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Aspects of the national competition policy reform package

CHAIR —I welcome the representatives from Pittwater Council and other councils. The hearing this morning is considered to be part of the proceedings of parliament. Any attempt to mislead the committee may be considered to be a contempt of parliament. The committee has received a submission from the Pittwater Council and it has been authorised for publication. We would also welcome representatives from the other councils that make the Regional Organisation of Councils in the area. Mr Cox, would you like to make an opening statement to the committee?

Mr Cox —Thank you, Mr Chair. Initially, when we put our submission together, it was done out of frustration more than anything, because it appeared at that point in time that local government had not been consulted to any great degree about the national competition policy and its ramifications. Some of the issues that came to light during state-local government briefings of recent times included the possibility of losing our crown protection status and therefore our sales tax exemption and the indication that the state would not be passing on any benefits to local government through national competition policy initiatives and changes at any level. We do represent a fairly high proportion of the population at grass roots level, regardless of the fact that we are not represented in the constitution.

The document that we wrote was from Pittwater initially on the basis that local government and Pittwater per se would have liked to have been involved in some of the strategies being planned.It was also a cry to the committee that there did not seem to be a lot of involvement of local government or state government in what was happening with national competition policy changes. Having said that, we have caucused as the SHOROC group, which is the regional group representing peninsula councils--Mosman, Manly, Warringah and Pittwater. I think collectively we have a view that we have some concerns and we would like the committee to hear our concerns. As a result, we pooled together a quick briefing document for you today entitled SHOROC submission.

CHAIR —Before you continue with your comments, we will formally order that the document presented by SHOROC as its submission be included in the committee's records as an exhibit.

Mr Cox —As I said in my submission, local government was going through a significant changed process anyway as a result of the 1993 Local Government Act changes and, as such, we were looking at our local competitiveness and benchmarking ourselves against our peers, both state wide and internationally. It would appear from the original information provided on national competition policy that this issue had been ignored.

I, as ex-federal and ex-state, was concerned that both the federal bureaucrats and state bureaucrats were producing models for the reformation of the electricity industry, rail and the like to be imposed at the local government level where they had no applicability at all. Again, it was a cry to say could local government be involved and could the contribution we make be recognised. One of the questions you asked the previous speaker was: have we been involved at state level and have we been given reasonable access to information? I think the answer, until the last two weeks, is no. Local government has not been involved very successfully or very openly. It is my view too--this is Pittwater's--that it was getting too far down the track to drag local government back in at any level, hence the submission.

If you look at the document we have tabled, the SHOROC document, you will see that we target certain areas. Perhaps it is appropriate if we deal with them one by one and go through it. Obviously, the issue of compliance with part 4 of the trade practices legislation is difficult because to comply we have to do an audit of all our activities. I am not quite sure what expense Warringah has gone to recently but they have undertaken that part 4 audit. It would be very expensive for all councils to do that audit, to target effectively maybe 10 per cent of its operations, when the definition of a competitive business is still somewhat rubbery.

A national competition policy, by its nature, is meant to be a national forum, a national agenda, but as I understand it local government will be dealt with on a state by state basis. Therefore, the federal government would set national benchmark levels and national grants and provide funds on a national basis. For example, through its regional economic development funding program, it would be funding to a local government level in each state that has different parameters, different directions, different measurables, different guidelines. It seems odd to do something like that when you are looking for a national competition policy and you are looking at a national initiative.

I suppose my view is that the federal government should be giving some guidance to the states so that there is some control put across all local government and we are dealing out of the one hymn book, singing from the one page, perhaps even at the one paragraph and in the long term from the one line.

CHAIR —It is the subject of intergovernmental agreements. Of course, like most intergovernmental agreements, it inevitably involves compromises across any federal system. You probably also heard my comment before, that while the Australian Local Government Association is represented on COAG it is not a signatory to the intergovernmental agreement on competition policy. I guess the issue of why they are not could probably be argued. I suppose the traditional hostility that often appears between local government and state governments may be the basis of that exclusion.

I do not think there is any problem from the Commonwealth perspective in terms of local government. So I can only assume that the fact that the local government representative was not a signatory may have been because of resistance from state governments who saw local government being a creation of their own legislation rather than as a third tier of government in Australia.

Mr Cox —I take your point, but I think it would be remiss not to raise it as an issue. You have a perfect opportunity to get some universality across local government in Australia and it seems to me that that is slipping out of everybody's grasp.

CHAIR —I should also declare my bias, of course, as a former federal minister for local government.

Mr Cox —On the issue of communications, the four councils represented today are suffering the ignominy of the federal government's legislation for telecommunications and third carriers in the form of Telstra and Optus. I think all of us have recently received statements of intent on the part of Optus to cable-ise, I suppose, for want of a better word, the whole of the peninsula. My understanding is that they will be slinging large black cables from pole to pole, as the deal struck with Sydney electricity.

It just seems odd in a world where telecommunications is changing rapidly and digitised data and optical fibres have become almost passe that there is not capacity for Telstra and Optus to share underground old Telecom services on a fee for charge basis. I think all councils have suffered the critiques too--`No, we can't share a tower with Telecom because we are different,' and vice versa. When it is my understanding that there is very little difference between the two; it is more a commercial advantage we are dealing with.

As a national competition policy initiative, surely this committee could put some direction into getting sanity into this issue. We are not the only ones, I am sure, who are suffering, but we do represent some rather pristine environments. I am not saying that large black cables in western Sydney or Bullamakanka are right either, but there is a very strong environmental presence in our various communities. There seems to be a solution, but it is being ignored. Does that clarify that position?

CHAIR —The committee will take on board your comments.

Mr HARRY WOODS —Have you put that point of view to Telstra or any of them?

Mr Cox —Yes. We are trying to get together with Telstra and Optus as a working party. The inevitability is that we have control over the federal legislation. Basically, local government pays lip-service to the federal act. If you look at the act, the hurdles to even get the secretary to the department of sport and recreation--of all things--signatory to stopping their activities are quiet bizarre.

Mr THOMSON —I have just had that issue explode in my electorate of Wentworth in exactly the same fashion as you probably all had. Have you considered almost a consumer boycott kind of campaign to stop this or are you satisfied with these working parties and bureaucratic sounding methods?

Mr Cox —Go back a step. We have no control--and this is my opinion, and I am sure my colleagues will step in if I am heading in the wrong direction--because the federal legislation takes that away from local government, and state for that matter. It is my view that the only way you will effect change in this area is by some sort of consensus position, hence Pittwater's position where we are trying to work with Telstra and Optus to try to find a strategy or solution which is palatable to all, assuming we have very little control.

The problem really lies in the federal legislation. If my memory serves me correct--and I did several years in the department of communications in Canberra--the legislation was geared around Telecom being the instrument of the department of communications and, therefore, a federal body. It did not recognise the commercial nature of Telecom and it did not recognise Optus in those days. The changes have not been significant since the move to commercialisation. I think we are saying the same thing; that you will suffer in terms of the problem. I do not know whether there is an easy solution, apart from a short sharp jolt at the federal level to get some control back in the agenda.

Mr THOMSON —They either go overground or underground. There does not seem to be anything in between.

Mr Cox —There doesn't seem to be, unless there is satellite, but then you have dishes everywhere. Having spent a little bit of time in England recently, I do not know whether that is an alternative either. But digitised information on an optical fibre cable, I understand, which will take a multitude of signals, certainly seems to be a solution. They are passing our doors. Why aren't they being used? So what if Optus has to pay or vice versa. Isn't that what national competition is all about?

Mr THOMSON —I think it is environmental; nothing to do with competition. It is the strength of the likely public pressure that you can apply to such an outfit like Optus that will get a solution that is acceptable to your electorate.

Mr May —The SHOROC mayors are endeavouring to meet with the communications minister when they will be pushing the conflict with the national competition policy versus the communications policy. SHOROC has great difficulty in understanding how the federal government gives its blessing to this fight to the death almost, spending billions between Optus and Telstra, when Optus can be putting their wires in Telstra's underground cable pits. It is causing considerable problems in Mosman where I come from. Our federal member, who is also a member of this committee--

Mr THOMSON —I was hoping he would be here this morning. He would never shut up about it if he were. He is the expert. He has been the first one to really get stuck into it.

CHAIR —He has certainly put it onto the agenda, well and truly. You were talking before about bio-resistance, almost. I think Optus may find bio-resistance in the Mosman area if they continue with their plans to put these wires above ground.

But, as I say, for what we are here today is national competition policy. Sure, Optus does not understand why, when the federal government is pushing for shared use of infrastructure--and so is the state government--they give their blessing through approvals from city electricity to overhead wires.

Mr HARRY WOODS —If it is all so sensible, why do they not agree to it?

Mr Cox —Because it is a commercial imperative, and physically and technically you can do it. That is the thing that probably rubs in my craw.

Mr HARRY WOODS —So it gives one or the other the upper hand.

Mr Cox —Yes. But supposedly--and this is something apparently that is not public--they do deals behind the scenes when they realise there is a problem. In one of my previous lives I was the contract negotiator for the National Broadcasting Television Service. There are something like 500 sites around Australia where it carries the ABC signal, SBS, every commercial service in that region--radio cabs, et cetera. That is old technology; it is not digitised technology, it is not using optical fibre. It is liner sites shooting, et cetera. I made some inquiries of previous colleagues in Canberra, and technically you can do it.

Why should a commercial advantage prejudice our environmental position? Mr Thomson took the view that it was an environmental position. Rubbish! It is a commercial position, no more, no less. It just happens that the environment is in the way. But that is my view, again.

Mr BRADFORD —I go back to the paper that you presented on the financial practices. Tim asked me whether I should declare an interest, having some in-laws still living in Narrabeen, but I do not think that is necessary.

Can someone take us through this part of it. I am interested particularly in what you describe as a rough estimate of the impact on councils who show an interest in costs between five and 10 per cent of total budget. I think that was the question we asked the WSROC representative, but he was not able to quantify anything. What is the point you are making there?

Mr F. Thomson —The numbers are very rough because really we have no basis for them. We were advised by officers of New South Wales cabinet that all local councils would have to pay payroll tax. In my case, out of a budget of $80 million, about $30 million is payroll. We would also have to pay sales tax; as you know, that varies depending on the item. We would also lose access to government stores because the removal of the shield of the Crown would take us out of the Q store operation.

They further advised us that we would have to break up our collective purchasing arrangements--and I cannot see there being any difference between what we do with the Q store and what franchises like Macdonald's and Chem-Mart do. You buy collectively--and that does not mean you are collusive in what you are doing. It does not mean in our case, in my view, that we are large enough, even collectively, to affect the national competition policy.

So I have had my Treasury people try to work out their best guess at what we would pay in the way of sales tax, if we had to pay it, what we would pay in payroll tax, and what the loss of access to government stores and the loss of our collective purchasing would mean to us. Their estimate is that it goes between five and 10 per cent, and that is a very ballpark figure. It is the best they could come up with. But in our budget that represents, as I said there, significant dollars.

The other complication was that the same cabinet officer told us that the national competition policy would give money back to the state government. In the New South Wales case, the cabinet had already decided that none of that money would flow to local government. So we would be paying off $3 million to $6 million in extra taxes, and this state government was only going to put it into police, education, hospitals and the Olympic sites. None would go to local government. We cannot get that confirmed or denied by anybody.

Mr Cox —To superimpose that too, we have rate pegging imposed on us. So we have lost our Crown status and, therefore, the tax free status that we enjoy and our rates are pegged. So you have a net outflow of fairly significant proportions but no way of recovering that loss because the state sets the level of rates achieved.

CHAIR —Could I perhaps raise an issue that I raised with the WSROC representatives. In the last couple of days a message has been coming across from local government that suggests there is a lot of obvious concern about some of the impact of the national competition policy and the implementation of those principles that are agreed. I think we all have to accept that, whether we like it or not, it is now part of that inter-governmental agreement.

The purpose of this committee, or the reference it has been given by the Assistant Treasurer, is to look at ways in which that process may work effectively. It would seem to me that we do need to have a strong coordinated approach by local government through representative bodies of the state, like the Local Government and Shires Association, for example. I notice that at their annual conference in Wagga this year they had a panel discussion dealing with competition policy. What sort of contact has your ROC had with the Local Government Association of New South Wales in terms of pursuing the concerns that you obviously have on these issues?

Mr F. Thomson —We attended a RIPA conference. The first time we knew about this, RIPA put on a conference with the cabinet office which was the first advice we had.


Mr F. Thomson —It was a great conference. RIPA represents Royal Institute of Public Administration. That is where these cabinet people addressed some representatives of local government. That was just shortly after the agreement was signed, and they announced that these things had already been decided in cabinet. We instantly left that conference, rang the Department of Local Government and the Local Government Association. When we went and saw them, we had two conflicting views--one was that it would have no impact on local government whatsoever and, therefore, we need not worry about it. We are not concerned about the competition; we are into that as hard as we can go. That is not the issue. It is the question of impact on our ratepayers and where the equalisation is in this entire thing.

We were told by one government officer at that second meeting with those departmental representatives that it would not affect us because we are not nationally significant. The only thing they could think of in New South Wales that may be roped in was the Wyong-Gosford water and sewerage supply, which is equivalent to about a third of Sydney water and, therefore, significant in national terms. Nothing else in local government would be roped in. The other officer, on the other hand, said that all these other decisions had been made in cabinet and Treasury in New South Wales and would be applied unilaterally without consultation.

The attitude of the Local Government Association is that the status quo is going to prevail. It will not impact on us. Therefore, we do not need to address it. That is their official stand coming from their executive director. I think that is just head in the sand, ostrich-like behaviour.

CHAIR —It sounds like it could be an interesting conference in Wagga.

Mr F. Thomson —Since then, I have had a conference at Warringah where I got all the North Shore general managers--11 of them--and their staff together. We got those people out to address us, and we have since had two meetings in their offices. We still cannot get any clarification. The nearest we have had is they keep telling us that New South Wales state Treasury is preparing a paper on the possible implications on New South Wales local government. The first draft was meant to be out a month ago. It still has not surfaced. On the other hand, they are telling us that if we want exemptions we have to have it into them before Christmas.

Mr Cox —That means that you have to do your part 4 assessment, identify all of your services and do a fairly onerous check listing the question and answer process to work out whether it is a competitive business. No-one has actually come out formally and said that the original statement by the cabinet office has been annulled. There has been a lot of rumour that, no, it was all a little bit too much too soon. But, as far as we are concerned, that is the current state government policy.

CHAIR —So has the minister for local government had any formal response since the agreement?

Mr Cox —I am not aware of any.

Mr F. Thomson —Not a word.

Mr May —We would argue strongly that the arrangements between state, federal and local--particularly between state and local--must cross state borders. There must be a level playing field; it is a national policy. One is left with the taste in the mouth that we will get picked off state by state. That worries us greatly.

Mr Cox —I go back to a question that Mr Bradford asked on the financial issues. I also harp back to the comments with WSROC and the CSOs, the services that we provide are really out of duty to the community. It was just coincidental in the budget last night that the state government axed the two kilometre limit for kids on buses, so anyone living inside two kilometres will pay. That has been a bone of contention with State Transit and State Rail for a long time--not the two kilometre limit but the amount of money that goes towards supporting a government initiative. Originally it started off, as I understand it, in the boondocks with kids in country towns, farms and so forth and progressively, as largess got carried away, politicians allowed it to become almost an enshrined right.

When I worked for State Transit it was quite a significant proportion of their budget. Each year when they went to have their funding structures looked at and their fare services and levels set, the CSOs were never addressed. So progressively they became a burden, but they were never rewarded for the service they were providing.

Likewise, we provide a lot of community services. We provide child-care services and we provide swimming pools. They are usually facilities that no commercial operator would go into because if there were a dollar in it the commercial operators would be there now. We then have to load up those services in this national competition policy, make them level playing fields and then say, `Isn't it horrible?' We are running a service as an advantaged service because it is there rather than saying, `Well, no-one else will provide the darned things.

It seems to be a little lopsided when you start getting into those grey areas of business. No-one argues the fact that, if we have got commercial services, they should not be on a level playing field and a competitive basis, given the guidelines of the national competition policy. But those social services, for want of a better term, really should be exempt right from the outset.

CHAIR —It gets back to a question of definition, I think, and that is part of the difficulty. It appears local government is trying to come to grips with what does constitute a business. Is a business, for example, a swimming pool that charges an admission fee in most cases compared with some other entrepreneurial activity that council might be involved in such as land development. In the case of my own council in Bathurst, we are actually part owners in a motor racing circuit with a number of joint venturers, which is clearly a business proposition. It gets very difficult, I guess, to make a firm judgment as to what is a business and what is not a business.

Mr Cox —I have no argument with what you are saying there, but it is that fine detail of the 10 per cent. The rest of it all falls over in that you provide rate services and you provide building application services, et cetera--no-one else provides those--it is that 10 per cent. But you have to work your way through all of your services to prove what are and are not competitive businesses under this policy.

Mr F. Thomson —I have engaged a firm of solicitors who specialise in trade practice to look at Warringah to try to develop guidelines of how we do a part 4 review in local government. To the best of my knowledge, it has not been done in local government anywhere in Australia yet, although I think one council in Perth is starting to tackle it. Our solicitor has gone off to talk to them to find out whether there is some commonality. In the work that has been done to date, it involves looking at all the activities and then seeing if it can pass or fail the part 4 assessment with a series of questionnaires. That is the way we are organising it.

Clearly, the majority of your functions will drop out and will not be competitive. But there are some at one end that clearly are, there are some at the other that are clearly not, and there is a big grey mass in the middle. You have to go through the rigour of the disciplined process to find out which is which and then be able to prove it. The solicitor's advice to me is that we are in for a legal feast because the word `business', which appears in the national competition policy, is not defined and it is not common with the federal companies legislation. So all the case law that is in the various companies acts will not assist you with the definition of business. The courts will start all over again redefining what is a business and, in the case of local government, that becomes a very complex question.

Mr Cox —Look at our history. Invariably in the 177 councils in New South Wales, the majority of costs is probably picked up by 30 or 40 of those councils with a population in excess of about 35,000. Small struggling councils will have to take the burden of that audit or rely upon the work and the largesse of the large councils who do it and who may pass on some information. If I have spent a heap of money on it and set up a format for question and answer testing of my business and I pass it on, I would be looking for some sort of compensation. It is an onerous burden on larger councils. We do not fall within the larger bracket. We will pick up the cost. When you get into the smaller councils, it is a burden. Most of their services may not be national competition competitive services. By their nature, they are service driven, but not business driven.

Mr HARRY WOODS —I am interested in Pittwater Council, as it is a newcomer since May 1992. To what extent has your council been able to pick up some of the competitive factors that are now in the national competition? In other words, did you have an advantage by being able to predict a lot of these things in your initial structuring of services to make sure you were competitive and you were looking for outside contracts?

Mr Cox —I do not think so. We inherited basically the north area. We have taken over possibly three businesses, including one significant business. It was running under another regime prior to this operation. I do not think we are in a position to really say that we have structured our process on a national competition basis, but we are very commercial in our approach in terms of our accounting and our handling of the books. It will not take much to do the analysis on that basis. We are talking from a global perspective here, not Pittwater, as I read it.

Mr BRAITHWAITE —But it was your initial objective. We asked that question of Wodonga yesterday. They have gone through a major restructuring competitively. We asked them where they expect to go under the NCP. They expect to move further down the line than what the Victorian government wishes them to go at the moment.

Mr Cox —With full tendering, et cetera?

Mr Woodward —We have got about a 60-40 split now anyway in our services. You would be lucky to get down to that ratio on either side--60-40 or 40-60 regardless--because a lot of the services cannot be provided by external services.

Mr HARRY WOODS —Have you developed any ideas about how you define a community service obligation, because I think that has obligations for what the business definition is? This particularly concerns what seems to be a common factor amongst most of the definitions of a community service obligation, which is that of a specific government direction.

Mr Cox —The answer is yes, but it is grey. We have things like child-minding services and out of school care that we provide. There are commercial services via people operating from home.

Mr HARRY WOODS —I am aware that councils provide a lot of services that will not fall into a definition because of the specific government direction.

Mr Cox —I see that they are more competitive services, but they are running side by side and they are not competing. We are filling a gap rather than competing on a commercial basis. That is where I think the logic of the legislation may lose those areas.

Mr HARRY WOODS —You would have a basic disagreement with that part of the definition that states it is a specific government direction?

Mr Cox —Yes. Take Meals on Wheels. It is a competitive service, but it is really a social service. Others provide meals around town in the form of cafes, restaurants, et cetera. There is Curry in a Hurry and God knows what. You can have food delivered anywhere in Sydney by vehicle. But is it a competitive service? Of course it is not. It is dealing with an element of the social community that really does need it. It is probably the only meal its recipients have on a daily or weekly basis. It is quite nutritious. By definition, it is a competitive service.

Mr HARRY WOODS —How do you provide that through a cross-subsidy of services?

Mr Cox —And across councils, too. But why would it be treated in any other context than a social service?

Mr HARRY WOODS —Hilmer says that these cross-subsidies are really not efficient.

Mr Cox —I do not think Hilmer thought of local government. As a matter of fact, he said--and it is anecdotal--`What is local government?' when someone asked him the question. I do not know that as a fact, but from what we have seen and heard it was certainly an afterthought very much afterwards.

Mr HARRY WOODS —What do you think would happen to some of these services you provide if they became budgetary items on a state budget or federal budget?

Mr Cox —They would fall over. You could not afford to pay for those services on a commercial basis.

Mr HARRY WOODS —So the only thing that really gives you the flexibility to fund them is the ability to cross-subsidise.

Mr BRADFORD —I am not sure that that is so. They have to be paid somehow and somewhere. It is a matter of accountability and proper accounting for them.

Mr Cox —But, if you had to recognise them fully as a commercial service and then back-charge to your client, I am sure your clients could fall over very quickly.

Mr BRADFORD —Meals on Wheels is a very good example. What are your fears about these principles as they might impact on Meals on Wheels?

Mr Cox —I am doing this on the run, but if you made it a level playing field and then charged all of your costs proportionally, including every administrative cost and overhead, the clients could not afford to pay for them.

Mr BRADFORD —No, of course not. But there is no suggestion, as far as I am aware, that they would be required to pay for it. It would be a matter of proper accounting for it so that everyone would know what it would cost.

Mr Cox —I do not have a problem with that. But if we are then seen to be competing against another supplier and we have to apply that level playing field, the supplier may come in and take it over and it becomes a commercial service at the full rate, not at a recognised discount.

Mr BRADFORD —It might be delivered very efficiently by Curry in a Hurry if people want that. They would then be subsidised. They would be paid directly to ensure that the customer got it at the $2.50 or $3 per hour rate.

Mr Cox —That transparent amount is a recognised social payment of the social service. If one transcends the other as a commercial imperative takes over, that discount or social payment is lost.

Mr Cheney —In the delivery of community and social services, one must not forget the high reliance on volunteers.

CHAIR —That happens with Meals on Wheels. Perhaps that is really drawing a long bow. It is largely volunteer driven anyway through a program that operates with a social objective.

Mr Cox —It is a long bow, but we are asking where the guidelines are.

CHAIR —That is the critical point that you are raising here today. In the last couple of days, there has been clear evidence of problems with consultation between the New South Wales government and local government in terms of possible exemptions and the process leading to the competition principles agreement publication by June of next year.

Mr Cox —It is not right to say that local government, by virtue of the fact that it is a puppet of the state, should miss out and be held to ransom by each individual state. The federal government is holding the purse strings. You can condition how that money flows through. The federal government holds a lot more power in this whole exercise than what it is saying it does and what the state is saying it does.

CHAIR —That is a moot point. There is a requirement for the publication of these statements by June next year. The clear understanding is that those statements are largely going to be published in terms of local government's role in the national competition policy by the state governments. Clearly, we will have a role in the recommendations we make, particularly when it comes to the third section of our terms of reference, which deals with existing government policies relating to CSOs and the options for the delivery and funding of these services. That is clearly a critical part of our role in this committee.

Mr HARRY WOODS —Does SHOROC have any idea of how they think community service obligations should be costed and by what methodology?

Mr Cox —We have not given it a lot of thought. I suppose we just want a consistent approach, and that applied across both federal and state boundaries.

Mr May —If I could ask a question: how would the federal government address a scenario that was outlined by the cabinet office in New South Wales where the benefits of the competition policy do not flow through to local government in New South Wales?

CHAIR —I cannot really comment on what is largely a piece of hearsay evidence, as they say in the legal jargon, with due respect, but obviously matters in terms of the agreement between the Commonwealth and the state, particularly in terms of the so-called windfall taxation revenue that will accrue to the federal government, and the state government asking for a share of that, the arrangements for that are a matter obviously that have to be worked out. I have made the point earlier on that I think it is a bit unfortunate that local government was not a signatory to the intergovernmental agreement even though they were, or are, a member of COAG, the Council of Australian Government.

Perhaps I can draw this to a conclusion at this point because we are, as I say, running into some time constraints, except to say that if there are any final comments that you would like to raise and leave with the committee, Mr Cox, or any of the other representatives--

Mr Cox —One point I would like to make is that if the committee could see its way clear to providing some guidance on part 4 assessments, what would and would not fit into the category to be assessed would save a lot of money and a lot of time. We have to have our submissions to the department by the end of January. At this point in time it means that every local government body has to go and do a part 4 assessment on its whole operation. It seems an awful waste of money and time.

CHAIR —My understanding is that there is not a formal requirement to in fact have a compliance audit of those activities, but obviously local government authorities would need to be sure that they are not in any way breaching the Trade Practices Act. In this respect they are not in any different position to anyone in the private sector or, indeed, government business enterprises at the state or federal level at the present time.

Mr Cox —With respect, Mr Chair, private business by its nature is a competitive business. We are not competitive in a lot of areas, 80 or 90 per cent of our activities, but the audit we would have to do would have to go across the whole organisation and it requires a lot of time, a lot of effort and a lot of money when we are only dealing with a very small proportion of our operations. Most of the non-competitive operations can be easily identified and put out as an addendum to the legislation or as an agreed position by federal and state for local government to adhere to, and at least then we only concentrate our resources on the part 4 review on that small area.

CHAIR —Perhaps I could leave you with the suggestion that you may like to make contact with an adviser with the committee, Mr Jim Dick, who is with us today, who might like to discuss this further with you in a private session which may help clarify some of those concerns.

I thank you and representatives from SHOROC for your appearance before the committee today. I think it has been useful, even to the extent that the waters may be a little bit muddied, and I guess that is part of the reason we have had this reference. But please feel free to comment at any stage during any other oral evidence presented to the committee or, if you wish to come back at any stage during the course of the inquiry, we would welcome your input.

I made the comment yesterday in an informal meeting with councils in the Albury area that the committee may give consideration to the publication of an issues paper later on during the course of this inquiry, because we may face a slight problem in our timetable with the election intervening before our report is completed, so I think something like that may be a useful way of providing guidance, to local government in particular, as to the direction in which the committee sees some of the references that we have been given by the Assistant Treasurer. Thank you once again.

[12.19 p.m.]