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Thursday, 6 April 2000
Page: 15392


Mr McGAURAN (Minister for the Arts and the Centenary of Federation) (9:46 AM) —I move:

That the bill be now read a second time.

ThePostal Services Legislation Amendment Bill 2000 implements a number of decisions made by the government in response to the review of the Australian Postal Corporation Act. This review was conducted by the National Competition Council and was completed in 1998. The review was undertaken in accordance with the Commonwealth's commitments under the Competition Principles Agreement. This agreement between the Commonwealth, states and territories requires the review of all legislation that restricts competition by the year 2000.

The bill is about measured and carefully designed reform aimed at providing optimal consumer and social benefits and at encouraging the growth and improvement of Australia Post's services.

The main purpose of the bill is to promote opportunities for competition in the postal services market and, thereby, improve the quality and price of services provided to consumers. Specifically, the bill proposes to reduce the scope of services reserved to Australia Post and to provide a postal services access regime under the Trade Practices Act.

The government rejected the recommendation of the National Competition Council that all business mail should be deregulated and opted instead for a more gradual reduction of Australia Post's monopoly. This will ensure that Australia Post continues to be able to fund the provision of its community service obligations from its reserved service revenue.

The bill proposes to reduce Australia Post's monopoly by reducing the level of services reserved to Australia Post. Currently, Australia Post has the exclusive right to carry letters in Australia subject to a number of exceptions.

These exceptions include the carriage of letters weighing over 250 grams and the carriage of letters for a rate of at least four times the standard postal rate. The bill allows for increased competition by reducing the weight threshold to competition from 250 grams to 50 grams and the price threshold from four times the standard rate, or $1.80, to one times the standard rate, or 45c. This means that competitors will be able to carry letters that weigh more than 50 grams and will be able to carry letters for a charge of at least 45c.

In 1994, Australia Post's monopoly on the carriage of outgoing international mail was removed. The bill proposes to remove Australia Post's monopoly on the carriage of incoming international mail. This will mean that the carriage of all international mail will be liberalised.

Safeguards have been included in the bill to address concerns that competitors may try to avoid Australia Post's monopoly on the carriage of domestic mail below 50 grams by moving mail offshore so that it is classified as incoming international mail. The safeguards provide Australia Post with the opportunity to take action against a person who breaches the reserved services in this way. The government will take further action, if it proves necessary, to ensure the reserved service is not undermined in this way.

The government is committed to ensuring that Australia Post continues to provide a letter service that is reasonably accessible to all Australians and which is available at a single rate of postage for standard letter items. The community service obligations set out in the bill require Australia Post to continue to provide the same level of service set out in the current act. In addition, in 1998, the government introduced regulations to prescribe minimum standards which Australia Post must achieve in relation to accessibility and reliability of the postal delivery service and which require Australia Post to provide a minimum number of postal outlets and street posting boxes. Performance against these criteria are audited each year by the Auditor-General.

The objective of the proposed access regime of the bill is to promote the long-term interests of users of postal services and to ensure that these services are supplied as efficiently and economically as possible. It is not the intention of that that the access regime should operate in any way to put at risk Australia Post's community service obligations or the viability of Australia Post's infrastructure.

The access regime is structurally similar to the infrastructure access regime in part IIIA of the Trade Practices Act. It also contains elements from the telecommunications record keeping rules in part XIB of the act and the telecommunications access regime in part XIC.

Like part XIC of the Trade Practices Act, the postal access regime is designed to assist competitors to gain access to services supplied by a strong market incumbent. It is also designed to encourage commercial negotiation between access providers and seekers but allows for intervention by the Australian Competition and Consumer Commission, if necessary.

Access providers are encouraged by the provisions in the bill to make undertakings about the types of services they may make available for access and the terms and conditions of access they will provide. However, the bill also provides the ACCC with the power to declare access to a postal service and to arbitrate the terms and conditions of access to a declared service, if agreement cannot be reached between the parties concerned.

The bill proposes that the minister will be required to declare a number of services at the commencement of the regime. These are Australia Post's bulk mail services and post office boxes. There is currently provision for access to Australia Post's bulk mail services through the bulk interconnection regime set out in the current legislation. The National Competition Council recommended access to post office boxes because physical access by competitors is unavailable.

The bill puts in place arrangements to assure competitors that Australia Post is not cross-subsidising from the monopoly reserved services to the services it provides in competition with other postal operators. Under these arrangements, the ACCC will be able to make record keeping rules to require providers of postal services to maintain records in a specified form.

The bill also proposes to convert Australia Post, a statutory corporation established under the Australian Postal Corporation Act 1989,to a public company under the Corporations Law. The conversion of Australia Post is consistent with government policy that all government business enterprises should be companies registered under, and therefore subject to, Corporations Law. This decision reflects the policy that Commonwealth owned entities competing against other companies should be subject to the same law.

There are a number of consequential amendments proposed to other acts. The majority of these amendments occur because it is proposed to change the name of the act to the Australian Postal Corporation Limited Act 1989. The new name reflects the new status of Australia Post as a Corporations Law company. I present the explanatory memorandum and commend the bill the House.

Debate (on motion by Mr Stephen Smith) adjourned.