Government Business Enterprises (Competition) Act 1996

This

Act may be cited as the Government

Business Enterprises (Competition) Act 1996.

In this Act—

confidential information means—

information that is commercially sensitive or otherwise of its nature confidential; or

information that is provided on a confidential basis; or

information that is declared by its terms to be confidential or is affected by a contractual requirement as to confidentiality; or

information that is otherwise affected by a requirement as to confidentiality, but does not include information that is publicly available (unless the information became publicly available through a breach of a duty of confidentiality);

declared

GBE means a GBE declared to be subject to prices oversight under

Part 3;¹

declared market means a market in which a declared GBE is subject to prices oversight;²

documentary material includes a computer disk, tape or other medium in which information is recorded;

GBE means a government agency that carries on commercial operations;

government agency means—

a

Minister; or

an administrative unit of the Public Service; or

any other agency or instrumentality of the Crown that is subject to control or direction by a Minister;

local government agency means—

a council, or a body established by a council, under the Local

Government Act 1999;

or

the

Local Government Finance Authority of South Australia;

portfolio

Minister, in relation to a GBE, means the Minister to which the GBE is responsible;

pricing recommendation

— See section 4;

principles of competitive neutrality

— See section 16(2);

services includes the supply of goods.

Examples—

• water reticulation;

• sewerage services;

• electricity supply.

Notes—

1 See section 8(1).

2 See section 8(3)(a).

A pricing recommendation—

may contain recommendations about pricing principles; or

Examples—

For

example, a pricing recommendation may recommend price setting by reference to—

• the location, quantity, or period of supply of the services; or

• a general price index, the cost of production, revenue, rate of return on assets, or any other factor.

may recommend price limitations.

Examples—

For

example, a pricing recommendation may contain recommendations about—

• maximum prices, or the maximum rate of increase or the minimum rate of decrease, in maximum prices;

• average prices or average rates of increase or decrease in average prices.

A pricing recommendation remains current until—

superseded by a later pricing recommendation; or

if not superseded during a term (which cannot exceed 5 years) stated in the recommendation—the end of that term.

A pricing recommendation is only advisory and does not bind the GBE to which it relates.

The

Governor may appoint Commissioners.

The basis of appointment is to be as specified in the instrument of appointment.

Examples—

• a person might be appointed for a specified term and on specified terms and conditions;

• a person might be appointed on specified terms and conditions to carry out a specified investigation.

However, an appointment cannot be made or renewed for more than 2 years (although the aggregate of the initial term and one or more renewals may be more than 2 years).

A

Commissioner cannot be removed from office except for—

mental or physical incapacity to carry out official duties satisfactorily;

or

misconduct.

A

Commissioner is not, as such, a member of the Public Service of the

State.

A

Commissioner is not subject to Ministerial direction about a recommendation, finding or report.

However, the Minister may, by written direction given to a Commissioner, require the Commissioner to take into account specified facts, policies or issues in a particular investigation.

For the purposes of an investigation, a Commissioner may issue a summons—

requiring a person to attend before the Commissioner at a specified time and place to give evidence; or

requiring a person to produce specified documentary material to the

Commissioner within a specified period.

A person who fails, without reasonable excuse, to comply with a summons under this section is guilty of an offence.

Maximum penalty: $1 000.

The

Governor may, by proclamation, declare a GBE to be subject to prices oversight.

A declaration may only be made under this section if the Governor is satisfied that the GBE has the market power of a monopoly or near monopoly in one or more markets.

A declaration under this section—

must identify the market or markets in relation to which the GBE is subject to prices oversight; and

must fix the period for which the declaration is to be effective.

The

Governor may, by proclamation—

amend a declaration under this section; or

extend the period for which a declaration under this section is to be effective; or

revoke a declaration under this section.

The

Minister may assign a Commissioner to carry out an investigation into the prices charged by a declared GBE in a declared market—whether or not a pricing recommendation relevant to those prices is current.

If a declared GBE notifies its portfolio Minister of an intention to increase prices for services provided in a declared market and there is no current pricing recommendation relevant to those prices, the

Minister must, at the request of the portfolio Minister, assign a

Commissioner to carry out an investigation into the prices charged by the GBE in the declared market.

A

Commissioner cannot be assigned to carry out an investigation into the prices charged by a GBE in a declared market if—

the

Commissioner has a business or commercial relationship with the GBE (other than a relationship of a kind that is common to a substantial section of the public); or

the

Commissioner is, for some other reason, subject to influence or control by the GBE.

A

Commissioner assigned to carry out an investigation under this section must—

carry out an investigation to enable the Commissioner to make a pricing recommendation about the prices to be charged by a declared GBE for services provided in the declared market; and

provide a report on the investigation (including a pricing recommendation) within a period fixed by the Minister.

Before a Commissioner begins an investigation, the Commissioner must—

prepare a budget setting out the estimated costs of the proposed investigation; and

discuss the budget with the GBE and the GBE's portfolio Minister; and

submit the budget to the Minister for approval.

The

Minister may approve a budget submitted under this section with or without amendment.

The

GBE must, if the Minister directs, pay to the Minister the cost of carrying out the investigation, as disclosed in an approved budget, or a proportion of that cost decided by the Minister.

When a Commissioner begins an investigation, the Commissioner must give public notice of the investigation, in a manner and form determined by the Commissioner to be most appropriate in the circumstances, inviting interested persons to make written representations on the subject matter of the investigation within a period (which must be reasonable) specified in the notice for that purpose.

The

Commissioner must consider all representations made in response to the notice.

The prime objective of a Commissioner in carrying out an investigation and making a pricing recommendation is—

to achieve prices that reflect, in the Commissioner's opinion, the cost of efficient production and supply; and

through that means to achieve efficient resource allocation, so far as that objective is consistent with explicitly identified and defined community service obligations imposed on the relevant GBE by

Act of Parliament or by the Government.

In the furtherance of that objective, the Commissioner must have regard to—

the need to protect consumers from abuse of market power; and

the costs of efficient production and supply; and

the costs of complying with government policies and Ministerial directions and, in particular the costs of carrying out community service obligations, to the extent the relevant costs are not reimbursed; and

Examples—

For

example—

• if it is government policy that services should be available to metropolitan and country users at the same price even though it is more costly to provide the services in the country, the costs of complying with that policy are to be considered by the Commissioner in arriving at the pricing recommendation;

• if it is government policy that services are to be provided to pensioners at a reduced price, the cost of giving that concession (to the extent the cost is not reimbursed out of the general revenue of the State) must be considered by the Commissioner in arriving at the pricing recommendation.

the provisions of any relevant intergovernmental agreement or understanding; and

the efficiency of the GBE's operations and the targets for efficient delivery of the relevant services that should reasonably be met by the GBE; and

the quality of the relevant services and the possible effect implementation of the proposed pricing recommendation would have on the quality of services; and

the need for sufficient revenue to defray outgoings and achieve a reasonable return on assets; and

the cost of complying with statutory and other legal obligations; and

matters the Minister directs the Commissioner to take into account; and

other relevant matters.

When a Commissioner completes an investigation, the Commissioner must prepare a draft report setting out the findings made on the investigation, the proposed pricing recommendation and the reasons for it.

The report must also contain—

a list of the persons who gave evidence or made submissions to the

Commissioner; and

a list of persons who prepared expert reports for the purposes of the investigation and the topics of the various reports; and

a statement of the cost of the investigation.

The

Commissioner must submit a copy of the draft report for comment to—

the

Minister; and

the

GBE; and

other person to whom the Minister directs that a copy of the draft report is to be given.

The

Commissioner must allow the persons to whom the draft report is submitted for comment a reasonable time to comment on the draft report.