Standing Committee on Economics, Finance and Public
Press release, 6 March 1998
NCC CLAIMS IT MEANS BUSINESS ON COMPETITION PAYMENTS
Responding to questions in a public hearing the National Competition
Council (NCC) again stated that it would recommend Competition payments
to the States and Territories be reduced where performance is not up to
the mark. In other words, States could lose millions if they don't meet
their competition timetable.
This message came through loud and clear when the activities of the
NCC were examined recently by the Financial Institutions Committee at
a public hearing in Melbourne. Appearing before the Committee were Mr
Graeme Samuel, NCC President, and Mr Ed Willett, its Executive Director.
'The NCC is one of the key new competition agencies - it advises the
Commonwealth, State and Territory Governments on implementing the competition
reforms, as well as assessing their progress. The council is in the unique
position of reporting to all those governments as a group, and as such
its appearance before this Parliamentary Committee provides a rare opportunity
for detailed public scrutiny' said Committee Chairman David Hawker MP.
'Several major issues emerged as significant from the Committee's hearing'
Mr Hawker said.
'First, in its assessment role the NCC is putting out a clear message
that the council does mean business. It said it will recommend reductions
in Competition Payments to States/Territories when non-compliance has
occurred. The council said the circumstances in which such reductions
would occur would be non-compliance in non-trivial areas such as energy
and major legislation areas.' Mr Hawker said 'Some $406 million in 1997-98
are involved. Council is clearly seeking a performance based assessment
system, one of the Committee's recommendation from its previous report
on competition policy, and it can no longer be taken for granted that
the States will receive their full Competition Payments.'
'Second, the NCC has taken on board the other recommendations from the
Committee's previous report, and is taking the public education process
about competition reform and the benefits very seriously and collaborating
with the states in addressing these matters.'
'Third, the council said over the next 12 months or so governments will
start getting into the meat of competition policy reform as the big infrastructure
reforms, such as electricity and gas, phase in, and major legislation
reviews get underway. While the benefits from competition reform are coming
through now, they will be more significant next year.'
'Fourth, the NCC said it is inevitable that in an uncontrolled fully
competitive environment certain sectors will receive those benefits of
competition reform to a greater or lesser degree than other sectors. The
council stressed that the question of whether the benefits of deregulation
should be more evenly distributed then becomes a matter of government
policy and it then becomes an extension of issues of community service
obligations and universal service obligations. The detail of the council's
views on this issue should become more evident when its report on its
Australia Post review (which is expected to go to the Treasurer this week),
becomes public' Mr Hawker said.
Other matters addressed by the Committee at the hearing were: net community
benefit; ongoing tensions in the dual role of the NCC; slow pace of reform
by local government; delays in the Commonwealth reporting on its performance;
adequacy of resources of the NCC; legislation reform of the professions
and the statutory marketing authorities; and reforms in particular sectors
such as casinos, airlines, electricity and telecommunications.
'The Committee was impressed by the more proactive and progressive approach
of the NCC' concluded Mr Hawker. He said 'The Committee expects to table
its report on the NCC this Parliamentary session. The transcript from
the hearing is available on the Committee's internet site and from the
6 March 1998
David Hawker MP (Chairman) (03) 5572 1100 (Electorate)
Bev Forbes (Inquiry Secretary) (02) 6277 4587
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