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Legislative Assembly for the ACT: 1999 Week 8 Hansard (26 August) . . Page.. 2521 ..

MS CARNELL (continuing):

Recognition Act would only be made with the unanimous consent of heads of government of the participating parties to the agreement; that is, the Prime Minister, the State Premiers and the two Territory Chief Ministers. As I will detail shortly, unanimous consent has not been given to ban in the ACT the sale and production of eggs from battery cage systems.

Mr Speaker, I also need to clarify the role of the competition principles agreement in this matter. Ms Tucker has said publicly that the opposition to this legislation from the states is as a result of the competition principles agreement. Mr Speaker, this is not the case. The mutual recognition agreement predates the competition principles agreement by three years. The competition principles agreement only came into play in this matter because one of the effects of amending the Mutual Recognition Act would have been to restrict competition. Therefore, a public benefit test was required to determine whether the benefits from this action outweighed the costs.

In undertaking the public benefit test, considerable latitude was needed to determine what public benefit means. The competition principles agreement includes in its test of the public benefit a wide range of qualitative and quantitative measures including, but not limited to, social welfare, occupational health and safety, ecologically sustainable development, regional development and the interests of consumers generally as matters that should be considered in all circumstances when determining the public benefit.

Following officer level discussions with the Commonwealth Department of Prime Minister and Cabinet, which was responsible for the Mutual Recognition Act, I wrote to the Treasurer, Mr Costello, seeking his agreement to the Productivity Commissioner undertaking the required public benefit test on behalf of the ACT Government. The Treasurer agreed to this request in July 1998 and the Productivity Commissioner sought public submissions to the test in August and September 1998. The rationale for the Productivity Commissioner undertaking the test was based on a recognition that, in order for the ACT's request to heads of government to amend the Mutual Recognition Act to have any chance of succeeding, the mutual benefit test would need to be independent and rigorous. Secondly, the commission's involvement was based on its strong endorsement and use of the public benefits test to help assess the efficiency of regulations and the important national implications of legislative changes.

Mr Speaker, the Productivity Commission's report, "Battery Eggs Sale and Production in the ACT", was released on 3 November 1998. Overall, the commission found that the legislative amendments would lead to some improvement in layer hen welfare, particularly in the longer term. However, the extent of the improvement and the benefit that would be derived by the community could not be measured reliably. This in part reflects the fact that the proposed ban on battery hen production raises ethical as well as economic issues.

Importantly, the commission found that the implementation of the ban on the production and sale of battery hen eggs would give rise to two significant economic costs - costs borne by ACT consumers from higher egg prices, estimated to be a permanent annual liability of $650,000, and adjustment costs resulting from the premature retirement of

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