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Legislative Assembly for the ACT: 1998 Week 3 Hansard (26 May) . . Page.. 582 ..

MR SMYTH (continuing):

All governments supported these objectives, resulting in all Australian governments signing the three agreements which constituted the national competition policy in April 1995. The three agreements covered different aspects of the reform framework. The first agreement, the conduct code agreement, applied the provisions of Part IV of the Trade Practices Act 1974 to those business activities that previously had been excluded from its effect, government business enterprises and unincorporated private enterprises. The competition principles agreement provided for prices oversight and a process to ensure a net public benefit when restructuring monopolies, the application of competitive neutrality principles to government-owned businesses, and review of legislation to ensure that there were no regulatory restraints on competition other than those which produced a net public benefit. The third agreement - the agreement to implement the national competition policy and related reforms - linked reforms in electricity, gas, water and road transport to the reforms outlined in the competition principles agreement.

I think that, by any measure, this is one of the most significant reform processes in recent Australian history. All Australian governments are working in concert, putting aside local differences. The reforms affect all levels of government, including local government as well as the State and Territory governments. All governments have agreed to subject their enterprises to reforms that encourage economic activity, provide access to nationally significant infrastructure, and encourage new entrants with new services into important industries, such as energy, transport, manufacturing and primary industry.

It is probably true to say that the vision for competition policy did not foresee the extent to which the application of the reform principles or practice would apply. Reform has not stopped at making changes to achieve efficiency gains in some nationally significant economic activities. Reform benefits are now being delivered not only to industry but throughout the economy. As a direct result of these reforms, the people in the ACT, as elsewhere, now enjoy cheaper energy, cheaper air fares and other transport, inexpensive personal and corporate communications, and cheaper entertainment. But those benefits are obvious. Most of the benefits of competition are more diffused, resulting in lower input costs for food and manufactured goods, and lower transport and distribution charges, which reduce the final consumption price for goods and services. These are benefits in the ACT as much as anywhere else in Australia.

While there are measurable benefits of competition policy, there are also costs. The reform process takes place under a system of incentives and constraints. The National Competition Council assesses the ACT's performance against its reform commitments. Failure to meet the spirit of the agreement puts at risk payments which will represent some $243m in competition payments to the ACT over the period up to and including 2005-06. These payments not only are competition policy payments, but also involve the real terms per capita general purpose funding guarantee that is associated with the related reforms and other agreements arising from our participation in COAG. Failure may risk a part or all of the tranche payments, which the ACT cannot afford. That is worth repeating: Failure may risk a part or all of the tranche payments, which the ACT cannot afford. Withdrawal from the agreements would have a significant impact on the ACT's budgetary position and the ability to attract and/or maintain private investment and, therefore, jobs. Even though the ACT would receive diffused economic benefits

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