NO.055

RELEASE OF PRODUCTIVITY COMMISSION REPORT ON THE REVIEW OF THE NATIONAL

ACCESS REGIME

The Treasurer today announced the release of the Productivity Commission’s

final report on the Review of the National Access Regime and also announced

the Government’s interim response to the report.

The National Access Regime allows third parties to seek access to the services

of certain essential infrastructure facilities on reasonable terms and conditions,

provided that commercial negotiations are unsuccessful. The services provided

by essential infrastructure facilities, such as natural gas pipelines, the electricity

grid and rail track, play a key role in Australia’s economic and social development.

The Government considers that access regulation of essential infrastructure

in Australia provides broader public benefits. This includes the promotion of

competition in upstream and downstream markets which is essential for economic

growth and job creation and can contribute significantly to efficiency and innovation.

The Commission’s report recommends retaining the Regime but proposes changes

aimed at improving the Regime’s operation. In its interim response, the Government

endorses the thrust of the majority of the Commission’s 33 recommendations.

The Government agrees that scope exists for improvements to the Regime. This

includes, for example, making changes to clarify the Regime’s objectives and

scope, encourage efficient investment in new infrastructure, strengthen incentives

for commercial negotiation and improve the certainty and transparency of regulatory

processes.

The changes being proposed by Government provide a balance between ensuring

a means for business to gain access to infrastructure while providing incentives

for new investment in essential infrastructure. The changes are also designed

to provide access seekers and investors with confidence and certainty about

the regulatory framework so they are able to make well informed decisions.

Effective implementation of these proposals is important to achieve the Government’s

targeted benefits. Given that a few recommendations create the prospect of changes

to clause 6 of the Competition Principles Agreement (CPA) – to which all State

and Territory governments are participants – the Government will write to Premiers

and Chief Ministers, asking them to consider the Report’s recommendations and

the Commonwealth’s interim response. Following these consultations, a final

Government response will be released.

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

This review fulfils the Commonwealth’s CPA obligation (clause 5 of the CPA)

to review the legislation which establishes the National Access Regime, to determine

whether any restrictions on competition should be retained in the net public

interest.

CANBERRA

17 September 2002

Contact: David Alexander

02 6277 7340