PROGRAMME 6 — AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

PROGRAMME 6 — AUSTRALIAN COMPETITION & CONSUMER COMMISSION
Objectives
To enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection.
To give special weight to small business interests through the coordination of enforcement and education activity in relation to small business issues.
Table 4.1:  Reconciliation of Appropriations to the Programme and Summary of Underlying Outlays

(i)	As presented in the 1997‑98 Budget documentation (May 1997  adjusted, where necessary, to reflect underlying outlays).
(ii)	1997‑98 Revised Appropriation figures amended to include Additional Estimates, Advance to the Minister for Finance, running cost borrowings, savings and other revisions.
(iii)	Variation percentage = ((1998-99 Budget less 1997-98 Estimated Outcome)/1997‑98 Estimated Outcome).

Sub‑Programme 6.1 — Compliance with the Trade Practices Act
Objective
To secure compliance with the Trade Practices Act 1974 by responding to complaints and inquiries and observing market conduct and initiating action where necessary.
Table 4.2:  How the Sub-Programme is Resourced;  Reconciliation of Appropriations to the Sub-Programme and Summary of Underlying Outlays

(i)	As presented in 1997‑98 Budget documentation (May 1997  adjusted, where necessary, to reflect underlying outlays).
(ii)	1997‑98 Revised Appropriation figures amended to include Additional Estimates, Advance to the Minister for Finance, running cost borrowings, savings and other revisions.
(iii)	Variation percentage = ((1998-99 Budget less 1997-98 Estimated Outcome)/1997‑98 Estimated Outcome).

Sub-Programme Variation
The following table shows changes in the underlying outlays of the Sub-Programme in 1998-99. 
Table 4.3: Variations to Sub-Programme Underlying Outlays 1997-98 to 1998-99

(i)	The 1997-98 figure appears in column 3 in Table 4.2 above.
(ii)	The 1998-99 Budget figure appears in column 4 in Table 4.2 above.
1998‑99 Budget Measures affecting Portfolio Underlying Outlays
Details of the Budget measure, Government response to Fair Trading Inquiry Report  funding to improve small business access to justice and awareness of fair trading issues, appear on page 188.
Performance of the Sub-Programme in 1996‑97 and 1997‑98
Information on the performance of the Sub-Programme in 1996-97 is at pages 7 to 90 of the 1996-97 Annual Report of the Australian Competition and Consumer Commission. Performance information for 1997-98 will be published in the ACCC’s 1997-98 Annual Report.
Performance Forecasts for 1998‑99
The functions performed pursuant to the objectives of this Sub-Programme are:
•	enforcement  investigation of alleged breaches, litigation, enforceable undertakings;
•	mergers  enforcement and adjudication action arising in the consideration of mergers and privatisations; and
•	adjudication  determination of formal applications for exemption from the Act.
Enforcement
Competition policy reform has significantly increased the number and range of markets in which the ACCC must operate. The challenge for the ACCC will be to look for speedy resolution of matters  short of costly and time consuming litigation, if possible, by finding more innovative solutions through negotiation of enforceable undertakings to cease offending conduct or administrative settlements in individual enforcement matters.
In broad terms, the ACCC’s selection of enforcement actions will be influenced by the likely resource costs and whether a particular matter satisfies the ACCC’s detailed selection criteria.
Anti-competitive conduct
The ACCC will be most concerned with:
•	anti competitive agreements - with particular emphasis on price collusion;
•	mergers  which would, or be likely to, substantially lessen competition in a substantial market;
•	abuse of market power;
•	resale price maintenance  imposed by major suppliers or induced by major customers; and
•	conduct in breach of the Act which inhibits micro-economic reform  especially in sectors with a significant impact on input costs throughout the economy.
Consumer Protection
State and Territory fair trading laws mirror the consumer protection provisions of the Trade Practices Act. The ACCC will give priority to consumer protection matters of national significance of which adversely affect large numbers of people.
Small Business Enforcement 
The ACCC is to be given a direction arising from the Government’s ‘Fair Trading Response’ to give special weight to small business interests and in particular to take small business enforcement ‘test’ cases. Priority will also be given to enforcement of mandatory codes of conduct such as in respect of franchising in the small business area as a means of both setting rules for dispute avoidance/fair trading and providing quick and flexible dispute resolution for small business parties.
Mergers
The ACCC encourages companies to give it advance warning of merger proposals that may breach the Act to minimise the risk of unnecessary delays should investigation prove necessary. The ACCC will seek to assess less complex merger proposals within a 10-15 day time frame. More complex mergers will take longer. The ACCC sees its Merger Guidelines as assisting in minimising the costs of its merger administration. The ACCC looks at around 120-150 mergers each year.
With the gradual reduction of tariff protection, analysis of particular merger proposals will increasingly emphasise the extent of import competition in the relevant market. In the traded goods sector, the presence of international competitors makes it less likely that a proposed merger would result in a substantial lessening of competition.
Assets sales
The ACCC expects to be involved in aspects of privatisations, particularly in the emerging sector covering gas privatisation in Victoria and the electricity sector in South Australia.
Broadcasting and Pay TV
The ACCC will be involved in the ongoing rationalisation of pay TV which involves discussions amongst competitors.
Adjudication
Authorisation has particular relevance in markets which are being deregulated and for business and industries newly subject to Part IV of the TPA as the steps in the competition policy reform agreement are implemented. There are some areas of particular importance  the deregulated utility sector, the continuing review of past authorisations and mergers  where there is a 30 day time limit (extendable to 45 days in the case of complex matters) on the ACCC with respect to determination.  
Adjudication activity in 1998-99 will include :
•	Utilities  the ACCC is examining the impact of competition policy reform on public utilities, and in particular the production and distribution of gas and electricity.
•	Gas  earlier authorisations for the joint production and marketing of gas are being reviewed. This adjudication work is vital and will evolve into the ACCC’s national gas regulatory role.
•	Electricity  the national electricity market is being restructured and these activities are the subject of authorisation applications to the ACCC.
•	Other  other applications may be expected as Federal and State Governments continue the process of structural reform, privatisation and corporatisation of telecommunications, water supply, ports, railways, airports, health and postal services. Some access regimes for essential facilities may involve applications for authorisation. High priority will be given to applications for authorisation from statutory marketing authorities, professional regulatory bodies and others newly within the jurisdiction of the Trade Practices Act.  
•	Review of past authorisations  including past authorisations in the gas industry, real estate, International Air Transport Association and other areas which may arise due to complaints. There will be major matters before the Australian Competition Tribunal during the reporting period including review of the ACCC’s decisions relating to Newsagents & the Australian Performing Rights Association.
Performance Indicators and Evaluation
Performance indicators for the Sub-Programme include:
•	attention to complaints and inquiries, initially within 7 working days and substantially within 30 working days wherever possible;
•	minimal inconvenience and uncertainty to business from investigation, litigation and resolution of matters;
•	litigation strategies achieve desired marketplace outcomes (with a target 95 per cent success rate for matters in court);
•	administrative resolutions and enforceable undertakings achieve the desired marketplace outcomes and all undertakings are complied with;
•	issue of draft determinations within 4 months of lodgement and within prescribed limits for applications in relation to proposed acquisitions;
•	resolution of arbitration disputes with informed, accurate and logical assessment of access undertakings, access disputes and applications; and
•	to achieve 100 per cent compliance with all statutory obligations set out in the Trade Practices Act and Prices Surveillance Act.

Sub-Programme 6.2 — Improvement in Market Conduct
Objective
To secure improvement in market conduct by developing and implementing regulatory frameworks which maximise the potential for promotion of competition and efficient outcomes, assessing 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. To contribute at the international level to competition and consumer protection issues.
Table 4.2:  How the Sub-Programme is Resourced;  Reconciliation of Appropriations to the Sub-Programme and Summary of Underlying Outlays

(i)	As presented in 1997‑98 Budget documentation (May 1997  adjusted, where necessary, to reflect underlying outlays).
(ii)	1997‑98 Revised Appropriation figures amended to include Additional Estimates, Advance to the Minister for Finance, running cost borrowings, savings and other revisions.
(iii)	Variation percentage = ((1998-99 Budget less 1997-98 Estimated Outcome)/1997‑98 Estimated Outcome).

Sub-Programme Variation
The following table shows changes in the underlying outlays of the Sub-Programme in 1998-99.
Table 4.3:  Variations to Sub-Programme Underlying Outlays 1997-98 to 1998-99

(i)	The 1997-98 figure appears in column 3 in Table 4.2 above.
(ii)	The 1998-99 Budget figure appears in column 4 in Table 4.2 above.
Performance of the Sub-Programme in 1996‑97 and 1997‑98
Information on the performance of the Sub-Programme in 1996-97 is at pages 91 to 121 of the Annual Report of the Australian Competition and Consumer Commission. Performance information for 1997-98 will be published in the ACCC’s 1997-98 Annual Report.
Performance Forecasts for 1998‑99
Access
The ACCC will be pursuing its role in relation to facilitating access to essential facilities, such as public utility infrastructure, so as to promote or create competition in upstream or downstream markets. Much of the work in this area is expected to centre on the assessment of undertakings from facility owners for access to services by third parties in sectors such as electricity, gas, telecommunications, rail, ports and shipping, airports, health and postal services.
Gas
Once legislation is passed the ACCC will be performing the function of gas regulator for transmission pipelines in all States and Territories except WA and distribution regulator in the Northern Territory.
The outcome sought is the promotion of open competition resulting in more efficient and better quality services in the Australian Gas market to all users, business and consumers alike.
Telecommunications and Broadcasting
The ACCC will continue to pro-actively administer the arrangements and structures pursuant to the Government’s regulatory approach embodied in Parts X1B and X1C of the Trade Practices Act 1974 and the Telecommunications Act 1997. It may also administer an Access Regime to digital broadcasting transmitters under the Television Broadcasting Services (Digital Conversion) Bill 1998. The outcome sought is the promotion of open competition resulting in more efficient and better quality services in the Australian telecommunications market to all users, business and consumers alike.
All telecommunications regulatory costs will be recovered through annual telecommunications carrier licence fees levied by the Australian Communications Authority.
Electricity
From 1 July 1999 on a progressive basis the Commission will assume responsibility for the regulation of transmission revenue in the national electricity market. This will require substantial preparatory work during 1998-99. The outcome sought is to ensure transmission networks do not earn monopoly rents from the competitive sectors of the market (generation and retail) while promoting efficient network investment and the protection of the quality of services to users.
Airports
Under the Airport Act, airport services will automatically be declared twelve months after privatisation if airport operators do not have access undertakings accepted by the ACCC. The outcome sought is the development of effective access arrangements for airports to facilitate competition in airport services.
Rail
Under the inter-governmental agreement on arrangements for interstate rail access, the ARTC is expected to submit an access undertaking to the ACCC for assessment.
Pricing
The ACCC has pricing functions through administration of industry‑specific access arrangements and administration of the Prices Surveillance Act.
Pricing roles in Industry Specific Access Arrangements which will be priorities in 1998‑99 include:
•	Gas  approval and monitoring of haulage charges under the Moomba-Sydney Pipeline System Sale Act.
•	Electricity  consideration of pricing issues in preparation for assessment of undertakings and preparation for the transmission pricing function.
•	Airports  a range of surveillance and monitoring in relation to the (CPI‑X) cap, non-aeronautical services, FAC notifications as they arise and cap administration arrangements.
•	Airservices  assess Airservices Australia notifications.
•	Harbour Towage   surveillance of harbour towage in Sydney, Brisbane, Melbourne, Fremantle, Newcastle and Perth.
•	ACI   surveillance and monitoring of glass wine bottles and food containers.
•	Petrol  surveillance of petrol prices to ensure prices are not excessive. 
•	Telecommunications  Pricing roles under the Telstra Corporation Act 1991 and the Telecommunications Act 1997. 
From 1 July 1997, the ACCC has had new responsibilities in administering telecommunications-specific price regulation. The main provisions for price regulation are price controls on Telstra under the Telstra Act.
Some of the ACCC responsibilities in administering price control arrangements took immediate effect from 1 July 1997. These arrangements relate to certain Telstra price controls (ie Price caps and notification and disallowance requirements) under the Telstra Act. These were previously administered by AUSTEL. Further, there are also new provisions in the Telecommunications Act 1997 which provides for the price regulation of universal service charges and untimed local calls.
Price caps: Monitoring of and responding to ministerial directions in relation to current provisions for price cap arrangements on Telstra tariffs. The price cap arrangements commenced on 1 January 1996 will continue to apply until 31 December 1998.
Notification and Disallowance Provisions: Under the notification and disallowance provisions, any proposal from Telstra to introduce a charge for directory assistance services must be notified to the Minister.
Price control under the Telecommunications Act 1997: certain additional pricing provisions have been introduced under this Act. These include the extension of untimed local call availability and arrangements to ensure that reductions to local call charges are reasonably and broadly accessible across different parts of Australia.
Performance Indicators and Evaluation
•	Programmes on competition, fair trading, consumers and the marketplace generally, are followed through with recommendations.
•	Smooth transition into the various regulatory frameworks so that principles of competition and consumer protection are promoted.
•	Increased general awareness of competition law, regulation reform and consumer issues.
•	Inclusion of proper monitoring and assessment in codes of conduct to which the ACCC has had input.
•	Development of more effective enforcement strategies.
•	Finalisation of reviews of price notifications, from declared companies, within the statutory period.
•	Acceptance of ACCC views and recommendations in relation to monitoring of prices, costs and profits of firms and industries as directed by the Minister.

Sub-Programme 6.3 — Education & Information
Objective
To inform the community at large about the Trade Practices and Prices Surveillance Acts and their implications for business and consumers.
Table 4.2:  How the Sub-Programme is Resourced;  Reconciliation of Appropriations to the Sub-Programme and Summary of Underlying Outlays

(i)	As presented in 1997‑98 Budget documentation (May 1997  adjusted, where necessary, to reflect underlying outlays).
(ii)	1997‑98 Revised Appropriation figures amended to include Additional Estimates, Advance to the Minister for Finance, running cost borrowings, savings and other revisions.
(iii)	Variation percentage = ((1998-99 Budget less 1997-98 Estimated Outcome)/1997‑98 Estimated Outcome).

Sub-Programme Variation
The following table shows changes in the underlying outlays of the Sub-Programme in 1998-99. 
Table 4.3:  Variations to Sub-Programme Underlying Outlays 1997-98 to 1998-99

(i)	The 1997-98 figure appears in column 3 in Table 4.2 above.
(ii)	The 1998-99 Budget figure appears in column 4 in Table 4.2 above.
Performance of the Sub-Programme in 1996‑97 and 1997‑98
Information on the performance of the Sub-Programme in 1996-97 is at pages 122 to 136 of the Annual Report of the Australian Competition and Consumer Commission. Performance information for 1997-98 will be published in the ACCC’s 1997-98 Annual Report.
Performance Forecasts for 1998‑99
In the coming year, the ACCC proposes to develop in conjunction with industry, guidelines for the telecommunications industry.
A number of regulatory guidelines will be developed and published, relating to the regulation role of the ACCC in gas, electricity and airports.
The ACCC will publish small business news sheets and a leaflet on benchmarks for small business. Various enforcement guidelines will be published covering a range of products standards. 
All publications and guidelines will be progressively reviewed and updated.
The ACCC will continue expanding its extensive Internet site as a means of widely disseminating information.
Performance Indicators and Evaluation
•	Good lines of communication with industry, consumers and other government agencies.
•	Relevant, clear, accurate and appropriately targeted publications, guidelines and internet home page.
•	Media releases reach the target audience and outcomes reported in media releases have a deterrent and educative effect.
•	Evidence of effective usage of ACCC products and services.

Sub‑Programme 6.4 — Corporate Planning & Management
Objective
To maintain high levels of management efficiency and cost effective resource utilisation at both national and regional office levels.
Table 4.2:  How the Sub-Programme is Resourced;  Reconciliation of Appropriations to the Sub-Programme and Summary of Underlying Outlays

(i)	As presented in 1997‑98 Budget documentation (May 1997  adjusted, where necessary, to reflect underlying outlays).
(ii)	1997‑98 Revised Appropriation figures amended to include Additional Estimates, Advance to the Minister for Finance, running cost borrowings, savings and other revisions.
(iii)	Variation percentage = ((1998-99 Budget less 1997-98 Estimated Outcome)/1997‑98 Estimated Outcome).

Sub-Programme Variation
The following table shows changes in the underlying outlays of the Sub-Programme in 1998-99.
Table 4.3:  Variations to Sub-Programme Underlying Outlays 1997-98 to 1998-99

(i)	The 1997-98 figure appears in column 3 in Table 4.2 above.
(ii)	The 1998-99 Budget figure appears in column 4 in Table 4.2 above.
Performance of the Sub-Programme in 1996‑97 and 1997‑98
Information on the performance of the Sub-Programme in 1996-97 is at pages 137 to 148 of the Annual Report of the Australian Competition and Consumer Commission. Performance information for 1997-98 will be published in the ACCC’s 1997-98 Annual Report.
Performance Forecasts for 1998‑99
•	Management of financial and human resources in order to achieve efficient and effective usage across the ACCC.
•	Plan for the implementation of a new financial management information system to meet the ACCC’s accrual accounting needs.
•	Manage the implementation within the ACCC of Public Service reforms and industrial relations matters as prescribed in the ACCC’s Certified Agreement and Australian Workplace Agreements with staff.
•	Manage corporate training and development programmes with an emphasis on new regulatory functions and improved management skills.
Performance Indicators and Evaluation
•	To provide an integrated systems approach to management of resources in a devolved environment to ensure effective planning, priority setting and evaluation processes are applied throughout the ACCC:
•	individuals and teams demonstrate professionalism meeting changing priorities and community needs; and
•	through the development and maintenance of skills and knowledge, a high community regard for ACCC expertise in access regimes, competition and consumer protection law and pricing.