (clause
60(2)(b));
- any person - where the Commission is holding an inquiry 'to the
extent that the subject matter of the inquiry relates to a subject
of Commonwealth power' (clause 60(3)).
Clause 60(4) provides that clause
60(3) does not enable a power to be exercised to the
extent that it would impair the capacity of a State to exercise its
constitutional power. Clause 60(4) appears to be
framed with the implied constitutional immunity of the States from
Commonwealth legislation in mind. There are two arms to the implied
immunity. They were described by Mason J (as he then was) in
Queensland Electricity Commission v. Commonwealth as:
(1) the prohibition against discrimination which involves the
placing on the States of special burdens or disabilities (the
limitation against discrimination) and (2) the prohibition against
laws of general application which operate to destroy or curtail the
continued existence of the States or their capacity to function as
governments.(7)
Part 8 - Miscellaneous
Clause 61 gives Commission members and others
protection from civil proceedings in certain circumstances.
Clause 63 deals with conduct by directors,
employees or agents in proceedings for offences against the
legislation. For example, clause 63(1) provides
the state of mind of a body corporate can be established by showing
that proscribed conduct was engaged in by a director, employee or
agent of the body corporate within the scope of their authority and
that the director, employee or agent had that state of mind.
Language
While the Productivity Commission Bill 1996 refers to Commission
office holders as 'his or her', the Commission's principal office
holder is called the 'Chairman' rather the gender neutral
'Chairperson.' This is a change in terminology from that found in
the Industry Commission Act 1989.It would be interesting
to know whether this change reflects the drafting instructions of
the originating Department or any new Office of Parliamentary
Counsel guidelines relating to gender specific language.
- Hon George Gear, Assistant Treasurer, 'Minister Opens New IC
Headquarters,' Press Release, 14 December 1993.
- Second Reading Speech, Productivity Commission Bill 1996,
p.1.
- Sydney Morning Herald, 29 July 1996.
- 'Policy statement on competitive neutrality', Press Release
(Treasurer), 39, 27 June 1996, p.1.
- Second Reading Speech, Productivity Commission Bill 1996,
p.4.
- The expression 'Commissioner' includes the Chairman of the
Commission - see clause 3.
- (1985) 159 CLR 192 at 217.
Jennifer Norberry & David Richardson
5 February 1997
Bills Digest Service
Information and Research Services
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.
IRS staff are available to discuss the paper's contents
with Senators and Members and their staff but not with members of
the public.
ISSN 1323-9031
Commonwealth of Australia 1996
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Published by the Department of the Parliamentary Library,
1997.
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Last updated: 24 March 1997
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