Page 312 - Week 02 - Tuesday, 1 March 1994
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Perhaps the most significant decision of the council was to agree to the principles of the competition policy articulated in Professor Hilmer's report on national competition policy. The Hilmer report suggests a framework for establishing a nationally competitive market for all areas of industry and business. The adoption of this framework would lead to more efficient industry, particularly in areas such as electricity and gas, and consequently reduced costs for consumers and a more internationally competitive Australia. The ACT, as a consumer of energy and many of the other goods and services subject to reform, will benefit greatly from this process.
Heads of government agreed that the Hilmer report would apply to all bodies, including Commonwealth, State and Territory government agencies and authorities. It also agreed to the merger of the Trade Practices Commission and the Prices Surveillance Authority to form the basis for a new Australian Competition Commission. Each State and Territory has agreed to report to the next COAG meeting on the practicalities of applying the recommendations of the Hilmer report in their jurisdictions. The Commonwealth has agreed to consider granting assistance for the costs to State and Territory governments of implementing the recommendations.
The council asked its working group on micro-economic reform to report to the next meeting with detailed proposals for further reform of the legal profession and the maritime sector. The council considered reform of the gas and electricity industries. The reforms agreed to in the gas industry are aimed at the best possible use of Australia's gas resources and the lowest possible prices for gas consumers. The council agreed to a set of principles and measures that would lead to free and fair trade in natural gas by 1 July 1996. These measures include removing all remaining legislative and regulatory barriers to the free trade of gas within and across jurisdictions. They also include complementary legislation so that a uniform national framework applies to third party access to all gas transmission pipelines. In relation to reform of the electricity industry, heads of government noted the progress towards implementing their commitment to have the necessary structural changes in place to allow a competitive electricity market to operate from 1 July 1995. They also agreed to principles for a national competitive electricity industry and for a uniform approach to network pricing and regulation.
Another key step in the micro-economic reform process and the introduction of national competitive markets in goods and services is the introduction of mutual recognition. The council noted the progress made in this area with the implementation of mutual recognition legislation and the associated intergovernmental agreement. The council also noted that discussions have commenced with New Zealand on the possibility of a trans-Tasman mutual recognition scheme.
Heads of government considered and endorsed the broad principles associated with the report from the working group on water resources policy outlining a strategic framework for the efficient and sustainable reform of Australian water resources. Because the changes flowing from the framework are extensive and far reaching in their implications, the council considered that a five- to seven-year implementation period will be required. COAG requested the working group to prepare a report for its first meeting in 1995 on progress in implementing the framework, with further reports to be prepared annually on progress over succeeding years.
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