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Australian Competition and Consumer Commission

• Outcomes and Output Groups
• Changes to Outcomes and Outputs
• Outcome 1
• Measures Affecting Outcome 1
• Outcome 1 - Resourcing
• Outcome 1 - Contribution of Outputs
• Performance Information for Outcome 1

Section 2: Outcomes and Outputs Information

Outcomes and Output Groups

The map on the following page shows the relationship between Government outcomes and the contributing outputs for the Australian Competition and Consumer Commission (ACCC). Financial detail for Outcome 1 by output appears in Table 2.1 while non-financial information for Outcome 1 appears in Table 2.2.

Changes to Outcomes and Outputs

The Commission's outputs as published in the 1999-2000 Treasury Portfolio Budget Statements were:

• Output 1.1.1: Compliance obligations pursuant to administration of Acts (Trade Practices Act, Prices Surveillance Act) and statutory responsibilities arising from parts of other relevant Acts and subordinate regulatory instruments; and


• Output 1.1.2: Competition initiatives, regulatory mechanisms, liaison and information.

The ACCC has amended the description of its two outputs. The descriptions have been amended to be more meaningful and the Commission's new outputs are:

• Output 1.1.1: The proper administration and enforcement of the Trade Practices Act 1974, the Prices Surveillance Act 1983 and related laws; and


• Output 1.1.2: Performance of actions that promote competition and fair trading and enable well functioning markets.

The change to the output descriptions has not changed the Commission's outcome.

Outcome 1

To enhance social and economic welfare of the Australian community by fostering competitive, efficient, fair and informed Australian markets

The ACCC's role is to administer the Trade Practices Act 1974, State and Territory Application Acts, the Prices Surveillance Act 1983 and related other legislation.

The Commission seeks to maintain and improve competition and efficiency in markets, foster adherence to fair trading practices in well informed markets, promote competitive pricing wherever possible and restrain price rises in markets where competition is less than effective. It is especially concerned to foster a fair and competitive operating environment for small business.

In 2000-01 additional resources have been provided to the Commission for tax reform price exploitation, for legal expenses and for additional functions and powers relating to Australia Post, Airport Regulation and Telecommunications.

Measures Affecting Outcome 1

Monitoring tax reform price exploitation

The Government is providing additional funding of $22 million over two years for the Australian Competition and Consumer Commission (ACCC) to undertake activities to ensure compliance with the price exploitation provisions of the Trade Practices Act 1974 (TPA). The ACCC will expand its monitoring of retail prices function to include further data collections in 2000-01 and in 2001-02; increase its capacity to respond to inquiries from business and consumers through its telephone hotline; and improve Australia-wide management of GST compliance by undertaking compliance and enforcement actions to counter deceptive and misleading conduct by unincorporated entities and individuals. The States were previously responsible for this activity.

The Government has also provided the ACCC with an additional $1 million in 1999-2000 for preparatory work on the second and third items above.

In the 1999-2000 Budget the Government provided the ACCC with $28 million over three years to monitor retail prices and to report to the Treasurer on instances where consumers have not benefited from reductions in the tax rate, or have been exposed to greater than necessary price rises. Funding was also allocated to provide information to the community at large through a national advertising campaign and to enable the ACCC to take enforcement action where there are breaches of the new prohibition on price exploitation in the Trade Practices Act 1974.

The Government announced in the Mid-Year Economic and Fiscal Outlook 1999-2000 that it would provide the ACCC with an additional $5 million in 1999-2000 to expand its monitoring of retail prices function to include four additional data collections before the implementation of the GST on 1 July 2000.

Provisioning for legal services

The Government will provide the Australian Competition and Consumer Commission (ACCC) with additional funding to enable it to meet increased legal expenses. This will enable the ACCC to maintain its compliance and enforcement activity. In addition, it will enable the ACCC to undertake representative actions, under Part IV of the Trade Practices Act 1974, where it identifies that there is a misuse of market power or other restrictive trade practices.

Postal services regulation

The Government will fund the Australian Competition and Consumer Commission (ACCC) to carry out its proposed role as the competition regulator for postal services. The ACCC will undertake tasks associated with administration of functions under the access regime, including declaration inquiries; arbitration of the terms and conditions of access; and assessment of access undertakings offered by providers of postal services. It will also oversee record keeping for the purpose of accounting separation between the reserved services and other services.

This measure will be funded by a levy on Australia Post.

The proposed access regime is a key feature of the postal reform package that the Government announced in July 1998 following a review of the Australian Postal Corporation Act 1989. The access regime allows competitors to access Australia Post's network. The regime will promote competition in the postal services industry. The current nationwide letter service at a uniform price for standard letters up to 250 grams - the Universal Service Obligation - will be unaffected by the reforms.

Extend communications regulation

The Government will provide additional funding in 2000-01 to the Australian Competition and Consumer Commission (ACCC) to administer a number of powers in relation to competition notices and arbitration activities. This will maintain funding at 1999-2000 levels.

The measure responds to increased demands on the ACCC, in particular to those flowing from amendments contained in the Telecommunications Legislation Amendment Act 1999.

Specifically, the measure will assist the ACCC to speed up the workings of the competition notice regime in Part XIB of the Trade Practices Act 1974 and the processing of arbitration and the associated legal issues under Part XIC of the Act.

The ACCC's costs will be recovered from industry in 2001-02.

Airport regulation

The Government will provide the Australian Competition and Consumer Commission (ACCC) with $3.6 million over four years to undertake its regulatory responsibilities in relation to airports.

The funding will enable the ACCC to improve airport access arrangements, assess compliance with airport price caps including pass through of necessary new investment, monitor prices of aeronautical-related services at airports, monitor quality of service and perform other related functions.

The ACCC's costs will be recovered from the industry.

The Federal Government granted long-term leases at Melbourne, Brisbane and Perth airports in 1997, and at Adelaide, Alice Springs, Canberra, Coolangatta, Darwin, Hobart, Launceston and Townsville airports in 1998. As part of the privatisation process, the Government introduced a framework for economic regulation of these airports under the Airports Act 1996, the Prices Surveillance Act 1983 and the Trade Practices Act 1974.

Monitoring of the prices of certain milk products

The Government has provided additional funding of $0.5 million in 1999-2000 for the Australian Competition and Consumer Commission (ACCC) to monitor prices, costs and profits of businesses selling liquid milk products. This is to examine whether the prices of these products are being appropriately set given the introduction of a dairy industry adjustment levy and industry deregulation.

The Commonwealth dairy industry adjustment package will assist dairy farmers to make the transition to a deregulated environment. This follows the agreement by the State and Territory Governments to the deregulation of the dairy industry by removing current farm gate pricing arrangements. The package will be funded by a levy of 11 cents per litre that will be applied to liquid milk products. The farm gate price of milk is expected to fall following deregulation on 1 July 2000.

Outcome 1 - Resourcing

Table 2.1 shows how the 2000-01 appropriations translate to total resourcing for Outcome 1.

Table 2.1: Total Resources for Outcome 1

Outcome 1 - Contribution of Outputs

Outcome 1 defines the ACCC's role in delivering Government competition and consumer policy. The ACCC's output groups are described below and Table 2.2 provides performance information on the strategies chosen to deliver Outcome 1.

The Commission's outputs are as follows:

• Output 1.1.1: The proper administration and enforcement of the Trade Practices Act 1974, the Prices Surveillance Act 1983 and related laws.


• Output 1.1.2: Performance of actions that promote competition and fair trading and enable well functioning markets.

Output 1.1.1 assists in the achievement of the Government's outcome by improving compliance laws, reducing compliance costs and influencing community behaviour and confidence. Competitive markets are promoted through the administration and enforcement of the Trade Practices Act, Prices Surveillance Act and statutory responsibilities arising from parts of other relevant Acts and subordinate regulatory instruments. Important aspects include enforcement of the Acts' provisions relating to restrictive trade practices, consumer protection, authorisations, notifications and prices for goods and services under price control; the prohibition of certain misleading or deceptive conduct and unfair practices, the disclosure of consumer information relating to the supply of certain goods and services, and the promotion of product safety; and the promotion of information and, in particular, public awareness of the requirements of, and remedies available under the Acts.

Output 1.1.2 assists in the achievement of the Government's outcome by having a well regulated, informed competitive and fair market. This includes developing, implementing and promoting public awareness of regulatory frameworks, maintaining and fostering international developments to improve market conduct.

In seeking to achieve its outcome, the ACCC will:

• pursue enforcement of the law without fear or favour;


• maintain a focus on competition and consumer strategies as reflected in virtually all parts of the legislation administered;


• give the highest priority to the non-traded goods and services sector;


• pursue its published enforcement priorities; and


• foster compliance via education and publicity.

Monitoring of possible price exploitation as a consequence of A New Tax System's reforms will be a major ACCC activity until 2002.

Performance Information for Outcome 1

Table 2.2: Performance Information 2000-01
Effectiveness - overall achievement of the outcome
	Indicators	Measures
Secure compliance by business with the Trade Practices Act.	Investigating complaints, developing and implementing compliance programmes, evaluating and reviewing applications for authorisations, access undertakings, monitoring them and arbitrating disputes. A small business focus which informs and educates small business about its rights and obligations under the Trade Practices Act (TPA) with a view to assisting in enforcing the TPA in relation to small business issues. A focus in the non-traded goods and services sector to encourage competition in markets and consumer protection.	Meeting of prescribed time limits and standards, decisions based on relevant facts, effective public relations programme including media releases, publications, and liaison meetings.
Secure improvement in market conduct.	Assisting with the development and implementation of regulatory frameworks which maximise the potential for promotion of competition and efficient outcomes including through access to essential facilities, liaising widely with key stakeholders, and reviewing price notifications from declared companies and monitoring prices as required under the Prices Surveillance Act.	Timely decisions resulting in improved access and service delivery and development of pro-competitive regulatory frameworks. Publication of price notifications within statutory timeframes.
Community informed about the Trade Practices Act and the Prices Surveillance Act and their implications for business and consumers.	Information programmes, publications and publicity are used to promote general awareness of the Acts and the ACCC's priorities and procedures. By these means also the deterrent and educational potential of the ACCC's enforcement work is reinforced.	Level of community awareness and responsibility to be monitored; number of complaints, inquiries, attendance at seminars; and by community surveys.

Table 2.2: Performance Information 2000-01 (continued)
Performance information for administered items (including third party outputs)
Output group 1.1 - Australian Competition and Consumer Commission
	Indicators	Measures
Output 1.1.1: The proper administration and enforcement of the Trade Practices Act 1974, the Prices Surveillance Act 1983 and related laws.	Collection of Statutory fees and judgement debts.	Timely banking and recording of Statutory fees and judgement debts.
Performance information for agency outputs
Output group 1.1 - Australian Competition and Consumer Commission
	Indicators	Measures
Output 1.1.1: The proper administration and enforcement of the Trade Practices Act 1974, the Prices Surveillance Act 1983 and related laws.	Responded to complaints and inquiries.	Initially within 7 working days and substantially within 28 days unless circumstances prevent this.
	Appropriate enforcement action taken and goals achieved, ie, stopped unlawful conduct, compensation gained for loss or damage, compliance with Act, pecuniary penalty.	Strategies achieve compliance with TPA (and associated State/Territory application legislation). Unconscionable conduct legislation tested. All undertakings complied with.
	Merger proposals likely to have an anti-competitive effect opposed or authorised where there is sufficient public benefit.	Prescribed time limits met. Number of mergers approved/opposed in traded and non-traded industries. Decisions are understood by key stakeholders.
	Appropriate action taken to ensure no business takes unfair advantage of A New Tax System.	Price movements monitored. Information provided to market participants including consumers. Complaints and issues of public concern investigated. Strategies (including court action) to achieve compliance with TPA.
	Granted statutory immunity from legal proceedings where there is sufficient public benefit concerning some anti-competitive practices (as prescribed by the TPA).	Issued draft determinations and notices within four months of lodgement and final determinations and notices within prescribed time limits. Determinations based on an accurate account of relevant facts. Decisions are understood by key stakeholders.

Table 2.2: Performance Information 2000-01 (continued)
Performance information for agency outputs (continued)
	Indicators	Measures
	Access to essential services including postal services and airport regulation is made on reasonable terms and conditions.	Decisions issued within 4 months on whether access undertakings will be accepted. Assessments and decisions made on accurate information. Decisions are understood by key stakeholders.
	Regulated gas market as required by the National Third Party Access Code for National Gas Pipeline Systems.	Time limits prescribed by Code met. Secured compliance with competition issues as set out in Code. Decisions made on accurate information and communicated to key stakeholders.
	Regulated electricity market as required by the National Electricity Market Code.	Time limits prescribed by Code met. Decisions (including revenue caps) made on accurate information and communicated to key stakeholders.
	Regulated telecommunications market.	Time limits prescribed by legislation met. Secured compliance with competition notice regime. Decisions made on accurate information and communicated to key stakeholders.
	Publication of new and amended provisions of the Trade Practices Act and new ACCC procedures.	Timely publications. Business and consumers understand obligations.
	Promoted competitive pricing where possible and restrained price rises in markets where competition is less than effective.	Prices charged to businesses accessing essential facilities reflect true costs of providing the service. Secured compliance with price caps. Price notifications completed within statutory time frames.

Table 2.2: Performance Information 2000-01 (continued)
Performance information for agency outputs (continued)
	Indicators	Measures
Output 1.1.2: Performance of actions that promote competition and fair trading and enable well functioning markets.	ACCC policy and positions formulated - discussion documents and guidelines on competition initiatives and regulatory mechanisms be prepared, disseminated and discussions take place with Government, industry and consumers.	Timely and effective consultation with key stakeholders. Policy and guidelines understood by key stakeholders. Implementation of pro-competitive strategies by essential industries.
	Consulted with Federal and State Governments on competition issues arising from regulatory reforms.	High quality and timely advice to Governments.
	Responded to Government inquiries on competition and consumer protection issues including references under Section 28 of the TPA relating to dissemination of information, law reform and research.	Well researched and timely advice to Government. Increased general awareness of competition law and consumer issues.
	Actively participated in the development of effective competition and consumer protection laws internationally.	Set in place lawful arrangements for exchange of information with other countries. Contributed technical advice to countries developing competition and consumer protection legislation.

Evaluations

No evaluations are planned for 2000-01.

Competitive Tendering and Contracting

The ACCC is planning to market test its banking arrangements during 2000-01.