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Legislative Assembly for the ACT: 1995 Week 8 Hansard (24 October) . . Page.. 1918 ..

MS TUCKER (continuing):

regulation and replacement with self-regulation could not only affect local businesses, social justice and the environment but also put community health and safety at risk. The Industry Commission speaks glowingly about self-regulation of the meat industry, but no-one talks about reduction in standards and the resulting meat contamination scandals.

This Bill will also reduce the scope of State or local governments to curtail competition, even when a broad public interest test based on factors other than economic efficiency alone may well indicate that it is in the interests of the community to restrict competition. Reform of electricity and gas is the single biggest source of the economic gains it claims will flow from the reforms. What we are not told is that an inevitable result of this Bill will be to encourage increased consumption. What business would encourage its consumers to use less of the service it promotes? I doubt that anyone would suggest that, in a time of increasing concern about the greenhouse effect, it is of benefit to the community to promote energy consumption.

While deregulation of the electricity industry in Australia may improve productivity or efficiency in the production of energy, it will not lead to greater efficiency in the use of energy and is also unlikely to promote an environment conducive to experimentation of alternative energy programs. On the contrary, with electricity prices predicted to fall, this will send the wrong price signal in terms of conserving resources through greater efficiency in energy use. The Hilmer reforms do not factor in the environmental or social costs of competition. They regard economic efficiency as the primary element of public benefit, and the Greens strongly challenge this view. In fact, I would say that most people do not make choices based purely on price.

The benefits from placing primary importance on economic efficiency are supposedly to be reaped by all. This Government appears to have bought the story that GDP will go up by 5 per cent, leading to increased household expenditure across the board. Many economists, however, have serious doubts about the validity of the modelling, and even the authors of the Hilmer report acknowledge that the predicted economic benefits are based on assumptions that may not be realised. Unfortunately, the advocates of competition reform have chosen to ignore the fact that errors or biases in modelling could well lead to different results.

The claimed benefits of micro-economic reform and the assumption that these benefits will flow on to the whole community are based on very simple assumptions of the real world, benchmarks that are not representational of sectors as a whole and comparisons with other countries that are extremely dubious, to say the least, given different socioeconomic factors and resource bases. Even if all the claimed consumer gains from competition reforms were realised, it is not enough. People do not, as I said, make individual lifestyle choices based on financial factors alone, and neither should governments. There may be a need for government in Australia to change, but the evidence that the market is capable of providing the answer to all the problems experienced is lacking.

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