NO.008

The Treasurer has sought in-principle agreement to a proposed Commonwealth solution that will enable NSW to avoid the $10m penalty recommended by the National Competition Council over its failure to reform domestic rice marketing arrangements.

Reform of domestic rice marketing arrangements was recommended by an independent review in 1995.

A working group established by the Commonwealth, involving representatives of NSW ricegrowers and marketers and the Council, has developed this solution. It involves the establishment of Commonwealth statutory authority to issue rice export licences the first such licence to be issued for an exclusive period of 3-5 years to the current NSW rice exporter, RCL. It does not require domestic vesting of rice.

The Treasurer said “If the NSW Government accepts the Commonwealths offer, it will receive the full balance of its 1998-99 Competition Payments and rice export premiums will be protected to the benefit of all producers”.

In July 1998 the NCC released its supplementary assessment of State and Territory performance against their outstanding first tranche National Competition Policy (NCP) commitments. The NCC recommended that:

• all States and Territories, with the exception of NSW, receive the full allocation of 1998-99 NCP Payments; and

• in relation to NSW, if domestic rice marketing arrangements are not reformed by 31 January 1999 as recommended by the 1995 independent review, $10m be deducted from its remaining 1998-99 Competition Payments.

This proposal has the potential to settle all outstanding issues for the benefit of growers and the community as a whole. It preserves the integrity of the Commonwealth-State inter-governmental agreements on competition.

CANBERRA

17 February 1999

For further information contact Alistair Davey, Treasurers Office on (02) 6277-7340