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Legislative Assembly for the ACT: 1995 Week 8 Hansard (24 October) . . Page.. 1917 ..

MS TUCKER (continuing):

their constituents. This involves a responsibility to ensure that national uniform legislation does not have an adverse impact on the community and does not limit the capacity of our local legislature to promote social justice and environmental objectives, the economic wellbeing of the local community, maintenance of basic wage and work conditions for residents of the ACT, and other important community concerns; but the proposed competitive reforms do just that. It is up to the 17 members of this Assembly to look very carefully at the legislation, debate the consequences for the ACT, and then ensure that all the interests I have just mentioned are protected.

The assumptions behind this legislation are alarming. The underlying assumption of the reforms that are sought through this Bill is that all competition is good and anything that in any way hinders competition is bad. The only exceptions that are recognised are where a natural monopoly might exist or where there is a business of so-called national significance. The reforms even favour market-based mechanisms for resolving community concerns about issues such as public health and safety and environmental protection. But we all know that markets fail, and fail regularly, although it is conveniently ignored by most politicians. So-called perfect competition is only an ideal. Market failure can come in many forms. One example is the failure of producers or consumers to factor in the impact of their production or consumption on other people or the environment - so-called externalities. Market failure could also come about as a result of unequal distribution of power, unequal information, and undersupply of public goods. Because the market system tabulates only individual wants, collective or public needs or wants are not catered for. It is worth reiterating this last point because many of the services that will be deemed to be uncompetitive under this legislation are utilities, providers of public goods.

The main beneficiaries of the Competition Policy Reform Bill are likely to be the big operators, that is, companies and individuals who have the resources to provide goods and services well beyond their home territory. We have just seen this in South Australia, where a French-based company was offered the contract to supply all Adelaide's water and sewerage services. A local company bid for the contract but it could not compete. So all the rhetoric about the public interest comes down to one thing: Commercial profitability. How was the public interest assessed in this case? On economic efficiency grounds alone: Any government policy that gives preferential treatment to a particular business over another would be subject to scrutiny by the new Australian Competition and Consumer Commission. It is interesting that South Australia, which is an extremely dry State, will be producing cheaper water. Thus the commission is likely to limit the scope of government purchasing policies that might be directed at promoting development of a particular part of the ACT, or a particular type of business might be declared as being uncompetitive.

Do we really want to subject all ACT legislation and regulation to wholesale review by such an external body? I do not believe that we would serve the true interests of the community if we did. We need to consider carefully what the implications are and make every effort to ensure that adverse effects will be limited. Reduction in government

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