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Postal Services Legislation Amendment Bill 2000

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1998 - 1999 - 2000

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

POSTAL SERVICES LEGISLATION AMENDMENT BILL 2000

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the Minister for Communications, Information Technology and the Arts, Senator the Hon Richard Alston)



 

POSTAL SERVICES LEGISLATION AMENDMENT BILL 2000

 

 

OUTLINE

 

The Postal Services Legislation Amendment Bill 2000 (the Bill) implements the Government’s response to the National Competition Council’s review of the Australian Postal Corporation Act 1989 by proposing to:

 

(a)                 reduce the scope of the services reserved to Australia Post, thereby increasing the opportunities for competition in postal services; and

 

(b)                provide a postal services access regime under the Trade Practices Act 1974 .

 

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, wholly-owned by the Commonwealth.  This is consistent with Government policy that all Government Business Enterprises should be companies registered under, and therefore subject to, the Corporations Law.  This decision reflects the policy that, for reasons of competitive neutrality, Commonwealth owned entities competing against other companies should be subject to the Corporations Law.

 

Part 1 of the Bill contains the preliminary provisions.

 

Part 2 of the Bill contains the provisions dealing with the corporatisation of Australia Post.

 

Schedule 1 to the Bill contains the amendments to the Australian Postal Corporation Act 1989.  This Schedule includes the provisions that reduce Australia Post’s reserved services.  Currently, subject to the exceptions to the reserved services set out in section 30 of the Act, Australia Post has the exclusive right to carry letters within Australia, whether the letters originated within or outside Australia.  The Bill reduces the reserved service so that Australia Post’s exclusive right only applies in relation to letters that originate in Australia and are for delivery in Australia.  This completes the deregulation of incoming and outgoing international mail commenced in the Australian Postal Corporation Amendment Act 1994 .

 

The proposed amendment of two significant exceptions to the reserved services, the weight and price exceptions, is intended to further reduce Australia Post’s reserved services.  Currently, the weight exception to the reserved services is the carriage of a letter weighing more than 250 grams.  Effectively, in relation to weight, Australia Post’s reserved services includes the carriage of a letter weighing 250 grams or less.  The Bill proposes to reduce the weight exception to the carriage of a letter weighing more than 50 grams.  Effectively, this reduces Australia Post’s reserved services to the carriage of a letter weighing 50 grams or less.

In relation to price, currently, carriage of a letter for at least 4 times the standard postal article rate is an exception to the reserved services.  The standard postal article rate is 45 cents, which means that the carriage of a letter for at least $1.80 is an exception to the reserved services. Effectively, in relation to price, Australia Post’s reserved services include the carriage of a letter for an amount less than $1.80.  The Bill proposes to reduce the price exception so the carriage of a letter for at least the standard postage rate is an

exception to the reserved services.  This reduces Australia Post’s reserved services to the carriage of a letter for less than 45 cents.

 

The Schedule also contains numerous amendments consequential upon the corporatisation of Australia Post and other minor amendments to update and improve the Act, including the revising of some of the Act’s central definitions.

 

Schedule 2 to the Bill is a Schedule that renumbers the Australian Postal Corporation Limited Act 1989 after all the amendments to the Act proposed by the Bill have been made.  It has been included so that, after the renumbering, the Act will have continuous numbering.  This was considered preferable to the Act having missing numbers because of the many provisions that are proposed for repeal in Schedule 1.

 

Schedule 3 to the Bill contains the consequential amendments to other Acts.  The majority of these consequential amendments update the proposed new references in those other Acts to the new name of the Act, Australian Postal Corporation Limited Act 1989.  The new name of the Act reflects the new status of Australia Post.  The proposed amendments to the Administrative Decisions (Judicial Review) Act 1977 and the Freedom of Information Act 1982, which have the effect that Australia Post will cease to be subject to these aspects of the administrative law package, are consequential upon Australia Post’s proposed new status as a public company under the Corporations Law. These proposed amendments implement Government policy that Government Business Enterprises not performing administrative functions should not be subject to statutory administrative law.

 

Schedule 4 contains the proposed amendments to the Trade Practices Act 1974 (TPA) to insert a new Part XID, a postal services access regime. The objective of the regime 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.

 

Like Part XIC of the TPA, Part XID is designed to assist competitors to gain access to services supplied by a strong market incumbent.  In this way, the proposed postal services access regime is different from the general access regime in Part IIIA of the TPA which assumes that access is required in the context of a natural monopoly.

 

The proposed new regime provides for the declaration of postal services by the ACCC.  Such a declaration may, but need not, follow a public inquiry.  If the ACCC makes a declaration, the declaration specifies a postal service provided by a particular provider.  In addition, within 6 months of the commencement of Schedule 4, the Minister for Communications, Information Technology and the Arts must make a determination that bulk services provided by Australia Post and services related to Australia Post’s post-office boxes are declared services.

 

As a result of the declaration of a postal service, whether by the ACCC or by the Minister, a person seeking access to a declared postal service may request the provider of the service for access to it.  If negotiations in relation to the access result in agreement about the terms and conditions of access, the parties may make a contract and register that contract.  If an agreement is registered, it can be enforced as though it is a determination made by the ACCC under Part XID.

 

If the parties are unable to reach an agreement in relation to the terms and conditions of access, the parties may notify the ACCC that a dispute exists and the ACCC must arbitrate the dispute and make a determination about the terms and conditions of access.

 

The proposed new regime also allows for the provider of a postal service to make an access undertaking at any time.  If the ACCC accepts the undertaking, the provider will be able to provide access to the service on the terms and conditions set out in the undertaking.  If an undertaking in relation to a service is in place, the service cannot be declared by the ACCC and the provider cannot become or remain a party to an access dispute about the service.

 

In addition, the ACCC will be empowered to make record-keeping and disclosure rules with which specified postal providers will be required to comply.

 

 

FINANCIAL IMPACT

 

The Bill is not expected to have a significant financial impact upon Commonwealth expenditure or revenue.  The Bill will require the ACCC to expand its regulatory functions in relation to the postal services industry.  Accordingly, further resources will be required for the ACCC, estimated to be in the order of $1m in the 2000/2001 financial year.

 

The Bill can be expected to have financial impact on Australia Post and other postal service operators.  The impact on Australia Post relates to possible revenue losses following the reduction in the reserved services and the imposition of the access regime.  However, some of these losses should be offset by the advantages that Australia Post could obtain if Australia Post benefits from access to declared services provided by other postal service providers.

 

It is not possible to quantify the costs and benefits to participants in the postal industry from the reduction in the reserved services and the postal services access regime.  This is because much will depend on both the nature of the commercial activities in which they engage and the extent to which the access regime effectively provides access to postal services.



REGULATION IMPACT STATEMENT

 

There are two Regulation Impact Statements relating to the Bill.  The first deals with the proposed amendments to the Australian Postal Corporation Act 1989 .  The second deals with the access regime.

 

Regulation Impact Statement 1

 

The National Competition Council (NCC) examined the postal market against the background of the National Competition Policy Principles.  There were two major aspects to the examination: the corporate performance of Australia Post; and consideration of the extent of the current monopoly against the public interest test established by the CPPs.

 

The NCC examined Australia Post’s financial and operating performance over the last 5 years and concluded that Australia Post is performing very well against its corporate objectives.  It is among the top performing postal authorities and compares extremely well with comparable organisations and similar corporations.  Australia Post has consistently been able to improve its internal efficiency, provide large dividend payouts and capital repayments to Government.  It has been able to make significant network investments ($500m over 3 years) funded almost entirely from internal cash flows.  It also achieves high results in reliability of delivery of non-bulk mail and has maintained the Standard Letter Rate (SLR) at 45 cents since 1992.

 

Australia Post operates a relatively low risk network business yet its targeted return on assets is high compared to all publicly listed companies, is higher than any public company in the transport industry and equals the best performing public company in the retail sector.

 

The NCC attributed Australia Post’s performance to good management since corporatisation and the reservation of services to Australia Post.

 

Australia Post has achieved this performance in a legislative framework which has required it to provide a universal letter service to all Australians at a uniform price (currently 45 cents) - the Universal Service Obligation (USO).  To assist it to meet the USO, Australia Post has been protected from competition for the carriage of articles weighing less than 250 grams (the reserved letter service) by a requirement that other service providers charge no less than 4 times the SLR (ie $1.80 per article).  This means that currently some 50% of Australia Post’s revenue is earned from services in competitive markets.

 

The NCC has reported that Australia Post’s monopoly imposes significant constraints on competition in several sectors of the market which would otherwise be contested.  Under the Competition Principles Agreements legislative barriers to competition should remain only if there is a net public benefit resulting from their retention and if the objective of the legislation can only be achieved by restricting competition.

 

The NCC has provided several reasons why increasing competition can advantage users of postal services and the community generally.

 

Effective communications are very important to commercial dealings by both individuals and businesses.  Traditional postal services should be produced as efficiently as possible, sold at the lowest possible prices and provide a flexible range of services which meet customer needs.  It is also important that services are developed which take advantage of new opportunities.  This means capitalising on new techniques and technologies by exploiting advances in information technology and telecommunications to enhance postal services.  It also means pricing these new services as competitively as possible.  A postal service industry which is operating in a competitive environment will be in a good position to tackle broader competitive challenges, such as those arising from electronic services.

 

There are a number of concerns expressed about the current arrangements:

 

(a)        Australia Post’s profits provide a return on equity which is well in excess of what could be considered typical for a corporation of this type suggesting that the extent of the monopoly is too large and that prices could be lower or services (or service standards) enhanced;

 

(b)        Australia Post is seen as inflexible in its dealings with major customers, exploiting the lack of service provider choice to set its own conditions of contract, service standards (which are inadequately monitored) and prices; and

 

(c)        it is suspected that, despite efforts to account separately for reserved and non-reserved services, Australia Post may be cross subsidising between the services (proper apportionment of shared costs is a critical issue to valuing the CSO and determining prices for competitive services).

 

The NCC’s recommended solution to (a) and (b) is to reduce the reservation to Australia Post to cover only household originated mail and for (c) to require more transparent accounting for reserved and non-reserved services.

 

Important issues to address in considering options for reform include:

 

·       the extent (end point) and pace of change

 

·       the delivery and funding of CSOs; and

 

·       pro-competitive provisions (network access and cost transparency).

 

The CSOs and their funding are of particular significance and are discussed in detail at ATTACHMENT D to this submission

 

 

DISCUSSION OF OPTIONS

 

The NCC is confident that Australia Post would remain a viable business (with external CSO funding).  Other stakeholders are concerned that a reduction in the reserved service and a substantial and sudden increase in competition would put increased pressure on Australia Post to reduce costs to the point that it would contract its network and reduce service levels (particularly in regions with low populations).  The NCC’s answer to this concern is to externally fund the CSO component of the Universal Letter Service (ULS) and Government imposed minimum service levels (regulations and customer charter).

 

Australia Post has argued for a more gradual approach to reform by progressive reduction of the weight and price thresholds which reserve services to it followed by a review to reconsider the need for further market liberalisation in 2003.

 

OPTION 1:  The NCC’s Recommended Approach

 

The key recommendations from the NCC’s report are:

 

Open competition in letter services to business from 1 January 2000 - business being any entity whose primary function is to provide goods and services, including organisations such as charities and government.  Australia Post should be free to compete in this part of the letter services market by, among other things, offering discounts below the uniform postage rate;

 

Open competition in all international mail services (currently incoming international mail is reserved to Australia Post);

 

The household letter service should remain reserved to AP (ie. competitors must charge two times the SLR for household mail) with a mandated uniform rate of postage;

 

AP should retain the obligation to provide an Australia wide letter service, with unprofitable parts of the Universal Service Obligation subject to CSO funding from a mix of sources.  (Mix of sources being a degree of cross subsidy between low cost and high cost household letter services with supplementary funding from the Commonwealth Budget); and

 

To address concerns about threats to the universal service posed by possible future reviews of Commonwealth funding and to maintain incentives in AP to minimise costs and to minimise barriers to entry in postal services, the Council recommends that prior to the introduction of the reform package:

 

(a)     an auditor should independently review the level of budget contribution to the direct costs of providing the community service obligation; and

 

(b)    funding should be negotiated with Australia Post up-front to cover CSO services for 5 years.

 

A second funding option proposed by the NCC if budget funding is not favoured is an industry levy similar to that currently in operation in the telecommunications industry.  This model for funding the CSO requires postal service providers competing against Australia Post to contribute to the cost of providing the CSO.  The contribution would be calculated according to the service providers’ market shares.  The NCC consider that the advantages of an industry levy are that it allows for a level playing field for competitors and provides a secure source of funding for the CSOs which is not vulnerable to the budget process.

 

In terms of access arrangements the NCC has recommended that :

 

(a)     a compulsory access undertaking, approved by the ACCC be developed by Australia Post for the CSO (this should more correctly be described as the ULS) and post office boxes;

 

(b)    if AP does not submit an acceptable undertaking the ACCC should determine the terms and condition for access; and

 

(c)     AP’s exemption from Part IIIA (Access provisions) of the Trade Practices Act 1974 be repealed.

 

The NCC also recommended the two additional safeguards should be in place during the initial years of deregulation:

 

(a)     a new section of the TPA dealing specifically with anti-competitive conduct in the market for postal services (reviewed in 2005); and

 

(b)    a requirement for detailed auditing and accounting information on Australia Post’s activities to provide for transparency of the financial relationship between different elements of the business.

 

ATTACHMENT E to this submission provides a more detailed response to each recommendation from the report.

 

IMPACT ANALYSIS

 

Impact on Australia Post

 

The NCC considered that the package for reform put forward by AP during its review underestimated the level of reform its business can tolerate.  In 1993, Australia Post estimated that the 1994 changes to the Act would put at risk $250 million of revenue. The actual loss of growth was only seven percent of this original estimate

(ie. $17.5 million).

 

The NCC is of the view that Australia Post has flourished in competitive markets with two thirds of its profit generated from services open to full competition.  Currently around fifty percent of Australia Post’s revenue and seventy percent of its profit is earned from services in competitive markets. 

 

The NCC’s reform package exposes around 90 percent of revenue to potential competition from 1 January 2000.  Australia Post’s initial proposal would increase exposure to potential competition to 84 percent over a three year period.  According to the NCC, the advantage of its proposal is that it deliberately targets the deregulation of services where competition would provide the greatest benefits to the community and the least threat to the ULS obligation.

 

Modelling work undertaken by Arthur Andersen (summarised below) for the NCC suggests that under a worst case deregulation scenario for Australia Post, the Corporation would earn at or around a commercial rate of return on assets for its type of business until at least 2005.  It should be noted, however, that this would represent a sizeable reduction on current operating performance with return on assets falling from around 15% to approximately 8% and return on equity falling to around 19% from 27%.  This worst case scenario assumes:

 

full deregulation of letter services (ie no reserved services)

 

no increase in prices

 

retention of the USO without compensation (no budget funding or industry levy)

 

no growth in the market as a result of increased competition

 

no additional cost cutting, productivity or marketing measures; and

 

the retention of existing capital expenditure plans (eg, futurePost).

 

External funding for CSO costs as recommended by this review would ensure the continuation of Australia Post’s viability and its universal service obligation.

 

The open competition scenario modelled by Arthur Andersen (when compared to a base case) found that Australia Post’s revenues would decrease by $347 million.  As well, projected EBIT virtually halves from $504 million (base case in 2005) to $260 million.  As a consequence, projected net profits are also around half the base case at $150 million compared to $307 million.

 

The NCC considered that in comparison to the $233 million net profit Australia Post achieved in 1996-97, a 36% reduction in net profits is not substantial although this does not appear to take into account growth in the market. 

 

The Arthur Andersen model also assumes that Australia Post would have to carry the cost of the CSO without external funding, whereas the NCC has recommended that Australia Post be directly funded for the CSO (currently estimated at $67 million).  This would add to the projected profits and reduce the impact of erosion of market share due to increased competition. 

 

The NCC considers that Australia Post will remain a viable business even when faced with open competition.  Further, the NCC considers that a commercial rate of return for the Australia Post business is 8-9 percent.  The greatest downside effect is the reduction in dividends to the Government.  On the other hand, the NCC believes there are considerable consumer benefits, including a considerable drop in prices, and no increase in the uniform standard letter rate. 

 

In respect to shareholder value, most industry participants believe that existing competitive strengths (customer loyalty, nationwide network, economies of scale) and market power will ensure that Australia Post remains the dominant player in a deregulated market for the foreseeable future.  Under these circumstances, and provided management is willing to effectively respond to the challenges of the new postal environment, Australia Post should continue to earn an adequate rate of return through its core businesses with shareholder value maintained.

 

 

Impact on the Postal Services Industry

 

The NCC believes that the industry is likely to develop two distinct types of service provider.  The first type will compete head-to-head with Australia Post, offering a full network service, albeit with different products and over geographic areas ranging from local to near-nationwide networks.  The second type will provide some processing services but utilise the network services of others.  The NCC considers that deregulation coupled with the access regime recommended in its report will eliminate the current competition bottlenecks in postal services.  Further, contesting of components of the service chain by new market participants will be an important source of competition in the industry.

 

The NCC considers that Australia Post is likely to remain in a strong position in the market and is capable of competing strongly over time.  It is unlikely to sacrifice market share easily.  Regardless of the market penetration achieved by other service providers, the threat of competition is considered sufficient to achieve initial improvements in the level, quality and prices of postal services.  Price competition in high-use segments of the market is likely to be fierce, while the take up of new technology and product diversification is likely to increase across the board.

 

Impact on Consumers

 

Australia Post argues that 45 cents offers good value for its letter service and that reducing this rate would have little impact on consumers.  The NCC believes that this is true for individual and household consumers where there is likely to be little competition for some considerable time.  The case is not the same for services to business.  The use of postal services for the marketing, delivery and payment for consumer products is growing rapidly.  Competition in business letter services will provide a significant fillip to this activity, by increasing the potential range and quality of services, reducing prices and increasing the responsiveness of business to customer needs.

 

Impact on the Australian Economy

 

Postal services are used by every business in Australia.  There are only a few essential services which affect the costs of so many businesses.  Therefore, the cost of postal services is not only important from the perspective of the postal industry, but also its impact on all industries in Australia (eg. small business).  Lower prices for this essential service will flow through into lower costs across the whole economy.

 

 

Impact on Employment

 

As in telecommunications, employment in the postal service industry is likely to be closely linked to the level of activity in the market.  While deregulation and its own network restructuring is likely to mean that Australia Post will reduce staff numbers in the short term, the NCC considers this is likely to be more than offset by increased employment flowing from the growth of existing service providers and new entry to the industry.  This is supported by historical evidence - since limited deregulation in 1994, Australia Post’s total workforce (full and part-time staff) has risen 5.5% while ABS figures indicate total employment in the postal and courier services sector has increased by 15% over the last two years.

 

Further, the NCC considers that a healthy, competitive postal services industry will be better equipped to meet the challenge of competition within the broader communications market, and thus provide more stable, reliable employment.

 

There has been some criticism of the anticipated movement in employment.  It is likely there will be a loss of permanent positions at Australia Post and an increase in more casual and part-time positions.  These are said to offer less opportunity for skills development and may lower the overall standard of employment in the industry.

 

Impact on Trade

 

The NCC has recommended that incoming international mail be opened to competition from 2000.

 

The NCC considers that if competitors enter the international inwards mail market this should remove some of the burden on Post for delivery of this type of mail which currently represents about one third of Post’s CSO costs.  The NCC also considers that deregulation would mean that inwards mail would have to interconnect with the Post network at Australian rates (as opposed to UPU terminal due rates) and this would also reduce Post’s exposure to this loss making activity.

 

It should be noted that the UPU does not allow for more than one postal authority from each member country.  There may, therefore, be problems aligning competitive arrangements for international inwards mail with the terminal dues system.  The NCC has suggested that Australia Post remain Australia’s designated postal administration to the UPU until such a time that major competitors establish themselves in the market.

 

The Benefits of Applying Competition Policy Principles in the Postal Industry

 

The NCC considers that its competition reform package will provide a net benefit to the community because:

 

(a)     increased competition need not necessarily lead to a loss of the CSO services.  It is desirable to fund the CSOs externally so that the objective of providing a universal service does not impede the introduction of competition;

 

(b)    business customers, including small business, can benefit from competition

 

(c)     competition can be introduced in a way that does not undermine the uniform rate of postage, or disadvantage small volume customers who have most frequently suggested that the monopoly should be retained;

 

(d)    competition will put pressure on Australia Post’s businesses but Australia Post will remain viable, particularly with a business focus and attention to reducing costs; and

 

(e)     there are several companies which are identified as potentially providing competitive low cost innovative postal services if they were allowed to compete with Australia Post.

 

CONSULTATION

 

The NCC conducted a wide range of formal consultations as part of their review process and received 138 submissions from individuals, governments, business and community organisations.

 

Following release of the NCC’s report the Department of Communications and the Arts in conjunction with the Department of Finance and Administration and the Treasury also consulted with a range of organisations in order to gauge reactions to the recommendations.

 

Reactions to the NCC’s suggested reform package can generally be divided into two groups - those who welcome introduction of competition (mainly potential competitors and major mail generators) and those who view the introduction of competition as a threat to Australia Post’s ability to deliver the ULS. 

 

In the former category are such organisations as Streetfile, TNT, Mayne Nickless, AUSDOC and the Major Mail Users of Australia Ltd.  These groups consider that the services reserved for Australia Post enable the company to extract monopoly rent over and above that required to service their CSO obligations.  There is also major concerns regarding Australia Post’s inflexibility in dealing with its customers.

 

In the latter category is organisations such as the National Farmers’ Federation, Australian Consumers Association, NSW Farmers Association and the Isolated Children’s Parents’ Association.  These groups are concerned that exposing Australia Post’s reserved service to competition will ultimately lead to a diminution of services regardless of the method of funding adopted.   These groups are particularly critical of budget funding (even if agreed 5 years in advance) which they see as the most fragile method of funding the CSO.

 

CONCLUSION

 

The NCC’s timeframe for deregulation is considered ambitious given the lead time necessary to introduce industry reform and uncertainty in relation to the effects of competition on Australia Post’s profitability and ability to deliver the CSO parts of their USO obligations.  There is also sensitivity in the community and in particular in rural and remote areas that complete deregulation, regardless of the funding option adopted, will inevitably lead to a diminution of postal services and an increases in prices.

 

OPTION 2:  Australia Post (AP) Approach

 

The Australia Post suggested approach is as follows:

 

(a)     Progressive reduction in weight/price thresholds for reserved services:

125 grams and 2 times Standard Letter Rate (SLR) from 1 January 1999

125 grams and 1 times SLR from 1 January 2001

 

(b)    SLR (45 cents) retained until 2002

more bulk discounts (barcoding/lower thresholds).

but aggregation not permitted.

 

(c)     USO continues to be funded by cross-subsidy.

 

(d)    International incoming mail reserved to AP.

 

(e)     Access/interconnection subject to commercial negotiation.

 

Impact Analysis

 

This is essentially change on AP’s own terms.  It would allow AP to make further progress in reducing its own operating costs in its own time, further consolidating its market strength and distributing the benefits as it sees fit.  Increasing mail volumes and declining margins in AP’s letters business from competing media forms are impelling it to reduce costs and improve productivity through capital investment and network renewal programs (totalling $555m) over the next few years.

 

This interim step at 2 times is not achievable at the time proposed because of the legislation timetable and it is doubtful that it would attract significant competition.  Items between 125-250 grams are limited to large letters and some publications.  There might be some marginal benefit to couriers and organisations like AUSDOC.

 

The second step would open the non-bulk letters market to competition on service but not price.  Australia Post has suggested that this would expose all small household and business full rate mail, all full rate large letters and most bulk medium letters to competition (total revenue around $1200m) but less than one quarter of this would be subject to both price and service competition.

 

Given the extent of Post’s network it is hard to see Australia Post facing substantial competition on this basis.  In addition it would remain the only provider able to discount for bulk lodgement, barcoding and Christmas cards and to carry international inwards mail (a total of some $575m in revenue).

 

While business would have the prospect of further discounts (businesses already have access to discounts which bring letter prices down to between 33 and 36 cents) and these would occur at lower levels (600 rather than 2500), Australia Post would not be pressed to be more flexible or negotiate on contract commitments.  We would need to enforce monitoring of bulk mail performance through regulation.  Major mailers face significant investments to meet AP’s requirements for barcoding.

 

AP’s business would continue to grow with the mail market and it would continue to pay dividends and have the ability to repay capital as well as to internally fund capital investment needs.

 

AP’s employment will decline regardless of reform (AP’s proposed network restructure affects 20,000 employees with the workforce expected to reduce by 7% or approximately 2,500 staff between now and 2000/2001).  On past record AP should be able to manage this with minimal disruption.

 

AP believes it would have no difficulty meeting USO requirement or regulated service standards.

 

Potential competitors would have little negotiating leverage in obtaining access to the AP network (little incentive for Australia Post to go below 45 cents or the current bulk interconnect arrangements for interstate carriage).  Post has indicated that it would “continue to provide interconnection facilities on conditions no less favourable than those available to our own customers”.

Metropolitan and regional business and household customers would get uniform standard rates regardless of whether competitors enter their market or not.

 

Under this proposal there is little movement in the market and none of the concerns identified by the NCC or industry are addressed.

 

OPTION 3 : Gradual Progression towards More Open Market

 

 

Amend NCC Option (Option 1) as follows:

 

(a)     Reduce weight/price threshold to 50 grams and 1 times SLR from 1 January 2000.

 

(b)    Deregulate inwards international mail from 1 January 2000.

 

(c)     Permit aggregation.

 

(d)    NCC recommendation on accounting separation to be implemented by 1 January 2000.

 

(e)     Interconnection - ACCC to consider access to ULS, PO Boxes (as recommended by the NCC) and appropriate aggregation volumes.

 

(f)      Pricing - SLR frozen until at least 2003.

 

(g)     ULS to be maintained/defined at current level.

 

(h)     CSO to be funded by internal cross subsidy.

 

Impact Analysis

 

This option would increase the competitive pressure on AP.  88% of total AP revenue would be exposed to some form of competition, at least on service if not price.  AP would however retain a substantive competitive advantage in bulk business mail below 50 grams (which is the overwhelming majority of the remaining reserved market in revenue terms) and be well-placed to complete its current capital investment programs to enhance its competitive position in all sectors.

 

AP has indicated that it could continue to fund the USO from internal cross subsidy and maintain the SLR at 45 cents until 2003.

 

Relocation of the weight threshold would open medium and large letters to price and service competition (est revenue to AP).  A wider range of advertising mail could fall clearly outside the reserved service.  This and the enhanced access provision should enable more effective competition from an alternative letter service such as Streetfile.  The ability to aggregate mail to take advantage of bulk discounts offered by AP would also permit greater flexibility and competition in the mail house market.

 

TNT has indicated it would enter the mail delivery market on the basis of an opening of inwards international mail alone.

 

AP will be concerned that ACCC could permit interconnect/access of points in the mail network other than mail centres.  The principle we would seek would be a fair access arrangement for competitors, overseen by the ACCC.  The legislative mechanism may need further refinement.  AP may also complain about the adverse competitive effects for it of potential publication of some of its cost data.  These issues will be subject to further consultation with AP and relevant stakeholders in the preparation of legislation

 

The universal letter service would be preserved, metropolitan and regional business customers would get access to similar bulk discounts, AP would retain current delivery/retail networks and delivery frequency and continue to return dividends and capital to government (at levels lower than would have occurred without these changes).

 

This would be a gradual and staged introduction of competition.  It would allow for monitoring of effects and a legislated review before 2003 to determine the need for further change.  It could provide a path towards a more open market from 2003 (possibly on the NCC model for open competition for business mail).

 

AP would be likely to continue its dominant position in the letters market through the period to 2003 and concerns about misuse of its market power and its ability to compete by leveraging from its reserved services would continue (despite the provision for accounting separation).

 

Legislative change would be relatively minor and the regulatory constraints on the private sector reduced.  There may be a need to institute arrangements for industry codes of conduct (eg for privacy) with some legislative backing.  Competitors would need to negotiate with AP in relation to return to sender, change of address etc.

 

AP has given undertakings to substantially reduce the current thresholds for bulk mail discounts from the current 2500 to 300, introduce bulk mail delivery performance monitoring and include performance provisions in arrangements with bulk mailers.



 

REGULATION IMPACT STATEMENT 2

 

 

INTRODUCTION

 

On 16 July 1998 the Government made a number of decisions relating to the reform of the Australian postal industry.  These reforms constitute the further introduction of competition to the postal services market and are designed to maintain high quality postal services for all Australians.  The Government decisions follow a review of the operation of the Australian Postal Corporation Act 1989 (the Act) conducted by the National Competition Commission (NCC).  The decisions included:

 

(a)     The reductions in Australia Post's (AP) reserved service for the carriage of letters from 250 grams and four times the standard letter rate to 50 grams and one times the standard letter rate;

(b)    The deregulation of all incoming international mail from 1 July 2000 (with safeguards to prevent this being used to circumvent AP’s domestic reserved service);

(c)     The introduction of an access regime; and

(d)    A review will be undertaken in 2002 to be completed by July 2003 to assess the effects of these changes and the need for further change.

 

PROBLEM

 

The preparation of the legislation has generated several minor policy issues not covered by the Government decision, including the form of the access regime and another issue relating to competition neutrality.

 

The Government identified the need for an access regime because of the continuing legislative monopoly, and AP’s significant market power in the postal services market and a number of related markets, for example mail house services, bill paying services and electronic commerce fulfilment. Competitors to AP will be limited in their ability to take advantage of the reduction in the reserved service if they are unable to successfully negotiate interconnection with AP’s network.

 

An example of this may be where a competitor wishes to deliver letters of between 50 and 250 grams, but only to major metropolitan areas.  The competitor would need to be able to negotiate reasonable interconnection with Australia Post’s network for the delivery of the letters that fall outside this area.

 

Without an effective access regime, competitors in the above situation would have recourse to no more than the general anti-competitive conduct provisions of the Trade Practises Act 1974 (TPA).  These provisions are not designed to address the case where a person does not want to do business.  They are also not designed to address cases where there is a combination of substantial market power and either a natural or legislated monopoly. 

 

The NCC, in its report on the operation of the current Act, recognised that further competition would initially be concentrated in metropolitan areas.

 

            The Council believes that business customers with mailings including post office box numbers and rural/remote addressed would be unable to receive a full service from competitors in a liberalised market, as mail would need to be split between AP and competing providers.  In the initial years of competition, these factors would serve to reinforce AP’s incumbent power.  Specifically, competitors would be disadvantaged relative to AP by not being able to provide a full service for customers, in addition to having to establish their own postal services networks and market profiles.  The Council believes that this would impede market entry, damage the competition that has already developed in the postal services market and consequently limit the benefits available to consumers through competition. (NCC Review, p 277-8)

 

The NCC concluded that the success of further competition in the postal services market would be dependent on adequate access arrangements.

 

The NCC listed a number of competition neutrality issues it believed should be addressed.  Many of these will be addressed in the upcoming legislation.  An outstanding issue relates to the erecting of street posting boxes.  This issue is discussed in the Implementation and Review section, below.

 

OBJECTIVES

 

The objectives are to generate further competition in the postal services market, and to have this competition flow through to the range of services offered to consumers, and the pricing of those services. This competition should develop as quickly as possible, both to address existing criticisms of the services available, and to provide a reasonable basis for assessing the effect of the reforms in the review in 2003.

 

Current Regulatory Arrangements

 

The postal services market is currently regulated by the Australian Postal Corporation Act 1989 .  This Act establishes Australia Post as a statutory corporation, regulates its behaviour, and creates the reserved service concept.

 

Australia Post is regulated primarily by the Minister for Communications, Information Technology and the Arts.  The shareholder role is shared between the Minister and the Minister for Finance.  The Australian Competition and Consumer Commission (ACCC) conducts some price scrutiny of reserved services under the Prices Surveillance Act 1983 (PSA) and arbitrates in disputes about discounts offered by AP under it bulk interconnection service.  Australia Post is able to regulate the reserved service though injunctive relief in the Federal Court.

 

In July 1998 the Government announced a number of changes to the Act, designed to introduce limited competition reform.  These decisions are outlined above.

 

OPTIONS

 

Three broad options for implementing an access regime for competitors to AP in Australia’s postal services market have been identified:

 

A         Limited Legislative Intervention

To implement the 1998 decisions with limited legislation for the access regime.  For example, it may involve minor provisions in the new postal legislation, and would not involve the Australian Competition and Consumer Commission (ACCC) in the role of competition regulator.  The effectiveness of this proposal would be considered in the context of the review of the reforms due to be completed by July 2003.

 

 

B         Modified Part IIIA-style access regime

Introduce a modified access regime based upon Part IIIA of the TPA but using declaration criteria similar to those used in Part XIC.  This regime would have two main components.

 

The first component deals with undertakings.  AP (or a competitor) may submit an undertaking to the ACCC, which outlines the terms and conditions that the access provider is willing to offer in relation to one or more services.  Following a public consultation, the ACCC may accept the undertaking.  If an undertaking has been accepted then arbitration processes relating to the service cease.  This regime is different to Part IIIA, where an undertaking cannot be accepted for declared services.

 

Once an undertaking has been accepted by the ACCC, access to the service will be along the lines of the undertaking.

 

The second component is the capacity for the ACCC to declare services. Several services, namely bulk interconnection and access to PO boxes, will be deemed to be declared at the inception of the regime.  After the inception of the regime, a service can only be declared following a public inquiry conducted by the ACCC. 

 

If, after a service has been declared, an access seeker is having difficulties in negotiating access to the service, then the access seeker may seek arbitration from the ACCC.  

 

The effectiveness of this proposal would be considered in the context of the review of the reforms due to be completed by July 2003.

 

C         Mandatory undertaking process

This option involves the development of a comprehensive undertaking by the ACCC.  The undertaking would set out the terms and conditions of access to all services that the ACCC believes should be included. 

 

While the ACCC would take account of submissions put by access seekers and access providers, ultimately, the contents of the undertaking would a matter for the ACCC.

 

            This is the preferred approach of the NCC, as it believes it will provide the most comprehensive and certain outcome from the point of view of access seekers.

 

The effectiveness of this proposal would be considered in the context of the review of the reforms due to be completed by July 2003.

 

IMPACT ANALYSIS

 

Option A - Limited legislative intervention

 

Option A would involve the least legislative intervention and would not, for example, have a role for the ACCC.

 

Benefits

 

It could be argued that this option would be more appropriate given the limited time until the review of the package in 2003.  With a more streamlined regime, there may be scope for greater use of the regime before the review.  A more complex mechanism would necessarily take longer to implement.

 

Costs

 

W ithout the option of the assistance of the ACCC, the postal industry would have a limited capacity to solve difficulties arising during negotiations with Australia Post over access.  This would limit the scope of the growth in competition resulting from the changes to the reserved service.  It may mean that the expected benefits from competition to consumers of postal services will be delayed. 



 

Impact on AP

 

Benefits

 

This option favours AP by limiting the administrative burden associated with complying with a more comprehensive regime, and limiting the capacity of competitors to obtain assistance in negotiating access to AP’s network

 

This would mean that access to AP’s network would continue to be virtually on terms and conditions specified by AP, which materially advantages AP both with respect to price and non-price terms and conditions.  An example of a non-price condition is where AP may only accept a certain variety of bulk mail for delivery within two days if that mail is lodged with AP before 6 pm.  This condition would favour AP because it maximises the time available for it to sort the mail before shipment later that night.

 

AP would be able to use the time until the next review to adjust to the coming changes in its environment without the additional burden of complying with a broader access regime.  These changes include the reduction in the reserved service, the conversion to a company under Corporations Law, and the introduction of the GST.

 

Costs

 

The costs of this approach to AP would be minimal, depending on its interpretation of the new provisions.

 

For example, AP would be obliged to provide access to its network to its competitors on no less favourable terms then it provides to its customers.  AP varies the terms and conditions it offers in relation to services across the variety of customers.  These terms and conditions are internally consistent, for example, one customer may receive a discount because of very high volumes of mail lodged.  It would be a very complex task to sort out these inter-relationships and then to compare the terms and conditions being offered to a number of customers. 

 

AP would be in the position of deciding which set of terms and conditions it must use as a comparison when considering a request for access from a competitor.  It would be natural for AP to make that decision in a way that advantages itself, rather than the competitor.



 

Impact on the Postal Services Industry

 

Benefits

 

This regime would apply almost no administrative or financial burden to competitors of AP.

 

Costs

 

The postal service competitors to AP such as courier and freight companies would have no independent third party to turn to in the case where negotiation over access breaks down.

 

This would mean that if AP wanted to change the terms under which it offered services to its customers, then these changes could be unilaterally applied to competitors.

 

The scope for the expansion of competition in the postal services market resulting from this option would be negligible.

 

Impact on Consumers

 

The impact is negligible, as the option is unlikely to result in a significant increase in competition in the postal services market.

 

Conclusion

 

Option A does not provide a framework for competitors to take full advantage of the reduction in the reserved service.  It will only be faster than the other options if negotiations with AP are successful.  Without the option of an independent arbitrator negotiations are likely to advantage AP as the market incumbent.  This advantage is likely to be considerable.

 

Option B - Modified Part IIIA-style access regime

 

The access regime in this option is structurally similar to Part IIIA of the TPA, but uses declaration criteria similar to those used in Part XIC (the telecommunications access regime).

 

It is expected that industry participants will seek the intervention of the ACCC only in cases where outcomes could not be achieved by commercial negotiations.

 

This option is different to Part IIIA in the following respects:

 

·           The entry criteria for declaration are similar to Part XIC; the telecommunications access regime, instead of Part IIIA.  The NCC in its review concluded that it is unlikely that postal services would intrinsically meet the tests for declaration required under Part IIIA.

 

·           Undertakings have precedence over the declaration/arbitration process in this regime.  This means that after an undertaking is accepted by the ACCC, any declaration relating to that service lapses.  This means that there is no option of  arbitration for that service for the duration of the undertaking.  This is different to Part IIIA, where an undertaking can not be accepted where a service is declared.  This is to encourage the creation of undertakings, which provide a multilateral solution to the problem of negotiating terms and conditions of access.

 

·           The package will include the record keeping and report making rules in Part XIB.  These rules were designed to assist the ACCC to obtain information such as internal transfer pricing of services within the vertically integrated, highly complex telecommunications companies.  Similar complexities exist within the postal services industry.

 

The regime is not restricted to access to AP’s network.  A service provided by a person other than AP may be declared.  Additionally, another person may wish to submit an undertaking setting out terms and conditions of access to a service provided by itself.

 

This option expands the role of the ACCC in the postal services market, which is currently restricted to scrutinising price rises for reserved services under the PSA and regulation of the bulk interconnection regime under the postal Act and in Regulations.

 

Benefits

 

The benefits of this regime are that it provides a safety net for competitors in negotiating access with AP.  This would mean that these negotiations are more likely to lead to greater access to AP’s network by competitors, and hence, greater competition in the postal services market. 

 

Additionally, the regime is based around the concept of a postal service or a service that facilitates the supply of a postal service.  This means that a service that does not yet exist, for example, an internet-based fulfilment service, could be declared in the future.  This option has the flexibility to adjust to changing circumstances to the advantage of competitors .

 

Costs

 

This option involves a greater administrative and cost burden than option A. Preliminary costing estimate that the running costs of the regime will be  approximately $675,000 per year.  This is before any arbitration costs which will vary depending on the amount and complexity of the arbitration that takes place.

 

This regime, including both the running costs and arbitration costs, would have to be funded from within the industry.  It is unclear how the running costs would be allocated, but arbitration costs will be allocated by the ACCC.  A percentage of these costs are likely to be allocated to the access seeker.  These costs may range from $10,000 to $500,000, depending on the complexity of the issues under dispute.

 

Additionally, any parties participating in inquiries or arbitrations would have to divert resources to formulate these submissions.

 

Impact on AP

 

Benefits

 

AP has the opportunity to submit undertakings in relation to any service that it provides.  If these undertakings are accepted by the ACCC, then AP will avoid the declaration of these services, and any arbitration that may result.  This means that as long as the undertaking is accepted, AP will be able to maintain control of the terms and conditions on offer. 

 

Having an undertaking accepted by the ACCC would also mean that AP would avoid the ongoing possibility of having to pay for participation in a declaration inquiry or arbitration in relation to that service.

 

Costs

 

This option will impose an administrative burden on AP in order to manage the interaction with the ACCC.  This burden will be partially related to the level of access that is requested and the pathway chosen by AP.  For example, submitting undertakings for acceptance may be a cheaper path than declaration of a service and a number of bilateral undertaking processes.

 

Compared with Option A, it is also likely to result in significantly more competition. This may result in a revenue fall for AP due to loss of market share.

 

Impact on the Postal Services Industry

 

Benefits

 

Commercial negotiation is a simple, quick and cheap way of solving problems associated with negotiating access.  This model gives competitors the space to negotiate.  It also gives competitors the ability to threaten AP with arbitration if the competitor believes AP is negotiating in bad faith.

 

If negotiations fail, then the parties may seek the intervention of the ACCC as an arbitrator.  At the end of an arbitration process, the ACCC would make a determination that is legally binding on both parties.  This determination would spell out the terms and conditions of access, and is enforceable in the Federal Court.

 

Costs

 

In order to obtain benefits from this option, the industry will have to meet the administrative costs of participating in the ACCC’s processes.  For example, if AP were to submit an undertaking that the competitors thought was insufficient, then competitors would need to put a submission to the ACCC giving this opinion. Without this information, the ACCC may accept an undertaking that did not meet the needs of access seekers.

 

Impact on Consumers

 

Benefits

 

This regime is likely to result in a greater level competition in the postal industry, leading to greater benefits in terms of price, range of services and quality of services.

 

Conclusion

 

This option has a number of advantages.  It leaves space for commercial negotiation, with the backup of an arbitration mechanism.  It encourages access suppliers to create undertakings providing a multilateral solution to the problem of access.

 

The industry will have to meet the administrative costs of complying with the regime, but this should have the effect of encouraging the parties to come to agreements, thus minimising this compliance cost.

 

In summary, Option B balances the legitimate requirements of industry without overly prescribing behaviour.

 

Option C - Mandatory undertaking process

 

Benefits

 

At the completion of the undertaking, competitors and AP will have certainty in that the terms and conditions of access to services will be prescribed.

 

Costs

 

This option is a substantial expansion of the current role of the ACCC in the postal services market.  The option chosen will have to be funded by the market, and as the most comprehensive option it is the most expensive.

 

The range of services considered in the undertaking would need to be wider than the list suggested by the NCC.  The NCC’s suggestion was based upon the recommendations of its review, some of which were not picked up by the Government.  The ACCC would need to consider via submissions the range of services that the undertaking should cover.

 

Additionally, the ACCC would need to make assessment of costing issues such as internal transfer prices within AP’s highly complex operation.  This would involve careful investigation of AP’s costing methodologies, and would take a long time to retrieve and analyse.

 

Access would not be available until the ACCC had completed the undertaking.  Depending on the range of services it chooses to consider, this may take some time.

 

Like other communications industries, the postal services industry is in a period of structural change driven by changes in technology, for example, the developments in optical character recognition technology and the migration of some forms of mail to electronically based alternatives.  The impact of these changes would need to be constantly incorporated in the undertaking.

 

Impact on AP

 

Benefits

 

It is likely to be some time (at least one year) before the undertaking was complete.  During this time AP would be under no obligation to provide access to competitors.

 

Costs

 

As the most interventionist of the three options, this option would ultimately result in prescribing AP’s behaviour in relation to a wide range of services. This is unlike the other two options, where AP only has to consider providing access to a service when another person requests access.  For some services, this may not occur for some time, depending on the business planning of the access seekers.

 



Impact on the Postal Services Industry

 

Benefits

 

After the creation of an undertaking, there would be relative certainty on which to base investment and expansion plans.

 

Costs

 

There is no room in this option for commercial negotiations, which is the preferred option for dispute resolution. 

 

It would take a considerable time to implement and it is unlikely that access would be available during that time.

 

It shuts out the option of bilateral solutions.  Under option B, if an access seeker believes that they have a case for more favourable terms and conditions than those being offered to other competitors, it can seek arbitration to have this incorporated. 

 

This is the most expensive of the three options and as whatever regime is chosen will need to be self-funded, the postal services industry will have to bear some of this cost burden, either directly through some sort of levy, or indirectly.  One example of indirect cost would be if AP were to be responsible for funding the undertaking process.  AP would look to recover this cost through the prices it charges to industry.

 

Given the technology-driven changes in the postal service market, unlike option B, this option would respond poorly to change.  For example, if a price for a service was placed into the undertaking, and the provision of this service became cheaper as a result of a technology change, then the price charged to competitors could be expected to fall.  These changes would need to be constantly incorporated and the old prices would remain until the undertaking caught up.

 

Impact on Consumers

 

 

While the benefits are more guaranteed under this scheme in the longer term, any benefits to consumers would be delayed until the successful completion of the undertaking. 

 

Conclusion

 

This option provides the highest degree of certainty in its result.  A comprehensive and rigorous undertaking would be the sturdiest means of providing access to postal services.

 

This benefit is outweighed by the time it would take to complete the undertaking.  There would be no access during this time.

 

It is unlikely that the undertaking would be in operation for very long before the review of the reform package due in 2003.  Depending on what is decided in that review, the undertaking may then be obsolete. 

 

A comprehensive mandatory undertaking may be a strong and rigorous solution, but these benefits are outweighed by its cumbersome nature and the time until the undertaking would be complete.

 

CONSULTATION

 

The following persons have provided the input to the development of options for the access regime:

 

Australia Post

 

AP is in favour of a minimalist regime without the intervention of the ACCC, and consequently prefers option A.  AP believes that because it is unlikely that its network would pass the natural monopoly test in Part IIIA, this indicates that a targeted access regime is not justified.

 

AP also believes that the current arrangements are working effectively, and that a more interventionist approach is unnecessary. 

 

AP has concerns about the administrative burden associated with complying with a more comprehensive regime .

 

Postal Services Industry

 

Representatives of bulk mail generators such as banks, utilities and mailing houses are in favour of a regime that generates results as quickly as possible.  The development of competitors to AP increases the ability of generators to negotiate favourable terms and conditions for the lodgement of bulk mail.

 

The competitors who contributed to the process are in favour of a regime which can be used when necessary, and provides a real incentive to AP to come to reasonable terms and conditions as quickly as possible.

 



Representative of Licensed Post Offices

 

The Licensed Post Offices licensees control some of the post office boxes that may be subject to up-front declaration under option B, as well as operating a number of shopfronts that may also be declared following a public inquiry. 

 

Representatives of the licensees are in favour of option B if it would give the licensees the ability to develop further revenue streams by being able to provide services to other postal operators.

 

Consumers

 

It is likely that the views of consumer groups will be that the introduction of further competition will be beneficial if it does not lead to a degrading of services, particularly services in regional Australia. 

 

The problems associated with access to AP’s services do not impact directly on consumers.  There is a potential for indirect benefit if the change to the reserved service leads to a greater diversity of services, better quality services and a reduction of costs.  This benefit will only be accrued if competitors to AP can successfully take advantage of these changes. 

 

The Community Service Obligations and the Performance Standards Regulations, which oblige AP to provide a universal postal service, and to meet certain service standards will not be changed by any of the options.

 

A further round of public consultation is planned for January 2000 before the introduction of the legislation.

 

CONCLUSION AND RECOMMENDED OPTION

 

Option A has the virtue of simplicity, but is unlikely to have the outcome of generating further competition in the postal services market to any substantial effect.

 

Option C would be more suitable in a more stable environment where it was planned to operate over a decade or more.

 

Option B provides a balance by allowing for commercially negotiated outcomes, while providing a framework for arbitration by the ACCC, should this prove necessary.  It is for this reason that is it is the preferred outcome at this time.

 

Option B meets the objectives of generating further competition in the postal services market, and having this competition flow through to the range of services offered to consumers, and the pricing of those services. It will ensure that the competition will develop as quickly as possible, both to address existing criticisms of the services available, and to provide a reasonable basis for assessing the effect of the reforms in the review in 2003.

 

IMPLEMENTATION AND REVIEW

 

Street Posting Boxes

 

Section 95 of the current Act deals with AP street posting boxes.  Subsection (1) provides that AP may erect, maintain and use post-boxes in any public road, street or highway, or in any other public place.  Subsection (2) imposes an obligation on AP to keep the boxes in good order.  Subsection (3) provides that AP may remove any post-boxes it has erected. 

 

These provisions give AP express power to erect post-boxes, without the approval of local councils and state and territory governments. AP erects two different types of boxes: ordinary post (red boxes); and those for the Express Post service (yellow boxes).   Competitors wishing to erect similar boxes would need to obtain whatever planning permission was necessary in the area chosen. This problem was identified by the NCC in its review. 

 

There are two possible solutions to this problem.  Firstly, any other person providing a postal service could be similarly exempt from planning laws.  Secondly, AP’s exemption could be removed.

 

The first solution is impractical for a number of reasons.  It is not intended to license postal service operators because there is no compelling reason to impose such an administrative and financial burden on competitors at this time.  Therefore, it would not be clear which persons would be exempted from planning laws.  This could cause considerable stress with local and territory Governments as they would have no recourse should the erection of boxes interfere with other services, such as parking meters, underground utilities or traffic flow.

 

The other option, removing AP’s exemption, would mean that AP would be in the same position as its competitors with respect to planning laws, etc.  As AP has approximately 12,000 street posting boxes already in place, it is proposed to grandfather these boxes.  This would mean that these post-boxes may not be removed by anyone other than AP.  Any future boxes erected by AP would have to be compliant with prevailing laws.

 

This second option would be accomplished by making the new Regulatory Bill silent on the issue of post-boxes, except with respect to the grandfathering of current AP boxes. 

 

The second option is the only viable option as state, territory and local Governments cannot be expected to allow the erection of street posting boxes by any person in any location. 

 

Access Regime

 

The modified-IIIA style access regime outlined in option B would be administered by the ACCC.  The cost of implementing the regime will need to be funded by industry in some way, for example through cost recovery by the ACCC.

 

Option B would involve the removal of the limited existing access regime, as the two would overlap.  Comprehension will be assisted through outlines at the front of the provisions, and through guidelines prepared by the ACCC.  Any party seeking assistance through the regime would be treated equally.

 

Option B leaves a wide scope for the range of matters that may be the subject of action under the regime.  For example, an internet-based service that is developed in two years time may be declared after it is introduced.  The decision to declare it would be based on criteria such as whether the service is a postal service or facilitates the supply of one, and whether declaring the service would have a beneficial effect on competition in the postal services market.

 

AP, and others wishing to benefit from the access regime, will have a one-off cost to acquire an understanding of the operation of the regime.  This would consist almost entirely of legal and consultancy fees.

 

The option of licensing postal service operators and using the licence fee to fund the access regime has been rejected at this time as unnecessarily interventionist.  The ACCC will have the power to distribute the costs associated with the conducting of arbitration among the parties to the arbitration.  The amount will depend on the level of complexity of the arbitration and the decision by the ACCC on how these costs might be allocated.

 

If an undertaking is submitted to the ACCC by an access provider, and access seekers wish to contribute to the ACCC’s consultation process, then the access seekers would have to bear the administrative cost of this participation.  It will be a matter of deciding whether the information they may add to the ACCC’s consideration of the undertaking will be repaid in the outcome of a more favourable undertaking.

 

The Government announced that the entire reform package would be reviewed in 2003.  This review will include the effectiveness of the access regime.

 

The package would be in the form of a new Part of the TPA.  This Part would expire on the 1 July 2003, unless it is extended via regulations for another set period.  This extension would only be made if the review and its implementation were not complete on this date.

 



ABBREVIATIONS

 

The following abbreviations are used in this explanatory memorandum:

 

ACCC:            Australian Competition and Consumer Commission

 

CAC Act:         Commonwealth Authorities and Companies Act 1997

 

TPA:                Trade Practices Act 1974

 

Tribunal:           Australian Competition Tribunal.

 



NOTES ON CLAUSES

 

Part 1 - Preliminary

 

Clause 1 - Short title

Clause 1 provides for the Act to be cited as the Postal Services Legislation Amendment Act 2000. 

 

Clause 2 - Commencement

Subclause 2(1) provides that, subject to this clause, the Postal Services Legislation Amendment Act 2000 commences on the day on which it receives the Royal Assent.

 

Subclause 2(2) provides that the following provisions (the proclamation provisions) of the Postal Services Legislation Amendment Act 2000 commence on a day to be fixed by Proclamation:

(a)                 Divisions 3, 4 and 5 of Part 2;

(b)                Part 3;

(c)                 Schedule 1 (other than items 1 and 2);

(d)                Schedule 3 (other than items 18, 22, 23, 24 and 25);

(e)                 Schedule 4.

 

Part 2 deals with all matters in relation to the conversion of Australia Post to a public company under the Corporations Law.  Division 3 deals with the process of conversion.  Division 4 contains taxation provisions relevant to the conversion process.  Division 5 contains miscellaneous provisions arising from conversion.

 

Part 3 includes the regulations making power.

 

Schedule 1 contains the amendments to the Australian Postal Corporation Act 1989.

 

Schedule 3 contains the consequential amendments to other Acts.

 

Schedule 4 contains the amendments to the TPA.

 

Subclause 2(3) provides that if the proclamation provisions do not commence

within the period of 6 months beginning on the day on which the Act receives the Royal Assent, those provisions commence on the first day after the end of that period.

 

Subclause 2(4) provides that items 1 and 2 of Schedule 1 commence immediately after the later of:

(a)                 the commencement of item 3 of Schedule 1; and

(b)                the commencement of item 1 of Schedule 1 to the Customs Legislation Amendment (Criminal Sanctions and other Measures) Act 2000.

 

Subclause 2(5) provides that Schedule 2 commences immediately after the commencement of item 2 of Schedule 1.  Schedule 2 renumbers the Australian Postal Corporation Limited Act 1989, and Schedule 1 makes amendments to the Australian Postal Corporation Act 1989.

 

Subclause 2(6) provides that the items 18, 22, 23, 24 and 25 of Schedule 3 commence on the later of the following:

(a)                 the commencement of item 1 of Schedule 3; or

(b)        immediately after the commencement of section 1 of the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Act 2000.

 

Clause 3 - Schedule(s)

 

Clause 3 provides that, subject to the commencement provision at clause 2, each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule, and any other item in a Schedule to this Act has effect according to its terms.  

 

Clause 4 - Crown to be bound

Clause 4 provides that the Postal Services Legislation Amendment Act 2000 binds the Crown in each of its capacities.

 

Clause 5 - External Territories

Clause 5 provides that the Postal Services Legislation Amendment Act 2000 extends to all the external territories.

 

Clause 6 - Extraterritorial operation

Clause 6 provides that the Postal Services Legislation Amendment Act 2000 applies both in and outside Australia.

 

 



Part 2 - Conversion of Australia Post to a Corporations Law company

 

Division 1 - Interpretation

Clause 7 - Definitions

Clause 7 sets out definitions used in Part 2 of the Postal Services Legislation Amendment Act 2000 .

 

Division 2 - Preliminary matters

 

Clause 8 - Application for registration under the Corporations Law

Clause 8 sets out the requirements for registration of Australia Post as a public company limited by shares under the Corporations Law.

 

Subclause (1) requires Australia Post, as soon as possible after the Postal Services Legislation Amendment Bill 2000 receives the Royal Assent, to apply to the Australian Securities and Investments Commission (ASIC) under Part 5B.1 of the Corporations Law, to register Australia Post as a public company limited by shares.

 

Subclause (2) provides that Australia Post is authorised to make the application to ASIC.

 

Subclause (3) requires the application to be lodged with an office of ASIC in the Australian Capital Territory.

 

Subclause (4) requires the application to be accompanied by a copy of Australian Postal Corporation Limited’s proposed constitution, which has first been approved in writing by the Minister for Communications, Information Technology and the Arts.

 

Subclause (5) provides that certain provisions of the Corporations Law do not apply in relation to the application for registration.  All other requirements that apply in relation to an application for registration under Part 5B.1 of the Corporations Law apply to the application by Australia Post.

 

Clause 9 - Share capital

Clause 9 deals with the share capital of Australia Post.

 

Subclause (1) provides that from a time that is immediately before the conversion time (the time when Division 3 of Part 2 commences), Australia Post is to have a share capital equal to the capital of Australia Post at the time.

 

Subclause (2) provides that the share capital is divided into 400 shares.

 



Division 3 - Conversion

 

Clause 10 - Registration under the Corporations Law

Clause 10 sets out details in relation to the registration of Australia Post as a public company by ASIC.

 

Subclause (1) provides that, at the conversion time (the time when Division 3 of Part 2 commences), ASIC is taken to have registered Australia Post under section 601BD of the Corporations Law as a public company limited by shares, with the name “Australian Postal Corporation Limited”.

 

Subclause (2) provides that ASIC must issue a certificate and ACN under section 601BD of the Corporations Law in respect of the registration.

 

Clause 11 - Operation of Corporations Law after the conversion time

Clause 11 provides that nothing in Part 2 prevents any of the following, after the conversion time:

(a)     a variation of the share capital of Australian Postal Corporation Limited;

(b)    a change in the name of Australian Postal Corporation Limited;

(c)     a change in the structure or constitution of Australian Postal Corporation Limited.

 

Clause 12 - Issue of shares to the Commonwealth

Clause 12 deals with the issue of shares to the Commonwealth.

 

Subclause (1) provides that at the conversion time (the time that Division 3 of Part 2 commences), the shares in Australian Postal Corporation Limited are taken to be issued, as fully paid, to the Commonwealth.

 

Subclause (2) provides that the Commonwealth:

(a)     becomes a  member of Australian Postal Corporation Limited;

(b)    is entitled to the same rights, privileges and benefits in respect of that membership as if it had become a member under the constitution of Australian Postal Corporation Limited; and

(c)     is subject to the same duties, liabilities and obligations in respect of that membership as if it had become a member under the constitution of Australian Postal Corporation Limited.

 



Division 4 - Taxation

 

Clause 13 - Exemption from State and Territory taxes

 

Clause 13 provides that no tax is payable under a law of a State or Territory in respect of the operation of Part 2 of this Bill (Conversion of Australia Post to a Corporations Law company) or giving effect to Part 2 of this Bill.

 

In relation to Commonwealth tax laws, it has been concluded that the registration of the Australia Post under Part 5B.1 of the Corporations Law has the effect that the corporation continues in existence and its property is not affected by the conversion, so taxing events are not created by the conversion.

 

Clause 14 - Australian Postal Corporation taken to have had share capital for purposes of Income Tax Assessment Acts

 

Clause 14 provides that, for the purposes of the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997 , Australian Postal Corporation Limited is taken to have had, at all times before the application of subsection 12(1), a share capital, all the issued shares in which were beneficially owned by the Commonwealth. 

 

This provision has been included to ensure that the provisions in the income tax law that can limit deductions for prior year losses and bad debts on a change of ownership of a company do not come into play on the conversion of Australia Post to a Corporations Law company.

 

 

Division 5 - Miscellaneous

 

Clause 15 - Tabling of Australian Postal Corporation Limited’s constitution

Clause 15 requires the Minister for Communications, Information Technology and the Arts to table a copy of the constitution of Australian Postal Corporation Limited before each House of Parliament within 15 sitting days of that House after the registration of Australia Post as mentioned in clause 10.

 

Clause 16 - Accounting records

Clause 16 provides that, for the purposes of the Corporations Law:

(a)     the accounting records kept by Australia Post before the conversion time under section 20 of the CAC Act are to be treated as financial records of Australian Postal Corporation Limited; and

(b)    the financial statements contained in an annual report prepared by Australia Post under section 9 of the CAC Act in relation to a financial year ending before the conversion time are to be treated as a financial report of Australian Postal Corporation Limited for that financial year.

 

After the conversion of Australia Post to a public company under the Corporations Law the company will not be required to keep accounting records under section 20 of the CAC Act.  Section 20 of that Act imposes obligations only on bodies that are “Commonwealth authorities” for the purposes of that Act.

 

In relation to the requirements in relation to the annual report and financial statements, after conversion to a public company, Australia Post will be required to comply with the requirements of the Corporations Law.  In addition, section 36 of the CAC Act requires the company, at least 14 days before each annual general meeting, to give the responsible Minister its annual report.

 

The Minister is required to table the reports of wholly-owned Commonwealth companies in each House of Parliament.  Australia Post will be a wholly-owned Commonwealth company when it is converted to a public company under the Corporations Law.

 

Part 3 - Miscellaneous

Clause 17 - Regulations

Clause 17 provides that the Governor-General may make regulations prescribing matters either required or permitted by this Act to be prescribed; or necessary or convenient for carrying out or giving effect to this Act.  In particular, regulations may be made for matters of a transitional or savings nature arising from the amendments made by the Postal Services Legislation Amendment Act 2000 .

 



Schedule 1 - Amendment of the Australian Postal Corporation Act 1989

 

Item 1 - Proposed amendment of the title of the Australian Postal Corporation Act 1989

Item 1 proposes to amend the title of the Australian Postal Corporation Act 1989 to add the word "Limited" after "Corporation" so that the new title of the Act will be Australian Postal Corporation Limited Act 1989 .  The title of the Act is being updated to reflect the change in status from a statutory corporation to a public company under the Corporations Law .

 

Item 2 - Proposed amendment of section 1 of the Australian Postal Corporation Act 1989

Item 2 proposes to amend section 1 of the Australian Postal Corporation Act 1989 so that the short title of the Act will be Australian Postal Corporation Limited Act 1989. The short title of the Act is being updated to reflect the change in status from a statutory corporation to a public company under the Corporations Law .

 

Item 3 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of Australia Post )

This item proposes to amend the definition of Australia Post in section 3 of the Australian Postal Corporation Act 1989 so that Australia Post means:

(a)     in relation to a time before the conversion time (the time that Australia Post is converted to a public company under the Corporations Law), the body corporate referred to in Part 2 of the Australian Postal Corporation Act 1989 as in force at the earlier time; and

(b)    in relation to a time after the conversion time (the time that Australia Post is converted to a public company under the Corporations Law), the body as continued in existence by registration under the Corporations Law as mentioned in clause 10 of the Postal Services Legislation Amendment Act 2000 .

 

Item 4 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of Board )

This item proposes to repeal the definition of Board in section 3 of the Australian Postal Corporation Act 1989.  The term Board is used throughout the Act.  It has been replaced with references to Australia Post.

 

Item 5 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of borrow)

This item proposes to repeal the definition of borrow in section 3 of the Australian Postal Corporation Act 1989.  The terms borrow and borrowings are used in section 61 of the Act.  Item 42 proposes to repeal Part 5 of the Act that contains section 61.

 

Section 61 of the Act provides that Australia Post may borrow money from persons other than the Commonwealth.   After the conversion of Australia Post to a public company, Australia Post will have all the powers of a natural person including the power to borrow money.  As a result, section 61 will not be necessary.  As a Government Business Enterprise, Australia Post is subject to the Corporate Governance Guidelines, which include guidelines in relation to borrowings.

 

Item 6 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 to insert a definition of carried by ordinary post

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to bring a definition of carried by ordinary post into section 3.  This new definition replaces the definition of carry by ordinary post in section 5.  The proposed amendment is being made so that section 3 of the Act contains all the definitions of terms.  Currently there are definitions in sections 3 - 6 of the Act.

 

An article is carried by ordinary post if it is carried by post by physical means in a way that does not involve a special service for which a special fee is payable.  For example, a letter sent from Sydney to an address in Melbourne for delivery by Australia Post for 45c would be carried by ordinary post .  In contrast, the same letter sent by certified mail would not be carried by ordinary post .

 

Item 7 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 to insert a definition of carried by post

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to insert a definition of carried by post into section 3.

 

Item 8 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of carry by post )

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to repeal the definition of carry by post in section 3, which refers to a definition in section 4, and substitutes a new definition of carried by post . The proposed amendment is being made so that section 3 of the Act contains all the definitions of terms.  Currently there are definitions in sections 3 - 6 of the Act.

 

Item 9 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of Chairperson )

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to repeal the definition of Chairperson.  This term is contained in Part 2 of the Australian Postal Corporation Act 1989 , the repeal of which is proposed by item 21 of this Schedule.

 

Item 10 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of conversion time )

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to insert a definition of conversion time , which means the time when Australia Post is taken to be registered as a company under Part 5B.1 of the Corporations Law in accordance with proposed section 10 of the Postal Services Legislation Amendment Act 2000 .  

 

Item 11 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of Deputy Chairperson )

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to repeal the definition of Deputy Chairperson.  The term is contained in Part 2 of the Australian Postal Corporation Act 1989 , the repeal of which is proposed by item 21 of this Schedule.

 

Item 12 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of director )

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to repeal the definition of director.  The term is contained in Part 2 of the Australian Postal Corporation Act 1989 , the repeal of which is proposed by item 21 of this Schedule.

 

Item 13 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 to insert a definition of GST

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to insert into section 3 a definition of GST .  A definition of GST is necessary because item 17 proposes to amend the definition of postage so that it includes GST.

 

Item 14 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of letter )

This item proposes to repeal the definition of letter in section 3 of the Australian Postal Corporation Act 1989 and replace it with a revised definition. The proposed new definition of letter is “ letter means:

(a)     a written communication (whether enclosed or unenclosed) that is directed to a particular person or address and, if the communication is enclosed, any envelope, packet, parcel, container or wrapper that encloses it; or

(b) a standard postal article.”

 

The intention of this proposed amendment is to make some cosmetic changes to the definition of letter so that it is clear that:

(a)     it is not necessary for a standard postal article to be directed to a particular person or address for the standard postal article to fall within the definition of letter ; and

(b)    if there is a letter enclosed in an envelope or other wrapper, the envelope or other wrapper is the letter. 

 

Item 15 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of Managing Director )

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to repeal the definition of Managing Director .  The term Managing Director is contained in Part 2 of the Australian Postal Corporation Act 1989 , the repeal of which is proposed by item 21 of this Schedule.

 

Item 16 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of ordinary post )

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to repeal the definition of ordinary post .  The repeal of the term o rdinary post is consequential upon the proposed amendment at item 6.

 

Item 17 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of postage )

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to repeal the definition of postage and substitute a new definition.  The proposed new definition provides that postage , in relation to a postal article, means that amount (including any GST and any special fee) payable in respect of the carriage of the article by or through Australia Post).

 

The carriage of international mail is to be GST exempt, but all other services provided by Australia Post are not GST exempt.

 

The proposed amendment at item 13 proposes to include a definition of GST in the Act.

 

Item 18 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of subsidiary )

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to repeal the definition of subsidiary as the term is not used in the amended Act.

 

Item 19 - Proposed amendment of section 3 of the Australian Postal Corporation Act 1989 (definition of the letter service )

This item proposes to amend section 3 of the Australian Postal Corporation Act 1989 to repeal the definition of the letter service as the term is not used in the amended Act.

 

Item 20 - Proposed repeal of sections 4, 5 and 6 of the Australian Postal Corporation Act 1989

This item proposes to repeal sections 4, 5 and 6 of the Australian Postal Corporation Act 1989.  It is proposed to repeal sections 4 and 5 because these sections contain definitions of terms which have been included in amendments to section 3 (see items 6 and 7).  It is proposed to repeal section 6 of the Act because it contains a definition of subsidiary that need not be included in the Act as the term is not referred to in the Act.

 

Item 21 - Proposed amendment of the Australian Postal Corporation Act 1989 to repeal Part 2

This item proposes to repeal Part 2 of the Australian Postal Corporation Act 1989.  Part 2 of the Act sets out provisions in relation to Australia Post and its Board.  Once Australia Post becomes a public company under the Corporations Law, the Corporations Law, and the constitution of the company, will cover the issues currently covered in Part 2 of the Act.

 

Item 22 - Saving of subsection 24(2) of the Australian Postal Corporation Act 1989

 

This item gives transitional operation to subsection 24(2) in relation to acts and things done by the Managing Director before the repeal of Part 2 of the Australian Postal Corporation Act 1989.  Subsection 24(2) provides that all acts and things done in the name of, or on behalf of, Australia Post by the Managing Director shall be taken to have been done by Australia Post.

 

Item 23 - Proposed repeal of sections 25 and 26 of the Australian Postal Corporation Act 1989

This item proposes to repeal sections 25 and 26 of the Australian Postal Corporation Act 1989.  Section 25 is a general provision that sets out Australia Post’s obligations  under the Act.  These obligations are: its commercial obligation under section 26; its community service obligations under section 27; and its general governmental obligations under section 28.

 

Section 26 provides that Australia Post shall, as far as practicable, perform its functions in a manner consistent with sound commercial practice.

 

Notwithstanding the proposed repeal of section 25, Australia Post will continue to have community service obligations under section 27 of the Act and general governmental obligations under section 28 of the Act.

 

It is proposed to repeal section 26 because when Australia Post becomes a public company incorporated under the Corporations Law, the directors of the company will be subject to the obligations to which all company directors are subject.  These obligations include the obligations under the general law and specific duties of a director under the Corporations Law.  These duties are substantially broader than the simple commercial obligation specified in section 26.

 

Item 24 - Proposed amendment of section 27 of the Australian Postal Corporation Act 1989

 

This item proposes to repeal section 27 of the Australian Postal Corporation Act 1989 and substitute a new section 27 that does not rely on the concept of the letter service , and maintains Australia Post’s community service obligations.  Changes are necessary because Australia Post’s community service obligations will no longer be linked to its reserved services, but will require Australia Post to continue to carry letters up to and including 250 grams, subject to the exceptions to the reserved services in subsection 30(1) (other than the weight exception in paragraph 30(1)(a)).

 

Proposed new subsection 27(1) provides that section 27 sets out Australia Post's community service obligations.

 

Proposed new subsection 27(2) provides that Australia Post must, by physical means, carry letters that Australia Post has the exclusive right to carry.  Australia Post has the exclusive right to carry letters in Australia that originate in Australia and are for delivery in Australia (section 29 of the Act), but only if these letters are not excluded from the reserved services by subsection 30(1) of the Act.  An example of a letter that Australia Post will have the exclusive right to carry is a letter weighing 50 grams or less that is not excluded from the reserved services by any paragraph of subsection 30(1) (see proposed amendment to paragraph 30(1)(a) of the Act at item 30).

 

Proposed new subsection 27(3) provides that Australia Post must, by physical means, carry in Australia letters that Australia Post would have the exclusive right to carry if the reference in paragraph 30(1)(a) of the Act to "more than 50 grams" was a reference to "more than 250 grams".  As a result of proposed new subsection 27(3), Australia Post has a community service obligation to carry letters which weigh anything up to (and including) 250 grams, even though Australia Post's exclusive right is to carry letters that weigh 50 grams or less.

 

Proposed new subsection 27(4) deals with incoming international mail.  The proposed amendment to the Australian Postal Corporation Act 1989 at item 29 provides for the removal of Australia Post’s monopoly in relation to the delivery of incoming international mail.  However, proposed new subsection 27(4) requires Australia Post, as part of its community service obligations, to carry in Australia letters that originate outside Australia, if the letters are for delivery in Australia and weigh 250 grams or less.  If the carriage and delivery of the letter is an exception to the reserved services listed in a paragraph of subsection 30(1), other than paragraph 30(1)(a) (which has a lower weight threshold), Australia Post’s community service obligation does not extend to that letter.

 

This is to ensure that the letter will be carried in Australia, and that Australia will be able to meet its obligations in relation to international mail under the Constitution of the Universal Postal Union.

 

Proposed new subsection 27(5) deals with outgoing international mail.  Proposed new subsection 27(5) provides that Australia Post must, by physical means, carry in Australia letters that:

(a)     originate in Australia; and

(b)    are for delivery outside Australia; and

(c)     weigh 250 grams or less; 

(d)    unless the carriage is covered by a paragraph of subsection 30(1) (other than paragraph 30(1)(a)).

 

The proposed new provision is intended to ensure that even though Australia Post does not have the exclusive right to carry letters within Australia that are for delivery overseas, Australia Post’s community service obligation still requires the carriage of such letters by Australia Post in Australia.

 

Proposed new subsection 27(6) provides that Australia Post must have a single uniform rate of postage for letters that:

(a)     are standard postal articles; and

(b)    Australia Post is obliged to carry under subsection 27(2) or (3); and

(c)     are to be carried by ordinary post.

 

Proposed new subsection 27(7) provides that Australia Post must ensure:

(a)     that the services that Australia Post is obliged to provide under section 27 are made reasonably accessible to all people in Australia on an equitable basis, wherever they reside or carry on business; and

(b)    that Australia Post's performance in providing those services reasonably meets the social, industrial and commercial needs of the Australian community.

 

Proposed new subsection 27(8) provides that in section 27 Australia includes Christmas Island and Cocos (Keeling) Islands, but does not include any other external territory to which the Act extends.  Section 8 of the Act provides that the Act extends to the external territories other than Norfolk Island.

 

Item 25 - Proposed repeal and substitution of paragraph 28(a) of the Australian Postal Corporation Act 1989

This item proposes to amend paragraph 28(a) of the Australian Postal Corporation Act 1989 so that the substituted paragraph refers to policies of the Commonwealth Government of which Australia Post is notified under section 43 of the CAC Act.   Section 43 of the CAC Act provides for the Commonwealth to notify wholly-owned Commonwealth companies of general policies of the Commonwealth

Government that are to apply to the company and requires the directors of the company to comply with the notification.



 

Item 26 - Proposed repeal of paragraph 28(b) of the Australian Postal Corporation Act 1989 to

This item proposes to repeal paragraph 28(b) of the Australian Postal Corporation Act 1989 which provides that the general governmental obligations of Australia Post include performance of Australia Post's functions in a way consistent with any directions given by the Minister under section 49.  This is consequential upon the proposed amendment at item 41 of this Schedule.  Item 41 proposes to repeal Divisions 2 and 3 of Part 4 of the Act.  Section 49 is in Division 3 of Part 4.

 

As a result of the repeal of section 49 of the Act, the Minister for Communications, Information Technology and the Arts will not have a power under the Australian Postal Corporation Limited Act 1989 to give directions to Australia Post under the Act.  This is consistent with Government policy that Government Business Enterprises should not be subject to Ministerial direction other than Ministerial direction under section 43 of the CAC Act.   Section 43 of that Act provides that the responsible Minister may notify the directors of a wholly-owned Commonwealth company in writing of general policies of the Commonwealth Government that are to apply to the company.

 

Item 27 - Proposed amendment of subsection 28A(3) of the Australian Postal Corporation Act 1989 to replace the reference to “the Board” with a reference to “Australia Post”

Item 27 is consequential upon item 4 which repeals the definition of Board.  It replaces the reference in subsection 28A(3) to “the Board” with a reference to “Australia Post”.  As a result, rather than subsection 28A(3) requiring the Minister to give written directions about the return of letters received through foreign postal authorities to the Board of Australia Post, the Minister will give the directions to the company, Australia Post, the directors of which are responsible for the management of the company.

 

Item 28 - Proposed amendment of subsection 28A(4) of the Australian Postal Corporation Act 1989 to repeal the subsection and substitute a new subsection

This item substitutes a new subsection 28A(4) which provides that Australia Post must ensure that it complies with any subsection 28A(3) directions from the Minister.  The proposed amendment is consequential upon the amendment at item 27 above.

 

Item 29 - Proposed amendment of subsections 29(1) and (2) of the Australian Postal Corporation Act 1989 to repeal the subsections and substitute new subsections

This item proposes to amend subsections 29(1) and (2) of the Australian Postal Corporation Act 1989 by repealing subsections 29(1) and (2) and substituting new subsections.

 

Proposed new subsection 29(1) provides that, subject to the exceptions in section 30, Australia Post has the exclusive right to carry a letter in Australia if the letter originates in Australia and is for delivery in Australia.  As Australia Post's reserved services do not extend to the carriage in Australia of a letter that originated outside Australia, or the carriage in Australia of a letter that is for delivery outside Australia, a person other than Australia Post may carry, in Australia, both incoming international mail and outgoing international mail. 

 

Proposed new subsection 29(2) sets out a special circumstance in which a letter is taken to originate in Australia for the purposes of proposed new subsection 29(1).  Generally, a letter originates in Australia if it is sent from a location in Australia.  In addition to this general case, a letter is taken to originate in Australia if some or all of the content or information in the letter is generated in Australia through an enterprise carried on in Australia, and the information is sent outside Australia for the purpose, or for purposes including the purpose, of avoiding the reserved services.

 

In proposed new subsection 29(2), the content or information that is sent outside Australia could be any kind of information in any form.  For example, the information in the letter could be a list of addresses sent outside Australia in a typed list or sent outside Australia electronically.  Similarly, the information in the letter could be a bank customer’s account transaction details sent outside Australia in paper form, or the same account transaction details sent outside Australia electronically.

 

Proposed new subsection 29(2) is intended to provide Australia Post with the opportunity to take action against a person who breaches the reserved services by carrying a letter that is taken to originate in Australia, even though the letter is actually sent into Australia from a place outside Australia.  Under section 31 of the Act Australia Post may apply to the Federal Court for relief where a person has engaged, or is proposing to engage, in conduct that involves, or would involve, an infringement of Australia Post’s exclusive right to undertake the reserved services.

 

Proposed new subsection 29(2A) defines an enterprise carried on in Australia for the purposes of proposed new subsection 29(2).  The definition of the term refers to the  meaning of enterprise in the A New Tax System (Goods and Services Tax) Act 1999

 

Item 30 - Proposed amendment of paragraph 30(1)(a) of the Australian Postal Corporation Act 1989

 

This item proposes to amend paragraph 30(1)(a) of the Australian Postal Corporation Act 1989 so that the exception to the reserved services in paragraph 30(1)(a) is the carriage of letters that weigh more than 50 grams.  This proposed amendment has the effect of reducing Australia Post's reserved services from the carriage of a letter weighing 250 grams or less, to the carriage of a letter weighing 50 grams or less.  A letter which falls within any paragraph of subsection 30(1) is an exception to reserved services.

 

Item 31 - Proposed amendment of paragraph 30(1)(e) of the Australian Postal Corporation Act 1989

This item proposes to amend paragraph 30(1)(e) of the Australian Postal Corporation Act 1989 so that the carriage of a letter for at least the postage for the carriage within Australia of a standard postal article by ordinary post is an exception to the reserved services.  As the rate of postage for carriage of a standard postal article is 45 cents, this proposed amendment has the effect of reducing Australia Post's reserved services from the carriage of a letter for at least $1.80, to the carriage of a letter for at least 45 cents.  A letter which falls within any paragraph of subsection 30(1) is an exception to reserved services.

 

Proposed new paragraph 30(1)(e) contains a reference to an amount including GST and any special fee .  The reference has been included to ensure that the amount that a person other than Australia Post is required to charge for the carriage of letters excepted from the reserved services will be the same as the minimum amount that Australia Post will charge after the commencement of the GST.

 

This is necessary because, as a result of an agreement between the Australia Post and the Government, Australia Post will not raise the postage for a standard postal article from 45 cents when the GST commences.  If not for the proposed amendment, a person other than Australia Post would have been required to add the GST to their service, and they would then be charging more than Australia Post for the same service.

 

Item 32 - Proposed amendment of paragraph 30(1)(ha) of the Australian Postal Corporation Act 1989

This item amends paragraph 30(1)(ha) of the Act so that the paragraph refers to "a bulk service (within the meaning of subsection 30(1BA))", and not "a bulk interconnection service (within the meaning of section 32A))”.  The proposed amendment is being made because item 36 proposes to repeal a number of sections including section 32A.

 

The proposed amendment has the effect that carriage of a letter to an office of Australia Post where it is then lodged for delivery under a bulk service would be an exception to the reserved services.  Australia Post offers a number of different bulk services in addition to the bulk interconnection service.

 

Item 33 - Proposed amendment of the Australian Postal Corporation Act 1989 to insert a new paragraph 30(1)(hb)

This item proposes to amend the Australian Postal Corporation Act 1989 by inserting a new paragraph 30(1)(hb), a new exception to the reserved services, to allow for the carriage of aggregated mail which will ultimately be lodged with Australia Post for delivery under a bulk service.  Proposed new paragraph 30(1)(hb) provides that carriage of a letter to a person for the purpose of the person or another person carrying the letter to an office of Australia Post where it is lodged for delivery under a bulk service (within the meaning of subsection 30(1BA)) is an exception to the reserved services.

 

Item 34 - Proposed amendment of the Australian Postal Corporation Act 1989 to insert a new subsection 30(1BA)

This item proposes to amend the Australian Postal Corporation Act 1989 to insert new subsection 30(1BA).  Proposed new subsection 30(1BA) provides a definition of a bulk service, a term used in the proposed amended paragraph 30(1)(ha) and proposed new paragraph 30(1)(hb).

 

Bulk service is a generic term that describes all the bulk services provided by Australia Post.  Bulk services are all services for the delivery of bulk quantities of letters in Australia at reduced rates if the letters are lodged with Australia Post offices specified in Australia Post’s terms and conditions and sorted before being lodged in accordance with the terms and conditions of the service.  A bulk service with terms and conditions additional to lodgement and sorting will still be a bulk service for the purposes of the definition.

 

Item 35 - Proposed amendment of the Australian Postal Corporation Act 1989 to repeal a heading of a Division

 

This item amends the Australian Postal Corporation Act 1989 to repeal the heading of Division 1 of Part 4.  This is consequential upon the repeal of Divisions 2 and 3 of Part 4 in item 41. 

 

Item 36 - Proposed amendment of the Australian Postal Corporation Act 1989 to repeal sections 32, 32A, 32B and 32D

This item proposes to amend the Australian Postal Corporation Act 1989 to repeal sections 32, 32A, 32B and 32D.  Section 32 deals with terms and conditions on which Australia Post supplies services.  Section 32A deals specifically with the terms and conditions on which Australia Post supplies a bulk interconnection service.  Section 32B provides for regulations to be made for inquiries into disputes about bulk interconnection services .  Section 32D provides that the access regime in Part IIIA of the TPA does not apply in relation to the supply of a service by Australia Post.

 

Section 32 is proposed to be repealed because, after conversion to a Corporations Law company, Australia Post will have all the powers of a natural person.  This includes the  power to determine terms and conditions in relation to the services it provides.  As a result, the repeal of section 32 will not affect Australia Post’s power to determine terms and conditions.

 

Any determination of general terms and conditions by Australia Post does currently, and will not after the proposed amendments to the Australian Postal Corporation Act 1989 , prevent a person from negotiating with Australia Post for terms and conditions that are more favourable than those in the determination. 

 

Item 37 saves the current Australia Post determination of terms and conditions under section 32 so that Australia Post need not make a new determination of terms and conditions when the Bill commences.

 

Section 32A is proposed to be repealed because the bulk interconnection service is intended to be a service declared under the proposed new Postal Services Access Regime in the Trade Practices Act 1974 provided for in Schedule 4 to the Australian Postal Legislation Amendment Bill 2000.  The Postal Services Access Regime is intended to provide access to postal services, whether supplied by Australia Post or another person.

 

Section 32B is proposed to be repealed because the Postal Services Access Regime will contain all the procedures in relation to disputes which may arise when a person wishes to access postal services supplied by Australia Post or another person.

 

Section 32D is proposed to be repealed because postal services provided by Australia Post and other providers will, after the commencement of Schedule 4 to the Act, be subject to an access regime.  Schedule 4 provides for a new Part XID of the TPA, a specific access regime in relation to postal services.  However, with the repeal of the exemption in section 32D, a person could choose to seek access to postal services either under Part XID or under Part IIIA.

 

The regime in Schedule 4 includes a provision intended to ensure that if a person commences the process of seeking access under one regime, it is that regime that is relevant for the remainder of the process.  For example if an application for a declaration of a service is sought under Part XID and that declaration is made by the ACCC, the arbitration of an access dispute cannot take place under the arbitration mechanisms in Part IIIA.

 

Item 37 - Saving of section 32 of the Australian Postal Corporation Act 1989

determination of terms and conditions

 

This item is a savings provision in relation to the determination of terms and conditions made by Australia Post under section 32 of the Australian Postal Corporation Act 1989 .  The effect of the item is that, when section 32 is repealed, the determination in force immediately before the repeal will continue in force.  This is intended to ensure that it will not be necessary for Australia Post to make a new determination of terms and conditions to commence when section 32 is repealed.

 

A new determination of terms and conditions, or a variation of the terms and conditions by Australia Post after the repeal of section 32 will be made under its powers as a corporation.

 

Item 38 - Proposed amendment of the Australian Postal Corporation Act 1989 to repeal the section 33 and substitute a new section

This item proposes to repeal section 33 of the Australian Postal Corporation Act 1989 and substitute a new section which:

(a)                 changes references to “rates of postage” to references to “postage”;

(b)                removes references to the making of a determination under section 32, consequential upon the proposed amendment at item 36;

(c)                 changes references to “the Board” to references to “Australia Post”; and

(d)                changes the “shall” in subsection 33(4) to “must”.

 

Item 39 - Proposed amendment of subsection 34(1) of the Australian Postal Corporation Act 1989

 

This item proposes to amend subsection 34(1) of the Australian Postal Corporation Act 1989 to remove the reference to the letter service and to limit the statutory immunity that Australia Post has under section 34 to letters that it is obliged to carry under section 27. 

 

Proposed new subsection 34(1) provides that an action or proceeding does not lie against Australia Post or any other person in relation to loss or damage suffered, or that may be suffered, by a person because of any act or omission (whether negligent or otherwise) by or on behalf of Australia Post in relation to the carriage of a letter that Australia Post is required to carry under section 27.

 

This amendment is intended to ensure that Australia Post’s statutory immunity is limited to letters that Australia Post is required to carry - that is limited to letters that are part of its community service obligation.  In practice, because Australia Post needs to have in place risk management strategies in relation to all letters and articles it carries, the statutory immunity is likely to be of limited practical effect.

 

Item 40 - Proposed amendment of subsection 34(2) of the Australian Postal Corporation Act 1989

 

This item proposes to amend subsection 34(2) of the Australian Postal Corporation Act 1989 to replace the word “article” with “letter” consequential upon the proposed amendment at item 39.

 

Item 41 - Proposed amendment of the Australian Postal Corporation Act 1989 to repeal Divisions 2 and 3 of Part 4

This item proposes to amend the Australian Postal Corporation Act 1989 to repeal Divisions 2 and 3 of Part 4 of the Act.

 

Division 2 sets out requirements in relation to the corporate plan: the matters to be considered in setting financial targets in the corporate plan and a special power for the Minister for Communications, Information Technology and the Arts to give directions to the Board of Australia Post in relation to the corporate plan.   Division 3 sets out other accountability requirements: extra matters to be included in annual reports, and a power for the Minister to direct the Board of Australia Post in relation to the performance of its functions as appear to the Minister to be necessary in the public interest.

 

The repeal of Division 2 is proposed because section 42 of the CAC Act sets out the conclusive list of corporate plan requirements in relation to wholly-owned Commonwealth companies that are GBEs which will, after conversion of Australia Post to a public company under the Corporations Law and the amendment of the regulations under the CAC Act, include Australia Post in its corporatised form.

 

The repeal of Division 3 is proposed because provisions of the CAC Act apply.  Section 36 of the CAC Act sets out the general requirements that apply to Commonwealth companies in relation to the annual report.  Australia Post will, after conversion, be required to comply with these requirements and the additional matters set out in proposed new section 100A of the Australian Postal Corporation Limited Act 1989 at item 56.

 

Australia Post is currently required under section 28 of the CAC Act to comply with general policies of the Commonwealth Government.  After conversion to a public company, section 43 of the CAC Act will apply to Australia Post.  Section 43 requires the Minister to consult the directors before notifying them of the policies, and requires the directors to ensure that the policies are carried out in relation to the company, and, as far as practicable, in relation to the subsidiaries of the company.

 

Item 42 - Proposed amendment of the Australian Postal Corporation Act 1989 to repeal Parts 5, 6 and 7

This item proposes to amend the Australian Postal Corporation Act 1989 to repeal Parts 5, 6 and 7.  Part 5 deals with finance, Part 6 with the Directors of Australia Post and Part 7 deals with Australia Post's staff.  Item 43 includes certain savings provisions including terms and conditions of employment determined by Australia Post in relation to staff employed by Australia Post prior to its conversion to a public company.  All the other provisions in Parts 5, 6 and 7 will no longer be needed when Australia Post is converted to a public company.

 

Item 43 - Proposed amendment of the Australian Postal Corporation Act 1989 to save certain provisions despite their repeal

This item proposes to amend the Australian Postal Corporation Act 1989 so that, despite the repeal of certain sections of the Act, certain things done under the provisions continue to have effect.  The proposed new section provides that:

(a)                 the appointment of a director of Australia Post and the Managing Director of Australia Post under sections 73 and 83 respectively continue (subsection (2));

(b)                the remuneration of a director determined by the Remuneration Tribunal under section 76 continues (subsection (3));

(c)                 any determination of terms and conditions on which a director holds office under section 80 continues (subsection (4));

(d)                any determination of terms and conditions on which the Managing Director holds office under section 86 continues (subsection (5)); and

(e)                 any determination of terms and conditions of employees engaged by Australia Post under section 89 continue (subsection (6)).

 

 

Section 89 of the Australian Postal Corporation Act 1989 provides that Australia Post may engage such employees as are necessary for the performance of its functions; and that the terms and conditions of employment shall be determined by Australia Post.  This provision deals with persons employed by Australia Post under the Australian Postal Corporation Act 1989 .

 

In relation to persons employed by Australia Post prior to the commencement of the Australian Postal Corporation Act 1989, section 72 of the Telecommunications and Postal Services (Transitional Provisions and Consequential Amendments) Act 1989 (the Transitional Act) is relevant.  Section 72 of the Transitional Act provides that each person who, immediately before the commencing day, was an employee of Australia Post, continues to be employed as if the person had been engaged under section 89 of the new Act.  The commencing day is defined in section 60 of the Transitional Act to mean the day on which the new Act commences; and the new Act is defined in section 60 to mean the Australian Postal Corporation Act 1989 .

 

Item 44 - Proposed amendment of the heading of Part 7A of the Australian Postal Corporation Act 1989

This item proposes to amend the heading of Part 7A of the Australian Postal Corporation Act 1989 so that it refers to "Application of Commonwealth, State and Territory laws".

 

Item 45 - Proposed amendment of section 90A of the Australian Postal Corporation Act 1989

This item proposes to repeal section 90A of the Australian Postal Corporation Act 1989 and substitute a new section 90A.  Proposed new section 90A provides that Australia Post is taken for the purposes of the laws of a Commonwealth, a State or a Territory:

(a)     not to have been incorporated or established for a public purpose or for a purpose of the Commonwealth;

(b)    not to be a public authority or an instrumentality or agency of the Crown; and

(c)     not to be entitled to any immunity or privilege of the Commonwealth;

(d)    except so far as express provision is made by this Act or any other law of the Commonwealth, a State or a Territory.

 

Item 46 - Proposed amendment of subsection 90J(6) of the Australian Postal Corporation Act 1989 to insert new paragraphs 90J(6)(ba) and 90J(6)(bb)

This proposed amendment to subsection 90J(6) of the Australian Postal Corporation Act 1989 inserts new paragraphs 90J(6)(ba) and 90J(6)(bb) so that the list of laws in the subsection includes the National Crime Authority (State Provisions) Act 1984 of New South Wales and the National Crime Authority (State Provisions) Act 1984 of Victoria. 

 

As a result of this proposed amendment, use or disclosure of information or a document under these laws is not prohibited conduct under section 90H of the Act.  Section 90H of the Act provides that use or disclosure of information or a document by a current employee of Australia Post is prohibited conduct if the use or disclosure is not permitted by section 90J, 90K or 90L.  The penalty for prohibited conduct is imprisonment for a period not exceeding 2 years and/or a penalty of up to 120 penalty units.  The current value of a penalty unit is $110 (see subsection 90H(2) of the Australian Postal Corporation Act 1989 and section 4AA and subsection 4B(2) of the Crimes Act 1914) .

 

Item 47 - Proposed amendment of subsection 90J(6) of the Australian Postal Corporation Act 1989 to insert new paragraphs 90J(6)(ca)-(cf)

This proposed amendment to subsection 90J(6) of the Australian Postal Corporation Act 1989 inserts new paragraphs 90J(6)(ca) - 90J(6)(cf) so that the list of laws in the subsection includes the National Crime Authority (State Provisions) Act 1985 of Queensland, the National Crime Authority (State Provisions) Act 1985 of Western Australia, the National Crime Authority (State Provisions) Act 1984 of South Australia, the National Crime Authority (State Provisions) Act 1985 of Tasmania, the National Crime Authority (State Provisions) Act 1991 of the Australian Capital Territory and the National Crime Authority (State Provisions) Act 1985 of the Northern Territory.

 

As a result of this proposed amendment, use or disclosure of information or a document under these laws is not prohibited conduct under section 90H of the Act.  Section 90H of the Act provides that use or disclosure of information or a document by a current employee of Australia Post is prohibited conduct if the use or disclosure is not permitted by section 90J, 90K or 90L. The penalty for prohibited conduct is imprisonment for a period not exceeding 2 years and/or a penalty of up to 120 penalty units.  The current value of a penalty unit is $110 (see subsection 90H(2) of the Australian Postal Corporation Act 1989 and section 4AA and subsection 4B(2) of the Crimes Act 1914) .

 

Item 48 - Proposed amendment of subsection 90LC(5) of the Australian Postal Corporation Act 1989 to insert new paragraphs 90LC(5)(ba) and (bb)

 

This proposed amendment of subsection 90LC(5) of the Australian Postal Corporation Act 1989 inserts new paragraphs 90LC(5)(ba) and 90LC(5)(bb) so that the list of laws in the subsection includes the National Crime Authority (State Provisions) Act 1984 of New South Wales and the National Crime Authority (State Provisions) Act 1984 of Victoria. 

 

As a result of this proposed amendment, use or disclosure of information or a document under these laws is not prohibited conduct under section 90LB of the Act.  Section 90LB of the Act provides that use or disclosure of information or a document by a former employee of Australia Post is prohibited conduct if the use or disclosure is not permitted by section 90LC or 90LCA. The penalty for prohibited conduct is imprisonment for a period not exceeding 2 years and/or a penalty of up to 120 penalty units.  The current value of a penalty unit is $110 (see subsection 90H(2) of the Australian Postal Corporation Act 1989 and section 4AA and subsection 4B(2) of the Crimes Act 1914 ).

 

Item 49 - Proposed amendment of subsection 90LC(5) of the Australian Postal Corporation Act 1989 to insert new paragraphs 90LC(5)(ca) - (cf)

This proposed amendment to subsection 90LC(5) of the Australian Postal Corporation Act 1989 inserts new paragraphs 90LC(5)(ca) - 90LC(5)(cf) so that the list of laws in the subsection includes the National Crime Authority (State Provisions) Act 1985 of Queensland, the National Crime Authority (State Provisions) Act 1985 of Western Australia, the National Crime Authority (State Provisions) Act 1984 of South Australia, the National Crime Authority (State Provisions) Act 1985 of Tasmania, the National Crime Authority (State Provisions) Act 1991 of the Australian Capital Territory and the National Crime Authority (State Provisions) Act 1985 of the Northern Territory.

 

As a result of this proposed amendment, use or disclosure of information or a document under these laws is not prohibited conduct under section 90LB of the Act.  Section 90LB of the Act provides that use or disclosure of information or a document by a former employee of Australia Post is prohibited conduct if the use or disclosure is not permitted by section 90LC or 90LCA.  The penalty for prohibited conduct is imprisonment for a period not exceeding 2 years and/or a penalty of up to 120 penalty units.  The current value of a penalty unit is $110 (see subsection 90H(2) of the Australian Postal Corporation Act 1989 and section 4AA and subsection 4B(2) of the Crimes Act 1914 ).

 

Item 50 - Application provision in relation to proposed amendments made by items 46-49

This item is an application provision in relation to the proposed amendments made by items 46-49.  It provides that the amendments made by those items apply to information or documents acquired or received before, on or after the commencement of those items. 

 

Item 51 - Proposed amendment of paragraph 90N(1)(b) of the Australian Postal Corporation Act 1989

This item proposes to amend paragraph 90N(1)(b) of the Australian Postal Corporation Act 1989 to substitute the reference to “the Board” with a reference to “Australia Post”.

 

Item 52 - Proposed amendment of paragraph 90Q(3)(c) of the Australian Postal Corporation Act 1989

This item proposes to amend paragraph 90Q(3)(c) of the Australian Postal Corporation Act 1989 consequential upon the amendment at item 36.

 

Item 53 - Proposed amendment of section 90Z of the Australian Postal Corporation Act 1989

This item proposes to amend section 90Z of the Australian Postal Corporation Act 1989 consequential upon the amendment at item 36.

 

Item 54 - Proposed amendment of the Australian Postal Corporation Act 1989 to repeal sections 93 - 97

This item proposes to repeal sections 93 - 97 of the Australian Postal Corporation Act 1989 .

 

Sections 93 and 94 are proposed to be repealed as they deal with delegation of Australia Post’s powers and delegation of powers of the Australia Post Board.  As a Corporations Law company, Australia Post will be able to delegate its powers as it sees fit (subject to its constitution), and, as a result, sections 93 and 94 are unnecessary.

 

Section 95 is proposed to be repealed because it provides Australia Post with the power to erect, maintain or use post-boxes in any public road, street or highway or in any other public place.  The repeal of section 95 will place Australia Post on an equal footing with any other person who would, if they sought to erect structures such as post-boxes,

 be required to consult with relevant local authorities and comply with relevant planning laws.  Item 55 provides that despite the repeal of section 95, section 95 continues to apply in relation to post-boxes erected before the commencement of item 54.

 

Section 96, which deals with Australia Post’s seal, and section 97, which deals with when contracts and documents are taken to be executed by Australia Post, are proposed to be repealed as these sections will not be required when Australia Post is converted to a public company under the Corporations Law.

 

Item 55 - Proposed amendment of the Australian Postal Corporation Act 1989 to save section 95 and 97

This item provides that, despite the repeal of section 95 and section 97 of the Australian Postal Corporation Act 1989 those sections continue to apply:

(a)     with regard to section 95, in relation to post-boxes erected before the commencement of item 54; and

(b)    with regard to section 97, in relation to contracts made before the commencement of item 54.

 

The proposed amendment is intended to ensure that Australia Post may continue to maintain and use any post-boxes in place before the repeal of section 95; and contracts or documents made before Australia Post has the powers of a natural person are not invalidated by the repeal of section 97.

 

Item 56 - Proposed amendment of the Australian Postal Corporation Act 1989 to insert new section 100A

This item proposes to amend the Australian Postal Corporation Act 1989 so that the Act includes new section 100A.  Proposed new section 100A sets out additional matters that Australia Post is required to include in annual reports that it will, as a Commonwealth company, provide under section 36 of the CAC Act.

 

Item 57 - Proposed amendment of the Australian Postal Corporation Act 1989 to repeal paragraph 102(e)

This item proposes to repeal paragraph 102(e) of the Australian Postal Corporation Act 1989 .   The paragraph, which provides that regulations may be made prescribing matters with respect to the making of deductions from amounts due to any of Australia Post’s employees on account of judgment debts, is not necessary.  As a public company, Australia Post will be able to make provision for such deductions.

 



Schedule 2 - Renumbering of the Australian Postal Corporation Limited Act 1989

 

Item 1 - Renumbering of the Australian Postal Corporation Limited Act 1989

 

Item 1 of Schedule 2 to the Postal Services Legislation Amendment Bill 2000 renumbers the Australian Postal Corporation Limited Act 1989.  Schedule 2 has been included in the Postal Services Legislation Amendment Bill 2000 so that, after the renumbering, the Act will have continuous numbering.  This was considered preferable to the Act having missing numbers because of the many provisions proposed for repeal in Schedule 1.

 



Schedule 3 - Consequential amendment of other Acts

 

Administrative Decisions (Judicial Review) Act 1977

 

Item 1 - Schedule 1 to the Administrative Decisions (Judicial Review) Act 1977

 

This item proposes to amend Schedule 1 to the Administrative Decisions (Judicial Review) Act 1977 (AD(JR) Act) to insert a new paragraph (ta) which refers to decisions of Australian Postal Corporation Limited or a company that is a subsidiary of the Australian Postal Corporation Limited.  This proposed amendment implements Government policy that Government Business Enterprises not performing administrative functions should not be subject to statutory administrative law.

 

Schedule 1 to the AD(JR) Act lists classes of decisions that are not decisions to which the AD(JR) Act applies.  As the AD(JR) Act applies to administrative decisions under enactments, it is very unlikely that this proposed amendment will have any practical effect, because decisions of Australia Post are not likely to be administrative decisions under the Australian Postal Corporation Act 1989 .

 

Archives Act 1983

 

Item 2 - Subsection 62(5) of the Archives Act 1983

 

This item proposes to amend subsection 62(5) of the Archives Act 1983 to omit the reference to "Australian Postal Corporation" and substitute "Australia Post (within the meaning of the Australian Postal Corporation Limited Act 1989 )".

 

Item 3 - Subsection 62(5) of the Archives Act 1983

 

This item proposes to amend subsection 62(5) of the Archives Act 1983 so that the reference to "the Corporation" is replaced by a reference to "Australia Post".

 

Australian Security Intelligence Organisation Act 1979

 

Item 4 - Paragraph 27(1)(a) of the Australian Security Intelligence Organisation Act 1979

 

This item proposes to amend paragraph 27(1)(a) of the Australian Security Intelligence Organisation Act 1979 consequential upon the inclusion in the Australian Postal Corporation Limited Act 1989 of a definition of Australia Post.

 



Item 5 - Paragraph 27(1)(b) of the Australian Security Intelligence Organisation Act 1979

 

This item proposes to amend paragraph 27(1)(b) of the Australian Security Intelligence Organisation Act 1979 so that the reference to "the Corporation" is replaced by a reference to "Australia Post".

 

Item 6 - Subsections 27(6) and (6A) of the Australian Security Intelligence Organisation Act 1979

 

This item proposes to amend subsections 27(6) and (6A) of the Australian Security Intelligence Organisation Act 1979 so that the references to "the Australian Postal Corporation" are replaced by references to "Australia Post".

 

Item 7 - Subsection 27(7) of the Australian Security Intelligence Organisation Act 1979

 

This item proposes to amend subsection 27(7) of the Australian Security Intelligence Organisation Act 1979 so that the reference to "the Australian Postal Corporation" is replaced by a reference to "Australia Post".

 

Item 8 - Subsection 27(8) of the Australian Security Intelligence Organisation Act 1979

 

This item proposes to amend subsection 27(8) of the Australian Security Intelligence Organisation Act 1979 so that the reference to " Australian Postal Corporation Act 1989 " is replaced by a reference to " Australian Postal Corporation Limited Act 1989 ".

 

Item 9 - Subsection 27(10) of the Australian Security Intelligence Organisation Act 1979 (definition of agent )

 

This item proposes to amend the definition of agent in subsection 27(10) of the Australian Security Intelligence Organisation Act 1979 so that references to "the Australian Postal Corporation" and "the Corporation" are replaced by references to "Australia Post".

 

Item 10 - Subsection 27(10) of the Australian Security Intelligence Organisation Act 1979

 

This item proposes to insert into subsection 27(10) of the Australian Security Intelligence Organisation Act 1979 a definition of Australia Post that refers to the definition in the Australian Postal Corporation Limited Act 1989.

 



Item 11 - Subsections 27A(6) and (6A) of the Australian Security Intelligence Organisation Act 1979

 

This item proposes to amend subsections 27A(6) and (6A) of the Australian Security Intelligence Organisation Act 1979 so that the references to "the Australian Postal Corporation" are replaced by references to "Australia Post".

 

Item 12 - Subsection 27A(7) of the Australian Security Intelligence Organisation Act 1979

 

This item proposes to amend subsection 27A(7) of the Australian Security Intelligence Organisation Act 1979 so that the reference to "the Australian Postal Corporation" is replaced by a reference to "Australia Post".

 

Item 13 - Subsection 27A(8) of the Australian Security Intelligence Organisation Act 1979

 

This item proposes to amend subsection 27A(8) of the Australian Security Intelligence Organisation Act 1979 so that the reference to " Australian Postal Corporation Act 1989 " is replaced by a reference to " Australian Postal Corporation Limited Act 1989 ".

 

Item 14 - Section 27A of the Australian Security Intelligence Organisation Act 1979

 

This item proposes to insert into section 27A of the Australian Security Intelligence Organisation Act 1979 a definition of Australia Post that refers to the definition in the Australian Postal Corporation Limited Act 1989.

 

Commonwealth Borrowing Levy Act 1987

 

Item 15 - Item 8 of the Schedule to the Commonwealth Borrowing Levy Act 1987

 

This item proposes to amend item 8 of the Schedule to the Commonwealth Borrowing Levy Act 1987 to omit the reference to "Australian Postal Corporation" and substitute "Australia Post (within the meaning of the Australian Postal Corporation Limited Act 1989 )".

 

Commonwealth Electoral Act 1918

 

Item 16 - Paragraph 102(4A)(b) of the Commonwealth Electoral Act 1918

 

This item proposes to amend paragraph 102(4A)(b) of the Commonwealth Electoral Act 1918  to omit the reference to "Australian Postal Corporation" and substitute "Australia Post (within the meaning of the Australian Postal Corporation Limited Act 1989 )".



 

Crimes Act 1914

 

Item 17 - Subsection 3(1) of the Crimes Act 1914

 

This item proposes to amend subsection 3(1) of the Crimes Act 1914 to insert a definition of Australia Post that refers to the definition in the Australian Postal Corporation Limited Act 1989.

 

Item 18 - Subsection 3(1) of the Crimes Act 1914 - paragraph (d) of the definition of Commonwealth officer

 

This item proposes to amend paragraph (d) of the definition of Commonwealth officer in subsection 3(1) of the Crimes Act 1914 so that the references to "the Australian Postal Corporation" are replaced by references to "Australia Post".

 

Item 19 - Section 85E of the Crimes Act 1914 - definition of Australia Post

 

This item proposes to repeal the definition of Australia Post in section 85E of the Crimes Act 1914.  This is consequential upon the proposed amendment at item 17.

 

Item 20 - Section 85F of the Crimes Act 1914

 

This item proposes to amend section 85F of the Crimes Act 1914 s o that the reference to " Australian Postal Corporation Act 1989 " is replaced by a reference to " Australian Postal Corporation Limited Act 1989 ".

 

Item 21 - Paragraph 85X(1)(b) of the Crimes Act 1914

 

This item proposes to amend paragraph 85X(1)(b) of the Crimes Act 1914 consequential upon the repeal of section 32 of the Australian Postal Corporation Act 1989 , the specific power under which Australia Post determines terms and conditions.  

 

Criminal Code Act 1995

 

Item 22 - Proposed section 470.1 of the Criminal Code Act 1995 - definition of article

 

This item proposes to amend the definition of article in proposed section 470.1 of the Criminal Code Act 1995 (contained in the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Bill 1999) so that the reference to " Australian Postal Corporation Act 1989 " is replaced by a reference to " Australian Postal Corporation Limited Act 1989 ".

 



Item 23 - Proposed section 470.1 of the Criminal Code Act 1995 - definition of Australia Post

 

This item proposes to repeal the definition of Australia Post in proposed section 470.1 of the Criminal Code Act 1995 (contained in the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Bill 1999) and substitute a new definition providing that Australia Post has the same meaning as in the Australian Postal Corporation Limited Act 1989 .

 

Item 24 - Proposed section 470.1 of the Criminal Code Act 1995 - definition of carry, carry by post, postage stamp and unwritten communication

 

This item proposes to amend the definitions of carry, carry by post, postage stamp and unwritten communication in proposed section 470.1 of the Criminal Code Act 1995 (contained in the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Bill 1999) so that the reference to " Australian Postal Corporation Act 1989 " is replaced by a reference to " Australian Postal Corporation Limited Act 1989 ".

 

Item 25 - Proposed paragraph 472.2(b) of the Criminal Code Act 1995

 

This item proposes to amend the proposed paragraph 472.2(b) of the Criminal Code Act 1995 (contained in the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Bill 1999) so that the reference to " Australian Postal Corporation Act 1989 " is a replaced by reference to " Australian Postal Corporation Limited Act 1989 ".

 

Customs Act 1901

 

Item 26 - Subsection 77F(1) of the Customs Act 1901 - definition of Australia Post

 

This item proposes to repeal the definition of Australia Post in s ubsection 77F(1) of the Customs Act 1901 and substitute a new definition providing that Australia Post has the same meaning as in the Australian Postal Corporation Limited Act 1989 .

 

Evidence Act 1995

 

Item 27 - Subsection 163(2) of the Evidence Act 1995 - paragraph (a) of the definition of letter

 

This item proposes to amend paragraph (a) of the definition of letter in subsection 163(2) of the Evidence Act 1995 so that the reference to " Australian Postal Corporation Act 1989 " is replaced by a reference to " Australian Postal Corporation Limited Act 1989 ".

 

Item 28 - Subsection 163(2) of the Evidence Act 1995 - (definition of letter )

 

This item proposes to replace the definition of letter in subsection 163(2) of the Evidence Act 1995 with the revised definition of letter proposed for inclusion in the Australian Postal Corporation Limited Act 1989.  Item 14 of Schedule 1 of this Bill provides for this revised definition.

 

Item 29 - Dictionary of the Evidence Act 1995 - definition of postal article

 

This item proposes to amend the definition of postal article in the Dictionary of the Evidence Act 1995 so that the reference to " Australian Postal Corporation Act 1989 " is replaced by a reference to " Australian Postal Corporation Limited Act ”.

 

Financial Transaction Reports Act 1988

 

Item 30 - Subsection 15(7AA) of the Financial Transaction Reports Act 1988

 

This item proposes to amend subsection 15(7AA) of the Financial Transaction Reports Act 1988 to omit the reference to "Australian Postal Corporation" and substitute "Australia Post (within the meaning of the Australian Postal Corporation Limited Act 1989 )".

 

Freedom of Information Act 1982

 

Item 31 - Part II of Schedule 2 to the Freedom of Information Act 1982

 

This item proposes to omit the reference in Part II of Schedule 2 to the Freedom of Information Act 1982 to Australia Post.  Part II of Schedule 2 contains a list of bodies that are exempt from the Freedom of Information Act 1982 in relation to documents in respect of their commercial activities.

 

After the conversion of Australia Post to a public company under the Corporations Law, Australia Post will not be subject to the Freedom of Information Act 1982 in relation to any documents because it will not be a “prescribed authority” under section 4 of the Freedom of Information Act 1982 .  The Freedom of Information Act 1982 applies to an “agency” which is defined in section 4 to mean “a Department, a prescribed authority or an eligible case manager”.

 

It is Government policy that Government Business Enterprises not performing administrative functions should not be subject to statutory administrative law.

 

Navigation Act 1912

 

Item 32 - Subsection 329B(2) of the Navigation Act 1912

 

This item proposes to amend subsection 329B(2) of the Navigation Act 1912 to omit the reference to "Australian Postal Corporation" and substitute "Australia Post”.

 



Item 33 - Subsection 329B(3) of the Navigation Act 1912 - definition of article in the course of post

 

This item proposes to amend the definition of article in the course of post in subsection 329B(3) of the Navigation Act 1912 to omit the references to "Australian Postal Corporation" and substitute "Australia Post”.

 

Item 34 - Subsection 329B(3) of the Navigation Act 1912

 

This item proposes to amend the subsection 329B(3) of the Navigation Act 1912 to insert a definition of Australia Post .

 

Occupational Health and Safety (Commonwealth Employment) Act 1991

 

Item 35 - Schedule to the Occupational Health and Safety (Commonwealth Employment) Act 1991

 

This item proposes to amend the Schedule to the Occupational Health and Safety (Commonwealth Employment) Act 1991 to remove the reference to “Australian Postal Corporation”.

 

The Schedule lists Government Business Enterprises that are Commonwealth authorities to which paragraph (a) of the definition of Commonwealth authority in section 5 applies.  After the commencement of the Postal Services Legislation Amendment Bill, Australia Post will be a Government Business Enterprise to which paragraph (b) of the definition of Commonwealth authority in section 5 applies.  This proposed amendment does not alter the status quo - the Occupational Health and Safety (Commonwealth Employment) Act 1991 will continue to apply to Australia Post.

 

Protection of Movable Cultural Heritage Act 1986

 

Item 36 - Paragraph 9(4)(b) of the Protection of Movable Cultural Heritage Act 1986

 

This item proposes to amend paragraph 9(4)(b) of the Protection of Movable Cultural Heritage Act 1986 to omit the reference to "Australian Postal Corporation" and substitute "Australia Post (within the meaning of the Australian Postal Corporation Limited Act 1989 )".

 

Sea Installations Act 1987

 

Item 37 - Schedule to the Sea Installations Act 1987

 

This item proposes to amend the Schedule to the Sea Installations Act 1987 to omit the reference to " Australian Postal Corporation Act 1989 " and substitute " Australian Postal Corporation Limited Act 1989 ".

 



Schedule 4 - Amendment of the Trade Practices Act 1974

 

 

Proposed new Schedule 4 - Amendment of the Trade Practices Act 1974

 

Proposed new Part 1 - Amendment of the Trade Practices Act 1974

 

Item 1 - Amendment to paragraph 29(1A)(a) of the Trade Practices Act 1974

 

Item 1 proposes to add to the restrictions contained in subsection 29(1A) by providing that the Minister may not give directions under subsection 29(1) relating to proposed Part XID of the TPA (which will set up a special regime for regulating access to postal services).

 

Item 2 - Amendment to the Trade Practices Act 1974 to insert Part XID

 

Proposed Part XID is inserted after Part XIC.

 

Proposed new Part XID of the Trade Practices Act 1974 - The postal services access regime

 

Proposed new Division 1 of Part XID of the Trade Practices Act 1974 - Introduction

 

Proposed new section 153A of the Trade Practices Act 1974 - Simplified outline of this Part

 

This proposed new section is a guide to Part XID to assist readers.

 

Proposed new section 153AA of the Trade Practices Act 1974 - Definitions

 

The proposed new section contains the definitions used in the proposed new Part.

 

Proposed new section 153AB of the Trade Practices Act 1974 - Additional effect of this Part

 

Proposed new section 153AB of the TPA is intended to ensure that Part XID which is authorised by the postal power in the Constitution, may also be regarded as authorised by the corporations power and the trade and commerce power in the Constitution.

 

Proposed new section 153AC of the Trade Practices Act 1974 - How this Part applies to partnerships

 

Proposed new Part XID applies to a partnership as if the partnership were a person, subject to the following changes:

 

(a)     if the Part requires a partnership to do something, any of the partners may do it (proposed new subsection 153AC(2));

 

(b)    other obligations imposed on each partner may be discharged by any partner (proposed new subsection 153AC(4));



(c)     if under the Part a document is given to a partner, then the document is taken to have been given to the partnership (proposed new subsection 153AC(3));

 

(a)     in this Part, if a partnership must pay an amount, all partners are jointly and severally liable for the payment of the amount (proposed new subsection 153AC(5)); and

 

(b)    any offence against Part XID is taken to have been committed by each partner who was involved in the contravention (proposed new subsection 153AC(6)).

 

If the composition of a partnership changes, then for the purposes of this Part, it is still regarded as the same partnership (proposed new subsection 153AC(7)).

 

Proposed new section 153AD of the Trade Practices Act 1974 - This Part binds the Crown

 

Proposed new section 153AD provides that Part XID binds the Crown in right of the Commonwealth, each of the States, the Australian Capital Territory and the Northern Territory (subsection (1)), but that nothing in Part XID makes the Crown liable to be prosecuted for an offence (subsection (2)).  That immunity does not apply to an authority of the Commonwealth, a State or a Territory (subsection (3)).

 

Proposed new Division 2 of Part XID of the Trade Practices Act 1974 - Declared services

 

Proposed new Subdivision A of Division 2 of Part XID of the Trade Practices Act 1974 - Guide to this Division

 

Proposed new section 153B of the Trade Practices Act 1974 - Guide to this Division

 

This proposed new section is a guide to proposed new Division 2 to assist readers.

 

Proposed new Subdivision B of Division 2 of Part XID of the Trade Practices Act 1974 - Declaration by the Commission

 

Proposed new section 153C of the Trade Practices Act 1974 - Commission may declare a postal service

 

If a postal service is not the subject of an access undertaking (see proposed new Division 6 for information about undertakings), then the ACCC may declare that service.  This declaration must be by written instrument, and the instrument must specify the service that is being declared, and the person who is providing that service (proposed new subsection 153C(1)).  The instrument must contain the date on which the declaration of the service ends (proposed new subsection 153C(7)).

 

The ACCC may declare a service of its own initiative, or if it is requested to do so by a person in a written request (proposed new subsection 153C(1)). 

 

There are two sets of criteria for the declaration of a service.  The first set contains the matters that the ACCC must be satisfied of before declaring a service (proposed new subsection 153C(2)).  The second set contains the matters that the ACCC must have regard to before declaring a service (proposed new subsection 153C(3)).

 

The declaration criteria in the postal access regime reflect some of the criteria in Part XIC and some in Part IIIA of the TPA.  Others are unique to the postal access regime. 

 

The first of the matters of which the ACCC must be satisfied before declaring a postal service is that the service must be significant to the provision of postal services in Australia.  While some services would not normally be considered significant because of their size, they might be regarded as significant for the purposes of this criterion because they occupy an important link in the chain of delivery for postal services in Australia.

 

The second is that access (or increased access) to the service would promote competition in at least one other market (whether or not in Australia), other than the market for the service.  This criterion reflects the purpose of the postal services access regime, which is to provide access only where access is necessary to allow an access seeker to gain entry into (and thus promote competition in) an upstream market, a downstream market, or some other market.

 

The third matter of which the ACCC must be satisfied before declaring a postal service is that access to the service can be provided without undue risk to human health or safety.  This criterion is based upon one of the criteria in Part IIIA (paragraph 44H(4)(d) of the TPA), and is also a feature of Part XIC (subparagraph 152AR(9)(b)(ii) of the TPA).

 

The final matter of which the ACCC must be satisfied before declaring a postal service is that access to the service would not be contrary to the public interest. This criterion is based upon one of the criteria in Part IIIA (paragraph 44H(4)(f) of the TPA).

 

In applying the public interest test in Part IIIA in the past, the ACCC has taken the following considerations into account:

 

(a)     ecologically sustainable development;

(b)    social welfare and equity considerations;

(c)     transitional issues created by the reform;

(d)    policies concerning occupational health and safety and industrial relations;

(e)     economic development (incorporating regional development), including employment and investment growth;

(f)      the interests of consumers generally, or the interest of a class of consumers; and

(g)     the competitiveness of Australian businesses.

 

It is likely that, in applying the public interest test in this context, the ACCC would take the same, or similar, considerations into account.

 

The first criterion to which the ACCC must have regard is the long-term interests of consumers of postal services.  In assessing this criterion, the ACCC will be required to  consider the effect of a declaration of a particular postal service on the range of users of postal services, including individual consumers, business users, non-profit organisations, and government.

 

The second criterion to which the ACCC must have regard relates to the legitimate business interests of the provider and the provider’s investment in a facility used to supply the service (from paragraph 152AB(6)(c) of Part XIC of the TPA).  This criterion is designed to ensure that regard is had by the ACCC to the interests particular to the provider of a postal service that might become the subject of a declaration.

 

The third criterion to which the ACCC must have regard relates to the economically efficient operation of a service or a facility used to provide that service (from paragraph 152AB(6)(b) in Part XIC of the TPA).  If, for example, the declaration of a particular service would have the effect of increasing access to a service to a point where the service can no longer operate at a level where the service is economically efficient, then the declaration of the service may not be advisable.

 

An example might be where a large increase in mail lodged at a particular mail-centre dock would substantially degrade the efficient operation of the facility.  In such a case, the resulting diseconomies of scale might preclude the ACCC from declaring a service using that facility.  Alternately, the ACCC may decide to declare the service keeping in mind that, should a dispute arise in the future, it could require the provider to extend the facility under proposed new paragraph 153KA(2)(d).

 

The fourth criterion to which the ACCC must have regard relates to Australia Post’s community service obligations.  These obligations are specifically mentioned because Australia Post has significant community service obligations, and Australia Post’s ability to meet these obligations depends upon its continued profitability.  The community service obligations are set out in section 27 of the Australian Postal Corporation Limited Act 1989 .

 

The ACCC must also have regard to any other matter it thinks relevant to the declaration of a service.

 

In order to make a decision about whether or not to declare a postal service, the ACCC may hold a public inquiry (see proposed new Subdivision C of this Division).  If the ACCC holds such an inquiry it must prepare and publish a report about the inquiry (proposed new subsection 153C(4)).  The content of this report is discussed further in proposed new section 153E.

 

If the ACCC decides not to hold a public inquiry, then it must publish a proposal to declare a service and invite public submissions about the proposal.  A report must also be made in relation to the submission process (proposed new subsection 153C(5)).

 

An example of when the ACCC may choose to call for submissions instead of holding a public inquiry might be where the service concerned had already been the subject of a full public inquiry.  In such a case, the ACCC may decide that, given its knowledge of the issue, a less cumbersome method of providing the opportunity for public involvement in the declaration process is appropriate.

 

The intention of the public inquiry or submission process is to ensure that the decision to declare a particular postal service takes into account the views of interested persons. 

 

When the ACCC has made a decision whether to declare a service or not to declare a service, it must publish the decision and the reasons for the decision.  If a particular person had requested the declaration, then the ACCC must also supply the decision and reasons for the decision to that person (proposed new subsection 153C(6)).

 

Two services, namely bulk services provided by Australia Post and services related to Australia Post post-office boxes will be declared by the Minister within 6 months of the commencement of Part XID (see item 8 of this Schedule).

 

Proposed new section 153CA of the Trade Practices Act 1974 - Duration and effect of a declaration

 

A declaration takes effect 21 days after it is published unless an application for review is made under proposed new section 153F.  If an application for review is made within 21 days of a declaration, then the declaration cannot take effect until the review is complete (proposed new subsections 153CA(1) and (2)).

 

If an application for review is withdrawn, the declaration takes effect after the original 21 days (if the 21 days has not yet passed), or when the application is withdrawn (if the 21 days have passed) (proposed new subsection 153CA(3)).

 

Unless a declaration is revoked under section 153CC, it will continue to have effect until it expires.  In either case, the expiry of the declaration will not effect:

 

(a)     an arbitration of an access dispute that was notified before the end of a declaration; or

 

(b)    a determination in operation before the end of the declaration.

 



Proposed new section 153CB of the Trade Practices Act 1974 - Revocation of a declaration

 

Proposed new section 153CB applies to the revocation of a declaration made by the ACCC under proposed section new 153C.  Before revoking a declaration, the ACCC must be satisfied that revoking the declaration would not be contrary to the long-term interests of users of postal services, and would not be contrary to the public interest (proposed new subsection 153CB(1)).

 

Where the ACCC holds a public inquiry into a proposed revocation of a declaration, the ACCC must publish a report about the inquiry prepared in accordance with proposed section 153E (proposed new subsection 153CB(2)). 

 

If the ACCC chooses not to hold a public inquiry in relation to a possible revocation, then it must go through a public submission process (proposed new subsection 153CB(3)). 

 

The ACCC must publish its decision to revoke, or not to revoke, a declaration (proposed new subsection 153CB(4)).  If the ACCC decides not to revoke the declaration, it must give the reasons for the decision to the provider when it publishes the decision (proposed new subsection 153CB(5)).

 

Proposed new Subdivision C of Division 2 of Part XID of the Trade Practices Act 1974 - Public inquiries

 

Proposed new section 153D of the Trade Practices Act 1974 - Public inquiries for proposals about a declaration

 

If the ACCC considers that it is appropriate and practicable to hold a public inquiry about either the declaration of a postal service, or the revocation of a declaration of a postal service, it will be able to hold such an inquiry about the matter.  The ACCC may begin such an inquiry of its own initiative, or if it is requested to do so by a person.  Such a request must be in writing (proposed new subsection 153D(1)).

 

If the ACCC receives a request from a person to hold a public inquiry and decides not to do so, then it must notify the person in writing of this decision.  The ACCC must include in this notification the reasons why it decided not to hold an inquiry (proposed new subsection 153D(2)).

 

Proposed new section 153DA of the Trade Practices Act 1974  - Combined inquiries for proposals about a declaration

 

The ACCC may decide to combine two or more public inquiries in relation to whether to declare a service or revoke a declaration (subsection 153DA(1)).  Where the ACCC decides to hold a combined public inquiry, the ACCC may publish a single notice; prepare a single discussion paper; and hold hearings about the combined inquiry.  The ACCC must produce a report that covers all of the inquiries combined.  A single report may cover all of the inquiries, or there may be more than one report (proposed new paragraph 153DA(2)(d)).

 

Proposed new section 153DB of the Trade Practices Act 1974   - Informing the public about a public inquiry

 

If the ACCC holds a public inquiry, it must publish details of the inquiry including its nature, duration and the form of public submissions (proposed new subsection 153DB(1)).

 

The ACCC is not required to publish all of the details at the same time or in the same way (proposed new subsection 153DB(2)).

 

Proposed new section 153DC of the Trade Practices Act 1974 - Discussion paper

 

After deciding to hold a public inquiry, the ACCC must arrange for the preparation of a discussion paper identifying relevant issues and setting out appropriate background and discussion material (proposed new subsection 153DC(1)).

 

The ACCC must make copies of the discussion paper available at each of its offices and, if it considers it appropriate, may charge a reasonable price for supplying copies of the discussion paper (proposed new subsections 153DC(2) and (4)).

 

The ACCC will also be able to publish the discussion paper by other means, including in electronic form.  If it does so, it will be able to charge a fee for supplying the publication (proposed new subsection 153DC(3)).

 

Proposed new section 153DD of the Trade Practices Act 1974 - Written submissions and protection from civil actions

 

The ACCC must provide a reasonable opportunity for any member of the public to make a written submission to it about the matter to which a public inquiry relates (proposed new subsection 153DD(1)).  The time period for acceptance of submissions will not be less than 28 days (proposed new subsection 153DD(2)).

 

Any member of the public who, in good faith, makes a statement or gives a document or information to the ACCC in connection with a public inquiry (whether in connection with a written submission or at a public hearing) will not be liable to any defamation action or other civil proceedings in respect of loss, damage or injury suffered by another person as a result of the making of a statement or the giving of information in good faith (proposed new subsections 153DD(3) and (4)).

 

Proposed new section 153DE of the Trade Practices Act 1974 - Hearings

 

The ACCC will be able to hold hearings for the purposes of a public inquiry (proposed new subsection 153DE(1)).

 

A hearing may be constituted by such ACCC members as the ACCC Chairperson determines (proposed new subsection 153DE(2)). If the Chairperson is present at the hearing, then he or she must preside at that hearing (proposed new subsection 153DE(3)). If the Chairperson is not present at a hearing, the member determined by the Chairperson as the presiding member is to preside (proposed new subsection 153DE(4)).

 

The ACCC will be able to regulate the conduct of proceedings at a hearing in whatever way it considers appropriate (proposed new subsection 153DE(5)).

 

Proposed new section 153DF of the Trade Practices Act 1974 - Hearing to be in public except in exceptional cases

 

As a general rule, hearings must be held in public (proposed new subsection 153DF(1)). The ACCC is required to give reasonable public notice of the conduct of the public hearing (proposed new subsection 153DF(3)).

 

A hearing, or part of a hearing, will, however, be able to be conducted in private if the ACCC is satisfied that confidential evidence may be given or other confidential matters may arise during the hearing, or that hearing a matter, or part of a matter, in public would not be conducive to the due administration of the Act (proposed new subsection 153DF(2)).

 

Proposed new section 153DG of the Trade Practices Act 1974 - Confidential material not to be published

 

The ACCC may order that confidential evidence or other confidential material presented to a public hearing or confidential material in a written submission lodged with the ACCC should not be published or should be disclosed only in restricted circumstances (proposed new subsection 153DG(1)).

 

Failure to comply with such an order will be an offence punishable on conviction by a maximum fine of 50 penalty units (proposed new subsection 153DG(2)).  Under section 4AA of the Crimes Act 1914 a penalty unit is currently valued at $110.

 

Proposed new section 153DH of the Trade Practices Act 1974 - Direction about private hearings

 

If a hearing, or part of a hearing, takes place in private, the ACCC must give directions as to those who may be present at the hearing or the part of the hearing (proposed new paragraph 153DH(1)(a)).  In such a case, the ACCC may also give directions restricting the disclosure of evidence or other material presented at the hearing or part of the hearing (proposed new paragraph 153DH(1)(b)).

 

Failure to comply with a direction under proposed new paragraph 153DH(1)(b)

will be an offence punishable on conviction by a maximum fine of 50 penalty units (proposed new subsection 153DH(2)).  Under section 4AA of the Crimes Act 1914 a penalty unit is currently valued at $110.

 

Proposed new Subdivision D of Division 2 of Part XID of the Trade Practices Act 1974 -- Reports on public inquiries and consultation

 

Proposed new section 153E of the Trade Practices Act 1974 - Reports on inquiries and consultation

 

The ACCC must prepare and publish a report setting out its findings as a result of any public inquiry it holds under proposed new Subdivision C (proposed new subsection 153E(1)).

 

If the ACCC does not conduct a public inquiry, and instead calls for submissions under proposed new subsections 153C(5) or 153CB(3), the ACCC must prepare and publish a report setting out its findings (proposed new subsection 153E(2)).

 

The ACCC’s report will not be required to include any material that is: confidential material; or the disclosure of which is likely to prejudice the fair trial of a person; or material that is subject to an ACCC order or an ACCC direction prohibiting or restricting its publication or disclosure under sections 153DG or 153DH (proposed new subsection 153E(3)).



Proposed new Subdivision E of Division 2 of Part XID of the Trade Practices Act 1974 -- Review of Commission’s decisions

 

Proposed new section 153F of the Trade Practices Act 1974 - Review of decision whether to declare a postal service

 

If the ACCC declares a postal service, the access seeker may request the Australian Competition Tribunal to review the decision.  This request must be in writing (proposed new subsection 153F(1)).

 

If the ACCC decides not to declare a postal service, the following people can request a review of the decision by the Australian Competition Tribunal:

 

(a)     the person who requested the declaration of the service; or

 

(b)    the person who provides a postal service who is affected by the decision.

 

These requests must be in writing (proposed new subsection 153F(2)).

 

Requests for review under subsection (1) and (2) must be made within 21 days of the decision (proposed new subsection 153F(3)).

 

Review by the Australian Competition Tribunal is a reconsideration of the matter (proposed new subsection 153F(4)).

 

The Australian Competition Tribunal can request the assistance of the ACCC in conducting the review.  The Australian Competition Tribunal may, for example, require the ACCC to make reports for the purposes of the review (proposed new subsection 153F(6)).

 

If the ACCC decided to declare the service, the Australian Competition Tribunal may affirm, vary or set aside a declaration (proposed new subsection (7)).  If the ACCC decided not to declare the service, then the Australian Competition Tribunal may either affirm the ACCC’s decision not to declare the service, or declare the service (proposed new subsection 153F(8)).

 

Proposed new section 153FA of the Trade Practices Act 1974 - Power of Tribunal to dismiss a review application

 

If an application is made to the Australian Competition Tribunal for review under proposed new section 153F, and the Tribunal is satisfied that the application is frivolous or vexatious, the Tribunal may dismiss the application.

 

Proposed new Division 3 of Part XID of the Trade Practices Act 1974 - Negotiations once postal service declared

 

Proposed new section 153G of the Trade Practices Act 1974 - Guide to this Division

 

This proposed new section is a guide to proposed new Division 3 to assist readers.

 

Proposed new section 153GA of the Trade Practices Act 1974 - Confidential information

 

Proposed new section 153GA provides that if:

 

(a)     an access provider and an access seeker are conducting negotiations concerning the terms and conditions of access to a declared service; and

 

(b)    at or after the time when the request for access was made, either party gives information to the other party relating to the negotiations; and

 

(c)     at or before the time that the information was given, the party giving the information gave the other party written notice that the information was confidential, and should only be used for the access negotiations; then

 

the party receiving the information must not use the information for any purpose other than the access negotiations without the written consent of the party giving the information (proposed new subsections 153GA(1) and (3)).

 

If there is an access undertaking in place when the access negotiations begin, then this proposed section does not apply (proposed new subsection 153GA(2)).

 

The remedies for breach of this section are at proposed new section 153V.

 

Proposed new Division 4 of Part XID of the Trade Practices Act 1974 -Registered contracts for access to declared services

 

Proposed new section 153H of the Trade Practices Act 1974 - Guide to this division

 

This proposed new section is a guide to proposed new Division 4 to assist readers.

 

The intention of this proposed new Division is to give the parties to a contract the option of registering the contract with the ACCC.  The effect of registration is that the contract may be enforced as though the contract was a determination of the ACCC in relation to terms and conditions of access (the ACCC makes these determinations under section 153KA).

 

Proposed new section 153HA of the Trade Practices Act 1974 - Application of this Division

 

The proposed new Division will only apply to contracts between access seekers and access providers that provide for access to services declared under Part XID.

 

Proposed new section 153HB of the Trade Practices Act 1974 - Registration of contract

 

All parties to a contract need to apply to the ACCC for registration of the contract.  In deciding whether to register the contract, the ACCC must take into account the public interest and the interests of other users of the service (proposed new subsection 153HB(2)).

 

If the ACCC decides to register a contract, the following details need to be entered on a public register:

 

(a)     the names of the parties to a contract;

 

(b)    the service to which the contract relates; and

 

(c)     the date on which the contract was made (proposed new subsection 153HB(1)).

 

If the ACCC decides not to register the contract it must publish that decision and give its reasons to the parties (proposed new subsections 153HB(3) and (4)).

 

Proposed new section 153HC of the Trade Practices Act 1974 - Review of decision not to register a contract

 

Where the ACCC decides not to register a contract, a party can, within 21 days of publication of the decision, apply in writing to the Australian Competition Tribunal for a review of the decision not to register the contract (proposed new subsections 153HC(1) and (2)).

 

The Tribunal’s review is a reconsideration of the matter (proposed new subsection 153HC(3)).  For the purposes of the review, the Tribunal has the same powers as the ACCC (proposed new subsection 153HC(4)).

 

The Tribunal may require the assistance of the ACCC in conducting the review (proposed new subsection 153HC(5)).  The Tribunal may, for example, require the ACCC to pass over information, or to make reports.

 

The Tribunal may either decide to affirm the decision or register the contract (proposed new subsection 153HC(6)).

 

The Tribunal’s decision takes effect when it is made (proposed new subsection 153HC(7)).

 

Proposed new section 153HD of the Trade Practices Act 1974 - Effect of registration of a contract

 

The parties to a registered contract can enforce the contract under proposed new Division 10 as if it were a determination made by the ACCC under section 153KA.  By registering the contract, the parties substitute the enforcement provisions of Division 10 of Part XID for contract law enforcement remedies.

 

Proposed new Division 5 of Part XID of the Trade Practices Act 1974 - Arbitration of disputes about access to declared services

 

Proposed new Subdivision A of Division 5 of Part XID of the Trade Practices Act 1974 - Guide to this Division

 

Proposed new section 153I of the Trade Practices Act 1974 - Guide to this Division

 

This proposed new section is a guide to proposed new Division 5.

 

This Division provides for the resolution of disputes about access to declared services.  It is based on the arbitration provisions set out in Division 3 of Part IIIA of the TPA.

 

Proposed new Subdivision B of Division 5 of Part XID of the Trade Practices Act 1974   - Notification of access disputes

 

Proposed new section 153J of the Trade Practices Act 1974 - Notification of access disputes

 

Proposed new section 153J provides for parties to a dispute to notify the ACCC of the dispute, thereby initiating an arbitration procedure under this Division.  This provision is broadly based on section 44S in Part IIIA of the TPA.

 

Proposed subsection 153J(1) provides that if an access seeker and a provider are unable to agree on the terms and conditions under which the provider must supply a declared service, the access seeker or the provider may notify the ACCC in writing that an access dispute exists.  This notification may not refer to an aspect of a service that is the subject of an access undertaking.

 

Where a dispute is notified under proposed new subsection 153J(1), the ACCC must give written notice of the access dispute to:

 

(a)     the access provider, if it was the access seeker who notified the dispute;

 

(b)    the access seeker, if it was the access provider who notified the dispute; and

 

(c)     any other person the ACCC thinks might want to be a party to the arbitration (proposed new subsection 153J(2)).

 

Proposed new section 153JA of the Trade Practices Act 1974 - Withdrawal of notifications

 

Proposed section 153JA is based on section 44T of the TPA.

 

Proposed new section 153JA provides for the withdrawal of notifications of disputes.  A notification may be withdrawn by the access seeker or access provider, where they were the person who originally notified the ACCC of the dispute, at any time before the ACCC makes a final determination (proposed new subsection 153JA(1)).

 

Proposed new subsection 153JA(2) provides that where a notification is withdrawn:

 

(a)     the ACCC must not make a final determination in relation to the access dispute;

 

(b)    if the ACCC has not made an interim determination in relation to the dispute, then it may not do so; and

 

(c)     if the ACCC has already made an interim determination, then the determination is revoked when the notification is withdrawn.

 

The process of making final and interim determinations is provided for in proposed new sections 153KA, 153KB and 153KC.

 

Proposed new Subdivision C of Division 5 of Part XID of the Trade Practices Act 1974 - Arbitration of access disputes

 

Proposed new section 153K of the Trade Practices Act 1974 - Parties to the arbitration

 

Proposed new section 153K identifies the parties to an arbitration.  It is based on section 44U of the TPA.  In addition to the access seeker and provider, a third party may also become a party to an access dispute.  To do this, the third party must apply in writing to the ACCC.  The ACCC will then decide whether the third party has sufficient interest to join the proceedings.

 

Proposed new section 153KA of the Trade Practices Act 1974 - Determination by the Commission

 

Proposed new section 153KA provides that, unless the arbitration is terminated under proposed section 153KD, the ACCC must make a written determination on the access seeker’s access to the declared service.  In addition, the ACCC may make a written interim determination on access. 

 

The determination must be in writing and may deal with any matter relating to access by the access seeker to the declared service, including matters that were not the basis for notification of the dispute (proposed new subsection153KA(2)). 

 

Proposed new subsection 153KA(2) also sets out examples of matters that the ACCC may include in a determination.  For example, a determination may:

 

(a)     require the provider to provide access to the service; and

 

(b)    require the access seeker, to accept access to the service and pay for access;

 

(c)     specify the terms and conditions of access;

 

(d)    require the provider to extend a facility to be used to provide access to a service; and

 

(e)     specify the extent to which a determination overrides an earlier determination.

 

The ACCC may make a determination where the provider is not required to give access to a service (proposed new subsection 153KA(3)).

 

Before making a determination, the ACCC must give a draft determination to the parties (proposed new section 153KA(4)).  The ACCC must also give the parties to the dispute reasons for its determination (proposed new subsection 153KA(5)).

 

The ACCC may vary or revoke an interim determination (proposed new subsection 153KA(6)).  Where the ACCC has made an interim determination and all of the parties to the arbitration request that it be revoked, the interim determination must be revoked (proposed new subsection 153KA(7)).

 

Proposed new section 153KB of the Trade Practices Act 1974 - When the Commission must not make a determination

 

Proposed section 153KB limits when the ACCC may make a determination and is based on section 44W of the TPA.  The ACCC must not make a determination that would have the effect of:

 

(a)     preventing any person who already has access to the declared postal service from obtaining a sufficient amount of the service to meet the person’s reasonably anticipated requirements (which may be greater or less than actual usage at the time the dispute was notified) (proposed new paragraph 153KB(1)(a));

 

(b)    preventing a person who has a right to access a declared postal service under a contract or under a determination that was in force at the time the dispute was notified, from obtaining a sufficient level of access to the declared service to be able to meet the person’s actual requirements (proposed new paragraph 153KB(1)(b) and proposed new subsection 153KB(8));

 

(c)     depriving any person of a contractual right in force at the date of introduction of the Postal Services Legislation Bill 2000 into Parliament (proposed new paragraph 153KB(1)(c) and proposed new subsection 153KB(8));

 

(d)    resulting in the access seeker becoming the owner of any part of a facility without the consent of the owner of the facility (proposed new paragraph 153KB(1)(d)); and

 

(e)     requiring the provider to bear some or all the costs of extending a facility used to provide the postal service or maintaining extensions of such a facility (proposed new paragraph 153KB(1)(e)).

 

While a determination may not require the provider to bear the costs of extending or enhancing the capability of a facility or for the maintenance of those extensions, proposed paragraph 153KC(1)(e) enables the ACCC, when determining terms and conditions or other matters relating to access, to have regard to the value to any party of extensions or enhancements.

 

Proposed new subsection 153KB(2) provides that paragraphs (1)(a) and (b) do not apply when the ACCC is making an arbitration determination relating to an earlier determination of an access dispute between the access seeker and the provider.

 

A determination that is made in contravention of subsection 153KB(1) has no effect (proposed new subsection 153KB(3)).

 

Proposed new subsection 153KB(4) deals with the effect of an ACCC determination where it deprives a person of a pre-notification right (a right under a contract or determination in effect when the dispute was notified - see proposed subsection (8)).  Where a determination has the effect of depriving a person of a pre-notification right in force at the time of notification of the dispute, the determination must also require the access seeker to:

 

(a)     pay to the person such compensation (if any) that the ACCC considers fair compensation for the loss of the pre-notification right; and

 

(b)    reimburse the provider and the Commonwealth for any compensation that the provider or the Commonwealth agrees, or that is required under court order, to pay to the person as compensation for the loss of the pre-notification right.

 

Before making an interim determination, the ACCC must give the access seeker a draft interim determination, and at least 7 days to object to the interim determination (proposed new subsections 153KB(5) and (6)).  Access seekers have the right to object to an interim determination during this period by writing to the ACCC (proposed new subsection 153KB(7)).  The ACCC must not make the interim determination if the access seeker objects to it.

 

Proposed new section 153KC of the Trade Practices Act 1974 - Matters for consideration when making determinations

 

Proposed new subsection 153KC(1) (broadly based on section 44X of the TPA) sets out the matters to which the ACCC must have regard when making a final determination. 

 

These matters are:

(a)     the legitimate business interests of the provider and the provider’s investment in a facility used to supply the postal service;

(b)    the public interest, including the public interest in having competition in markets (including markets that are not in Australia);

(c)     the interests of all persons who have rights to use the postal service;

(d)    the direct costs of providing access to the postal service;

(e)     the reduction in cost to the provider of the access seeker performing functions that would otherwise have been performed by the provider;

(f)      the value to the provider of extensions, the cost of which is borne by someone else;

(g)     the operational and technical requirements necessary for the safe and reliable operation of the postal service, or a facility used to provide the postal service;

(h)     the economically efficient operation of the service, or a facility used to provide the postal service;

(i)       in the case where the provider is Australia Post, the need for Australia Post to recover the cost of performing its community service obligations; and

(j)      any other matters the ACCC thinks are relevant.

 

In considering proposed new paragraph 153KC(1)(a), it would be expected that the ACCC would take account of such matters as the need for access providers to make normal commercial rates of return on investments over time.

 

While the costing methodology used by the ACCC in making a determination will be at the discretion of the ACCC, the Bill requires the ACCC to take account of: any direct costs incurred by the access provider in providing access (under proposed new paragraph 153KC(1)(d)), and the savings which the access provider might make because of functions which would otherwise have been performed by the provider (proposed new paragraph 153KC(1)(e)). 

 

An example of when a`function' referred to in proposed new paragraph 153KC(1)(e) might arise is where delivery of bulk quantities of mail that have been presorted and barcoded is a declared service.  Where the provider of the service accepts this presorted and barcoded mail the provider does not bear the cost of the functions of sorting and barcoding that mail.  Consequently, the provider is likely to have made cost savings which the provider may not have made if it had collected the mail in the course of its ordinary retail trade.

 

Proposed paragraph 153KC(1)(i) is intended to make it clear that the need for Australia Post to recover the cost of its community service obligations (which are set out in section 27 of the Australian Postal Corporation Limited Act 1989 , as amended by this Bill) is a relevant consideration for the ACCC in setting access prices.  The paragraph is not, however, intended to imply that the cost of those CSOs should be funded solely or principally via access charges on competitors.  In practice, given that Australia Post has significant reserved services from which to fund its CSOs, it is likely that this paragraph would only be relevant if Australia Post’s capacity to fund the community service obligation from the reserved services revenue is in doubt.

 

Proposed new subsection 153KC(2) gives the ACCC the discretion, but not the obligation, to take account of any of the matters in subsection (1) when making an interim determination.

 

Proposed new section 153KD of the Trade Practices Act 1974 - Termination of arbitration in certain cases

 

Proposed new section 153KD provides for the termination of an arbitration by the ACCC.  The proposed section is broadly based on section 44Y of the TPA. 

 

The ACCC may terminate an arbitration if it thinks that the notification of the dispute is vexatious; the subject matter of the dispute is trivial, misconceived or lacking in substance; the party who notified the dispute has not engaged in negotiations in good faith; or access to the postal service should continue to be governed by an existing contract between the provider and the access seeker (proposed new subsection 153KD(1)).

 

Proposed new section 153KD is intended to enable the ACCC to terminate a dispute and give a direction under proposed new section 153KE where it thinks that doing so will enable the resumption of commercial negotiations.  It is not expected that the ACCC exercise this power unless it is of the opinion that commercial negotiations can be facilitated by such a direction.

 

Proposed new subsection 152KD(2) enables the ACCC to terminate an arbitration if it relates to a dispute about an existing determination and the ACCC thinks there is no sufficient reason that the existing determination should not continue to have effect in its present form.

 

Under proposed new subsection 152KD(3) an arbitration is terminated if a final determination has not been made and an undertaking takes effect in relation to the service.  If the arbitration is wider in scope than the undertaking, then the arbitration may continue to the extent that the service is not covered by the undertaking.

 

Proposed new section 153KE of the Trade Practices Act 1974 - Commission may give directions in relation to negotiations

 

Proposed new subsection 153KE(1) provides that the ACCC may, if it has been requested to do so by a person who is or was a party to the arbitration of an access dispute, give to the other person who is a party to the negotiations a written direction requiring the person to do, or refrain from doing, a specified act or thing relating to the conduct of those negotiations, if the ACCC considers that the direction would be likely to facilitate the negotiations.

 

Proposed new subsection 153KE(2) provides a list of examples of the types of directions that may be given under subsection 153KG(1).  It is not intended that subsection 153KE(1) empower the ACCC to direct a party as to the outcomes it wishes to see from commercial negotiations.  This proposed directions power is  intended to remove obstacles from the resumption of negotiations in good faith (by, for example, addressing imbalances in provision of information or removing unreasonable conditions which the party is imposing for its participation in negotiations).

 

Proposed new subsection 153KE(3) provides that a requirement imposed on a party not to disclose information to the ACCC will be an unreasonable procedural condition for the purposes of paragraph 153KE(2)(c).

 

The remedies in proposed new section 153V apply to a contravention of a direction under proposed new subsection 153KE(1) (proposed new subsection 153KE(4)).  In addition, a person must not be concerned in, or party to, a contravention of proposed new subsection 153KE(4) (proposed new subsection 153KE(5)).

 

Proposed subsections 153KE(6) and (7) provide that the ACCC may determine a set of guidelines in relation to when it will use the direction power in proposed subsection 153KE(1) and requires the ACCC to have regard to these guidelines when deciding whether to use the directions power under proposed new subsection (1).  The ACCC must also have regard to any other matters it considers relevant.

 

Proposed new Subdivision D of Division 5 of Part XID of the Trade Practices Act 1974 - Procedures in arbitrations

 

Proposed new section 153L of the Trade Practices Act 1974 - Constitution of the Commission for an arbitration

 

Proposed new subsection 153L(1) is based on section 44Z of the TPA and provides that the ACCC, when conducting an arbitration, is to be constituted by at least two members nominated in writing by the Chairperson.

 

Proposed new subsection 153L(2) provides that the performance by a member of the ACCC of functions, or the exercise of powers, in relation to the same or a related matter, does not disqualify a member for the arbitration of a dispute.

 

Proposed new section 153LA of the Trade Practices Act 1974 - Member of the Commission presiding at an arbitration

 

Proposed new section 153LA, based on section 44ZA of the TPA, provides that the Chairperson of the ACCC will normally preside at arbitration.  If the Chairperson is not a member of the ACCC, as constituted for the purposes of arbitration, the Chairperson must nominate a member of the ACCC to preside at the arbitration.

 

Proposed new section 153LB of the Trade Practices Act 1974 - Reconstitution of  the Commission

 

Proposed new section 153LB provides that, if a member of the ACCC, constituted for a particular arbitration, stops being a member of the ACCC or is otherwise unavailable for the arbitration, the Chairperson of the ACCC must either direct that the remaining members of the ACCC shall constitute the ACCC for the purposes of finishing the arbitration or direct that one or more other members of the ACCC shall join the remaining members to finish the arbitration.

 

Proposed new subsection 153LB(3) makes it clear that the ACCC as constituted by a direction made under this section may have regard to any record of proceedings of the arbitration as previously constituted.

 

Proposed new section 153LC of the Trade Practices Act 1974 - Determination of questions

 

Based on section 44ZC of the TPA, proposed new section 153LC provides that a question before the ACCC is to be resolved according to the opinion of a majority of members of the ACCC or, in the event of an even division of opinion, according to the opinion of the member presiding.

 

Proposed new section 153LD of the Trade Practices Act 1974 - Hearing to be in private

 

Proposed new section 153LD provides that an arbitration hearing is to be held in private unless the parties agree to public hearings.  This proposed section is based on section 44ZD of the TPA.

 

The presiding member of the ACCC may give written directions as to the persons who may be present at a private hearing, having regard to the wishes of the parties and the need for commercial confidentiality (proposed new subsection 153LD(3) and (4)).

 

Proposed new section 153LE of the Trade Practices Act 1974 - Right to representation

 

Proposed new section 153LE allows parties to a dispute to appear either in person or be represented by someone else.  This proposed section is based on section 44ZE of the TPA.

 

Proposed new section 153LF of the Trade Practices Act 1974 - Procedure of Commission

 

Proposed new subsection 153LF(1), which is based on section 44ZF of the TPA, provides that the ACCC:

 

(a)     is not bound by the rules of evidence when hearing an access dispute; and

 

(b)    must act as speedily as proper resolution of the dispute allows; and

 

(c)     may inform itself of any relevant matter in any way it thinks appropriate. 

 

The ACCC may determine the length of time reasonably necessary for the parties to fairly and adequately present their cases and may require that the cases be presented within that length of time (proposed new subsection 153LF(2)).  The ACCC may also require evidence or argument to be presented in writing (proposed subsection 153LF(3)) and may determine how a hearing is to be conducted (proposed new subsection 153LF(4)).

 

Proposed new section 153LG of the Trade Practices Act 1974 - Particular powers of Commission

 

Proposed new section 153LG sets out particular powers of the ACCC for the purpose of arbitrating an access dispute.

 

The ACCC may, under proposed subsection 153LG(1), give a direction during the course of, or for the purposes of, an arbitration hearing.  The ACCC may also hear disputes in the absence of a person summonsed or served notice to appear, sit at any place and time, refer matters to an expert and give all such directions or do all things necessary for the speedy hearing and determination of the dispute.

 

Proposed subsection 153LG(2) provides that the arbitration is similar to a court in that a party may be in contempt.  A maximum penalty of imprisonment for 6 months and/or a pecuniary penalty of up to 30 penalty units applies if a person is found to be in contempt (see subsection 4B(2) of the Crimes Act 1914) .

 

Proposed subsection 153LG(3) provides that the ACCC’s powers under proposed subsection 153LG(1) have effect subject to any other provisions of this Part and any regulations made under the TPA.

 

Proposed subsection 153LG(4) enables the ACCC to give an oral or written order to a person not to divulge or communicate, without the ACCC’s permission, specified information which was given to the person during the course of an arbitration.  Contravening such an order may also lead to a penalty of up to 50 penalty units (proposed new subsection 153LG(5)).  The current value of a penalty unit is $110.

 

Proposed new section 153LH of the Trade Practices Act 1974 - Power to take evidence on oath or affirmation

 

Proposed new section 153LH sets out evidentiary powers of the ACCC when conducting a hearing into an access dispute, including the power to summon witnesses and to take evidence on oath or affirmation.

 

Proposed new section 153LI of the Trade Practices Act 1974 - Party may request Commission to treat material as confidential

 

Proposed new section 153LI sets out procedures for protecting the commercial confidentiality of documents, and the powers of the ACCC in relation to confidential documents.

 

A party to an arbitration hearing may request the ACCC not to give a copy of a specified part of a document to another party (proposed new subsection 153LI(1)) and the ACCC must inform the other party or parties of the request, and seek their views (proposed new subsection 153LI(2)).  A party objecting to the request may inform the ACCC (proposed new subsection 153LI(3)); and the ACCC may decide not to give the other party or parties a copy of the confidential commercial information (proposed new subsection 153LI(4)).

 

Proposed new section 153LJ of the Trade Practices Act 1974 - Failing to attend as a witness

 

Proposed new section 153LJ provides that a summonsed witness must attend as required by the summons unless excused or released by an ACCC member unless the witness has a reasonable excuse for not doing so.

 

The maximum penalty for failure to attend is imprisonment for 6 months and/or a pecuniary penalty of up to 30 penalty units (see subsection 4B(2) of the Crimes Act 1914) (proposed new subsection 153LJ(2)).

 

Proposed new section 153LK of the Trade Practices Act 1974 - Failing to answer questions etc.

 

Proposed new subsection 153LK(1) provides that a witness must not refuse or fail to:

 

(a)     be sworn or to make an affirmation;

 

(b)    answer ACCC questions; or

 

(c)     produce documents that he or she was required to produce by a summons.

           

The maximum penalty for refusing or failing to comply with proposed new section 153LK(1) is 6 months imprisonment and/or a pecuniary penalty of up to 30 penalty units (see subsection 4B(2) of the Crimes Act 1914) .

 

A person may refuse or fail to answer a question or produce a document on the ground that the answer or production of the document may tend to incriminate him or her, or expose him or her to a penalty (proposed new subsection 153LK(2)).

 

Proposed new section 153LL of the Trade Practices Act 1974 - Intimidation etc.

 

Proposed new section 153LL establishes as an offence intimidation of witnesses (or proposed witnesses) and persons who produce (or who propose to produce) documents to the ACCC for the purposes of an arbitration.  There is a maximum penalty of up to 12 months imprisonment and/or a pecuniary penalty of up to 60 penalty units for this offence (see subsection 4B(2) of the Crimes Act 1914) .

 

Proposed new section 153LM of the Trade Practices Act 1974 - Sections 18 and 19 do not apply to the Commission in an arbitration

 

Proposed new section 153LM provides that sections 18 and 19 of the TPA do not apply to the ACCC as constituted for an arbitration.  Those sections set out procedural matters in relation to meetings of the ACCC and, where the Chairman has directed the ACCC to sit in Divisions, in relation to the Divisions.  These provisions are unnecessary in Part XID, as this Division sets out the procedures the ACCC is to follow in arbitrations.

 

Proposed new Subdivision E of Division 5 of Part XID of the Trade Practices Act 1974 - Effect of determinations

 

Proposed new section 153M of the Trade Practices Act 1974 - Effect of final determinations

 

Proposed new subsection 153M(1) provides that a final determination takes effect 21 days after the determination is made. 

 

Proposed new subsection 153M(2) provides that an application for review of a determination does not affect the operation of the determination or prevent action to implement the determination.

 

However, if a party seeks review of a final determination, the Australian Competition Tribunal may make orders staying or otherwise affecting the final determination (proposed new subsection 153M(3)).  Such an order, which may be varied or revoked by the Tribunal, continues until whichever is the earlier of the expiry date on the order or the finalisation of the review (proposed new subsections 153M(4) and (5)).

 

A provision of a final determination may be expressed to cease to have effect on a specified date (proposed new subsection 153M(6)).

 

Proposed new section 153MA of the Trade Practices Act 1974 - Backdating of final determinations

 

Proposed new section 153MA, which is based on section 152DNA in Part XIC, will allow provisions of a final access determination to have a retrospective operation.  This is intended to encourage commercial agreement and co-operation during access arbitrations by removing incentives for delay and to ensure a considered and reasonable outcome is ultimately applied to the interim period which may otherwise be covered by an interim determination or a commercial agreement which one or more parties may be disputing.

 

Any or all of the provisions of a final determination will be able to be expressed to have taken effect on a specified date that is earlier than the date on which the determination took effect, but not earlier than the date of notification of the dispute (proposed new subsections 153MA(1) and (2)).

 

The intention is that a final determination can operate both retrospectively and prospectively, with either the same or different conditions.  For example, a final determination may provide for the same charges to be provided retrospectively and prospectively.  Alternately, the charges could be different.  The ACCC may make a final determination that is silent in relation to retrospective non-price terms and conditions while providing for such terms and conditions prospectively. 

 

This provision has effect despite of proposed subsection 153M(1), which provides for a final determination to have effect 21 days after it is made.

 

Proposed new section 153MB of the Trade Practices Act 1974 - Effect and duration of interim determinations

 

The ACCC shall specify the date an interim determination takes effect in the determination (proposed new subsection 153MB(1)). 

 

If the interim determination has not been revoked, an interim determination is in effect until which is the earlier of:

 

(a)     the end of the period specified in the interim determination (which must be within 12 months of when the interim determination was made); or

 

(b)    when a final determination relating to the access dispute takes effect.

 

Proposed new section 153MC of the Trade Practices Act 1974 - Revival of interim determination if final determination is stayed

 

If a final determination, in relation to the dispute, is stayed under proposed new subsection 153M(3), and there was an interim determination in effect immediately before the final determination took effect, then the interim determination is revived and continues in effect until whichever is the earliest of:

 

(a)     the end of the period specified in the order;

 

(b)    the revocation of the order;

 

(c)     the finalisation of the review;

 

(d)    the revocation of the interim determination; or

 

(e)     the staying of the interim determination.

 

Proposed new section 153MD of the Trade Practices Act 1974 - Stay of determinations

 

Proposed new section 153MD restricts the powers of the Federal Court to make orders in relation to determinations when a person seeks review of a decision of the ACCC to make a determination under the Administrative Decisions (Judicial Review) Act 1977 (AD(JR) Act) and where a person seeks review of a decision by the ACCC to make a determination under the Judiciary Act 1903 .

 

Proposed new subsection 153MD(1) provides that the stay of proceedings powers in paragraphs 15(1)(a) and (b) of the AD(JR) Act do not apply to a decision of the ACCC to make a determination.  Under paragraphs 15(1)(a) and (b) of the AD(JR) Act, the Court or a Judge may, on such conditions (if any) as it or he or she thinks fit, suspend the operation of a decision which is reviewable under the AD(JR) Act; and stay of all or any proceedings under the decision.  The provision is intended to ensure that the Australian Competition Tribunal is the only body that may make orders in relation to a determination.

 

Proposed new subsection 153MD(2) provides that, if a person applies to the Federal Court under subsection 39B(1) of the Judiciary Act 1903 for a writ or injunction in relation to a decision of the ACCC to make a determination, the Court must not make any orders staying or otherwise affecting the operation of implementation of the decision pending the finalisation of the application for review.

 

Proposed new Subdivision F of Division 5 of Part XID of the Trade Practices Act 1974 - Review of determinations

 

Proposed new section 153N of the Trade Practices Act 1974 - Review by Tribunal

 

A party to a final determination can seek a review by the Australian Competition Tribunal (proposed new subsection 153N(1)).  This must be in writing and be made within 21 days (proposed new subsection 153N(1)).  The Tribunal has the same powers as the ACCC and can arbitrate the matter.  The exception to this is that the Tribunal cannot make an interim determination if one has been revived by proposed new subsection 153MC(1) (proposed new subsection 153N(3) and (4)).

 

The ACCC may be required by the Tribunal to assist in the review (proposed new subsection 153N(5)).  The Tribunal may affirm, vary or set aside the ACCC’s determination, and the decision takes effect from when it is made (proposed new subsections 153N(6) and 153N(8)).

 

Procedural requirements set out in sections 37 and 39 to 43 of the TPA and the evidential and procedural matters set out in sections 103 to 110 of the TPA do not apply in relation to a review of a determination by the Tribunal (proposed new subsection 153N(9)).

 

Proposed new section 153NA of the Trade Practices Act 1974 - Transmission of documents

 

Proposed new section 153NA provides that if there is an appeal to the Australian Competition Tribunal, the ACCC must send to the Tribunal all documents relevant to the matter before the ACCC are transmitted to the Tribunal.

 

Proposed new section 153NB of the Trade Practices Act 1974 - Appeals to Federal Court from determinations of the Tribunal

 

Proposed new subsection 153NB(1) provides that a party to an arbitration may appeal to the Federal Court on a question of law from a decision of the Australian Competition Tribunal.  An appeal must be instituted not later than 28 days after the decision is made, or within such further period as the Federal Court allows, and in accordance with the Rules of Court under the Federal Court of Australia Act 1976 (proposed new subsection 153NB(2)).

 

The Federal Court must hear and determine the appeal and make any order it thinks appropriate, including an order affirming or setting aside the Tribunal’s decision or an order remitting the matter to be decided again by the Tribunal (proposed new subsections 153NB(3) and (4)).

 

Proposed new section 153NC of the Trade Practices Act 1974 - Operation and implementation of a determination that is subject to appeal

 

Proposed new subsection 153NC(1) provides that a decision of the Australian Competition Tribunal that is the subject of a Federal Court appeal has effect notwithstanding the appeal.  If an appeal is instituted in the Federal Court from a Tribunal decision, the court of a judge may make orders staying or affecting the decision of the Tribunal (proposed new subsection 153NC(2)).  The Court or a Judge may vary or revoke an order under subsection (2) (proposed new subsection 153(3)).  An order under subsection (2) has effect until whichever is the earlier of the end of the period specified in the order or the decision on the appeal (proposed new subsection 153NC(4)).

 

Proposed new section 153ND of the Trade Practices Act 1974 - Transmission of documents

 

Proposed new section 153ND is intended to ensure that, if an appeal is instituted in the Federal Court, all documents relevant to the matter before the Australian Competition Tribunal are transmitted to the Court, and that the Federal Court returns all documents to the Tribunal at the conclusion of the proceedings.

 

Proposed new Subdivision G of Division 5 of Part XID of the Trade Practices Act 1974 - Variation of determinations

 

Proposed new section 153O of the Trade Practices Act 1974 - Variation of determinations

 

Proposed new subsection 153O(1) allows for the ACCC to vary a final determination on the application of any party to the final determination, but only if another party doesn’t object.  If the parties cannot agree on a variation, a new access dispute can be notified under proposed section 153J.  Proposed subsection 153O(2) provides that, if proposing to vary a determination, the ACCC must not make a variation that would have the effects in section 153KB, and must have regard to the matters in section 153KC.

 

Proposed new Division 6 of Part XID of the Trade Practices Act 1974 - Access undertakings for postal services

 

Proposed new section 153P of the Trade Practices Act 1974 - Guide to this division

 

This proposed new section is a guide to proposed new Division 6 to assist readers.

 

The intention of this proposed Division is to give access providers the option of avoiding possible arbitration by submitting an access undertaking in relation to one or more postal services it provides. This undertaking would have to be acceptable to the ACCC, which will have, in deciding the acceptability of the undertaking, the advantage of information supplied by other industry participants.

 

There is no reason why an undertaking should not provide for different levels of service to different types of customers.  For example, if the undertaking dealt with the terms and conditions of lodgement of bulk mail, the payment structure could be linked to the volumes lodged.

 

Proposed new section 153PA of the Trade Practices Act 1974 - Access undertakings by providers

 

Any person who either provides a postal service, or expects to provide a postal service, may submit an undertaking to the ACCC in relation to that service.  The undertaking may, for example, cover such matters as the terms and conditions of access to the service (proposed new subsection 153PA(1)).

 

The undertaking must contain an expiry date (proposed new subsection 153PA(2)).

 

Proposed new subsection 153PA(3) specifies the matters to which the ACCC will have regard to in deciding whether or not to accept the undertaking.

 

Before accepting an undertaking, the ACCC must publish the undertaking and consider any submissions it receives as a result (proposed new subsection 153PA(4)).

 

The undertaking has effect from when it is accepted by the ACCC to when it expires, unless it is withdrawn.  Undertakings can only be varied or withdrawn with the agreement of the ACCC (proposed new subsections 153PA(5) and (8)).

 

If an undertaking provides for the ACCC to perform functions or exercise powers, the ACCC may perform these functions or exercise theses powers in accordance with an example of when the ACCC may have a function specified in an undertaking would be specification of the ACCC as the arbiter of a dispute arising from an undertaking.

 

Proposed new section 153PB of the Trade Practices Act 1974 - Further information about an undertaking

 

The ACCC may request further information about any undertaking it is considering accepting, and may delay further consideration until it receives that information.

 

Proposed new Division 7 of Part XID of the Trade Practices Act 1974 - Hindering access to declared services

 

Proposed new section 153Q of the Trade Practices Act 1974 - Prohibition on hindering access to declared services

 

Proposed new subsection 153Q(1) provides that the provider or a user of a postal service to which an access seeker has access under a determination or a registered contract, or a body corporate related to the provider or user of a service, is prohibited from engaging in conduct for the purpose of preventing or hindering the access seeker’s access service (proposed new section 153Q(1)).  Proposed new section 153V sets out remedies for contraventions of proposed new section 153Q.

 

Proposed new subsection 153Q(2) provides that a person is taken to have engaged in conduct for the purpose referred to in proposed new subsection 153Q(1) even though, after all the evidence has been considered, the existence of that purpose is ascertainable only by inference from the conduct of the person or from other relevant circumstances. 

 

Proposed new subsection 153Q(2) does not, however, limit the manner in which the purpose referred to in proposed new subsection 153Q(1) can be established.

 

For the purpose of proposed new section 153Q “user” includes a person who has a right to use the service (proposed new subsection 153Q(3)).

 

Proposed new Division 8 of Part XID of the Trade Practices Act 1974 - Relationship between Divisions 1 to 7 and Part IIIA

 

Proposed new section 153R of the Trade Practices Act 1974 - Relationship between Divisions 1 to 7 and Part IIIA

 

Proposed new section 153R sets out how Part IIIA and Division 1 to 7 of Part XID interrelate.  This is necessary because declarations of postal services could be made under either Part IIIA or Part XID of the TPA.

 

Proposed new section 153R does not restrict the declaration of a service under Part XID which has already been declared under Part IIIA, or the declaration of a service under Part IIIA which has already been declared under Part XID.  However, where access has been sought under Part XID to a particular service, persons may not seek to have Part IIIA apply in relation to that access.  There are three circumstances in which overlap of the two Parts of the TPA may occur (but for the operation of this proposed section).

 

First, where a service is declared under both Parts, parties might have been able to seek arbitration under both Parts.  Proposed new subsection 153R(1) addresses this circumstance by providing that if a service is declared under both Parts IIIA and XID of the TPA, and a dispute exists between parties who may seek arbitration under Part XID, that dispute may not be notified under section 44S in Part IIIA. 

 

Second, where a service is declared under this Part, but not declared under Part IIIA, an access provider might have sought to control the terms and conditions of access available to service providers for that service by submitting an undertaking under Part IIIA.  Proposed new subsection 153R(2) addresses this circumstance by prohibiting the ACCC from accepting an undertaking under Part IIIA relating to a service which has been declared under this Part.

 

Third, if an undertaking that has been submitted under Part IIIA sets out terms and conditions for access to a service which later is declared under this Part, the access provider might have sought to continue to control the terms and conditions of access by service providers to that service via the Part IIIA undertaking.  Proposed new subsection 153R(3) addresses this circumstance by providing that if an undertaking made under Part IIIA is in operation in relation to a particular service which becomes a declared service under this Part, then that undertaking ceases to be in operation to the extent (if any) to which it sets out terms and conditions relating to the provision of access to the service.

 

Proposed new Division 9 of Part XID of the Trade Practices Act 1974 - Record keeping rules and disclosure directions

 

Proposed new Subdivision A of Division 9 of Part XID of the Trade Practices Act 1974 - Guide to this Division

 

Proposed new section 153S of the Trade Practices Act 1974 - Guide to this Division

 

This proposed new section is a guide to the proposed new Division 9 to assist readers.

 

Proposed new Subdivision B of Division 9 of Part XID of the Trade Practices Act 1974 - Record keeping rules and disclosure directions

 

Proposed new section 153T of the Trade Practices Act 1974 - Commission may make record-keeping rules

 

The ACCC may make record-keeping rules under this proposed Division with which specified providers are required to comply.  These rules will require one or more specified providers to keep and retain records, to prepare reports based on those records, and to pass those reports to the ACCC (proposed new subsection 153T(1)). 

 

The record-keeping rules may specify the manner and form in which the records are to be kept (proposed new subsection 153T(2)).  The manner in which the ACCC may require records to be kept includes an electronic format (proposed new subsection 153T(4)).

 

If the rules apply to a particular provider, the ACCC will be required to give the provider a copy of the rules (proposed new subsection 153T(6)).  The ACCC may decide when and at what intervals these reports must be prepared (proposed new subsection 153T(3)).

 

The ACCC will not be able to impose the record-keeping requirements under proposed new section 153T on a provider unless the records contain, or will contain, information that will be relevant to:

(a)     the operation of Part XID (other than Division 9);

(b)    the operation of the Australian Post Corporation Limited Act 1989 ; or

(c)     the provision of postal services (proposed new subsection 153T(7)).

 

Proposed new section 153T does not limit the ACCC’s information gathering powers under section 155 of the TPA (proposed new subsection 153T(8)).

 

Proposed new section 153TA of the Trade Practices Act 1974 - Commission must make record-keeping rules for Australia Post

 

Proposed new subsection 153TA(1) provides that the ACCC must make record-keeping rules under section 153T for and in relation to requiring Australia Post to keep and retain separate records in relation to the costing of the community service obligations; and Australia Post’s reserved services; and to prepare reports containing that information and give the reports to the ACCC. 

 

The primary intention of these rules is to enable the ACCC to advise Australia Post’s competitors that Australia Post is not cross-subsidising from the reserved services to the services it provides in competition with others.

 

In addition, proposed new subsection 153TA(2) provides that the ACCC may make record-keeping rules under section 153T for and in relation to requiring Australia Post to keep records for each or all of Australia Post’s services other than the reserved services; and prepare reports and give the reports to the ACCC.

 

Proposed new section 153TB of the Trade Practices Act 1974 - Commission to give access to report

 

This proposed new section applies to particular reports given to the ACCC by a provider in accordance with the record-keeping rules (proposed new subsection 153TB(1)).

 

The ACCC may give notice to providers that either the ACCC, or the provider itself, shall make available for inspection or purchase copies of reports or extracts, together with any other relevant material.  Such a notice must be in writing.  The notice may specify that the information should be available to the public, or to any persons and on terms and conditions as are specified (proposed new subsections 153TB(4) and (5)). 

 

In both cases above, the provider may seek review of the ACCC’s decision by the Australian Competition Tribunal under proposed new section 153U.

 

Proposed new subsection 153TB(2) provides that the ACCC may only issue such a notice if it is satisfied that disclosing the information would be likely to facilitate:

(a)     the operation of Part XID (other than Division 9);

(b)    the operation of the Australian Postal Corporation Limited Act 1989 ; or

(c)     competition in the provision of postal services.

 

Before issuing a notice under 153TB(4) or (5), the ACCC must have regard to:

(a)     the legitimate commercial interests of the provider;

(b)    the public interest; and

(c)     any other matter that the ACCC considers relevant (proposed new section 153TB(3)).

 

If a provider is directed to make information available under proposed new subsection 153TB(5), then the provider must take all reasonable steps to inform the recipients of the terms and conditions of the release of the information (proposed new subsection 153TB(6)). 

 

A notice under subsections 153TB(4) or (5) should also specify the period after which the information must be available.  This period must be at least 28 days after the notice was given (proposed new subsection 153TB(7)).

 

Contravention of a term or condition of a direction of a notice carries with it a maximum penalty of 100 penalty units (proposed new subsection 153TB(14)).  The current value of a penalty unit is $110.  If the provider charges to supply information under subsection 153TB(5), then it must not charge more than the reasonable costs of making the information available (proposed new subsection 153TB(13)).

 

In addition, the ACCC must send the provider a draft version of the notice before issuing a notice.  The provider should have the opportunity to comment on the draft notice, and if the comments are received within a time specified (not less than 28 days), then the ACCC should consider the comments (proposed new subsection 153TB(8)).

 

If the ACCC intends to provide the reports to the public under proposed new subsection 153TB(4), then the ACCC must make copies available after the period specified in the notice (proposed new subsection 153TB(9)).  If the notice under proposed new subsection 153TB(4) is only for release to specified persons, the ACCC must take reasonable steps to inform the persons after the specified time, and make the information available (proposed new subsection 153TB(10)).

 

The ACCC may give a written direction to a provider specifying how the provider must inform the public (or specified persons) of the availability of information obtainable via a notice under subsection 153TB(5) (proposed new subsection 153TB(11)).  The maximum penalty for failing to comply with a direction is 20 penalty units (proposed new subsection 153TB(12)).  The current value of a penalty unit is $110.

 

Proposed new section 153TC of the Trade Practices Act 1974 - Exemption of reports from access requirements

Proposed new section 153TC enables the ACCC to make a written determination exempting specified reports (subsection 153TC(1)), or specified information (subsection 153TC(2)) from the scope of proposed new section 153TB.  An exemption may be given subject to conditions.

 

A determination made under proposed new section 153TC is a disallowable instrument for the purposes of section 46A of the Acts Interpretation act 1901 (proposed new subsection 153TC(3)) and must therefore be gazetted, tabled in both Houses of Parliament within 15 sitting days and subject to disallowance.

 

Proposed new section 153TD of the Trade Practices Act 1974 - Commission may give reports to a body specified by the Minister

 

Proposed new subsection 153TD(1) requires the ACCC to pass over to a body, specified by the Minister in writing, any reports collected under the record-keeping rules that contain information about a matter determined by the Minister in writing relating to the provision of postal services in Australia.

 

An example of where this provision may be used is where the Minister charges a body (such as the Productivity Commission) to conduct a review of the operation of the Australian Postal Corporation Limited Act 1989 or a review of the postal services industry.  In such a case, relevant information collected by the ACCC under the record-keeping rules may contribute to the review.

 

The ACCC must inform the body which will receive the report what parts (if any) of the report are confidential (proposed new subsection 153TD(2)).  The body must return all reports to the ACCC as soon as is practicable after the body has finished with the report (proposed new subsection 153TD(3)).

 

Proposed new section 153TE of the Trade Practices Act 1974 - Access via the Internet

 

Proposed new section 153TE provides that if the ACCC or a provider is required under proposed Division 9 to make copies of reports, extracts, or other material available for inspection and purchase, the requirement can be met by making the material available on the Internet.

 



Proposed new section 153TF of the Trade Practices Act 1974 - Self-incrimination

 

Proposed new subsection 153TF(1) provides that an individual is not excused from giving a report under the record-keeping rules, or from making available a report or extracts of a report, on the grounds that the report might tend to incriminate the individual or expose him or her to a penalty.

 

However, the giving of the report or extracts or any information, document or thing obtained as a direct or indirect consequence of giving the report or making the report or extracts available will not be admissible in evidence in criminal proceedings other than proceedings under, or arising out of proposed new section 153TG.  This section relates to the making of incorrect records (proposed new subsection 153TF(2)).

 

Proposed new section 153TG of the Trade Practices Act 1974 - Incorrect records

 

Proposed new section 153TG provides that a person who makes an incorrect record in purported compliance with a requirement of the record-keeping rules will be guilty of an offence punishable on conviction by imprisonment for up to 6 months and/or a pecuniary penalty of 30 penalty units (see subsection 4B(2) of the Crimes Act 1914 ).

 

Proposed new Subdivision C of Division 9 of Part XID of the Trade Practices Act 1974 - Review of decisions

 

Proposed new section 153U of the Trade Practices Act 1974 - Review by Tribunal

 

Under proposed new subsection 153U(1) certain record-keeper rules decisions of the ACCC will be reviewable by the Australian Competition Tribunal.  Reviewable decisions are:

(a)     a decision under 153TB to make a report available for inspection or purchase; or

(b)    a decision under 153TB to direct someone to make a report available for inspection or purchase.

 

An application for review must be made within 28 days of the ACCC making the decision (proposed new subsection 153U(2)).  The Tribunal’s review is a reconsideration (proposed new subsection 153U(3)).  The presiding member of the Tribunal may require the ACCC to give information and assistance as the member specifies (proposed new subsection 153U(5)).  The Tribunal may affirm, set aside, or vary the ACCC’s decision, and the Tribunal’s decision is taken to be a decision of the ACCC (proposed new subsections (6) and (7)).

 

Proposed new Division 10 of Part XID of the Trade Practices Act 1974 - Enforcement and remedies

 

Proposed new Subdivision A of Division 10 of Part XID of the Trade Practices Act 1974 - Enforcement and remedies

 

Proposed new section 153V of the Trade Practices Act 1974 - Injunctions and other orders

 

Proposed new subsection 153V(1) provides that the Federal Court may, on the application of a party to determination, grant relief where it satisfied that a person has engaged, is engaging, or proposing to engage, in conduct that constitutes a contravention of the determination. The following types of orders may be made by the Federal Court under this proposed new subsection:

(a)     an order granting an injunction on such terms as the Court determines to be appropriate, either restraining a person from doing something, or requiring a person to do something;

(b)    an order requiring a respondent to compensate a person who has suffered loss or damage as a result of a the contravention; and

(c)     any other order the Court thinks appropriate.

 

Similarly, the Federal Court may grant relief in relation to the contravention of the provisions relating to confidential information during negotiations set out in proposed new section 153GA (proposed new subsection 153V(2)).  In this case, the Court may act at the request of the ACCC or the first party under 153GA.  Orders under this proposed new subsection include:

(a)     an order granting an injunction on such terms as the Court determines to be appropriate, either restraining a respondent or requiring a respondent to do something;

(b)    an order requiring a respondent to pay compensation for damage or loss suffered as a result of the contravention;

(c)     any other order the Court thinks appropriate.

 

Following application by the ACCC, the Federal Court may make orders in relation to the contravention of the provisions relating to directions about negotiations set out in proposed new subsections 153KE(4) or (5) (proposed new subsection 153V(3)).  Orders under this proposed new subsection include:

(a)     an order granting an injunction on such terms as the Court determines to be appropriate, either restraining a respondent or requiring a respondent to do something; and

(b)    any other order the Court thinks appropriate.

 

On application of the ACCC, the Federal Court may also make orders where the Court is satisfied that an access provider has engaged in, is engaging, or is proposing to engage, in a contravention of the terms of an access undertaking (proposed new subsection 153V(4)).  Orders under this proposed new subsection include:

(a)     an order granting an injunction on such terms as the Court determines to be appropriate, either restraining a provider or requiring a provider to do something;

(b)    an order directing the provider to pay compensation for damage or loss suffered as a result of the contravention; and

(c)     any other order the Court thinks appropriate.

 

The Federal Court may grant relief in relation to the contravention of the provisions relating to hindering access set out in proposed new section 153Q (proposed new subsection 153V(5)).  In this case the Court may act at the request of the ACCC or any other person.  Orders under this proposed new subsection include:

(a)     an order granting an injunction on such terms as the Court determines to be appropriate, either restraining a respondent or requiring a respondent to do something;

(b)    an order requiring a respondent to pay compensation for damage or loss suffered as a result of the contravention;

(c)     any other order the Court thinks appropriate.

 

Further, the Federal Court may grant relief in relation to the contravention of the provisions relating to a breach of the record-keeping rules or a disclosure direction (proposed new subsection 153V(6)).  In this case the Court may act at the request of the ACCC or any other person.  Orders that the Court may make under this proposed new subsection include:

(a)     an order granting an injunction on such terms as the Court determines to be appropriate, either restraining a respondent or requiring a respondent to do something;

(b)    an order requiring a respondent to pay compensation for damage or loss suffered as a result of the Contravention;

(c)     any other order the Court thinks appropriate.

 

In granting a injunction restraining a person or requiring a person to do something under proposed new subsections 153V(1), (5) or (6) above, the Court may make other orders including an injunction.  Such an order may be against any other person who has in any way, either directly or indirectly, been knowingly concerned in the contravention or a party to it (proposed new subsection 153V(7)).

 

In making orders concerning the contravention of determinations (under proposed new subsection 153V(1)), the revocation of a determination does not effect an order made under proposed new subsection 153V(1) if the contravention took place while the determination was still in force (proposed new subsection 153V(8)).

 

Proposed new subsection 153V(9) provides that in making orders in relation to hindering access (in proposed new subsection 153V(5)), the Court may decide not to make an order under subsection (5) on the ground that the access declaration and arbitration process (set out in proposed new Divisions 2 and 5) may be a more appropriate way of dealing with the access demands of the access seeker.

 

Proposed new section 153VA of the Trade Practices Act 1974 - Consent injunctions

 

Proposed new section 153VA provides that the Court may grant an injunction under proposed new section 153V by consent of all parties to the proceedings, whether or not it is satisfied that proposed section 153V applies.

 



Proposed new section 153VB of the Trade Practices Act 1974 - Interim injunctions

 

The Federal Court may also grant an interim injunction pending determination of an application under proposed new section 153V (proposed new subsection 153VB(1)).  The Court must not, as a condition of granting an interim injunction in relation to hindering access or record-keeping and disclosure rules, require the ACCC or any other person to give any undertakings as to damages (proposed new subsection 153VB(2)).

 

Proposed new section 153VC of the Trade Practices Act 1974 - Factors relevant to granting a restraining injunction

 

Proposed new section 153VC provides that the Federal Court’s power to grant an injunction under proposed new section 153V, restraining a person from engaging in conduct, may be exercised whether or not it appears to the Court that: the person intends to engage again or to continue to engage in the conduct of that kind; the person has previously engaged in conduct of that kind; or there is imminent danger of substantial damage to any person if that conduct is engaged in.

 

Proposed new section 153VD of the Trade Practices Act 1974 - Factors relevant to granting a mandatory injunction

 

Proposed new section 153VD provides that the Federal Court’s power to grant an injunction under proposed new section 153V, requiring a person to do a thing, may be exercised whether or not it appears that: the person intends to refuse or fail again or continue to refuse or fail to do that thing; the person has previously refused or failed to do that thing; or whether there is an imminent danger of substantial damage to any person if the first-mentioned person refuses or fails to do that thing.

 

Proposed new section 153VE of the Trade Practices Act 1974 - Disclosure of

documents by Commission

 

This proposed new section relates to the case where the ACCC institutes Court proceeding against a person under proposed new subsection 153V(6), which relates to the record-keeping rules and disclosure directions (proposed new subsection 153VE(1)).

 

If a person requests it, the ACCC must give to that person a copy of any document that the ACCC has in relation to the proceeding and the person’s case.  The exceptions to this are where the document originated with the person making the request, or where the document has been prepared by an officer of the ACCC, or professional adviser to the ACCC.  The ACCC may charge a fee for this action, if such a fee has been specified in legislation (proposed new subsection 153VE(2)).

 

The Federal Court may direct the ACCC to comply with a request under proposed new subsection 153VE(2), if the ACCC has not already done so (proposed new subsection 153VE(3)).

 

The Federal Court may choose to refuse a request made under proposed new section 153VE(3).  This refusal may relate to a document or part of a document.  The basis for this refusal would be if the Court believed that it would be inappropriate for the ACCC to hand over the information because the disclosure would prejudice any person, or for any other reason (proposed new subsection 153VE(4)).

 

The Court may inspect any relevant documents before making a decision under 153VE(3) (proposed new subsection 153VE(5)).  In addition, if the Court makes an order under this section, it may set conditions (proposed new subsection 153VE(6)).

 

Proposed new Division 11 of Part XID of the Trade Practices Act 1974 - Miscellaneous

 

Proposed new section 153W of the Trade Practices Act 1974 - Register of declarations, determinations and access undertakings

 

Proposed new subsection 153W(1) requires the ACCC to keep a register of declarations made under proposed new section 153C.  The register must include all declarations, including ones that are no longer in force, for example, declarations that have expired.

 

Proposed new subsection 153W(2) requires the ACCC to maintain a register of information about each determination, including the names of parties to the determination, the postal service to which the determination relates and the date on which the determination was made.

 

Proposed new subsection 153W(3) requires the ACCC to maintain a register of information about each undertaking that has been accepted by the ACCC, including variations and undertakings that are no longer in effect.

 

The register may be maintained by electronic means and may be inspected by any person. 

 

Any person may also take a copy of all or part of a register on payment of the fee, if any, specified in the regulations (proposed new subsections 153W(4) and (5)).

 

If a register is maintained electronically, access to the public can be by printouts of all or part of the register, or via a data processing device or electronic transmission (proposed new subsections 153W(6) and (7)).

 

Proposed new section 153WA of the Trade Practices Act 1974 - Commission can determine that a service is, or is not, a postal service

 

While a postal service is defined in proposed new section 153AA, this proposed new section provides the ACCC with the power to clarify what is a postal service, and is not a postal service, for the purposes of Part XID. 

 

Proposed new subsection 153WA(1) enables the ACCC to determine that a particular service is a postal service and proposed new subsection 153WA(2) enables the ACCC to decide that a particular service is not a postal service.  These decisions must be made by a written determination that is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 (proposed new subsection 153WA(4)).  The determination must therefore be gazetted, tabled in both Houses of Parliament within 15 sitting days and is subject to Parliamentary disallowance.

 

Proposed new section 153WB of the Trade Practices Act 1974 - Offences

 

The general principles of criminal responsibility set out in Chapter 2 of the Criminal Code apply to all offences in proposed Part XID.  A penalty is punishable, on conviction, by a penalty up to the specified penalty.

 

Proposed new section 153WC of the Trade Practices Act 1974 - Interpretation of Part IIIA, XIB, XIC and this Part

 

Proposed new section 153WC is intended to ensure that expressions used in proposed new Part XID, with the exception of proposed section 153WC, should not be used to interpret the meaning of provisions of Part IIIA, Part XIB or Part XIC.  Proposed new Part XID uses many different concepts to the other access regimes, reflecting specific postal industry access requirements.

 

Similarly, concepts used in Parts IIIA, XIB and XIC should not be used to interpret proposed new Part XID.

 

Proposed new section 153WD of the Trade Practices Act 1974 - Operation of Parts IV and VII not affected by this Part

 

Proposed new section 153WD clarifies that nothing in this Part is intended to exempt conduct from the operation of Part IV of the TPA, dealing with Restrictive Trade Practices, or the ability of persons to seek authorisations or notify conduct under Part VII of the TPA.

 

Proposed new section 153WE of the Trade Practices Act 1974 - Compensation for acquisition of property

 

Proposed new section 153WE is a constitutional safeguard and provides that the Commonwealth must pay a reasonable amount of compensation to a person where a determination would result in an acquisition of property within the meaning of paragraph 51(xxxi) of the Constitution and the determination would otherwise be invalid because compensation is inadequate.

 

The amount of compensation is that either agreed by the person and the Commonwealth or, failing agreement, that determined by a court of competent jurisdiction.  Any damages or compensation, or other remedy, in a proceeding otherwise than under proposed new section 153WE must be taken into account if they arise out of the same event or transaction as the acquisition of property.

 

Proposed new section 153WF of the Trade Practices Act 1974 - Conduct of directors, employees or agents

 

Proposed new subsection 153WF(1) provides that in a proceeding under Part XID (that is not a criminal proceeding) in respect of a body corporate. in order to demonstrate that a body corporate has been involved in a breach, it is sufficient to demonstrate: that a director, employee or agent of the body corporate carried out the relevant conduct; that the person concerned was acting within the scope of his or her actual or apparent authority; and that they had the requisite state of mind.  Proposed new subsection 153WF(6) sets out what is included in the reference to state of mind.

 

Proposed new subsection 153WF(2) provides that a body corporate is also responsible for a breach of this Part if a director, employee or agent (while acting within the scope of his or her actual or apparent authority) directed, consented or agreed to another person’s conduct.  This direction, consent or agreement can be expressed or implied. If the body corporate can establish that it took reasonable precautions and exercised due diligence, then the conduct of the person is not the responsibility of the body corporate.

 

Proposed new subsection 153WF(3) provides that, in establishing the state of mind of an individual for a proceeding under this Part, it is sufficient to show that an employee or agent of the individual was acting within the scope of his or her actual or apparent authority, and that the employee or agent had the requisite state of mind.  Proposed new subsection 153WF(6) sets out what is included in the reference to state of mind.

 

Proposed new subsection 153WF(4) provides that in establishing the conduct of a person acting on behalf of an individual:

(a)     where the person is an employee or agent of the individual acting within the scope of his or her actual or apparent authority; or

(b)    an employee of the person directed, consented or agreed to conduct by another person (whether the direction, consent or agreement was expressed or implied) and the employee was able to give this direction, consent or agreement within the scope of his or her actual or apparent authority;

then the conduct is the responsibility of the person unless he or she can establish that he or she took reasonable precautions and exercised due diligence.

 

Proposed new subsection 153WF(5) provides that if an individual is convicted of an offence; and the individual would not have been convicted of an offence, if subsections (3) and (4) had not been enacted, then the individual cannot be imprisoned for the offence.

 

Proposed new subsection 153WF(7) provides that the reference to “director” includes a member of a body corporate incorporated for a public purpose by a law of the Commonwealth, of a State or of a Territory.

 

Proposed new section 153WG of the Trade Practices Act 1974 - Review of the operation of this Part

 

Proposed new subsection 153WG requires the Minister to arrange for a review of the Part XID to be conducted before 1 July 2004.  This date can be extended by regulations made under proposed new Part 153WI.  The review should consider whether all or some of the proposed Part should be repealed.

 

On completion of the review, the Minister must prepare a report on his or her findings and have the report tabled in Parliament within 15 sitting days of its completion.

 

Proposed new section 153WH of the Trade Practices Act 1974 - When this Part ceases to apply

 

Proposed new subsection 153WH(1) provides that, after the cut-off time, there can be no new declarations, contracts registered, disputes notified or undertakings accepted.  The cut-off time is the later of the end of 1 July 2005 or, if, before 1 July 2005, the regulations prescribed a day in the period beginning 2 July 2005 and ending on 1 July 2006 - the end of the day prescribed.

 

Proposed new section 153WI of the Trade Practices Act 1974 - Regulations

 

Proposed new section 153WI of the Trade Practices Act 1974 - Regulations

 

Proposed new subsection 153WI(1) provides that the Governor-General may make regulations prescribing matters required or permitted to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to this Part.

 

Proposed new subsection 153WI(2) provides that, without limiting subsection (1), the regulations may prescribe that a thing is, or is not, a postal article for the purposes of the definition in section 153AA.  Postal article is defined in section 153AA to mean, subject to the regulations, any thing that weighs 20 kilograms or less.  As definition of postal article is central to the definition of postal service, it plays a significant role in determining the scope of the proposed postal services access regime.

 

The regulation making power may be used to narrow or widen the definition of postal article.   For example, if it is found in the future that there is full competition in the parcels market at the over 5 kilogram weight threshold, access to a postal service for the carriage of weighing over 5 kilograms would not promote competition in the market.  A regulation could be made that narrows the definition of postal article for the purposes of the regime to any thing that weighs 5 kilograms or less, and it would be clear that such a service was not subject to the postal services access regime.

 

Proposed new subsection 153WI(3) provides that, without limiting subsection (1), the regulations may provide for the ACCC to charge parties to an arbitration the cost of conducting the arbitration, and divide that cost between them.  Requiring parties to pay for arbitrations in which they are involved is intended to encourage parties to negotiate in good faith and to try to avoid arbitrations.

 

Proposed new subsection 153WI(4) provides that, without limiting subsection (1), the regulations may provide for the specified matters in relation to the functions of the Australian Competition Tribunal.

 

Proposed new subsection 153WI(5) provides that, without limiting subsection (1), the regulations may provide for the inspection of public registers (including fees charged for access to registers).

 

Item 3 - Amendment to subsection 155(1) of the Trade Practices Act 1974

 

The proposed amendment to subsection 155(1) of the TPA includes designated postal matters in this subsection.  In addition, a reference to proposed new subsection 155(10) will be included.  This will enable the powers in section 155 to be used to obtain information, documents and evidence to be used in relation to designated postal matters.

 

Item 4 - Amendment to section 155 of the Trade Practices Act 1974

 

The addition of proposed new subsection 155(10) will define a designated postal matter for the purpose of section 155.

 

Item 5 - Addition of new section 155AC to the Trade Practices Act 1974

 

This item inserts after section 155AB a proposed new section 155AC which prohibits any ACCC official from disclosing any information collected by the ACCC under proposed amended section 155 or proposed new sections 153PB or 153T and which relates to a matter arising under Parts XID except where the official is performing duties or functions as an ACCC official or is otherwise required by law to disclose the information.

 

Proposed new subsection 155AC(2) provides that section 28 of the TPA, which allows for dissemination of information for research purposes, does not override the prohibition in proposed new section 155AC on the disclosure of information.

 

Item 6 - Amendment to subparagraph 163A(1)(a)(iii) of the Trade Practices Act 1974

 

This item amends section 163A of the TPA to prevent a person bringing proceedings in the Federal Court seeking a declaration in relation to the operation or effect of new Part XID.

 

Item 7 - Amendment to subsection 171B of the Trade Practices Act 1974

 

This item inserts a reference to Division 5 of Part XID into section 171B of the TPA.  This will mean that under section 171B, Division 5 of Part XID of the TPA will have no effect to the extent (if any) that it purports to confer judicial power on the ACCC.  This provision is intended to operate as a safeguard to ensure that the arbitration provisions of the TPA are not vulnerable to challenge on the basis of conferring judicial power on the ACCC.

 

Proposed new Part 2 - Transitional provisions

 

Item 8 - Minister must declare postal services

 

This item requires the Minister for Communications, Information Technology and the Arts to, during the period beginning on the day on which item 2 of Schedule 4 commences, to determine that specified postal services are declared services for the purposes of the postal services access regime.  The services that the Minister must determine are declared services are bulk services and services related to a post-office box provided by Australia Post.  A bulk service is defined for the purposes of this item.  The definition is the same as the new definition proposed in amendments to the Australian Postal Corporation Act 1989 in Schedule 1.

 

These two services have been included in the determination power because the current provision for access to Australia Post’s bulk mail services through the bulk interconnection regime in the Australian Postal Corporation Act 1989 is proposed for repeal in the amendments to that Act in Schedule 1.  It is intended that all bulk services provided by Australia Post, not only the bulk interconnection service, will be included in a Ministerial determination under this item.

 

In relation to post-office boxes, the National Competition Council recommended access to post-office boxes because physical access by competitors is unavailable.

 

As a result of a determination by the Minister, the services will be declared services, and the provisions of Part XID of the TPA will apply, as though the services were declared by the ACCC.  Therefore, a person seeking access to a service in relation to a post-office box may commence negotiations with Australia Post, and if the negotiations do not result in a contract, the ACCC may take part in an arbitration, and if necessary, make a determination of terms and conditions.

 

At any time after the commencement of Part XID, Australia Post may give an access undertaking in relation to one of the services, and the ACCC must consider that undertaking under Part XID.  If the ACCC accepts an undertaking, any dispute about access to the service cannot be the subject of an arbitration and cannot be the subject of a determination by the ACCC.

 

The Minister may also revoke a determination under this item.  This revocation power has been included to ensure that, if an incorrect determination is made by the Minister, it may be revoked and a new determination made.  If the Minister revokes a determination of a declaration of a service under this item, then an arbitration in progress at the time of revocation or the operation or enforcement of a determination that was made before the revocation continues.

 

A determination is a disallowable instrument under section 46A of the Acts Interpretation Act 1901 and must therefore be gazetted, tabled in both Houses of Parliament within 15 sitting days, and is subject to Parliamentary disallowance.