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Monday, 24 November 2008
Page: 19


Senator STEPHENS (Parliamentary Secretary for Social Inclusion and the Voluntary Sector and Parliamentary Secretary Assisting the Prime Minister for Social Inclusion) (5:05 PM) —I move:

That this bill be now read a second time.

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

Leave granted.

The speech read as follows—

NATIONAL MEASUREMENT AMENDMENT BILL 2008

The National Measurement Amendment Bill 2008 is a bill to amend the National Measurement Act 1960. This legislation will establish a single trade measurement system for Australia, replacing the current fragmented situation in which each State and Territory has a separate system.

The Government is committed to reducing the regulatory burdens on Australian business and has embarked on an ambitious reform agenda through the Council of Australian Governments (COAG).

COAG has endorsed a business regulation reform agenda designed to advance Australia towards a seamless national economy.

COAG’s Business Regulation and Competition Working Group has been directed to deliver early action on the regulatory reform “hot spots” identified by COAG in 2006 and again in 2007. The area of trade measurement is one of the 10 identified regulatory “hot spots”.

‘Trade measurement’ is a term that refers to the use of measurement as the basis for the price in a transaction. For example, by measuring the volume of fuel delivered from a petrol pump, a service station determines the total price you pay to fill your car’s petrol tank.

A ‘trade measurement system’ is the term used to describe the infrastructure that is needed to make sure the petrol pump (or any other trade measuring instrument) is sufficiently accurate to give a fair result to the buyer and seller.

In Australia, an estimated $400 billion worth of trade based on some kind of measurement takes place annually. Transactions involving measurements range from simple consumer purchases at the corner shop to complex multi-million dollar international trade deals.

So, why does government need to be involved in these market processes? Well, consider how onerous it would be if traders had to prove to every customer that they had weighed each purchase accurately. Similarly, how difficult it would be for a packing house to prove to each purchaser that their cereal packet is filled with the stated amount. Also, think how wasteful it is for wine producers to sacrifice product to prove that a wine bottle is filled correctly.

A trade measurement system helps overcome these difficulties. It gives confidence to buyers and sellers that measurements are accurate and this reduces transaction costs in each trade.

Trade measurement is a classic example of a proper role for government in establishing the infrastructure that makes it possible for markets to operate efficiently and effectively.

But Australia’s current trade measurement infrastructure is not operating as efficiently and effectively as it should. This is why the Rudd Government is introducing this historic legislation. We are determined to create a truly national system that will deliver productivity improvements throughout the economy to the benefit of all Australians.

To describe how significant this change to Australia’s trade measurement system will be, let me set out a bit of history.

Prior to Federation, each British colony in Australia had its own weights and measures system. When the Constitution was drawn up, the Commonwealth’s constitutional power for weights and measures was established under section 51 - subsection 15. However the scope of “weights and measures” in 1901 was limited almost exclusively to measurements of mass and volume, and trade was very much more a local matter than it is today. Without a pressing need for national administration, the States retained responsibility for their various trade measurement systems.

However, within several decades, the desirability of having nationally consistent rules and practices was evident and has been the subject of a number of reviews and inquiries.

Two reviews in particular have been influential.

In 1983, the Scott Review recommended a national approach to the administration of trade measurement. The recommendation resulted in drafting of Uniform Trade Measurement Legislation. Unfortunately it took more than 20 years for all jurisdictions to enact this legislation. Despite the uniform format of the legislation, practical problems persisted. This was largely because the amendments to legislation were not adopted simultaneously, the interpretation of regulations varied between jurisdictions, and there were different approaches to administration.

In 2006, the Ministerial Council on Consumer Affairs commissioned a review of trade measurement arrangements. The problems identified by stakeholders included unwarranted costs to businesses that operate across borders, different cost recovery procedures in different jurisdictions, different processes for licensing private sector verifiers of trade measuring instruments, and inconsistent advice being provided about trade measurement requirements.

This review concluded that the adoption of a national trade measurement system would deliver a net economic benefit to Australian industry, business, government and consumers. In April 2007, COAG accepted this recommendation.

The National Measurement Amendment Bill gives effect to this COAG decision. And it will create a legislative framework for a national trade measurement system that will be administered by the Commonwealth from 1 July 2010.

The bill recognises that many elements in the existing model, the Uniform Trade Measurement Legislation, have stood the test of time. The bill adopts those elements where appropriate, but frames them in a way that will be responsive to future needs and improvements in business practices and technologies.

The new national system will continue to ensure the accuracy and reliability of traditional trade measuring instruments such as scales, fuel dispensers and weighbridges. However, it provides the flexibility for new technologies to be introduced as business or consumers require additional assurance. For example, the price of grain is set by measuring grain protein and both the grain growers and grain receival sites need confidence that accurate results have been used to determine the price.

The new system will set uniform practices for each class of measuring instruments. Traders who operate across Australia will be able to use one set of procedures, rather than meeting different sets in the different States.

The bulk of verifications of trade measuring instruments will continue to be performed by the private sector, with firms or individuals licensed on the basis of competence and integrity. However, multiple licensing for cross-border operation will no longer be required, with one licence being valid for operation across Australia.

Licensees will continue to be responsible for ensuring that their employees are competent to perform verifications. Currently the means of demonstrating competence varies across jurisdictions. In implementing the national trade measurement system, the Commonwealth will develop nationally-recognised qualifications for verifiers, providing a harmonised platform for skills development in the workforce.

As in State and Territory trade measurement systems, government will perform an inspection function to ensure that traders and licensees are maintaining the accuracy of trade measuring instruments. Trade measurement inspection is a routine activity in business premises and State and Territory inspectors conduct this work without requiring warrants. Infrequently, access to residential premises is necessary and this must occur under warrant. To facilitate an effective inspection regime, these powers have been replicated for Commonwealth inspectors. They will be able to inspect, examine and test measuring instruments, examine and test prepacked articles, investigate alleged offences, search and seize records, measuring instruments and prepacked articles, subject to Commonwealth codes covering investigative practices. These inspection procedures have long been accepted in the marketplace as part of the cost of doing business and ensuring fair trading.

The current trade measurement systems also examine pre-packaged goods to confirm that packages contain the stated quantities. At the request of wine producers and major packers, this new legislation includes the option for production-line packers to use an internationally-agreed system to demonstrate compliance with quantity statements. This system - the Average Quantity System (or AQS) - has already been adopted in New Zealand and by many of Australia’s major trading partners, including Japan, the European Union and the United States. AQS is now available to production-line packers to adopt voluntarily in instances where it is a more efficient means to demonstrate compliance and to align with international practice.

The bill provides the heads of power for all the necessary elements in a national trade measurement system. As with the current trade measurement system, the bill provides for the technical and administrative detail required to operate the system to be specified in regulations.

The bill provides the legislative framework for the national trade measurement system by amendment of the National Measurement Act 1960. This Act already defines technical infrastructure that the Commonwealth delivers to support trade measurement - such as maintaining Australia’s measurement standards and approving the design of trade measuring instruments - and the National Measurement Institute performs those functions. Therefore it is a logical progression to expand the National Measurement Act to encompass a national trade measurement system, and to designate the National Measurement Institute as the body responsible for administering the system.

This Government is serious about creating a seamless national economy unhampered by unnecessary duplications, overlaps and differences in regulation. In particular, we are determined to remove those inconsistencies that create unnecessarily complex and costly burdens on business.

I am pleased to introduce a National Measurement Amendment Bill that brings these necessary reforms to Australia’s trade measurement system.

Debate (on motion by Senator Stephens) adjourned.