|
Source: Commonwealth of Australia, Federal
Financial Relations 1998-99, 1998-99 Budget Paper No 3, Table 13, p
30.
4.28 The Hilmer Report recommended that the National Competition Policy be
implemented by Commonwealth legislation under a referral of power by the
States to the Commonwealth.14
However, the States objected to this approach, and the State and
Commonwealth Governments therefore opted for a scheme of uniform
legislation of the first sort, with each jurisdiction passing its own
legislation modelled on a Commonwealth template.
4.29 In Victoria, the Competition Policy Reform (Victoria) Act 1995
makes the Commonwealth Trade Practices Act law in Victoria, as if
Part IV of the Trade Practices Act (which deals with restrictive
trade practices by corporations) extended to restrictive trade practices
undertaken by any person, whether a corporation or not.15
Modifications to the Trade Practices Act apply automatically in
Victoria after two months, unless (before the two months have expired) the
Governor-in-Council orders that the modification is to take effect at an
earlier date, or not at all.16
The Victorian Act vests enforcement of the Trade Practices Act, as
in force in Victoria, in Commonwealth authorities, including the Federal
Court.17
The Victorian Act also makes the operation of the Trade Practices Act,
as in force in Victoria, subject to Commonwealth administrative law.18
4.30 At the April 1995 Council of Australian Governments Meeting, it
was agreed that amendments to the Trade Practices Act, as in force
on a national uniform basis, would be determined by vote, with each State
having a single vote, and the Commonwealth having two votes and a casting
vote. However, this is a political agreement which has not been
implemented by legislation.
4.31 National Competition Policy is an area of regulatory harmonisation
in which joint Commonwealth-State institutions were consciously avoided.
The two powerful bodies established under the National Competition Policy
- the Australian Competition and Consumer Commission and the National
Competition Council - are solely accountable through a Commonwealth
minister to the Commonwealth Parliament. Commonwealth legislation confines
the role of the States to the right to be consulted on the appointments to
the Commission and the Council. An appointment to the Council may not be
made unless supported by a majority of the States that are party to the Conduct
Code Agreement,19
while an appointment to the Commission cannot be made unless supported by
a majority of the States that are party to the Conduct Code Agreement,
and have implemented the Trade Practices Act within their
jurisdictions.20
4.32 The expanded operation of the Trade Practices Act has meant
a significant increase in Commonwealth power, at the expense of State
regulatory autonomy. However, much of the implementation of National
Competition Policy depends upon the States’ ongoing commitment to
jointly agreed objectives and outcomes. The Competition Principles
Agreement in particular requires ongoing work through the National
Competition Council and the States.
4.33 The implications of the Policy are far-reaching, and in some cases
unforseen. Changes to various sectors, and particularly to utilities, will
be ongoing for years to come. Concerns about the impact of National
Competition Policy on industry and employment have been expressed in the
Queensland Parliament by Government,21
Opposition22
and independent members.23
Other concerns include the impact on community service providers of the
need to tender on a regular basis for government funding, and the impact
on Local Government revenue of corporatisation and the contracting out of
services.24
The Queensland Government is attempting to reduce the adverse effects of
Competition Policy on Local Government by using a share of its
compensation payments to compensate Local Government.25
4.34 The proponents of National Competition Policy acknowledge these
concerns. The National Competition Council
recognise[s] that there will be situations where
unfettered competition may not be appropriate26
and Mr Bill Scales told the Committee that
I think Australia has to have a good robust competition
policy [but] . . . one should not use competition as being the panacea
for every reform.27
Particular areas of government activity in which Mr Scales suggested
competition might be inappropriate included workers’ compensation,28
State business taxes29
and environmental protection laws.30
4.35 Not all regulatory harmonisation has taken the form of new
sets of uniform national rules. Mutual recognition is a device borrowed
from the European Community. Under a regime of mutual recognition, each
participating government recognises the regulations of all other
participating governments as equivalent to its own with respect to trade
in goods or pursuit of professional occupations. That is, a company
satisfying the regulatory requirements of one jurisdiction can trade in
all jurisdictions, without being obliged to meet the individual regulatory
requirements of each. Similarly, a professional registered in one
jurisdiction can practice in all jurisdictions, without having to be
registered in each.
4.36 The Commonwealth initially preferred a uniform approach to
national standards for the regulation of goods and occupations. However,
the Government of New South Wales realised that such a process would be
excessively time-consuming. A separate process of review and negotiation
in each field of regulation would unleash competition by each jurisdiction
to preserve its own standards. The Commonwealth became convinced of the
sense of a mutual recognition approach, and encouraged the Government of
New South Wales to take the lead in developing the mutual recognition
proposals.31
4.37 In 1992 the States and the Commonwealth reached agreement on the
mutual recognition of regulations for the trade of goods, and for the
regulation of occupations. This agreement formed the basis of legislation
passed by every State and the Commonwealth within twelve months of the
initial New South Wales legislation in October 1992, except for Western
Australia, which did not pass its law until 1995.
4.38 The mutual recognition scheme has largely created the conditions
of free interstate trade. The scheme is most developed with respect to
goods. In the case of occupations, some sectors are resisting change. A
recent review by the Productivity Commission called for the scheme to be
extended to the regulation of all services.32
4.39 Mutual recognition of standards is a decentralised means of
harmonising regulation. Each State is able to pursue its own approach
while meeting minimum national standards, and a cumbersome and
centralising process of establishing uniform national standards is
avoided. In the long run, however, mutual recognition promotes increased
uniformity of regulation.
4.40 Interestingly, it was a scheme of uniform legislation of the sort
with the greatest potential for centralisation that was used to commence
implementation of the mutual recognition scheme. The initial States to
pass mutual recognition legislation - New South Wales, Queensland and
Tasmania - referred powers to the Commonwealth, authorising the
Commonwealth Parliament to legislate to provide for mutual recognition.
The later States - Victoria, South Australia and Western Australia - did
not. Rather, they passed legislation adopting the Commonwealth template.
4.41 In Victoria, the Mutual Recognition (Victoria) Act 1993
makes the Commonwealth Mutual Recognition Act 1992, and regulations
made under that Act prior to the enactment of the Victorian Act, law in
Victoria for five years.33
Any subsequent amendments to the Commonwealth legislation, or any
regulations subsequently made under it, will have to be passed separately
by the Victorian Parliament if they are to apply in Victoria.
4.42 The Commonwealth and State Governments reached a Trans-Tasman
Mutual Recognition Arrangement with New Zealand in 1996.34
The Commonwealth Trans-Tasman Mutual Recognition Act 1997 was
adopted by Victoria under the Trans-Tasman Mutual Recognition
(Victoria) Act 1998.35
As with the Mutual Recognition (Victoria) Act, the adoption comes
to an end after five years.36
Unlike the earlier adoption Act, the Trans-Tasman Mutual Recognition
Act adopts future as well as past regulations made under the
Commonwealth Act.37
4.43 There are five policy areas in which national uniformity of
regulation has been achieved without power having been centralised with
the Commonwealth. In four of these areas, standards are determined by the
State and Commonwealth Governments working together through national joint
decision-making bodies. In the case of the regulation of non-banks
financial institutions, the joint decision-making body is States-only.
4.44 These instruments of intergovernmental joint decision-making are
established under schemes of uniform legislation, which delegate
continuing regulatory authority to an appropriate Ministerial Council. The
Ministerial Council, and its decision-making procedures, are generally
identified by reference to an intergovernmental agreement, attached as a
schedule to the legislation. The standard decision-making arrangement is
two-tier: the legislation creates a national agency to provide independent
regulatory or policy advice to the Ministerial Council, which takes the
final decision with respect to implementing a recommended measure.
4.45 In the case of the National Road Transport Commission, the
Australian National Training Authority and the National Food Authority,
industry is represented on the agency board, and thus has a formal role in
the regulatory process. The presence of industry is intended to reduce
government dominance of the sector, and to maintain pressure for
efficiency and effectiveness in the regulatory regime, while the
involvement of multiple governments ensures that public interest
considerations remain at the core of the regulatory process.38
4.46 On December 22nd 1978 the Commonwealth and the States reached
an intergovernmental agreement that led to the establishment of a
co-operative scheme of uniform companies and securities legislation. Each
jurisdiction enacted legislation implementing the principles of the
co-operative scheme, and the Ministerial Council on Companies and
Securities was given responsibility for overseeing the scheme.
4.47 This co-operative scheme made it difficult to alter the regime of
companies regulation while preserving uniformity, as this required every
Parliament to amend its jurisdiction’s companies legislation. In 1990,
therefore, a new agreement was reached, which resulted in the adoption of
a scheme of uniform legislation based on a Commonwealth template.
4.48 The Commonwealth Corporations Act 1989 establishes a Corporations
Law for the Australian Capital Territory.39
This Corporations Law, adopted by every Australian jurisdiction,
regulates corporate entities and the securities and futures industries on
a national basis. Separate company registration is not required in each
State. The oversight role of the Ministerial Council was eliminated, and
the Australian Securities and Investments Commission, created by the
Commonwealth Australian Securities Commission Act 1989,40
was given responsibility for administering the law. The Australian
Securities Commission Act and the Corporations Law are
expressly intended to be administered as if each constituted a single
national law, applying on a national basis.41
4.49 The Australian Securities Commission Act and the Corporations
Law are given the force of law in Victoria by the Corporations
(Victoria) Act 1990.42
That Act gives a number of other Commonwealth Acts, as in force from time
to time, the force of law in Victoria, and confers certain authority on
Commonwealth officers.43
4.50 A new intergovernmental Corporations Agreement of September
23rd 1997 establishes a Ministerial Council for Corporations. While the
Agreement recognises that the Australian Securities and Investments
Commission is responsible solely to the Commonwealth,44
and states that the Ministerial Council has no power of control or
direction over the Commission,45
it does note that the Commonwealth will consult with the Ministerial
Council on the making of appointments to the Commission.46
4.51 In addition to the Australian Securities and Investments
Commission, the Australian Securities Commission Act creates a
Companies and Securities Advisory Committee.47
The functions of this Committee are to make recommendations to the
Commonwealth on ways to improve the scheme of uniform companies and
securities law, and to improve the regulation of companies and securities
generally. In making any such recommendations, the Advisory Committee must
have regard to the implications of its recommendations on the laws of the
jurisdictions participating in the uniform scheme.48
4.52 Under the Corporations Agreement the Commonwealth is
committed to ensuring that, so far as practicable, at any time there is at
least one member of the Advisory Committee resident in each State.49
The Australian Securities Commission Act makes this commitment
binding (but preserves the ‘practicability’ clause).50
4.53 The principal role of the Ministerial Council is to maintain the
scheme of uniform legislation. Under the Agreement, the Commonwealth and
State Governments are committed to altering the law, at either the
Commonwealth or State level, only if the Ministerial Council approves;51
and the States are committed to implementing any changes to the uniform
scheme enacted by the Commonwealth.52
When voting on approvals, the Commonwealth has four votes plus the casting
vote, and each State has one vote53.
On other matters, each State has one vote, and the Commonwealth has one
vote with no casting vote.54
In addition to this political agreement, both the Corporations Act
and the Corporations (Victoria) Act state that future legislation
is not to be interpreted as amending or repealing the uniform legislation
unless it expressly provides for such amendment or repeal.
4.54 For some years Australian governments had sought to remove
discrepancies in food standards.55
At the October 1990 Special Premiers Conference, Australian Heads of
Government agreed to establish a National Food Authority, which would set
uniform national food standards. This commitment was reaffirmed at the
July 1991 Special Premiers Conference.
4.55 The National Food Authority was established by Commonwealth
legislation in 1991.56
In 1995, that legislation was amended,57
and the Authority became known as the Australia New Zealand Food
Authority.58
Under its Act, the Authority may propose standards to be put to a
Ministerial Council (the Australia New Zealand Food Standards Council,
which is made up of Health Ministers from all Australian States and
Territories, the Commonwealth and New Zealand59).60
The Council must adopt a proposed standard (with or without amendment),
return it for reconsideration or reject it.61
The aims of the Authority in proposing food standards are to
protect public health and safety; provide adequate
information relating to food to enable consumers to make informed
choices and to prevent fraud and deception; promote fair trading in
food; promote trade and commerce in the food industry; and promote
consistency between domestic and international food standards where
these are at variance.62
4.56 In performing its functions, the Authority is subject to direction by
the Commonwealth Minister for Health and Family Services,63
but the Minister must consult with the Council before issuing such a
direction.64
The Authority has six permanent members, who must be experts in a relevant
field (such as public health, food science or consumer rights).65
Two of the members must be nominated by New Zealand, and one must be a
public health officer of a State or Territory. The members are appointed
by the Commonwealth Minister, following consultation with the Council.66
4.57 In addition to the Authority, the Act creates the Australia New
Zealand Food Authority Advisory Committee.67
This is an intergovernmental body chaired by the Chairperson of the
Authority, and having in addition two members nominated by the
Commonwealth Government and one member nominated by the New Zealand
Governmnet, and by each of the State and Territory Governments.68
The role of this Committee is to advise the Authority on matters referred
to it by the Authority, or by any of the participating governments.69
4.58 Standards approved by the Council must be published in both the
Commonwealth and New Zealand Gazette,70
and form part of the Australia New Zealand Food Standards Code.71
State and Territory legislation ensures that the Australia New Zealand
Food Standards Code is enforced throughout Australia. In Victoria, the
relevant legislation is the Food Act 1984. That Act, and the
regulations made under it, give the Code, as amended from time to time,
the force of law in Victoria.72
4.59 Currently, food hygiene regulations are outside this uniform
framework of food standards, being established and enforced by each State
and Territory acting within its own jurisdiction. Australian Health
Ministers have directed the Australia New Zealand Food Authority to
develop a new national standard that would lead to a nationally uniform,
consistent approach to the regulatory framework and the behaviour of
individual food businesses. In December 1998 Australian Health Ministers
will consider a Draft Agreement Between the Commonwealth of Australia,
the States, the Northern Territory of Australia and the Australian Capital
Territory in Relation to the Implementation of National Uniform Food Acts.
This Draft Agreement was placed on the table at the Health Ministers
Council in July 1998. The Commonwealth Government favours an increase in
national uniformity in this area. The case for such uniformity is
presented in a recently released report, Food: A Growth Industry,
by the Prime Minister’s Independent Task Force on Food Standards.
4.60 Several Special Premiers Conferences and Council of Australian
Governments meetings have discussed national road and rail transport. Road
transport is an area in which regulatory harmonisation has not progressed
very far.
4.61 At the July 1991 Special Premiers Conference, State and
Commonwealth Governments signed an agreement establishing the National
Road Transport Commission, overseen by the Australian Transport Council (a
Ministerial Council). Uniform legislation focused on the Commonwealth National
Road Transport Commission Act 1991 has been used to implement these
arrangements, which have not yet resulted in uniform national road laws.
4.62 The National Road Transport Commission is authorised to provide
policy advice on (among other issues) uniform road rules and vehicle
licensing regimes. The Australian Transport Council plays a role in
endorsing national schemes.
4.63 A formal agreement to establish a National Rail Corporation was
reached in 1991. Commonwealth legislation was passed soon after. The
National Rail Corporation is essentially a joint Government Business
Enterprise, which has the States and the Commonwealth as shareholders. The
intent of the new corporation is to acquire existing assets and provide a
base for investing in new rail infrastructure as a means of encouraging
state-based rail reforms and a national rail freight system. The National
Rail Corporation is eventually to be privatised.
4.64 The National Competition Policy also applies to state rail
services, requiring access and competitive neutrality.
4.65 Ports and shipping have not been the focus of the same
intergovernmental attention as road and rail transport.
4.66 At the meeting of Premiers and Chief Ministers in November
1991, agreement was reached on the joint regulation of non-bank financial
institutions (building societies and credit unions). In 1992 the States
passed legislation enacting the scheme, which has three elements: a
uniform code, a national supervisory authority (the Australian Financial
Institutions Commission, established under the Queensland Australian
Financial Institutions Commission Act 1992), and a Ministerial Council
on Financial Institutions, created by intergovernmental agreement, which
has the power to vary the uniform scheme.
4.67 The scheme is implemented in Victoria under the Financial
Institutions (Victoria) Act 1992. This Act gives the Financial
Institutions Code established by the Financial Institutions
(Queensland) Act 1992,73
together with the regulations in force under Part 3 of that Queensland
Act, the force of law in Victoria.74
It also confers upon the Australian Financial Institutions Commission the
power to act in Victoria.75
Finally, it gives the Governor in Council the power to vary by regulation
the Financial Institutions Code in force in Victoria, the regulations
under Part 3 of the Financial Institutions (Queensland) Act 1992 in
force in Victoria, or the powers and functions in Victoria of the
Australian Financial Institutions Commission, provided that such variation
has been approved by the Ministerial Council.76
4.68 The Commonwealth facilitated and supported the inter-State
agreement creating this uniform scheme, but did not take part in the
scheme, not wanting to complicate its role (and the role of the Reserve
Bank) in the regulation of the banking sector.
4.69 The area of environmental protection has seen slow change. On
May 1st 1992, after three years of negotiations, the Prime Minister and
Premiers concluded an Intergovernmental Agreement on the Environment
(the Agreement is incorporated as Schedule 1 to the Commonwealth National
Environment Protection Council Act 1994).
4.70 The Agreement is in fact a complex of agreements, with detailed
action plans and principles in nine appended schedules. These deal with:
- data collection;
- resource assessment, land use decisions and approval processes;
- environmental impact assessment;
- national environmental protection measures;
- climate change;
- biological diversity;
- national estate;
- World Heritage;
- nature conservation.
The Intergovernmental Agreement on the Environment requires
continuing negotiations for its implementation, with some of the schedules
remaining undeveloped.
4.71 One of the most significant outcomes of these negotiations has
been the agreement by the Council of Australian Governments in February
1994 to establish the National Environmental Protection Council (Western
Australia did not agree to participate in the Council).
4.72 The National Environment Protection Council is established under
the Commonwealth National Environmental Protection Council Act 1994,77
and corresponding State legislation (the provisions of the Victorian National
Environment Protection Council (Victoria) Act 1995 are virtually
identical to those of the Commonwealth Act).
4.73 The Council consists of a Minister from each participating
jurisdiction,78
with the Commonwealth Minister in the Chair.79
The Council has the power to make national environment protection measures
concerning air, water, noise and soil pollution, and must be consulted
when motor vehicle noise and emission standards are developed.80
Decisions of the Council require the votes of two-thirds of all the
members of the Council (regardless of the number of members present at the
meeting).81
The Commonwealth does not receive a casting vote.82
4.74 Each member of the Council is obliged to report annually to the
Council on the implementation and effectiveness within that member’s
jurisdiction of national environment protection measures.83
The Council must make an annual report which, together with each of the
members’ reports, is tabled in the Parliament of each participating
jurisdiction.84
4.75 The Acts give the Council permanent administrative support, in the
form of the National Environment Protection Council Service Corporation,85
and the National Environment Protection Council Executive Officer.86
The role of the Service Corporation is to assist the Council, using the
normal rights, powers and legal personality of a corporation.87
The Executive Officer is appointed by the Council,88
and conducts the affairs of the Service Corporation subject to direction
by the Council.89
4.76 The Acts also create the National Environment Protection Council
Committee,90
the role of which is to assist and advise the Council in the performance
of its functions and the exercise of its powers.91
The Committee consists of the Executive Officer, an officer appointed by
each member of the Council, and a member appointed by the President of the
Australian Local Government Association. The Local Government
representative does not have voting rights.92
The Committee is chaired by the Commonwealth officer.93
4.77 A number of other provisions of the Acts preserve the
intergovernmental nature of the Council. Regulations under each Act may be
made only on the recommendation of the Council,94
and each Act confers on the Council, the Committee, the Service
Corporation and the Executive Officer any powers conferred on those bodies
by any corresponding legislation of another jurisdiction.95
4.78 In some respects the operation of the Council is not
intergovernmental. The Service Corporation is subject to the Commonwealth Audit
Act 1901,96
and it is the Commonwealth Gazette in which notices of the Council’s
activities must be published.97
Perhaps most significantly, either House of the Commonwealth Parliament
may disallow any national environment protection measure, or disallow the
revocation of such a measure.98
4.79 Schedules 2 and 3 to the Intergovernmental Agreement on the
Environment apply the device of mutual recognition to environmental
protection policy. Schedule 2 provides for the option of mutual
accreditation of land use decisions and approval processes. Schedule 3
provides for the option of mutual accreditation of environmental
assessment processes.99
A review of Commonwealth-State Roles and Responsibilities for the
Environment begun in 1996 considered this issue of mutual accreditation,
and also considered the principals which ought to govern Commonwealth
intervention in environmental assessment and related matters.100
4.80 In November of 1997 the Council of Australian Governments agreed
on a revised Heads of Agreement on Commonwealth and State roles and
responsibilities in the area of environmental protection. The key concept
to govern Commonwealth intervention in environmental matters is that of
environmental impacts of “national environmental significance”. The
Commonwealth Government introduced the Environment Protection and
Biodiversity Conservation Bill 1998 into the Senate on July 2nd 1998.
The Bill defines these matters of national significance as:
- World Heritage properties;
- wetlands of international importance;
- nationally endangered or vulnerable species and endangered
ecological communities;
- migratory species;
- cetaceans;
- nuclear activities;
- Commonwealth waters.
4.81 The Bill has a strong intergovernmental focus. The Bill permits
the Commonwealth to exempt its agencies from Commonwealth approval
procedures where they are subject to state environmental laws,101
and permits the Commonwealth and a state to enter into a bilateral
agreement exempting certain activities from Commonwealth environmental
approval procedures.102
It also requires the Commonwealth to consult with the States before making
certain environmental protection determinations,103
and specifies that the Commonwealth law is not intended to exclude or
limit the concurrent operation of state law, unless the contrary intention
appears.104
4.82 The Bill has been referred to the Senate Environment, Recreation,
Communication and the Arts Legislation Committee for consideration. Some
States have already made submissions to this inquiry.
4.83 Intergovernmental relations are by nature an exercise of the
executive function of government. The term executive federalism
is used extensively in Canada, and applies to Australia also. It describes
the tendency for intergovernmental relations in a parliamentary system of
government to be dominated by the executive branch, both elected ministers
and unelected officials.105
Problems resulting from the closed nature of intergovernmental relations
have been recognised for some time, notably in the 1977 report of the
Coombs Royal Commission into Australian Government Administration.106
4.84 The various schemes of uniform legislation developed during the
1990s, and the various intergovernmental mechanisms by which regulatory
harmonisation has been brought about, are examples of executive
federalism. Consideration of the way in which this legislation, and these
mechanisms, have been introduced, and are continuing to operate, reveals a
possible tension between the pursuit of national uniformity through
intergovernmental co-operation, and three central functions of parliament:
scrutiny, law-making and oversight of government.
4.85 Intergovernmental agreement on the details of a scheme of
uniform legislation typically leave little scope for subsequent
parliamentary scrutiny of the legislation. This is true with respect to
both the initial passage and the later amendment of the scheme. In
reviewing uniform legislation schemes and the operation of
intergovernmental agencies, parliaments are typically faced with a fait
accompli argued to be the result of difficult intergovernmental
bargaining,107
leaving very little, if any, room for legislative amendment.
4.86 In 1994 the Council of Australian Governments endorsed a set of
principles and guidelines on national standard-setting by all Ministerial
Councils and national intergovernmental agencies. The approach adopted was
that of a nationally consistent regulatory assessment process. It
encouraged Ministerial Councils and intergovernmental agencies to
undertake their own assessments, so as to avoid duplication created by
separate analysis by each government. There is no reference to a direct
role of parliaments in this process of assessment. Since 1993,
representatives of scrutiny of regulations and scrutiny of bills
committees from every Australian Parliament have been working to develop a
mechanism for effective parliamentary scrutiny of proposed schemes of
uniform legislation, and of regulations made under such schemes,108
but no mechanism has yet been implemented.
4.87 The various schemes of uniform legislation examined in this
chapter all reduce the law-making role of the Victorian Parliament to some
degree. The Food Act, the Corporations (Victoria) Act, the Trans-Tasman
Mutual Recognition (Victoria) Act and the National Environment
Protection Council (Victoria) Act all permit the introduction of, or
changes to, Victorian regulations, without the possibility of Victorian
Parliamentary disallowal. The Corporations (Victoria) Act and the Competition
Policy Reform (Victoria) Act permit changes to Victorian companies and
competition law to be made by the Commonwealth Parliament, although the Competition
Policy Reform (Victoria) Act does give the Governor-in-Council two
months in which to disallow in Victoria a change in the Commonwealth law.
The Financial Institutions (Victoria) Act permits changes to
Victorian law to result from a Ministerial Council decision implemented by
the Queensland Parliament, but only if the Governor-in-Council orders that
such changes are to take effect.
4.88 While each Australian Government is responsible to its
Parliament, it is unclear to whom intergovernmental agencies are
responsible. Intergovernmental meetings are typically confidential. The
more visible intergovernmental forums, such as the Council of Australian
Governments, produce communiques, but when compared to the open
proceedings of parliaments and local councils, intergovernmental relations
and intergovernmental decision-making processes are more akin to cabinet
meetings. Commonwealth and State freedom of information laws exempt
documents related to intergovernmental meetings in the same way as Cabinet
documents.109
Relations with other governments in a federation are not unlike relations
with foreign countries.110
In both cases, another sovereign entity is involved, and the prerogative
of the Prime Minister and cabinet to keep foreign relations confidential
has been recognised by the High Court.111
It is argued by governments that the closed nature of intergovernmental
processes is essential if difficult negotiations and sensitive discussions
are to occur. Intergovernmental agencies remain subject to broad political
pressures for accountability, but this lack of openness leaves parliaments
with only a limited ability to play the oversight role which is typically
a component of such accountability.
4.89 Microeconomic liberalisation encompasses more than regulatory
harmonisation. Governments at all levels have to varying degrees adopted
the aim of increased economic efficiency in the public sector, resulting
in microeconomic liberalisation of government activity. The entire role
and form of government has undergone and continues to undergo change:
departments and agencies have been rationalised, delivery of services has
been contracted out, regulation has been, and continues to be,
systematically reviewed and subsidies and transfers have been scrutinised
and cut or transformed. This drive by Australian governments for increased
economic efficiency in the public sector is a significant departure from
the past that is not unique to Australia.
4.90 As part of these changes, microeconomic liberalisation has
occurred in various infrastructure sectors. The Government Business
Enterprises (in the main, public-owned utilities and transport services)
were obvious candidates for such developments, lying on the boundary
between microeconomic liberalisation and broader public sector change.
Rail transport is an area where a great deal of liberalisation has
occurred. Changes to utilities (electricity, gas and water) are still
under way.
4.91 The objectives of Australian governments in the three sectors of
electricity, water and gas have been the same: to create a national or at
least multi-state market in basic utilities, and to increase efficiency
and competition in what has been a series of state monopoly providers.
4.92 The approach of the Council of Australian Governments has been to
cover the three sectors under the general umbrella of the National
Competition Policy. This includes the stipulation that scheduled progress
for reform in these three sectors is required if the States are to get
their compensation payments. The governments have also agreed to pursue
individual reform frameworks for each sector.
4.93 In 1991 the Special Premiers Conference established the National
Grid Management Council. Although not covered by legislation, this body
has played a role in creating the framework for a national market in
electricity. This national framework now includes the National Electricity
Code Administrator and the National Electricity Market Management Company.
Regular exchange between providers in Victoria and New South Wales in 1997
marked the first major step to a national market for electricity.
4.94 Developing national markets for gas and water has taken longer.
Governments reached a National Gas Pipeline Access Agreement in
November 1997. Legislative implementation of this Agreement has begun. The
South Australian Gas Pipeline Access (South Australia) Act 1997
contains the Gas Pipeline Access Law as the first Schedule to that
Act. The Victorian Gas Pipeline Access (Victoria) Act 1998 makes
this Schedule law in Victoria.112
4.95 The main instrument of intergovernmental action in the area of
water has been a Statement of Principles released in 1994. An independent
task force continues to pursue an agenda mandated by the Council of
Australian Governments.
4.96 Prominent in changes to the operation of utilities, and to
other areas of government activity, has been a significant reduction in
the role of government, or even a complete withdrawal of government in
favour of the market. This can be seen in the corporatisation and
privatisation of utilities and of transport infrastructure; in the growing
importance of performance measures (first of Government Business
Enterprises, and since 1994 more generally); and in the National
Competition Policy. It is also evident in policies (such as the
contracting out of services) which have led to contestability in the
provision of publicly funded goods and services.
4.97 It is clear that in Australia (as in most advanced industrial
democracies) these changes mark an historic reversal in the role of
government in the economy, with a substantial shift of power to private
hands. A growing trend since the 1980s has seen governments increasingly
redefine their role, from one of service provision, to one of the
regulation of private service providers.113
4.98 As will be seen in the Chapter 5, this change in the role of
government has proved more complex and difficult to implement in the area
of community service delivery.
4.99 It is unclear whether these changes to the role of government are
best understood to be centralising or decentralising. Indeed, in this
context of public sector reductions, when the role and size of government
is no longer expanding, some commentators have even questioned the
continuing relevance of the contrast between centralisation and
decentralisation in a federal system.114
4.100 Deregulation gives the economic decision-making role to the
market; power is thus decentralised to firms and individual actors in the
marketplace. State and Commonwealth Governments continue to take
unilateral and joint decisions that determine the shape and direction of
economic change. But regulatory harmonisation has reduced the opportunity
for state governments to regulate economic activity in ways that are
appropriate to regional differences.
4.101 While it seems that regulatory harmonisation must necessarily
reduce the power of state governments to intervene in their local
economies, the variety of approaches means that the degree of reduction in
state government autonomy varies from instance to instance. Not all
microeconomic liberalisation has centralised power with the Commonwealth.
A great deal of regulatory harmonisation has been undertaken through joint
decision-making bodies (such as the Australia New Zealand Food Standards
Council, the Australian Transport Council and the Ministerial Council on
Financial Institutions), and a great deal of power has been transferred
away from governments to the market.
4.102 There is an important difference, too, between mechanisms that
aim to create a single new national set of standards or regulations, and
agreements to adopt a common but not identical approach to policy, which
leave the implementation and administration of the uniform legislation to
the States. In the move to collaborative policy making, there remains room
in approaches of the second type, such as mutual recognition, for
competition as well as co-operation within the federation.
4.103 Nevertheless, the national uniformity that is a consequence of
microeconomic liberalisation reduces the scope for state governments to
maintain and pursue diversity in these policy fields.
Finding 8:
On balance, microeconomic liberalisation has increased the jurisdiction
and authority of the Commonwealth while reducing the policy choices of the
States. In some cases, this trend has been mitigated by ensuring a State
role in national uniform policy making, through a variety of joint
Commonwealth-State instruments.
RETURN TO TOP
1See, for example, the
discussion of these factors in: Fred Hilmer et al, National Competition
Policy: Report of the Independent Committee of Inquiry, Australian
Government Publishing Service, Canberra, 1993.
2Minutes of Evidence, FSRC, May 19th
1997, pp 434-5 (per Mr B Scales).
3Ibid, p 428.
4Ibid, p 431.
5R J Hawke, Building a Competitive
Australia, Australian Government Publishing Service, Canberra, 1991; Ross
Garnaut, Australia and the Northeast Asian Ascendancy, Australian
Government Publishing Service, Canberra, 1989.
6Minutes of Evidence, FSRC, May 29th
1998, p 965 (per The Hon R J Hawke).
7Economic Planning Advisory Council,
Promoting Competition in Australia, Council Paper No 38, Australian
Government Publishing Service, Canberra, 1989; Industry Commission, Annual
Report 1989-90, Australian Government Publishing Service, Canberra, 1990.
8For a similar but not identical
typology of legislative schemes see: Select Committee for Parliamentary
Procedures for Uniform Legislation Agreements, Report of the Select
Committee for Parliamentary Procedures for Uniform Legislation Agreements,
Parliament of Western Australia, Perth, 1992; Working Party of
Representatives of Scrutiny of Legislation Committees throughout
Australia, Scrutiny of National Schemes of Legislation: Position Paper,
Parliament of Australia, Canberra, 1996.
9Sections 52 and 122.
10Fred Hilmer et al, National
Competition Policy: Report of the Independent Committee of Inquiry,
Australian Government Publishing Service, Canberra, 1993, pp iii, 365-371.
11See, for example, Council of
Australian Governments, Communique, August 19th 1994.
12Attachment A to Council of
Australian Governments, Communique, April 11th 1995.
13See below, Chapter 5, para 5.48, p
120.
14Fred Hilmer et al, National
Competition Policy: Report of the Independent Committee of Inquiry,
Australian Government Publishing Service, Canberra, 1993, pp 344-7, 357.
15Competition Policy Reform (Victoria)
Act 1995, ss 3, 4, 5.
16Section 6.
17Sections 21, 22, 25, 26, 27, 28, 38.
18Division 5.
19Trade Practices Act 1974 (Cth), s
29C (3) (b).
20Trade Practices Act 1974 (Cth), ss
4, 7 (3) (b), 150A. The opinion of a state deemed by the Commonwealth to
have excessively varied the Trade Practices Act in it implementation of
that Act does not count: ss 4, 150K.
21Parliament of Queensland,
Legislative Assembly Hansard, August 5th 1998, pp 1617, 1674 (per Mr N
Roberts MLA), p 1629 (per The Hon H Palaszczuk MLA, Minister for Primary
Industries); August 6th 1998, pp 1757-8 (per The Hon J Fouras MLA), pp
1771, 1772 (per The Hon K Hayward MLA).
22Parliament of Queensland,
Legislative Assembly Hansard, July 30th 1998, p 1385 (per Mr T Cooper
MLA), p 1414-5, 1416 (per Mr J Seeney), p 1465 (per Mr G Malone MLA), pp
1469, 1470 (per Mr J Elliott MLA); August 5th 1998, p 1658 (per Mr T
Cooper MLA), p 1666 (per Mr V Johnson MLA), p 1671 (per Mr M Rowell MLA);
August 6th 1998, p 1773 (per Mr L Stephan MLA).
23Parliament of Queensland,
Legislative Assembly Hansard, July 30th 1998, p 1383 (per Mr P Wellington
MLA).
24Parliament of Queensland,
Legislative Assembly Hansard, August 6th 1998, p 1720 (per The Hon D
Hamill MLA, Treasurer); National Competition Council, Annual Report
1996-97, , National Competition Council, Melbourne, 1997, p 29.
25Parliament of Queensland,
Legislative Assembly Hansard, August 6th 1998, p 1720 (per The Hon D
Hamill MLA, Treasurer); National Competition Council, Annual Report
1996-97, p 29.
26National Competition Council, Annual
Report 1996-97, p 49.
27Minutes of Evidence, FSRC, May 19th
1997, p 441 (per Mr B Scales).
28Ibid, p 432.
29Ibid.
30Ibid, p 441.
31Consultant’s interviews with
senior officials; T Thomas & C Saunders, The Australian Mutual
Recognition Scheme, Centre for Comparative Constitutional Studies,
University of Melbourne, Melbourne, 1995.
32Productivity Commission, Impact of
Mutual Recognition on Regulations in Australia: A Preliminary Assessment,
Information Paper, Office of Regulatory Review, Productivity Commission,
Canberra, 1997.
33Section 4.
34Council of Australian Governments,
Communique, June 14th 1996.
35Section 4 (1).
36Section 4 (2).
37Section 4 (1).
38Martin Painter, The COAG and
Intergovernmental Cooperation, Federalism Research Centre, Australian
National University, Canberra, 1995.
39Sections 5, 82.
40Section 7.
41Corporations Act 1989 (Cth), ss 14,
37.
42Sections 7, 8, 58. The intention
that the laws are to be administered on a single national basis is
expressed in ss 13, 26, 65. Power is conferred on the Australian
Securities Commission under ss 66, 68.
43Section 3 (2), part 8, ss 74, 75.
44Paragraph 302 (1).
45Paragraph 302 (2).
46Paragraph 601 (1).
47Section 145.
48Section 148.
49Paragraph 606 (3), (5).
50Section 147 (5) (b), (6).
51Paragraphs 505 (1), 513 (1).
Paragraphs 506 (1) and 506 (3) exempt certain changes from the need for
Ministerial Council approval.
52Paragraph 514 (1), (2), (3).
53Paragraphs 506 (2), 513 (1), 514
(4).
54Paragraph 410.
55Helen Nelson, “Recipes for
Uniformity: The Case of Food Standards”, Australian Journal of Political
Science, Vol 27, 1992, pp 63-77.
56National Food Authority Act 1991 (Cth).
57By the National Food Authority
Amendment Act 1995 (Cth).
58Australia New Zealand Food Authority
Act 1991 (Cth), s 6 (1).
59Australia New Zealand Food Authority
Act 1991 (Cth), s 3 (1), definition of “Council”.
60Australia New Zealand Food Authority
Act 1991 (Cth), s 18 (1), 26(1).
61Australia New Zealand Food Authority
Act 1991 (Cth), s 20 (1), 28 (1).
62Australia New Zealand Food Authority
entry in the Commonwealth Government On-Line Directory, available on the
World Wide Web at http://gold.directory.gov.au/tmpl/s.html.
63Australia New Zealand Food Authority
Act 1991 (Cth), s 11 (1).
64Australia New Zealand Food Authority
Act 1991 (Cth), s 11 (3).
65Australia New Zealand Food Authority
Act 1991 (Cth), s 40 (1), (3), (4), (5), (6).
66Australia New Zealand Food Authority
Act 1991 (Cth), s 40 (2).
67Section 42 (1).
68Section 42 (4).
69Section 42 (2).
70Australia New Zealand Food Authority
Act 1991 (Cth), s 32 (1).
71Australia New Zealand Food Authority
Act 1991 (Cth), s 3 (1), definition of “Australia New Zealand Food
Standards Code”.
72Food Act 1984 (Vic), s 63A; Food
Regulations 1986 (Vic).
73Section 30.
74Sections 8 (1) and 9 (1).
75Section 12.
76Section 56.
77Section 8.
78Section 9. References are to both
the Commonwealth and the Victorian Act.
79Section 10.
80Sections 3 (a), 14 (1), (2).
81Section 28 (1).
82Section 28 (2).
83Section 23.
84Section 24. The Commonwealth Act
mandates tabling in the Commonwealth Parliament, while the Victorian Act
mandates tabling in the Victorian Parliament.
85Section 35 (1). The Victorian Act
does not create a separate Service Corporation for Victoria, but
recognises as the Service Corporation the body created by the Commonwealth
Act.
86Section 39 (1).
87Sections 36-7.
88Section 39 (2).
89Sections 40, 41.
90Section 29 (1).
91Section 32.
92Section 29 (3).
93Section 30.
94Section 63.
95Section 60.
96Section 59 (1).
97Sections 16 (2) (a), 18 (2) (a), 20
(3) (a). During the month when a notice is published in the Gazette, it
must also be published on at least 2 days in a newspaper circulating in
each participating State: ss 16 (2) (b), 18 (2) (b), 20 (3) (b).
98Section 21.
99Stuart Hamilton, “The
Intergovernmental Agreement on the Environment: Three Years On” in Peter
Carroll and Martin Painter (eds), Microeconomic Reform and Federalism,
Federalism Research Centre, Australian National University, Canberra,
1995, pp 185-90.
100Submissions, FSRC, No 9.
101Section 28 (4), (5).
102Chapter 3.
103Sections 14 (2), 25 (3), 87 (2),
188 (5).
104Section 10. Sections 267 (2) and
285 (2) allow the Commonwealth, under certain circumstances, to adopt an
environment protection plan suggested by a state.
105John Warhurst, “Intergovernmental
Managers and Cooperative Federalism: The Australian Case”, Public
Administration, Vol 61, No 3, 1983; Ronald Watts, Executive Federalism: A
Comparative Analysis, Institute of Intergovernmental Relations, Queen’s
University, Kingston, 1989.
106John Uhr, “Parliament and the
Political Management of Federalism” in Carroll and Painter, above
n 99, pp 267-85.
107Minutes of Evidence, FSRC, April
15th 1997, p 367 (per Professor C Saunders); Minutes of Evidence, FSRC,
June 30th 1997, p 571 (per Professor C Saunders).
108Working Party of Representatives
of Scrutiny of Legislation Committees throughout Australia, Scrutiny of
National Schemes of Legislation: Position Paper, Parliament of Australia,
Canberra, 1996.
109Freedom of Information Act 1982
(Vic), s 29; Freedom of Information Act 1982 (Cth), s 33A.
110Cheryl Saunders, The Impact of
Intergovernmental Relations on Parliament, Papers on Federalism No 1,
Centre for Comparative Constitutional Studies, University of Melbourne,
Melbourne, 1984.
111Sankey v Whitlam (1978) 142 CLR
1; Cheryl Saunders, Accountability and Access in Intergovernmental
Affairs: A Legal Perspective, Papers on Federalism No 2, Centre for
Comparative Constitutional Studies, University of Melbourne, Melbourne,
1985.
112Section 7.
113David Osbourne and Ted Gaebler,
Reinventing Government, Penguin, New York, 1993, describe this as a change
from ‘rowing’ to ‘steering’.
114For example Ronald Watts,
Comparing Federal Systems in the 1990s, Institute of Intergovernmental
Relations, Queen’s University, Kingston, 1996.
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