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Legislative Assembly for the ACT: 1998 Week 3 Hansard (28 May) . . Page.. 700 ..

MR SMYTH (continuing):

The passage of the Gas Act 1992 subsequently enabled the Government to authorise AGL to operate as a gas distributor in the ACT on a non-exclusive basis. This meant that the Government maintained the ability to require AGL to provide access to other gas retailing businesses. Mr Speaker, whilst these arrangements did foresee future market reform, it is now necessary to build on these provisions and establish an access regime as well as opening gas pipelines to a competitive market. The combination of gas legislation and price nexus with the New South Wales gas tariff used to date has served the ACT well. However, the new arrangements proposed provide the additional benefits to the ACT community in competitive gas pricing and improved industry regulation.

Mr Speaker, this would be a good time to talk about national competition policy reforms and to revisit the commitments, made in 1992 by the then ACT Government, to market reform. These reforms, it must be stressed, are not about competition for the sake of competition. The reform process is about assisting economic growth and job creation, about better customer service in a competitive marketplace and about real choice for consumers. It is about the benefits to the public of preventing monopolies, and those benefits are social as well as economic. Mr Speaker, the Assembly has already dealt with a range of legislation fostering reform, such as transport, electricity, legal services and the environment. The legislation I am presenting today to open the gas market to competition takes us another step along the way to better consumer services through greater competition in the ACT.

Mr Speaker, in 1994, heads of government agreed to a set of principles to enable access on fair and reasonable terms for new market entrants and requiring jurisdictions and industry to recommend an agreed framework. The initial base of this framework was the development of an access code, setting out the terms under which access to gas pipelines would be given by pipeline operators or service providers. The code prescribes the detail to be included in an access agreement, which is an undertaking by a service provider to provide access, including the details of the pipelines, price terms and conditions. The code sets out reference tariff principles, including the detail of asset evaluation methods to be used by the independent regulators in their examination of an access arrangement. The code also provides for the separation of gas businesses by market sectors, so that network operations are separate legal entities from retail businesses. This separation or "ring fencing" prevents any incumbent monopolies from giving a price advantage to their related businesses. Dispute resolution, rights of appeal and code change mechanisms are also included. The code may be amended by agreement between the relevant Ministers and participants in the scheme.

To ensure that a national code for access to pipelines would be applied in a uniform manner by jurisdictions, national gas pipelines access law was developed in consultation with the Attorney-General's Department of each jurisdiction. In late 1996, the Prime Minister wrote to heads of government seeking their out-of-COAG-session agreement to the framework of gas reforms. This framework comprised an intergovernmental agreement, or IGA, to commit jurisdictions to enacting consistent access legislation that, in turn, would adopt a uniform national gas pipelines access code. The ACT Government agreed to this framework in early 1997.

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