Stephen King, Monash University Whatever happened to National Competition Policy?

2 Remember the excitement? The access regime The legislative reviews The regulatory reform The structural reform The big picture – focusing on competition So, what happened?

3 Some early wins Explicitly separating out the regulators from the firm Deemed declarations in energy, telecommunications, rail Structural separation in some industries Review of some anticompetitive provisions in legislation State and national infrastructure regulators.

4 But…. Part IIIA “You can put lipstick on a pig. It’s still a pig” –Part IIIA has pretty much failed –Doomed bit of legislation –Slow process –Legalistic interpretation of criteria that has lost the economics Would we be better off without Part IIIA?

5 Regulation – safe, solid, predictable Rate of Return Building block regulation –Relatively safe and simple –Some incentives to operate efficiently –Keeps the lights on –WACC too high initially –Annoyingly intrusive on investment Scorecard: B+. Solid performance from AER. Could be more concise in decisions.

6 Telecommunications

7 Reducing the regulatory burden The PC keeps talking – but is anyone listening? “Nationals Senator Barnaby Joyce is in hot water again for saying the Federal Government can boost the economy by rebuilding houses burnt down under its botched home insulation program. He also joked that he used Productivity Commission reports when he runs out of toilet paper.”

8 A job half done QR, NSW electricity, water, … New areas of regulatory interest: –Media –Banking / Financial services –Health / Education / Transport Will the next government ‘make our day’?