Following the creation of the Productivity Commission on 16 April 1998 and my Press Release earlier today on the staffing of the Commission, I am now announcing the Commission’s work programme for 1998.

The Commission has an expanded charter and more varied responsibilities when compared with the former Industry Commission. The Government’s intention in creating the Commission is to have a flexible institution able to handle considerable and varied responsibilities.

Formal inquiries will continue to be an important part of the Commission’s work. However, reflecting the Commission’s other responsibilities they will take less of the Commission’s time and resources than has been the case in the past. All inquiries will involve substantial public consultation. However, there will be flexibility in the conduct of inquiries, which will range from the traditional twelve month inquiry with draft report and public hearings, to shorter less formal research studies.

The Commission’s formal inquiry programme comprises topics covering all sectors of the economy, including a number of topics which were announced in the Commonwealth’s Legislation Review Schedule, and several new topics. One such new topic which is to be sent to the Commission shortly is to be a fact finding public inquiry into Australia’s gambling industries. The Commission will be asked to provide an information report on gambling for the benefit of public information and consideration by policy makers. This inquiry is in response to the Government’s – and community’s – concerns about the economic and community impacts of gambling in Australia. Comments will be sought from the States and Territories on the terms of reference for the inquiry.

Details of the inquiry programme are at Attachment A, and provision has also been made for additional references to be accommodated as and when the need may arise.

Beyond its inquiry programme, the Commission will undertake the following wide ranging responsibilities.

Annual Report: An Annual Report on the Commission’s overall operations will be statutorily notified to each House of Parliament within 15 sitting days of receipt. The Report will address what amounts to a standing reference on the productivity performance of industry and the economy as a whole, together with the principal factors affecting that performance, and the effect of assistance and regulations on industry and the Australian economy generally.

Benchmarking: This includes research into the performance of economic infrastructure, such as ports, rail and electricity, and government services to business such as business licensing. The recent International Benchmarking of the Australian Waterfront is an example of this research.

Competition Policy: This includes responsibility for operating a competitive neutrality complaints mechanism. An outline of the background to, and the process and procedures for handling competitive neutrality complaints is at Attachment B. It is intended that competition research, including on request by the National Competition Council, will form part of the activities of the Commission.

Labour Market Analysis: The Commission will identify and benchmark restrictive work practices and a range of significant labour market arrangements which add to the cost of doing business. The recent report on Work Arrangements in Container Stevedoring is an example of such analysis.

Performance Monitoring for the Council of Australian Governments: This involves the annual review of over seventy Government Trading Enterprises and twelve service areas such as schools, hospitals and public housing, with scope for more research in both areas.

Regulation Review: This will mainly be conducted through the Office of Regulation Review and comprises: advising the Government and the Council of Australian Governments on standards setting; advising Commonwealth agencies on regulatory review matters; liaising with the States and Territories on regulation review programmes; commenting on both terms of reference for the Legislation Review Program and on subordinate regulation reviews; and undertaking research on regulatory issues.

Research: The Commission has a self-initiated research program which will complement its other activities. Research themes would be responsive to the views of Governments and business and welfare groups. A major focus for this research will be to analyse the factors underlying productivity growth and social policy issues.

Programme Evaluation: With my agreement, this provides the opportunity for independent scrutiny of Government programmes by the Commission.

CANBERRA

30 April 1998

Contact Officer:

Alistair Davey

Treasurer’s Office, Canberra

02 6277 7340

(B) Inquiry references to be sent to the IC (8)

• Gambling
• Implementation of ecologically sustainable development by Commonwealth agencies

• The extent to which the benefits of competition are flowing to rural and regional Australia

• Prices Surveillance Act 1983 (Legislation Review Schedule reference)

• Progress in rail reform

• Transport trade

• Australian Tourist Commission; and
• Review of market based reforms and the activities currently undertaken by the Spectrum Management Agency

3. Labour market research studies to benchmark restrictive work practices (3)

 

	Date Sent	Study Due
Coal mining industry	23 January 1998	(now subsumed into the PC’s public inquiry)
Meat processing industry	23 January 1998	August 1998
Construction industry	23 January 1998	( following completion of the meat processing industry study)

 

4. Other research studies (2)

Under the Commonwealth’s competitive neutrality (CN) policy, government-owned businesses should not have competitive advantages simply by virtue of their public ownership. The Commonwealth’s approach for implementing CN is outlined in its 1996 Competitive Neutrality Policy Statement.

The Statement nominates a diverse range of Commonwealth government business activities that will be required to comply with competitive neutrality. Examples are: Government business enterprises, such as Australia Post; business units such as the Royal Mint and businesses engaged in competitive tendering and contracting, such as inhouse units bidding for defence contracts.

The Commonwealth Competitive Neutrality Complaints Office is an autonomous unit within the Productivity Commission and is located in the Commission’s Canberra Office. The role of the Office is to receive complaints, undertake complaint investigations and provide independent advice to the Treasurer on the application of competitive neutrality to Commonwealth Government activities. Copies of an information booklet and complaint forms are available from the Office.

Any interested party may lodge a complaint to the Competitive Neutrality Complaints Office on the grounds that:

• a Commonwealth Government activity has not been exposed to the CN arrangements;
• a Commonwealth Government business activity is not complying with the CN arrangements that apply to it; or
• CN arrangements are not effective in removing a Commonwealth Government business activity’s competitive advantages.

If the Office considers a complaint has raised CN issues that require further consideration by Government, it will forward a report to the Treasurer outlining its investigations and findings. Depending on the nature of the matters raised by the complaint, the report may include a finding that CN should be extended to cover a Commonwealth Government activity that is not currently exposed or that changes are required to improve the effectiveness of the CN arrangements that apply to a particular business activity. Alternatively, it may include a recommendation that the Treasurer refer the matter to the Productivity Commission for public inquiry.

Following receipt of a report from the Commonwealth Competitive Neutrality Complaints Office, the Government will publish the report and its response within 90 days.