Review of the National Competition Council annual report 1996-97

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 Committee secretariat.'

Ends
6 March 1998

Further information:
David Hawker MP (Chairman) (03) 5572 1100 (Electorate)
Bev Forbes (Inquiry Secretary) (02) 6277 4587
Email: EFPA.Reps@aph.gov.au

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