[View the

Government’s response to the Report]

NO.044

PRODUCTIVITY COMMISSION REPORT ON PRICES SURVEILLANCE ACT 1983

The Treasurer today released the Productivity Commission’s inquiry report “Review

of the Prices Surveillance Act 1983” and also announced the Government’s

response to the report.

The Government has accepted the Commission’s recommendation that the Prices

Surveillance Act 1983 (PSA) be repealed and a new part inserted into

the Trade Practices Act 1974 (TPA). The new part will preserve the existing

powers of price surveillance.

The PSA was legislated in 1983 as part of the then Government’s prices and

incomes policy. The economic environment has, however, changed considerably

and transferring these powers to the TPA is consistent with establishing a uniform

competition policy administered by the Australian Competition and Consumer Commission.

The Government agrees that the proposed new part of the TPA should include

an objects clause specifying the objectives of the new part. The objects clause

will be drafted to be consistent with the Treasurer’s statement in September

1996 that prices surveillance will only be applied in those markets where competitive

pressures are not sufficient to achieve efficient prices and protect consumers.

The Government believes that its prices surveillance powers should be available

in circumstances that the Minister considers important and where the public

interest is involved. Most significantly, the Government wishes to retain its

ability to respond promptly, if needed, to public concerns about price rises.

The Government is also aware that price controls can worsen existing inefficiencies

and deter investment. Competition, rather than regulation, remains the best

means of lowering prices and improving choices for consumers.

The Government’s response to the report is available at http://www.treasurer.gov.au.

Copies of the report are available from Government Info Shops, or may be downloaded

from the Productivity Commission website at www.pc.gov.au.

CANBERRA

20 August 2002

Contact Niki Savva

02 6277 7340