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Wednesday, 1 July 1998
Page: 5747

Mr TRUSS (Customs and Consumer Affairs) (9:50 AM) —I move:

That the bill be now read a second time.

The National Measurement Act 1960, `the act', provides the legislative basis for the Australian national measurement system. The objective of this act is to ensure that measurements are made on a consistent basis throughout the nation and are compatible with measurements in other countries.

While trade measurement in reticulated water, electricity and gas already falls within the ambit of the act, the act does not provide a detailed measurement control system to enable traders to easily comply with its broad requirements for legal traceability. This bill amends the act to provide mandatory requirements for specified utility meters, as recom mended by the Review of Australia's Standards and Conformance Infrastructure, the Kean report.

The Kean committee recognised that the present system of utility measurement was wasteful, inadequate in today's environment and inappropriate to address the privatisation and corporatisation of utility authorities. In recommending an amendment to the National Measurement Act, the Kean committee was aware that a state and territory based solution would not effectively address the transborder nature of the utility sector which includes the national electricity grid and interstate gas pipelines.

The proposal contained in this bill has significant benefits for utility meter manufacturing industry, utility companies and consumers. National pattern approval and verification will provide local manufacturers of utility meters with the efficiencies and benefits of scale of a single national market for utility meters.

As a consequence of international harmonisation of requirements, the proposal will enhance export opportunities for local manufacturers of utility meters. While the proposal will expose local manufacturers to additional competition from imported meters, it will at the same time safeguard them against unfair competition from substandard imported meters.

The proposal contained in this bill will provide direct benefits for utility companies by eliminating multiple, inefficient testing of utility meters for pattern approval purposes that is only partially effective. The associated cost burden will be removed, and the exposure of these companies to risk arising from the purchase of substandard utility meters will be greatly reduced.

Consumer confidence in utility metering will be increased because of the independent third party approval and auditing of meters, reducing the present asymmetry of information between utility companies and consumers. This will translate into indirect benefits to utility companies because of fewer consumer complaints and a consequent reduction in transaction costs.

The proposal contained in this bill will cause additional costs for utility meter manufacturers, but these will be more than compensated for by the efficiencies and benefits of scale associated with a single national market for utility meters and the increased access to export opportunities. In addition, the proposal has clear benefits for consumers, utility authorities and state and territory regulators. However, it is not possible to quantify these benefits. There will be minor costs to the National Standards Commission associated with coordinating the system.

The bill broadens the objects of the act to embrace the verification of utility meters and extends the functions of the National Standards Commission to ensure that utility meters used for trade are verified. The bill introduces a new section 4A that defines the extent to which the amended act will exclude state and territory laws relating to utility meters used for trade. In particular, this section provides for the concurrent operation of state and territory laws relating to the re-verification of utility meters used for trade and the in-field replacement of meters that give inaccurate measurements.

The bill requires that utility meters used for trade, not prescribed as exempt in the regulations, must be verified by the National Standards Commission or a verifying authority appointed by the commission for that purpose. One of the requirements for verification is that the pattern—design—of the utility meter has been approved by the commission under the existing pattern approval provisions of the act.

Provision is made for the commission to audit the work of verifying authorities to ensure both that the meters conform to their approved pattern and that they have been correctly verified. Enforcement provisions are included to provide the commission with access to evidence in the event that offence provisions of the bill are contravened. These enforcement powers are similar to those of a trade measurement inspector in a state or territory jurisdiction.

It is intended that all classes of utility meters will initially be exempted from the application of these new provisions. Follow ing the satisfactory completion of consultations and the expiry of an agreed introductory period, the exemption will be lifted for a particular class of utility meter. Provision is made in the bill for utility meters already being used for trade to remain in use provided that they give accurate measurement.

Recommendation 6 of the Kean report, to which this bill relates, has been accepted by both the present government and the previous government. In addition, the proposal is strongly supported by the utility meter manufacturing industry. I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Dr Theophanous) adjourned.