Northern Territory Second Reading Speeches

[Index] [Search] [Bill] [Help]

COMPETITION POLICY REFORM (NORTHERN TERRITORY) AMENDMENT BILL 1999

Mr Speaker, I move that the bills be now read a second time.

The Commonwealth is currently embarking on the most comprehensive reform to Australia’s taxation system since Federation. This package is not just about a new tax on consumption, the GST, it is about putting in place new tax system to serve the needs of Australia into the next millennium. An improved tax system will lead to increasing levels of economic activity and ultimately a stronger economy. Such developments are clearly in the interests of the country generally and the Northern Territory in particular.

As part of its tax reform proposals, the Commonwealth has passed amendments to the Trade Practices Act 1974 to prohibit price exploitation by entities during the transition period of 1 July 1999 to 30 June 2002. Price exploitation occurs when the price for the supply of a good or service is unreasonably high, taking into account the various tax changes including the implementation of the GST and the removal or reduction of various Commonwealth, state and territory taxes.

The Australian Competition and Consumer Commission, the ACCC, will have the responsibility for price monitoring and initiating action against offending parties. Breaches of the act could result in penalties up to $10m for a body corporate, and up to $500 000 for a person other than a body corporate.

The Commonwealth, except in the territories, does not have the constitutional power to extend the price monitoring laws to all business activities. It cannot, for example, apply price monitoring legislation to unincorporated businesses in the states. State legislation is required to do that.

The Commonwealth has therefore sought the assistance of the states to apply the Trades Practices provisions to state entities. This cooperation was formalised with the signing of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations, which included a clause requiring states and territories to extend the transitional price control measures to areas outside the constitutional coverage of the Commonwealth, including states’ and territories’ own agencies.
The Territory’s different constitutional status means that Commonwealth laws can be made to apply to Territory agencies if the Commonwealth specifies it, although past practice has been for the Territory to implement its own enabling legislation. It is for these reasons that I am introducing these 2 bills to parliament today.

With the passage of the New Tax System Price Exploitation Code (Northern Territory) Bill, Northern Territory government business activity will become subject to price monitoring by the ACCC in the same manner as private sector entities. Territory business and consumers will welcome such a move.

The Competition Policy Reform (Northern Territory) Bill is a consequential amendment. It ensures the New Tax System Price Exploitation Code (Northern Territory) Bill deals exclusively with the prevention of price exploitation, while the Competition Policy Reform (Northern Territory) Act, will deal exclusively with other competition policy issues, not those related to price exploitation. This means the 2 issues are dealt with independently in legislation, while providing the ability to work seamlessly together.

I do not foreshadow any difficulties for Northern Territory government departments and agencies in meeting the challenge that the new rules impose on the conduct of their business activities. The introduction and passage of both the new Tax System Price Exploitation Code (Northern Territory) Bill and the Competition Policy Reform (Northern Territory) Amendment Bill will, in conjunction with the Commonwealth legislation, help ensure that the benefits of the tax reform are passed to Territorians in their entirety. I commend the bills to honourable members.

 

[Index] [Search] [Bill] [Help]