Recommendations 1 - 21

Competition Principles

Recommendation 1

The Australian Government, state and territory and local governments should commit to the following principles:

• Competition policies, laws and institutions should promote the long term interests of consumers.

• Legislative frameworks and government policies and regulations binding the public or private sectors should not restrict competition.

• Governments should promote consumer choice when funding, procuring or providing goods and services and enable informed choices by consumers.

• The model for government provision or procurement of goods and services should separate the interests of policy (including funding), regulation and service provision, and should encourage a diversity of providers.

• Governments should separate remaining public monopolies from competitive service elements, and also separate contestable elements into smaller independent business activities.

• Government business activities that compete with private provision, whether for profit or not for profit, should comply with competitive neutrality principles to ensure they do not enjoy a net competitive advantage simply as a result of government ownership.

• A right to third party access to significant bottleneck infrastructure should be granted where it would promote a material increase in competition in dependent markets and would promote the public interest.

• Independent authorities should set, administer or oversee prices for natural monopoly infrastructure providers.

Applying these principles should be subject to a public interest test, such that legislation or government policy should not restrict competition unless:

• the benefits of the restriction to the community as a whole outweigh the costs; and

• the objectives of the legislation or government policy can only be achieved by restricting competition.

Draft Recommendation 1 - Competition principles

The Panel endorses competition policy that focuses on making markets work in the long term interests of consumers. The following principles should guide Commonwealth, state and territory and local governments in implementing competition policy:

• legislative frameworks and government policies binding the public or private sectors should not restrict competition;

• governments should promote consumer choice when funding or providing goods and services and enable informed choices by consumers;

• the model for government provision of goods and services should separate funding, regulation and service provision, and should encourage a diversity of providers;

• governments should separate remaining public monopolies from competitive service elements, and also separate contestable elements into smaller independent business activities;

• government business activities that compete with private provision, whether for profit or not for profit, should comply with competitive neutrality principles to ensure they do not enjoy a net competitive advantage simply as a result of government ownership;

• a right to third party access to significant bottleneck infrastructure should be granted where it would promote a material increase in competition in dependent markets and would promote the public interest; and

• independent authorities should set, administer or oversee prices for natural monopoly infrastructure providers.

Applying these principles should be subject to a ‘public interest’ test, so that:

• the principle should apply unless the costs outweigh the benefits; and

• any legislation or government policy restricting competition must demonstrate that:

  • it is in the public interest; and

  • the objectives of the legislation or government policy can only be achieved by restricting competition.

Analysis

Substantially the same - some change

Addition of first principle:

Competition policies, laws and institutions should promote the long term interests of consumers.(previously endorsed policy that focussed on making markets work in the long term interests of consumers)

Remaining principles substantially the same.

Clearer direction on public interest test (reference to benefits being 'to the community as a whole' when applying balancing exercise)

Human services

Recommendation 2

Each Australian government should adopt choice and competition principles in the domain of human services.

Guiding principles should include:

• User choice should be placed at the heart of service delivery.

• Governments should retain a stewardship function, separating the interests of policy (including funding), regulation and service delivery.

• Governments commissioning human services should do so carefully, with a clear focus on outcomes.

• A diversity of providers should be encouraged, while taking care not to crowd out community and volunteer services.

• Innovation in service provision should be stimulated, while ensuring minimum standards of quality and access in human services.

Draft Recommendation 2 - Human Services

Australian governments should craft an intergovernmental agreement establishing choice and competition principles in the field of human services. The guiding principles should include:

• user choice should be placed at the heart of service delivery;

• funding, regulation and service delivery should be separate;

• a diversity of providers should be encouraged, while not crowding out community and voluntary services; and

• innovation in service provision should be stimulated, while ensuring access to high quality human services.

Each jurisdiction should develop an implementation plan founded on these principles that reflects the unique characteristics of providing human services in its jurisdiction.

Analysis

Identical

Road transport

Recommendation 3

Governments should introduce cost reflective road pricing with the aid of new technologies, with pricing subject to independent oversight and revenues used for road construction, maintenance and safety.

To avoid imposing higher overall charges on road users, governments should take a cross jurisdictional approach to road pricing. Indirect charges and taxes on road users should be reduced as direct pricing is introduced. Revenue implications for different levels of government should be managed by adjusting Australian Government grants to the States and Territories.

Draft Recommendation 3 - Road transport

Governments should introduce cost reflective road pricing with the aid of new technologies, with pricing subject to independent oversight and linked to road construction, maintenance and safety.

To avoid imposing higher overall charges on road users, there should be a cross jurisdictional approach to road pricing. Indirect charges and taxes on road users should be reduced as direct pricing is introduced. Revenue implications for different levels of government should be managed by adjusting Commonwealth grants to the States and Territories.

Analysis

Identical

Liner shipping

Recommendation 4

Part X of the CCA should be repealed. A block exemption granted by the ACCC should be available for liner shipping agreements that meet a minimum standard of pro competitive features (see Recommendation 39). The minimum standard of pro competitive features to qualify for the block exemption should be determined by the ACCC in consultation with shippers, their representative bodies and the liner shipping industry.

Other agreements that risk contravening the competition provisions of the CCA should be subject to individual authorisation, as needed, by the ACCC.

Repeal of Part X will mean that existing agreements are no longer exempt from the competition provisions of the CCA. Transitional arrangements are therefore warranted.

A transitional period of two years should allow for the necessary authorisations to be sought and to identify agreements that qualify for the proposed block exemption

Draft Recommendation 4 - Liner shipping

The Australian Government should repeal Part X of the CCA.

A block exemption granted by the ACCC should be available for liner shipping agreements that meet a minimum standard of pro competitive features (see Draft Recommendation 35). The minimum standard of pro competitive features to qualify for the block exemption should be determined by the ACCC in consultation with shippers and the liner shipping industry.

Other agreements should be subject to individual authorisation by the ACCC.

Repeal of Part X will mean that existing agreements are no longer exempt from the competition provisions of the CCA. Transitional arrangements are therefore warranted.

A transitional period of two years should allow for authorisations to be sought and to identify agreements that qualify for the proposed block exemption.

Analysis

Identical

Cabotage - coastal shipping and aviation

Recommendation 5

Noting the current Australian Government Review of Coastal Trading, cabotage restrictions on coastal shipping should be removed, unless it can be demonstrated that the benefits of the restrictions to the community as a whole outweigh the costs, and the objectives of the government policy can only be achieved by restricting competition.

The current air cabotage restrictions should be removed for all air cargo as well as passenger services to specific geographic areas, such as island territories and on poorly served routes, unless it can be demonstrated that the benefits of the restrictions to the community as a whole outweigh the costs, and the objectives of the restrictions can only be achieved by restricting competition.

Introducing an air cabotage permit system would be one way of regulating air cabotage services more effectively where necessary.

Draft Recommendation 5 - Coastal shipping

Noting the current Australian Government Review of Coastal Trading, the Panel considers that cabotage restrictions should be removed, unless they can be shown to be in the public interest and there is no other means by which public interest objectives can be achieved.

Analysis

Significant addition

Substantially the same in relation to coastal shipping

Air cabotage references added.

Intellectual property review

Recommendation 6

The Australian Government should task the Productivity Commission to undertake an overarching review of intellectual property. The Review should be a 12 month inquiry.

The review should focus on: competition policy issues in intellectual property arising from new developments in technology and markets; and the principles underpinning the inclusion of intellectual property provisions in international trade agreements.

A separate independent review should assess the Australian Government processes for establishing negotiating mandates to incorporate intellectual property provisions in international trade agreements.

Trade negotiations should be informed by an independent and transparent analysis of the costs and benefits to Australia of any proposed intellectual property provisions. Such an analysis should be undertaken and published before negotiations are concluded.

Draft Recommendation 7 - Intellectual property review

The Panel recommends that an overarching review of intellectual property be undertaken by an independent body, such as the Productivity Commission.

The review should focus on competition policy issues in intellectual property arising from new developments in technology and markets.

The review should also assess the principles and processes followed by the Australian Government when establishing negotiating mandates to incorporate intellectual property provisions in international trade agreements.

Trade negotiations should be informed by an independent and transparent analysis of the costs and benefits to Australia of any proposed IP provisions. Such an analysis should be undertaken and published before negotiations are concluded.

Analysis

Substance the same but some more detail

Specifically recommends PC for task of review with 12 month time-frame.

Specifically recommends separate independent review to assess Govt processes for establishing negotiating mandates to incorporate IP provisions in int trade agreements.

Trade negotiations should b informed by independent and transparent IP analysis

Intellectual property exception

Recommendation 7

Subsection 51(3) of the CCA should be repealed.

Draft Recommendation 8 - Intellectual property exception

The Panel recommends that subsection 51(3) of the CCA be repealed.

Analysis

Identical in substance

Regulation review

Recommendation 8

All Australian governments should review regulations, including local government regulations, in their jurisdictions to ensure that unnecessary restrictions on competition are removed.

Legislation (including Acts, ordinances and regulations) should be subject to a public interest test and should not restrict competition unless it can be demonstrated that:

• the benefits of the restriction to the community as a whole outweigh the costs; and

• the objectives of the legislation can only be achieved by restricting competition.

Factors to consider in assessing the public interest should be determined on a case by case basis and not narrowed to a specific set of indicators.

Jurisdictional exemptions for conduct that would normally contravene the competition law (by virtue of subsection 51(1) of the CCA) should also be examined as part of this review, to ensure they remain necessary and appropriate in their scope. Any further exemptions should be drafted as narrowly as possible to give effect to their policy intent. The review process should be transparent, with highest priority areas for review identified in each jurisdiction, and results published along with timetables for reform.

The review process should be overseen by the proposed Australian Council for Competition Policy (see Recommendation 43) with a focus on the outcomes achieved rather than processes undertaken.

The Australian Council for Competition Policy should publish an annual report for public scrutiny on the progress of reviews of regulatory restrictions.

Draft Recommendation 11 - Regulation review

All Australian governments, including local government, should review regulations in their jurisdictions to ensure that unnecessary restrictions on competition are removed.

Regulations should be subject to a public benefit test, so that any policies or rules restricting competition must demonstrate that:

• they are in the public interest; and

• the objectives of the legislation or government policy can only be achieved by restricting competition.

Factors to consider in assessing the public interest should be determined on a case by case basis and not narrowed to a specific set of indicators.

Jurisdictional exemptions for conduct that would normally contravene the competition laws (by virtue of subsection 51(1) of the CCA) should also be examined as part of this review, to ensure they remain necessary and appropriate in their scope. Any further exemptions should be drafted as narrowly as possible to give effect to their policy intent.

The review process should be transparent, with highest priority areas for review identified in each jurisdiction, and results published along with timetables for reform.

The review process should be overseen by the proposed Australian Council for Competition Policy (see Draft Recommendation 39) with a focus on the outcomes achieved, rather than the process undertaken. The Australian Council for Competition Policy should conduct an annual review of regulatory restrictions and make its report available for public scrutiny.

Analysis

Substantially the same

Makes specific reference to legislation (including regulations)

Balancing exercise replaces 'public interest' with 'benefits ... to the community as a whole'

Planning and zoning

Recommendation 9

Further to Recommendation 8, state and territory governments should subject restrictions on competition in planning and zoning rules to the public interest test, such that the rules should not restrict competition unless it can be demonstrated that the benefits of the restriction to the community as a whole outweigh the costs, and the objectives of the rules can only be achieved by restricting competition.

The following competition policy considerations should be taken into account:

• Arrangements that explicitly or implicitly favour particular operators are anti competitive.

• Competition between individual businesses is not in itself a relevant planning consideration.

• Restrictions on the number of a particular type of retail store contained in any local area is not a relevant planning consideration.

• The impact on the viability of existing businesses is not a relevant planning consideration.

• Proximity restrictions on particular types of retail stores are not a relevant planning consideration.

• Business zones should be as broad as possible.

• Development permit processes should be simplified.

• Planning systems should be consistent and transparent to avoid creating incentives for gaming appeals.

An independent body, such as the Australian Council for Competition Policy (see Recommendation 43) should be tasked with reporting on the progress of state and territory governments in assessing planning and zoning rules against the public interest test.

Draft Recommendation 10 - Planning and zoning

All governments should include competition principles in the objectives of planning and zoning legislation so that they are given due weight in decision making.

The principles should include:

• a focus on the long term interests of consumers generally (beyond purely local concerns);

• ensuring arrangements do not explicitly or implicitly favour incumbent operators;

• internal review processes that can be triggered by new entrants to a local market; and

• reducing the cost, complexity and time taken to challenge existing regulations.

Analysis

Some change

Recommend planning and zoning restrictions be subject to public interest test (as in rec 8)

List of considerations more extensive

Calls for independent body to report on progress

Priorities for regulation review

Recommendation 10

Further to Recommendation 8, and in addition to reviewing planning and zoning rules (Recommendation 9), the following should be priority areas for review:

• Taxis and ride sharing: in particular, regulations that restrict numbers of taxi licences and competition in the taxi industry, including from ride sharing and other passenger transport services that compete with taxis.

• Mandatory product standards: i.e., standards that are directly or indirectly mandated by law, including where international standards can be adopted in Australia.

Draft Recommendation 6 - Taxis

States and Territories should remove regulations that restrict competition in the taxi industry, including from services that compete with taxis, except where it would not be in the public interest.

If restrictions on numbers of taxi licences are to be retained, the number to be issued should be determined by independent regulators focused on the interests of consumers.

Analysis

Significant change

Two priority areas identified

Taxi: separate taxi recommendation in draft calling for removal of regulation - final report calls for 'review'

Mandatory product standards added

Standards review

Recommendation 11

Given the unique position of Australian Standards under paragraph 51(2)(c) of the CCA, Australian Standards that are not mandated by government should be subject to periodic review against the public interest test (see Recommendation 8) by Standards Australia.

Draft Recommendation 12 - Standards review

Given the unique position of Australian Standards under paragraph 51(2)(c) of the CCA, the Australian Government’s Memorandum of Understanding with Standards Australia should require that non government mandated standards be reviewed according to the same process specified in Draft Recommendation 11.

Analysis

No significant change

Retail trading hours

Recommendation 12

Remaining restrictions on retail trading hours should be removed. To the extent that jurisdictions choose to retain restrictions, these should be strictly limited to Christmas Day, Good Friday and the morning of ANZAC Day, and should be applied broadly to avoid discriminating among different types of retailers. Deregulating trading hours should not prevent jurisdictions from imposing specific restrictions on trading times for alcohol retailing or gambling services in order to achieve the policy objective of harm minimisation.

Draft Recommendation 51 - Retail trading hours

The Panel notes the generally beneficial effect for consumers of deregulation of retail trading hours to date and the growth of online competition in some retail markets. The Panel recommends that remaining restrictions on retail trading hours be removed. To the extent that jurisdictions choose to retain restrictions, these should be strictly limited to Christmas Day, Good Friday and the morning of ANZAC Day.

Analysis

Some change

Recommendation to remove restrictions retained.

Specific reference to allowing specific restrictions re: alcohol and gambling.

Parallel imports

Recommendation 13

Restrictions on parallel imports should be removed unless it can be shown that:

• the benefits of the restrictions to the community as a whole outweigh the costs; and

• the objectives of the restrictions can only be achieved by restricting competition.

Consistent with the recommendations of recent Productivity Commission reviews, parallel import restrictions on books and second hand cars should be removed, subject to transitional arrangements as recommended by the Productivity Commission.

Remaining provisions of the Copyright Act 1968 that restrict parallel imports, and the parallel importation defence under the Trade Marks Act 1995, should be reviewed by an independent body, such as the Productivity Commission.

Draft Recommendation 9 - Parallel imports

Remaining restrictions on parallel imports should be removed unless it can be shown that:

• they are in the public interest; and

• the objectives of the restrictions can only be achieved by restricting competition.

Analysis

Minor change and additions

Balancing exercise replaces 'public interest' with 'benefits ... to the community as a whole'.

Adds specific recommendation for removal of import restrictions on books and second hand cars.

Recommends review of remaining parallel import provisions by independent body

Pharmacy

Recommendation 14

The Panel considers that current restrictions on ownership and location of pharmacies are not needed to ensure the quality of advice and care provided to patients. Such restrictions limit the ability of consumers to choose where to obtain pharmacy products and services, and the ability of providers to meet consumers’ preferences.

The Panel considers that the pharmacy ownership and location rules should be removed in the long term interests of consumers. They should be replaced with regulations to ensure access to medicines and quality of advice regarding their use that do not unduly restrict competition.

Negotiations on the next Community Pharmacy Agreement offer an opportunity for the Australian Government to implement a further targeted relaxation of the location rules, as part of a transition towards their eventual removal. If changes during the initial years of the new agreement prove too precipitate, there should be provision for a mid term review to incorporate easing of the location rules later in the life of the next Community Pharmacy Agreement.

A range of alternative mechanisms exist to secure access to medicines for all Australians that are less restrictive of competition among pharmacy service services providers. In particular, tendering for the provision of pharmacy services in underserved locations and/or funding through a community service obligation should be considered. The rules targeted at pharmacies in urban areas should continue to be eased at the same time that alternative mechanisms are established to address specific issues concerning access to pharmacies in rural locations.

Draft Recommendation 52 - Pharmacy

The Panel does not consider that current restrictions on ownership and location of pharmacies are necessary to ensure the quality of advice and care provided to patients. Such restrictions limit the ability of consumers to choose where to obtain pharmacy products and services, and the ability of providers to meet consumers’ preferences.

The Panel considers that the pharmacy ownership and location rules should be removed in the long term interests of consumers. They should be replaced with regulations to ensure access and quality of advice on pharmaceuticals that do not unduly restrict competition.

Negotiations on the next Community Pharmacy Agreement offer an opportunity for the Australian Government to remove the location rules, with appropriate transitional arrangements.

Analysis

Some change (substance remains)

First two paragraphs substantially the same.

Draft referred to opportunity to 'remove' location rules via next Community Pharmacy Agreement; final report talks of 'relaxation of the location rules' as part of transition to eventual removal.

Final paragraph speaks of alternative mechanisms available to secure access to medicine that are less restrictive, particularly in under-served locations.

Competitive neutrality policy

Recommendation 15

All Australian governments should review their competitive neutrality policies. Specific matters to be considered should include: guidelines on the application of competitive neutrality policy during the start up stages of government businesses; the period of time over which start up government businesses should earn a commercial rate of return; and threshold tests for identifying significant business activities.

The review of competitive neutrality policies should be overseen by an independent body, such as the proposed Australian Council for Competition Policy (see Recommendation 43).

Draft Recommendation 13 - Competitive neutrality policy

All Australian governments should review their competitive neutrality policies. Specific matters that should be considered include: guidelines on the application of competitive neutrality during the start-up stages of government businesses; the period of time over which start-up government businesses should earn a commercial rate of return; and threshold tests for identifying significant business activities.

The review of competitive neutrality policies should be overseen by an independent body, such as the proposed Australian Council for Competition Policy (see Draft Recommendation 39).

Analysis

No significant change

Competitive neutrality complaints

Recommendation 16

All Australian governments should increase the transparency and effectiveness of their competitive neutrality complaints processes. This should include at a minimum:

• assigning responsibility for investigation of complaints to a body independent of government;

• a requirement for government to respond publicly to the findings of complaint investigations; and

• annual reporting by the independent complaints bodies to the proposed Australian Council for Competition Policy (see Recommendation 43) on the number of complaints received and investigations undertaken.

Draft Recommendation 14 - Competitive neutrality complaints

All Australian governments should increase the transparency and effectiveness of their competitive neutrality complaints processes. This should include at a minimum:

• assigning responsibility for investigation of complaints to a body independent of government;

• a requirement for the government to respond publicly to the findings of complaint investigations; and

• annual reporting by the independent complaints bodies to the proposed Australian Council for Competition Policy (see Draft Recommendation 39) on the number of complaints received and investigations undertaken.

Analysis

No significant change

Competitive neutrality reporting

Recommendation 17

To strengthen accountability and transparency, all Australian governments should require government businesses to include a statement on compliance with competitive neutrality principles in their annual reports.

To strengthen accountability and transparency, all Australian governments should require government businesses to include a statement on compliance with competitive neutrality principles in their annual reports. The proposed Australian Council for Competition Policy (see Recommendation 43) should report on the experiences and lessons learned from the different jurisdictions when applying competitive neutrality policy to human services markets.

Draft Recommendation 15 - Competitive neutrality reporting

To strengthen accountability and transparency, all Australian governments should require government businesses to include a statement on compliance with competitive neutrality principles in their annual reports.

Analysis

No significant change

Adds reference to ACCP reporting on experience of jurisdictions when applying this policy to human services markets

Government procurement and other commercial arrangements

Recommendation 18

All Australian governments should review their policies governing commercial arrangements with the private sector and non government organisations, including procurement policies, commissioning, public private partnerships and privatisation guidelines and processes.

Procurement and privatisation policies and practices should not restrict competition unless:

• the benefits of the restrictions to the community as a whole outweigh the costs; and

• the objectives of the policy can only be achieved by restricting competition.

An independent body, such as the Australian Council for Competition Policy (see Recommendation 43), should be tasked with reporting on progress in reviewing government commercial policies and ensuring privatisation and other commercial processes incorporate competition principles.

No comparable recommendation in draft

Analysis

New recommendation

Procurement and privatisation policies should not restrict competition unless meeting standard public interest balancing requirements

ACCP should report on progress

Electricity and gas

Recommendation 19

State and territory governments should finalise the energy reform agenda, including through:

• application of the National Energy Retail Law with minimal derogation by all National Electricity Market jurisdictions;

• deregulation of both electricity and gas retail prices; and

• the transfer of responsibility for reliability standards to a national framework administered by the proposed Access and Pricing Regulator (see Recommendation 50) and the Australian Energy Market Commission (AEMC).

The Panel supports moves to include Western Australia and the Northern Territory in the National Electricity Market, noting that this does not require physical connection.

The Australian Government should undertake a detailed review of competition in the gas sector.

Draft Recommendation 16 - Electricity, gas and water

State and territory governments should finalise the energy reform agenda, including through:

• application of the National Energy Retail Law with minimal derogation by all National Electricity Market jurisdictions;

• deregulation of both electricity and gas retail prices; and

• the transfer of responsibility for reliability standards to a national framework.

The Panel supports moves to include Western Australia and the Northern Territory in the National Electricity Market, noting that this does not require physical integration.

All governments should re-commit to reform in the water sector, with a view to creating a national framework. An intergovernmental agreement should cover both urban and rural water and focus on:

• economic regulation of the sector; and

• harmonisation of state and territory regulations where appropriate.

Where water regulation is made national, the body responsible for its implementation should be the Panel’s proposed national access and pricing regulator (see Draft Recommendation 46).

Analysis

No significant change

Draft recommendation included water (now see rec 20)

Adds reference to proposed Access and Pricing Regulator and AEMC

Adds recommendation for detailed review of competition in the gas sector

Water

Recommendation 20

All governments should progress implementation of the principles of the National Water Initiative, with a view to national consistency. Governments should focus on strengthening economic regulation in urban water and creating incentives for increased private participation in the sector through improved pricing practices.

State and territory regulators should collectively develop best practice pricing guidelines for urban water, with the capacity to reflect necessary jurisdictional differences. To ensure consistency, the Australian Council for Competition Policy (see Recommendation 43) should oversee this work.

State and territory governments should develop clear timelines for fully implementing the National Water Initiative, once pricing guidelines are developed. The Australian Council for Competition Policy should assist States and Territories to do so.

Where water regulation is made national, the responsible body should be the proposed national Access and Pricing Regulator (see Recommendation 50) or a suitably accredited state body.

Draft Recommendation 16 - Electricity, gas and water

State and territory governments should finalise the energy reform agenda, including through:

• application of the National Energy Retail Law with minimal derogation by all National Electricity Market jurisdictions;

• deregulation of both electricity and gas retail prices; and

• the transfer of responsibility for reliability standards to a national framework.

The Panel supports moves to include Western Australia and the Northern Territory in the National Electricity Market, noting that this does not require physical integration.

All governments should re-commit to reform in the water sector, with a view to creating a national framework. An intergovernmental agreement should cover both urban and rural water and focus on:

• economic regulation of the sector; and

• harmonisation of state and territory regulations where appropriate.

Where water regulation is made national, the body responsible for its implementation should be the Panel’s proposed national access and pricing regulator (see Draft Recommendation 46).

Significant additions

Now forms separate and more detailed recommendation

Specific reference to principles of National Water Initiative and to developing best practice

Final paragraph the same

Informed choice

Recommendation 21

Governments should work with industry, consumer groups and privacy experts to allow consumers to access information in an efficient format to improve informed consumer choice.

The proposed Australian Council for Competition Policy (see Recommendation 43) should establish a working group to develop a partnership agreement that both allows people to access and use their own data for their own purposes and enables new markets for personal information services. This partnership should draw on the lessons learned from similar initiatives in the US and UK.

Further, governments, both in their own dealings with consumers and in any regulation of the information that businesses must provide to consumers, should draw on lessons from behavioural economics to present information and choices in ways that allow consumers to access, assess and act on them.

Analysis

New recommendation

Recommendations 43 - 52

Australian Council for Competition Policy - Establishment

Recommendation 43

The National Competition Council should be dissolved and the Australian Council for Competition Policy (ACCP) established. Its mandate should be to provide leadership and drive implementation of the evolving competition policy agenda.

The ACCP should be established under legislation by one State and then by application in all other States and Territories and at the Commonwealth level. It should be funded jointly by the Australian Government and the States and Territories.

The ACCP should have a five-member board, consisting of two members nominated by state and territory Treasurers and two members selected by the Australian Government Treasurer, plus a Chair. Nomination of the Chair should rotate between the Australian Government and the States and Territories combined. The Chair should be appointed on a full-time basis and other members on a part-time basis.

Funding should be shared by all jurisdictions, with half of the funding provided by the Australian Government and half by the States and Territories in proportion to their population size.

Draft Recommendation 39 - Establishment of the Australian Council for Competition Policy

The National Competition Council should be dissolved and the Australian Council for Competition Policy established. Its mandate should be to provide leadership and drive implementation of the evolving competition policy agenda.

The Australian Council for Competition Policy should be established under legislation by one State and then by application in all other States and the Commonwealth. It should be funded jointly by the Commonwealth, States and Territories.

Treasurers, through the Standing Committee of Federal Financial Relations, should oversee preparation of an intergovernmental agreement and subsequent legislation, for COAG agreement, to establish the Australian Council for Competition Policy.

The Treasurer of any jurisdiction should be empowered to nominate Members of the Australian Council for Competition Policy.

Analysis

Minor change

Core recommendation the same

More detail on membership and funding

Australian Council for Competition Policy - Role

Recommendation 44

The Australian Council for Competition Policy should have a broad role encompassing:

• advocacy, education and promotion of collaboration in competition policy;

• independently monitoring progress in implementing agreed reforms and publicly reporting on progress annually;

• identifying potential areas of competition reform across all levels of government;

• making recommendations to governments on specific market design issues, regulatory reforms, procurement policies and proposed privatisations;

• undertaking research into competition policy developments in Australia and overseas; and

• ex-post evaluation of some merger decisions.

Draft Recommendation 40 - Role of the Australian Council for Competition Policy

The Australian Council for Competition Policy should have a broad role encompassing:

• advocate and educator in competition policy;

• independently monitoring progress in implementing agreed reforms and publicly reporting on progress annually;

• identifying potential areas of competition reform across all levels of government;

• making recommendations to governments on specific market design and regulatory issues, including proposed privatisations; and

• undertaking research into competition policy developments in Australia and overseas.

Analysis

Some change

Added 'promotion of collaboration' in dot point one

Dot point four adds procurement policies

Adds ex-post evaluation of some mergers

Market studies power

Recommendation 45

The Australian Council for Competition Policy (ACCP) should have the power to undertake competition studies of markets in Australia and make recommendations to relevant governments on changes to regulation, or to the ACCC for investigation of potential breaches of the CCA.

The ACCP should have mandatory information-gathering powers to assist in its market studies function; however, these powers should be used sparingly.

Draft Recommendation 41 - Market studies power

The proposed Australian Council for Competition Policy should have the power to undertake competition studies of markets in Australia and make recommendations to relevant governments on changes to regulation or to the ACCC for investigation of potential breaches of the CCA.

The Panel seeks comments on the issue of mandatory information gathering powers and in particular whether the PC model of having information gathering powers but generally choosing not to use them should be replicated in the Australian Council for Competition Policy.

Analysis

Some change

Draft sought comment on ACCP powers; final report recommends mandatory info-gathering powers (to be used sparingly)

Market studies requests

Recommendation 46

All governments, jointly or individually, should have the capacity to issue a reference to the Australian Council for Competition Policy (ACCP) to undertake a competition study of a particular market or competition issue.

All market participants, including small business and regulators (such as the ACCC), should have the capacity to request market studies be undertaken by the ACCP.

The work program of the ACCP should be overseen by the Ministerial Council on Federal Financial Relations to ensure that resourcing addresses priority issues.

Draft Recommendation 42 - Market studies requests

All governments, jointly or individually, should have the capacity to issue a reference to the Australian Council for Competition Policy to undertake a competition study of a particular market or competition issue.

All market participants, including small business and regulators (such as the ACCC), should have the capacity to request market studies be undertaken by the Australian Council for Competition Policy.

The work program of the Australian Council for Competition Policy should be overseen by the Ministerial Council on Federal Financial Relations to ensure that resourcing addresses priority issues.

Analysis

Virtually identical

Annual competition analysis

Recommendation 47

The Australian Council for Competition Policy should be required to undertake an annual analysis of developments in the competition policy environment, both in Australia and internationally, and identify specific issues or markets that should receive greater attention.

Draft Recommendation 43 - Annual competition analysis

The Australian Council for Competition Policy should be required to undertake an annual analysis of developments in the competition policy environment, both in Australia and internationally, and identify specific issues or markets that should receive greater attention.

Analysis

Identical

Competition payments

Recommendation 48

The Productivity Commission should be tasked to undertake a study of reforms agreed to by the Australian Government and state and territory governments to estimate their effect on revenue in each jurisdiction.

If disproportionate effects across jurisdictions are estimated, competition policy payments should ensure that revenue gains flowing from reform accrue to the jurisdictions undertaking the reform.

Reform effort should be assessed by the Australian Council for Competition Policy based on actual implementation of reform measures, not on undertaking reviews.

Draft Recommendation 44 - Competition payments

The Productivity Commission should be tasked to undertake a study of reforms agreed to by the Commonwealth and state and territory governments to estimate their effect on revenue in each jurisdiction.

If disproportionate effects across jurisdictions are estimated, the Panel favours competition policy payments to ensure that revenue gains flowing from reform accrue to the jurisdictions undertaking the reform.

Reform effort would be assessed by the Australian Council for Competition Policy based on actual implementation of reform measures, not on undertaking reviews.

Analysis

Virtually identical

ACCC functions

Recommendation 49

Competition and consumer functions should be retained within the single agency of the ACCC.

Draft Recommendation 45 - ACCC functions

Competition and consumer functions should be retained within the single agency of the ACCC.

Analysis

Identical

Access and Pricing Regulator

Recommendation 50

The following regulatory functions should be transferred from the ACCC and the NCC and be undertaken within a single national Access and Pricing Regulator:

• the telecommunications access and pricing functions of the ACCC;

• price regulation and related advisory roles of the ACCC under the Water Act 2007 (Cth);

• the powers given to the ACCC under the National Access Regime;

• the functions undertaken by the Australian Energy Regulator under the National Electricity Law, the National Gas Law and the National Energy Retail Law;

• the powers given to the NCC under the National Access Regime; and

• the powers given to the NCC under the National Gas Law.

Other consumer protection and competition functions should remain with the ACCC. Price monitoring and surveillance functions should also be retained by the ACCC.

The Access and Pricing Regulator should be constituted as a five-member board. The board should comprise two Australian Government-appointed members, two state and territory-nominated members and an Australian Government-appointed Chair. Two members (one Australian Government appointee and one state and territory appointee) should be appointed on a part-time basis.

Decisions of the Access and Pricing Regulator should be subject to review by the Australian Competition Tribunal.

The Access and Pricing Regulator should be established with a view to it gaining further functions if other sectors are transferred to national regimes.

Draft Recommendation 46 - Access and pricing regulator functions

The following regulatory functions should be transferred from the ACCC and the NCC and be undertaken within a single national access and pricing regulator:

• the powers given to the NCC and the ACCC under the National Access Regime;

• the powers given to the NCC under the National Gas Law;

• the functions undertaken by the Australian Energy Regulator under the National Electricity Law and the National Gas Law;

• the telecommunications access and pricing functions of the ACCC;

• price regulation and related advisory roles under the Water Act 2007 (Cth).

Consumer protection and competition functions should remain with the ACCC.

The access and pricing regulator should be established with a view to it gaining further functions as other sectors are transferred to national regimes.

Analysis

Some change

Re-ordered list (Access powers of ACCC and NCC listed as separate dot-points in final report)

Final report states that price monitoring and surveillance functions should be retained by ACCC

Composition of board outlined

Decisions of regulator to be reviewable by Tribunal.

ACCC governance

Recommendation 51

Half of the ACCC Commissioners should be appointed on a part-time basis. This could occur as the terms of the current Commissioners expire, with every second vacancy filled with a part-time appointee. The Chair could be appointed on either a full-time or a part-time basis, and the positions of Deputy Chair should be abolished.

The Panel believes that current requirements in the CCA (paragraphs 7(3)(a) and 7(3)(b)) for experience and knowledge of small business and consumer protection, among other matters, to be considered by the Minister in making appointments to the Commission are sufficient to represent sectoral interests in ACCC decision-making.

Therefore, the Panel recommends that the further requirements in the CCA that the Minister, in making all appointments, be satisfied that the Commission has one Commissioner with knowledge or experience of small business matters (subsection 10(1B)) and one Commissioner with knowledge or experience of consumer protection matters (subsection 7(4)) be abolished.

The ACCC should report regularly to a broad-based committee of the Parliament, such as the House of Representatives Standing Committee on Economics.

Draft Recommendation 47 - ACCC governance

The Panel believes that incorporating a wider range of business, consumer and academic viewpoints would improve the governance of the ACCC.

The Panel seeks views on the best means of achieving this outcome, including but not limited to, the following options:

• replacing the current Commission with a Board comprising executive members, and non executive members with business, consumer and academic expertise (with either an executive or non executive Chair of the Board); or

• adding an Advisory Board, chaired by the Chair of the Commission, which would provide advice, including on matters of strategy, to the ACCC but would have no decision making powers.

The credibility of the ACCC could also be strengthened with additional accountability to the Parliament through regular appearance before a broadly based Parliamentary Committee.

Analysis

Significant change

Draft report called for comment

Final report recommends half ACCC commissioners should be part time and positions of Deputy Chair should be abolished.

Specific requirement that one Commissioner have small business knowledge or experience and another have consumer protection knowledge or experience be abolished.

Media Code of Conduct

Recommendation 52

The ACCC should establish, publish and report against a Code of Conduct for its dealings with the media with the aim of strengthening the perception of its impartiality in enforcing the law. The Code of Conduct should be developed with reference to the principles outlined in the 2003 Review of the Competition Provisions of the Trade Practices Act.

Draft Recommendation 48 - Media Code of Conduct

The ACCC should also develop a Code of Conduct for its dealings with the media with the aim of strengthening the perception of its impartiality in enforcing the law.

Analysis

Substantially the same

Some further detail in final report

No separate recommendations

• For Retail Trading House (draft rec 51) see rec 12

• For Pharmacy (draft rec 52) see rec 14