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Tuesday, 5 September 2000
Page: 17323


Senator IAN CAMPBELL (Parliamentary Secretary to the Minister for Communications, Information Technology and the Arts) (3:42 PM) —I table two revised explanatory memoranda relating to the bills and move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

VETERANS' AFFAIRS LEGISLATION AMEND-MENT BILL (No. 1) 2000

This bill is a parcel of amendments that directly or indirectly assist veterans and their families.

Amendments being made in this bill will assist Australian Defence Force members who have been severely injured as a result of their service, and the families of members who have been killed as a result of their service.

These amendments will ensure that any additional payments for the severe injury or the death, made by a determination under the Defence Act 1903, will not affect any compensation payments that may be payable to under the Veterans' Entitlements Act 1986. These additional payments were part of a package of assistance that this Government introduced after an Inquiry into Military Compensation Arrangements undertaken in 1997, in the aftermath of the Black Hawk accident.

A further element of this package of assistance, being introduced through this bill, is the provision for the children of these severely injured or deceased veterans to have access to counselling and guidance by the Veterans' Children Education Boards.

This bill also will allow the Repatriation Commission to accept an application for reimbursement of travelling expenses incurred by a veteran travelling to obtain medical treatment more than three months after the travel, where there are exceptional circumstances for the delayed application.

There have been cases where the current three-month time limit has caused difficulties where a person has suffered a prolonged illness, limiting their ability to manage their affairs. By introducing flexibility into these processes, this Government is demonstrating once again it listens to the needs of the veteran community, and is responsive to those needs.

This bill will give effect to three recommendations made by Professor Dennis Pearce in his "Review of the Repatriation Medical Authority and the Specialist Medical Review Council", which were endorsed by this Government as part of its commitment to identify improvements in the system of determining claims for compensation. These recommendations clarify the powers of the Authority in respect of requests it receives to review Statements of Principles.

The bill will also complete compensation adjustments associated with A New Tax System. These adjustments will ensure the value of the pension supplement will flow through to the amount of a bonus calculated under the Pension Bonus Scheme and to the farmers' income test, which is part of the criteria for eligibility under the Retirement Assistance for Farmers Scheme. Amendments will also enable the maximum amount payable for certain medical reports, obtained and used in support of a claim for pension, to be increased in line with the expected GST impact.

This bill also introduces various changes that will improve administrative arrangements associated with the delivery of services and assistance to veterans and their families.

The operation of the Veterans' Review Board will benefit from increased flexibility. This will be obtained by:

· providing an additional configuration of the Board,

· the introduction of a "slip rule" to correct an obvious error in the text of a decision or in a written statement of reasons for decision, and

· a power to delegate certain action within the Board's registry.

The Repatriation Commission facilitates access to a wide range of health care services for eligible veterans and dependants. The Commission has progressively reviewed the circumstances in which it needs to approve treatment before it is provided to the eligible person as the Department of Veterans' Affairs has shifted its focus from a health service provider to a purchaser of services. This bill reflects these changes by removing references to the former repatriation hospitals from the Act, and by reducing the need for prior approval of treatment from a general to an exceptional requirement.

The bill will provide a link between any special assistance and benefit the Repatriation Commission may grant a veteran or dependant and the appropriation available to the similar form of assistance or benefit that is available to other veterans and dependants eligible under the Veterans' Entitlements Act 1986. This will streamline the processes associated with any such grant by the Commission in the future.

The present restriction on the Repatriation Commission to delegate its powers to a person employed under the Public Service Act 1999, is a barrier to effective use of contracted and out-sourced services. This bill will enable the Commission to delegate its powers to certain contractors where the person, or the agency or firm for which the person works, is contracted to perform services on behalf of the Commission. The desired standards of service and codes of conduct of persons to whom the Commission would delegate its powers would be set out in the terms of the contract.

The recent introduction of the Home Support Advance Scheme has provided an opportunity to invite tenders for provision of advances under this Scheme. The changes to the Defence Service Homes Act 1918 will enable these business arrangements to be made, and separates this new Scheme from the Defence Service Homes Scheme that continues to be administered by the Westpac Banking Corporation.

In conclusion, this is a bill that offers reform to the conduct of business and further demonstrates this Government's commitment to cut red tape. It also offers timely and appropriate assistance to veterans and their dependants.

TRADE PRACTICES AMENDMENT (INTER-NAT-IONAL LINER CARGO SHIPPING) BILL 2000

This bill amends Part X (X means ten in this context) of the Trade Practices Act 1974, which regulates the market conduct of international liner cargo shipping companies that collaborate as conferences to coordinate joint services, share capacity and agree on freight rates.

Liner shipping comprises scheduled services for non-bulk cargo, most of which is carried in containers. The annual value of Australia's international trade carried by this sector of the shipping industry is around $85 billion.

The legislation has its origins in the late 1920s and resulted from concerns that Australian exporters should have access to adequate and efficient liner shipping services at reasonable freight rates.

The Government's objectives in respect of liner shipping are to ensure that Australian shippers - that is exporters and importers - have ongoing stable access to services of adequate capacity, frequency and reliability, at freight rates which are internationally competitive.

These objectives are given effect through Part X of the Trade Practices Act 1974, which permits conference operations while aiming to enhance the competitive environment for liner shipping services through the provision of adequate and appropriate safeguards against abuse of market power. This includes allowing shippers to form negotiating groups with countervailing powers to bargain with shipping conferences.

The means by which these objectives are achieved reflect the Australian Government's commitment to effective and efficient regulation.

The legislation sets out conditions for granting limited, but assured exemptions from

Section 45 and some parts of section 47 of the Trade Practices Act to allow liner shipping companies to collaborate as conferences. The current conditions include requirements to negotiate with exporters on standards of service and freight rates to be provided under registered agreements.

If exporters are dissatisfied with the negotiations, the Minister can refer the matter to the Australian Competition and Consumer Commission for investigation. This can lead to the Minister removing the exemptions.

It should be noted that Part X does not exempt shipping conferences from section 46 of the Trade Practices Act that prohibits misuse of market power.

Part X provides a legislative framework within which shipping conferences and their customers can resolve problems through commercial negotiations, with only minimal government involvement.

Australia's major trading partners including the USA, Japan, Korea, European Union and New Zealand, have arrangements broadly similar to Part X for regulating international liner shipping.

Productivity Commission's Review

Due to its relevance to competition policy, Part X was included in the Commonwealth Legislation Review Schedule for review in 1998/99.

On 12 March 1999 the Government, through the Assistant Treasurer - Senator the Hon Rod Kemp, referred Part X to the Productivity Commission for inquiry and report. The Commission submitted its final report on 15 September 1999, recommending the retention of Part X with a number of amendments.

On 23 December 1999 the Government announced its decision to retain Part X and implement the amendments recommended by the Commission, plus a number of additional changes to strengthen Part X so as to bring it more into line with national competition policy. The amendments in the bill can be divided into six broad categories.

1. Exemptions relating to rate setting

The exemptions relating to rate setting will be limited to `terminal to terminal' type shipping arrangements; that is, ones that include the ocean transport as well as cargo handling at a terminal carrying out operations on behalf of a shipping line.

The definition of terminal is to be widened to include terminals located away from ports. The relevant operations may take place at terminals on the waterfront or some inland terminal facility used for assembling export cargo for delivery to a port, or for delivering cargo to importers.

In some port approaches such as Sydney and Melbourne where there can be considerable traffic congestion, shipping lines are developing a practice of placing containers on rail wagons and sending them to some inland facility before delivery to an importer takes place. A reverse operation in respect of exports can also occur.

Individual shipping lines will still be able to quote door-to-door rates, but they would not have an exemption to collude in respect of arranging the inland haulage tasks.

2. Shipping Conference negotiations with stevedores

At present there is some uncertainty as to whether Part X provides exemptions for conference lines to negotiate collectively with stevedores for the provision of stevedoring services to member lines of conferences. However, this has been a common practice for many years and no objections have been raised to it on competition policy grounds.

The Government has decided that Part X should be clarified to confirm that shipping conferences may negotiate collectively with stevedores. The reason for this is that where a group of shipping lines act collectively through a conference agreement when negotiating with stevedores, the conference lines are able to offer a much larger volume of cargo. This can give the conference lines considerable leverage in negotiating a more favourable stevedoring rate than would be the case if shipping lines were to negotiate individually with stevedores.

3. Countervailing powers for importers

As far as practicable, importers will be provided with similar countervailing powers to those provided to exporters under Part X. This means extending to inward conferences the appropriate conditions in Part X that apply to outward liner shipping conferences.

Given the direct effect of inward liner shipping on Australia there is, in principle, no reason why Australia should not assert jurisdiction over such shipping in a manner consistent with international legal principles.

In this regard measures will be taken to avoid conflicts of jurisdiction where conferences are operating under exemptions granted in the country of export. The OECD has established a set of principles concerning the regulation of international liner shipping, which include ones aimed at avoiding problems from overlapping jurisdictions. The Government will be guided by these principles.

In addition, the amendments covering inwards liner shipping will contain provisions for the Minister to issue exemption orders covering those sections in Part X that could lead to conflicts of jurisdiction. The advice of the Attorney General's Department will be sought when considering the need for an exemption order.

The exemption orders will be disallowable instruments so that they will be subject to scrutiny by Parliament.

4. Increased powers for Minister and Australian Competition and Consumer Commission

The Minister and the Australian Competition and Consumer Commission will be granted increased powers to deal with concerns about conduct which has resulted in, or is likely to result in, a substantial lessening of competition and which is likely not to result in a public benefit. Such a situation could arise with the operation of discussion agreements that cover parties to traditional shipping conference agreements as well as independent operators.

The increased powers will only be used in `exceptional circumstances', such as where the operation of an agreement results in an unreasonable reduction in shipping services and/or an unreasonable increase in liner shipping freight rates, and where the public benefit from the conference agreement may be lost. In these circumstances the Minister will have the power to suspend, in whole or in part, such an agreement.

As a guideline for exercising the additional powers, exceptional circumstances will be taken to apply where:

· an agreement has the effect of giving its parties a substantial degree of market power;

· the conduct of the parties to the agreement has led to, or is likely to lead to, an unreasonable increase in freight rates or an unreasonable reduction in services; and

· the anti-competitive detriment of the agreement outweighs the benefit to shippers flowing from the agreement.

Exceptional circumstances will also be taken to apply where the agreement in question is substantially similar to one that has previously been deregistered pursuant to section 10.44 of Part X.

5. Open/Closed conferences

Liner shipping companies are to be allowed to continue to form `closed conferences' - that is those that require agreement by existing members before new members are admitted.

However, where refusal to admit a new member to a conference is considered to be contrary to the interests of Australian shippers, the Minister would be able to refer the matter to the Australian Competition and Consumer Commission for investigation and report. If such an investigation reveals that refusal to admit the new member is unreasonable, the Minister will be empowered to either suspend the operation of the agreement in question, or accept undertakings from parties to the agreement that would make suspension unnecessary.

6. Other matters

Repeal of section 10.05

Section 10.05 which prohibits price discrimination in certain circumstances is to be repealed. The Government agrees with the Commission's view that the price discrimination provisions of Part X serve no useful purpose, and indeed are potentially harmful if they discourage efficient price discrimination. In addition they would be extremely difficult to implement.

Section 49 in Part IV of the Trade Practices Act contained similar provisions to section 10.05 and was repealed in 1995 as not being cost effective.

Exemptions relating to freight rate charges

The bill will clarify the requirement that liner shipping companies must have a conference agreement registered under Part X, before the Part X exemptions relating to agreements on freight rate charges come into effect.

The Australian Government Solicitor has advised that there is a possibility that a court could take the view that sections 10.17A and 10.18A of Part X allow parties to a shipping conference to agree on freight rates without having a registered conference agreement. This was never the intention of these sections, which were added to Part X in 1991. Accordingly, the bill provides for redrafted sections 10.17A and 10.18A to remove any ambiguity that may exist.

The provisions of the 1991 amendments to Part X, which removed the requirement for shipping conferences to include freight rate details, or variations to those rates, in their registered conference agreements are being retained. Such a requirement would impose a significant reporting burden on the shipping industry, be very costly to administer and serve no useful purpose. Part X already provides exporters with a legislated right to require shipping conferences to provide them with details of freight rate charges, when reasonably requested to do so.

Australian flag shipping

While the existing provisions which prohibit parties to a conference agreement from hindering Australian flag shipping are being retained, the Government has accepted the Productivity Commission's recommendation to add a national interest test to apply to any determination by the Minister as to whether Australian flag shipping is being adversely affected by the conduct of conference lines.

This amendment will ensure that shippers' interests are taken into account explicitly in a Ministerial determination as to whether a conference, or non-conference carrier with substantial market power, is misusing that power in order to hinder an efficient Australian carrier.

Enforcement of undertakings

The bill provides for more effective and flexible enforcement of undertakings along the lines of section 87C of the Trade Practices Act.

While enforcement provisions have been resorted to only very infrequently, a greater range of sanctions would be useful, and will further encourage conference members to abide by the rules, and facilitate the commercial resolution of disputes between conferences and shippers.

Mechanism for reviewing decisions

Decisions taken by the Minister or the Australian Competition and Consumer Commission under Part X, and which affect the interests of shippers and/or shipping lines, are to be reviewable by the Australian Competition Tribunal.

Future reviews of Part X

The amendments to Part X represent a continuation of the process of regularly reviewing the mechanisms for controlling the conduct of liner shipping conferences with the aim of ensuring that the arrangements result in overall benefits to the users of liner shipping services in Australia.

In line with the Productivity Commission's recommendations, the Government has decided that Part X should be re-examined in 2005.

Ordered that further consideration of these bills be adjourned to the first day of the 2000 summer sittings, in accordance with standing order 111.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.