NO.082

PRODUCTIVITY COMMISSION REPORT ON SECTION 2D OF THE TRADE PRACTICES ACT

1974 – LOCAL GOVERNMENT EXEMPTIONS

Today I am releasing the report of the Productivity Commission inquiry “Review

of Section 2D of the Trade Practices Act 1974: Local Government Exemptions”.

Section 2D of the Act exempts local government licensing decisions and internal

transactions from Part IV (the competition provisions) of the Act. The exemption

was reviewed in line with the Commonwealth’s commitment under the Competition

Principles Agreement to review all legislation that restricts competition to

ensure that the legislation is of net benefit to community as a whole.

The Commission found that, on balance, Section 2D provides a net benefit to

the community. However, the Commission also found that greater benefits would

be obtained by directly limiting the application of Part IV to the business

activities of local government, consistent with the original intention of the

National Competition Policy reforms. The Commission has recommended that Section

2D be repealed and replaced with a section stating explicitly that Part IV of

the TPA only applies to the business activities of local government.

The Government is releasing the report to facilitate consultation with the

States and Territories on the report’s recommendation. The Government will respond

to the recommendation in due course.

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

from the Productivity Commission’s website at http://www.pc.gov.au

CANBERRA

12 December 2002

Contact: David Alexander

02 6277 7340