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2002-2003
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF REPRESENTATIVES
POSTAL
SERVICES LEGISLATION AMENDMENT BILL 2003
EXPLANATORY
MEMORANDUM
(Circulated by the authority of the Minister for
Communications, Information Technology and the Arts, Senator the Hon. Richard
Alston)
The Postal Services Legislation Amendment Bill 2003 (the Bill) makes
amendments to the Australian Postal Corporation Act 1989 (APC Act), the
Australian Communications Authority Act 1997 (ACA Act) and the Trade
Practices Act 1974 (TPA) to address various regulatory and consumer issues
relating to Australia Post.
The main elements contained in the Bill are
aimed at:
(a) addressing concerns raised by competitors of Australia Post
that Australia Post is unfairly competing in the market place by using its
reserved services revenue to cross-subsidise its retail activities:
- The
Bill amends the APC Act to facilitate greater accounting transparency. Proposed
new Division 2 of Part 4A of the APC Act, to be inserted by item 21 of Schedule
1 to the Bill, will enable the Australian Competition and Consumer Commission
(ACCC) to require Australia Post to keep records about specified matters. The
ACCC must require Australia Post to keep records about its reserved services.
The requirement on Australia Post to keep detailed auditing and accounting
information about Australia Post’s reserved services will provide for
transparency between different parts of Australia Post’s business. This
will enable the ACCC to determine if Australia Post is cross-subsidising its
competitive services from its core mail service. The ACCC may publish reports
analysing the information given to it by Australia Post;
(b) ensuring that Australia Post does not set unreasonable terms and
conditions for its bulk mail service:
- Currently the ACCC may inquire into
the amount of rate reduction that should be given to a person under Australia
Post’s bulk interconnection service. A bulk interconnection service is a
service supplied by Australia Post in which bulk quantities of letters are
delivered within Australia at reduced rates provided that certain conditions are
met. The Bill amends the APC Act to provide for the independent inquiry into
all the terms and conditions of Australia Post’s bulk mail service, not
just the rate reduction. Item 16 of Schedule 1 to the Bill enables regulations
to provide for the ACCC to inquire into disputes and make recommendations in
relation to the terms and conditions of Australia Post’s bulk mail
service;
(c) ensuring effective monitoring and independent scrutiny of
Australia Post’s supply of postal services and its performance in relation
to its prescribed performance standards:
- Proposed new Division 1 of Part 4A
of the APC Act, to be inserted by item 21 of Schedule 1 to the Bill, requires
the Australian Communications Authority (ACA) to monitor and report on Australia
Post’s performance in its supply of postal services each financial year.
As part of this monitoring function, the Bill provides for the ACA to undertake
the role, currently performed by the Auditor-General, of assessing the extent to
which Australia Post has met its prescribed performance standards. The Bill
enables the Minister to exempt Australia Post from preparing a service
improvement plan if the ACA has reported that Australia Post has not met a
prescribed performance standard (proposed new subsection 50D(1)). This
recognises that Australia Post may have addressed the reasons for a failure to
meet a performance standard before its failure is reported in the ACA
report;
- This new Division also requires the ACA to calculate the costs to
Australia Post of carrying out its community service obligations (see proposed
new section 50F). Currently Australia Post calculates the cost to Australia
Post of providing the community service obligations The amendments made in this
Bill ensure that there is an independent costing of providing the community
service obligations;
(a) legitimising existing business practices of
document exchanges and aggregation services:
– Items 11 to 14 of
Schedule 1 to the Bill add the carriage of letters from a customer of an
aggregation service to the aggregator before lodgement with Australia Post under
its bulk interconnection service; and the carriage of letters between customers
of a document exchange service and the document exchange centre (subject to
certain qualifications applying), to the exceptions to Australia Post’s
reserved services. Aggregators and DX service providers commonly offer the
collection of mail from their customers as part of their services. These
amendments will legitimise these current practices;
(b) providing a
mechanism to enable measurement of Australia Post’s performance in respect
of delivery arrangements:
- Proposed new section 50C of the APC Act, to be
inserted by item 21 of Schedule 1 to the Bill, extends the performance standards
regulation-making power in the APC Act to allow for the prescribing of standards
relating to Australia Post’s delivery arrangements. This will enable
standards to be prescribed relating to the processes used by Australia Post for
polling communities to determine whether delivery services should be provided
‘to the property’, to address the concern that Australia
Post’s current method of polling communities to determine whether to
institute ‘to the property’ delivery services has made it very
difficult for communities to convince Australia Post to institute these
services; and
(c) making a number of other minor amendments:
-Items
23 and 24 of Schedule 1 to the Bill contain some minor amendments
to update the list of laws in Part 7B of the APC Act, under which the use or
disclosure of information by an employee or former employee of Australia Post to
law enforcement agencies is permitted. The amendments are necessary to reflect
amendments made to Queensland legislation that is referred to in the APC Act.
In addition the Bill establishes a levy on Australia Post to fund the
new functions conferred on the ACCC and ACA by this Bill. The Bill provides for
the Minister to estimate the ACA and the ACCC’s costs (which are likely to
be based on estimates provided by the ACA and ACCC) in performing their
‘postal functions’ and to direct Australia Post to pay this amount
(see proposed new section 56A, to be inserted by item 22 of Schedule 1 to the
Bill). Amendments also enable the redistribution of costs after the end of a
financial year if an estimated cost is above or below the ACA or ACCC’s
actual costs, as determined by the Minister.
Clauses 1 to 4 of the Bill
contain the preliminary provisions.
Schedule 1 contains the amendments to
the APC Act, the ACA Act and the TPA.
The Bill will not have any significant impact on Commonwealth expenditure
or revenue.
INTRODUCTION
The Postal Services Legislation Amendment
Bill 2003 (the Bill) implements a number of 2002 Government decisions relating
to reform in the Australian Postal Sector. The reform measures are intended to
address continued concerns about some elements of the current legislative regime
by means of a number of relatively minor but targeted amendments of the
Australian Postal Corporation Act 1989 (the Act).
These amendments
are dealt with in the Regulation Impact Statement under four broad headings:
• Part 1 - Australia Post’s involvement in non-reserved
services;
• Part 2 - Operation of Australia Post’s reserved
service;
• Part 3 – Oversight of Australia Post’s
service performance;
• Part 4 – Service Improvement
Plans.
From time to time the Government has received complaints, particularly from
newsagents, that Australia Post unfairly competes in the market place by
cross-subsidising its competitive services with revenue from its reserved
services. These claims have focussed particularly on the sale of stationery
products.
This issue was examined by the National Competition Council
(NCC) in 1997/98 when it reviewed the Act. While the NCC found no evidence to
substantiate the claims of newsagents that Australia Post was applying profits
earned from its monopoly activities to the cross-subsidisation of competitive
services, it recommended that there be a requirement for detailed auditing and
accounting information on Australia Post’s activities to provide for
transparency of the financial relationships between different elements of its
business. An appropriate amendment, to give effect to the NCC’s
recommendation was included in the Postal Services Legislation Amendment Bill
2000 which was withdrawn.
The objective is to implement the recommendations of the NCC to address the
perception that Australia Post competes unfairly in the market place by
cross-subsiding from its monopoly reserved services to the non-reserved services
it provides in competition with private operators.
IDENTIFICATION OF
OPTIONS
The NCC considered a range of measures to address concerns
that Australia Post competes unfairly in the market place by cross-subsidising
its competitive services with revenue from its reserved services. These
included: accounting transparency; and excluding Post from providing
non-reserved services. A third option, not considered by the NCC, is to require
Australia Post to restructure its retail network.
This option is to enable the ACCC to require Australia Post to keep records
in a form specified by the ACCC and to enable the ACCC to publish information
about the records.
Option 2 - Limiting Australia Post’s Retail
Business
To remove any possibility that Australia Post would compete
unfairly with private businesses for retail articles such as stationery,
Australia Post could be prevented from providing such items and instead be
required to concentrate on supplying only postal products and
services.
Option 3 - Franchising Australia Post’s retail
network
Australia Post’s network currently comprises corporate post
offices (including Post Offices, Retail Shops and Business Centres), and
outsourced outlets (including Licensed Post Offices and Community Postal
Agencies). One option considered in relation to complaints about unfair
competition is to require Australia Post to outsource its remaining Post
Offices.
As part of its review process, the NCC called for public submissions and held
meetings with a large number of businesses, government and other organisations
as well as conducting several workshops. The Australian Newsagents Federation
and Streetfile, an alternative delivery service, both made submissions to the
NCC, complaining of cross-subsidisation by Australia Post. Australia Post, in
its submission to the NCC, noted that the enterprise is careful not to
cross-subsidise any of its competitive services.
Australia Post was
consulted about the possible options.
IMPACT ANALYSIS
The
preferred option for addressing the objectives is Option 1.
Option 1
will empower the ACCC to require Australia Post to keep and retain records in a
form specified by the ACCC and for the ACCC to publish related information.
This is the option recommended by the NCC in its 1998 report on the postal
legislation. It will address allegations of cross-subsidisation by providing a
means of assuring competitors, through transparency in Australia Post’s
accounts, that it is not cross-subsidising.
Australia Post currently
determines the format of its accounting records subject to accounting standards
and Government reporting requirements.
The ACCC will need to consider
whether the current format is adequate to address concerns about transparency or
whether the records should be kept in a different form. As Australia Post
already maintains detailed accounting records, it is not expected that there
will be any significant cost implications for the Corporation in the event that
it is required to change the format.
Implementation of this option will
also meet with the Government’s objectives of ensuring greater scrutiny
over the activity of Australia Post’s activities generally.
CONCLUSION AND RECOMMENDED OPTION
Options 2 and 3 are not
considered necessary to address the allegations of anti-competitive behaviour.
They do not offer any better mechanism for dealing with these allegations than
Option 1. They are significant measures which, in the absence of conclusive
evidence of anti-competitive behaviour cannot be justified. They are also
likely to have some negative impacts on consumers, Australia Post and its
licensees and the Commonwealth. This was also the conclusion reached by the
NCC.
Options 2 and 3 would require Government intervention in what are commercial
decision of the Board of Australia Post. While the Minister has a power to
direct Australia Post in the public interest, a direction to the Board to
require Australia Post to restructure its business as a whole or its retail
network or to cease its involvement in non-reserved services would be a move
away from the Government’s policy of exercising strategic control of
Government business enterprises without involving itself in the day-to-day
decision-making. There may also be budgetary implications as the Act provides
for Australia Post to be reimbursed for any financial detriment caused by
Australia Post’s compliance with a direction.
The NCC also noted
that consumers enjoy the benefits of one-stop shopping in postal outlets. Any
restriction on the sale of stationery, for example, is, therefore, likely to be
unpopular. This would also impact directly on Australia Post’s revenue
earnings and on revenue to the Commonwealth, as dividend payments to the
Commonwealth are based on the net revenue of Australia Post, and on the earnings
of its licensees, who benefit financially from the positive performance of the
Australia Post’s retail network.
Option 2 would prevent Australia
Post from being involved in non-reserved services. Australia Post’s
involvement in non-reserved services is consistent with its legislated
obligation to perform its functions in a manner consistent with sound commercial
practice and in accordance with the broad range of powers provided to the
Corporation to fulfil this and other statutory obligations. Such action is not
necessarily likely to provide significant assistance to newsagents, given that
Australia Post outlets represent only one form of competition in the retail
market. With respect to stationery items and related goods, newsagents compete
with supermarkets, stationery stores, card shops and souvenir shops.
In
addition, it is likely that there would be a strong adverse public reaction to
this measure, especially if it was directed by Government.
In relation
to Option 3, the Board of Australia Post has made a commercial decision to
retain ownership of part of the retail network because it considers there are
substantial benefits to Australia Post. These include providing a training
ground for managers or an avenue for trialing new retail products. The NCC
supported the view that decisions about contracting out and leasing generally
are commercial ones for Australia Post and that it is unlikely that any external
body would be in a position to judge the appropriate level of contracting
out.
IMPLEMENTATION AND RECOMMENDATION
Implementation of Option
1 requires amendment of the Act to enable the ACCC to require Australia Post to
keep and retain records relating to certain postal matters and publish related
information.
It is expected that the ACCC will continue to monitor and
review the adequacy of records produced by Australia Post to ensure that they
are meeting requirements.
There will be a review of the costs of
implementing Option 1 at the end of the first year of implementation. The Bill
provides for the Commonwealth to recover the costs incurred by the ACCC.
PROBLEM
In 1998, the Government announced, as part of its
package of reforms, that it would amend the Act to permit the carriage of
reserved letters for the purposes of aggregation and lodgement with Australia
Post to qualify for bulk discounts. “Aggregation” entails the
collecting together of the mail of small businesses (eg small retail enterprises
or professional service providers) which, individually, do not generate
sufficient quantities of mail to qualify for Australia Post’s bulk
interconnection rates, or do not have the equipment necessary to barcode mail to
qualify for Australia Post’s discount rates.
The list of
exceptions to Australia Post’s reserved services allows the carriage of
letters to an office of Australia Post where it is then lodged for delivery
under a bulk discount service. However, the carriage of letters from the small
business to the aggregation service provider is still reserved to Australia
Post. While Australia Post has been allowing the carriage of mail for
aggregation purposes, it is, nevertheless, open to Australia Post to enforce its
reserved service and to prevent aggregation services from operating.
The
list of exceptions to the Australia Post’s reserved service allows for the
carriage of mail, in the course of a document exchange service, from one
document exchange service centre to another, or within a document exchange
service centre. However, it appears that at least one document exchange
business may be operating outside this exception by collecting and delivering
mail for its customers.
In the past, Australia Post has indicated that
it may take action under the Act to seek relief from the Federal Court for this
infringement of its reserved service. It is understood, however, that the
carriage of mail between customers of document exchange services and document
exchange centres is a long standing and integral part of these businesses and
that its prohibition could impinge on their ongoing viability.
The Act
currently provides for regulations to be made to allow for the ACCC to inquire
into disputes between Australia Post and its customers about the rate of
discount offered by Australia Post under its bulk interconnection service.
Bulk interconnection services are provided for under section 32A of the
Act. They are services under which bulk quantities of letters are delivered by
Australia Post, within Australia, at reduced rates if they meet specified terms
and conditions (eg sorting and lodgement requirements). Under current
arrangements, there is no avenue for external adjudication of the terms and
conditions determined by Australia Post, other than the amount of
discount.
The broad objective of the amendments is to ensure the continued operation of
small businesses, which are providing value added postal services, and to
provide safeguards against Australia Post using its market power to impose
unreasonable terms and conditions of access to its network.
IDENTIFICATION OF OPTIONS
There are a number of options for
addressing concerns about the operation of Australia Post’s reserved
services including: introducing specific measures to address the issues;
retaining the status quo; or conducting a further review of the extent of
Australia Post’s reserved service.
This option involves the amendment of the list of exceptions to Australia
Post’s reserved service to allow for the carriage of mail between
customers of document exchange services and the document exchange centres
(subject to various safeguards to ensure the amendments do not have any
unintended effect) and between mail generators and aggregation service
providers. It also proposes the amendment of the Act to extend the role of the
ACCC to include arbitration of disputes about all terms and conditions of access
to Australia Post’s bulk mail rates.
This option would mean that no action was taken to amend the Act to legalise
the current operations of aggregation and document exchange services or to
provide appeal mechanisms against the terms and conditions set by Australia Post
for access to its bulk mail service.
Option 1 is the favoured option as it implements measures to assist small
businesses:
. The facilitation of aggregation services will enable small
businesses to access Australia Post’s bulk delivery
rates;
. Legalising the collection and delivery of mail from document
exchange members will ensure the continued viability of document exchange
services and ensure that they are able to continue to provide important time
critical/specialised delivery services to their small business customers;
and
. Providing for independent adjudication of Australia Post’s
terms and conditions of its bulk mail delivery service will ensure that
Australia Post is not able to use its monopoly position to determine
unreasonable terms and conditions for the businesses using this
service.
The proposed aggregation and document exchange amendments are
intended to legalise current practices. They are not intended to provide any
new advantages to either Australia Post or document exchange or aggregation
service providers. Nor are they intended to disadvantage any of these
parties.
The ACCC may incur some costs arising from investigating
complaints made to it about access to bulk services. The ACCC has power under
the Act and Australian Postal Corporation Regulations 1996 to hear
matters relating to the price of bulk interconnection services. The proposed
action will merely extend the regulation-making power in the Act to enable the
ACCC with the power to inquire into disputes about the general terms and
conditions of service.
While there is no practical means of collecting
information about the number of document exchange and aggregation services
operating in Australia, it is known that document exchanges had been operating
for some time before their operations were removed from Australia Post’s
reserved service in 1994. Aggregation services, on the other hand, are a
product of the Government’s reform package announced in 1998 and,
therefore, a relatively new service.
Both document exchange and
aggregation services are seen as providing important value-added services to
those provided by Australia Post. Without aggregation services, for example,
small businesses which do not have the resources to be able to barcode mail, and
which do not generate sufficient quantities of mail, do not have access to
Australia Post’s bulk discount rates. Document exchange services provide
a convenient means for groups of professionals, such as lawyers, to exchange
documents. An important part of this service includes the carriage of letters
between members and a document exchange service centre.
The proposed
amendments will enable document exchange and aggregation businesses to continue
to offer their current services without the threat of legal action by Australia
Post, and the consequent industry instability that may result from such an
action.
There are a number of reasons why it is not expected that the
legalisation of current document exchange practices will have a significant
effect on Australia Post’s business:
1. the practice of carrying
mail between customers of a document exchange and document exchange centres has
been occurring for some time and to date Australia Post has not reported any
detrimental effect to its financial position as a result of the operation of
these services;
2. the customer base of document exchange services is
generally limited, usually involving groups of professionals such as lawyers or
doctors. It is unlikely, therefore, that Australia Post will lose a significant
proportion of business mail deliveries under these arrangements; and
3. the
Bill contains a number of safeguards which must be satisfied before the carriage
of a letter between a member and a document exchange service centre will fall
outside the reserved service. These include the following
requirements:
- a member of a document exchange must have chosen to be a
member by applying directly to the provider of the service;
- a member must
pay a membership fee;
- a member must be given a unique identifier that is
not a postal address;
- a member is entitled to send and receive
letters;
- a member must be a government agency, partnership, educational
institution, health or community service provider, charity, religious
institution or other person carrying on a business or other undertaking not of a
private or domestic nature; and
- a document exchange service cannot carry a
letter between its customers if the letter only has a postal address.
It
should also be noted that the NCC actually recommended that all business mail
should be removed from Australia Post’s reserved service and commented
that, in its view, Australia Post would easily manage this level of competition
and remain a viable business.
If no action were taken by the Government,
as proposed under Option 2, the concerns of aggregation and document exchange
service providers would not be addressed and it would remain open for Australia
Post to enforce its reserved service through the Federal Court and prohibit the
operation of aggregation businesses and certain elements of document exchange
businesses. It would also mean the continuation of a system, which provides no
independent scrutiny of the terms and conditions of Australia Post's bulk mail
service. While Australia Post has allowed the aggregation of mail to occur, in
line with the Government’s 1998 commitment, it has been accused of
imposing terms and conditions which make it difficult for aggregation services
to operate efficiently. Without some recourse to review of these terms and
conditions the future of these businesses is uncertain.
Although the Government would bear no direct financial costs under this
option, in policy terms, any action which Australia Post was permitted to take
against these businesses could be construed as lack of support on the part of
Government for the operation of small businesses in general. This option may
also result in a reduction in the provision of value-added postal services for
consumers.
Option 3 is to undertake a further review of postal
competition issues. The last major review of the postal legislation and level of
services reserved to Australia Post was undertaken in 1997/98 by the NCC. The
Government’s package of reforms, proposed in response to the NCC report,
was opposed in the Parliament, partly because it included a reduction in the
reserved service. There would appear to be little benefit, therefore, in
undertaking another major review at this point in time. However, any further
consideration of Australia Post’s reserved service would certainly be
supported by the postal industry and by business and consumer
groups.
IMPLEMENTATION AND REVIEW
Implementation of Option 1
would involve amendment of the Act. These amendments would:
• extend the exceptions to Australia Post’s reserved service
by removing the carriage of mail between customers of aggregation services and
document exchange services and the respective service providers;
• include some measures to ensure that the document exchange
amendments only achieve the objective of legalising current practices and do not
have the unintended effect of allowing for the establishment of alternative
delivery networks operating in competition with Australia Post’s postal
address delivery service without impinging on the current, legitimate,
commercial operations of document exchange services; and
• extend the
regulation-making power in section 32B to enable regulations to be made to
provide for the ACCC to inquire into disputes and make recommendations in
relation to all terms and conditions of Australia Post’s bulk rate
discounts.
There will be a review of the ACCC’s costs in inquiring into disputes
about the terms and conditions of Australia Post’s bulk rate discounts at
the end of the first year of operation of the amendments.
As Australia Post maintains a monopoly over the delivery of reserved letters
there is not the impetus of competition to drive improvements in the delivery of
its services. In addition, there is no independent oversight or reporting on
the general performance of Australia Post in the delivery of its services,
although the Australian National Audit Office (ANAO) does monitor Australia
Post’s performance in relation to prescribed performance standards. Nor
is there any independent costing of Australia Post’s community service
obligations (CSOs). Currently, Australia Post carries out its own costings of
the CSOs. As there are direct linkages between the extent of Australia
Post’s reserved service and the cost to it of providing the CSOs, it is
important that it is costed accurately and independently.
One of the
purposes of the Government’s 1998 reform package was to improve the
quality of postal services through the promotion of increased competition in the
postal sector. As the reform measures were not adopted and these opportunities
for improved quality of service not realised, other, specific measures are
needed to drive improvements in the delivery of services provided by Australia
Post.
OBJECTIVE
The broad objective of the amendments is to
ensure that there are mechanisms in place to ensure Australia Post provides the
best service possible to its customers, that the level of service is measured
where appropriate and that the cost of providing CSOs is independently
assessed.
There are several possible options for dealing with quality of service issues.
1: Retain the Current Situation with Minimal Oversight of Quality of
Service
This would continue the current situation with minimal oversight
of the services, particularly the reserved services, provided by Australia Post.
The ANAO would continue to monitor Australia Post’s compliance with the
performance standards but there would be no oversight of other service quality
issues. Australia Post would continue to cost its own CSOs with no independent
analysis of the accuracy of its costing.
2: Establish a Postal Regulator within the ACA
This option would
require the ACA to monitor and report on Australia Post’s performance in
the supply of postal services, to take over the functions of the ANAO in
measuring Australia Post’s performance against prescribed performance
standards and to independently cost the CSOs.
3: Establish an Independent Postal Regulator, with Powers Similar to the
ACA.
This option is similar to Option 2 except that the functions would
be undertaken by an independent body established specifically for this purpose.
CONSULTATION
In its report on Australia Post, the NCC noted
that while most postal users judged Australia Post’s performance as
reasonable, there were some identifiable shortcomings which could be addressed
by the appointment of an independent regulator which could assess Australia
Post’s performance against prescribed standards and report annually to the
Government on its performance.
Australia Post and the ACA have been
consulted about the proposed amendments. Australia Post has some concerns about
the extent of oversight by the ACA. It is intended that the level of oversight
be limited to the supply of postal services and not to other incidental services
such as banking and bill paying services which are provided by other operators
and are not exclusively associated with Australia Post.
IMPACT
ANALYSIS AND CONCLUSION AND RECOMMENDED OPTION
Option 2 is the
favoured option. Through the independent monitoring of Australia
Post’s supply of services it should be possible to drive improvements in
that service to the benefit of customers. This is particularly important in
relation to the delivery of Australia Post’s reserved service where
customers have no alternative but to use Australia Post’s service.
The ACA is favoured over the establishment of a separate, independent body.
There are clear comparisons with the consumer safeguards established in the
telecommunications industry and, in view of the existing role of the ACA
relation to these matters, it is considered that the ACA could effectively also
undertake this role in relation to postal matters.
As the ACA has
responsibility for costing the Telecommunications Universal Service Obligation,
it already has expertise in this area and is considered, therefore, an
appropriate body to carry out this work in relation to the postal CSOs.
Option 1 is not supported as it would not address the problem identified and
would leave the current, unsatisfactory situation in place. While Option 3
would have the same benefits as Option 2, it would be more costly to implement,
because it would require the development of expertise in another organisation.
It is, therefore, not supported.
IMPLEMENTATION AND
REVIEW
Implementation of Option 2 would involve amendments to the Act.
These amendments would extend the role of the ACA to monitor and report on
Australia Post’s performance in the supply of postal services, to report
on Australia Post’s performance in relation to prescribed performance
standards and to provide an assessment of the cost to Australia Post of meeting
its CSOs.
There will be a review of the costs of implementing Option 2 at the end of the first year of implementation.
PROBLEM
Section 28E of the Act requires Australia Post to
prepare a service improvement plan if the Auditor-General reports that a
performance standard has not been met by Australia Post. Under the Act,
Australia Post must provide this plan to the Minister who must cause a copy of
the plan to be laid before Parliament within 15 sitting days after its
receipt.
Under current arrangements, a service improvement plan must be
prepared for any matter where there has been a failure to meet a performance
standard, regardless of the following:
• the failure to meet the
performance standard is due to circumstances beyond the immediate control of
Australia Post, and the conditions leading to that failure have been addressed
since passed; and/or
• the reasons for failing to meet the relevant
performance standard have already been addressed through administrative or other
action by Australia Post, prior to the time that such a matter has been noted by
the Auditor-General.
To ensure that service improvement plans are prepared by Australia Post only
when there is a clearly identified need for such plans.
IDENTIFICATION
OF OPTIONS
This option would maintain the current obligation on Australia Post to
prepare a service improvement plan to address any identified failure to meet
performance standards, regardless of the circumstances.
This option would provide for an amendment to the Act to provide the Minister
with the discretion to exempt Australia Post from preparing a service
improvement plan in certain circumstances. These circumstances may include, for
instance, the failure in service being beyond the control of Australia Post or
Australia Post already having taken measures to address the reasons for the
failure.
Australia Post has been consulted about the proposal.
Option 2 enables the Minister to exempt Australia Post from preparing a
service improvement plan if the plan is considered to be unnecessary
The
proposal is not intended to relieve Australia Post of the responsibility to
explain to the Minister why a performance standard has not been achieved.
Australia Post will continue to be expected to provide the Minister with reasons
why a performance standard has not been achieved, and (as appropriate) what
action has been taken to ensure it is not repeated. Based on this information,
the Minister will need to consider the reasons for the failed performance, and
decide whether the failure to meet a particular performance standard
is:
• a one-off matter not requiring a service improvement plan; or
• is likely to become an ongoing or systemic matter if Australia Post
does not complete and implement an appropriate service improvement plan.
Option 1 would create no new costs or benefits for Australia Post or the
Commonwealth, and would mean Australia Post is required to prepare a plan for
every circumstance where a failure to meet a performance standard is identified,
regardless of the circumstances. The obligation to prepare such reports in the
circumstances described above could potentially divert resources from
performance issues that can and should be addressed by Australia
Post.
IMPLEMENTATION AND REVIEW
It is proposed that the Act
will be amended to accommodate the proposed Ministerial exemption
power.
There will be ongoing monitoring of the effects of the
amendment.
The following abbreviations are used in this explanatory
memorandum:
ACA: Australian Communications Authority
ACA
Act: Australian Communications Authority Act 1997
ACCC: Australian Competition and Consumer Commission
APC Act: Australian Postal Corporation Act 1989
Bill: Postal Services Legislation Amendment Bill 2003
CAC
Act: Commonwealth Authorities and Companies Act
1997
CSO: community service obligation
DX: document
exchange
Minister: Minister for Communications, Information Technology and the
Arts
TPA: Trade Practices Act 1974
Clause 1 provides that the Bill, when enacted, may be cited as the Postal
Services Legislation Amendment Act 2003.
Clause 2 provides that the Bill, when enacted, will commence on the day on
which it receives the Royal Assent.
Clause 3 –
Schedule(s)
Clause 3 provides that each Act that is specified in a
Schedule to the Bill is amended or repealed as set out in that Schedule and any
other item in a Schedule has effect according to its terms. Schedule 1 to the
Bill amends the ACA Act, the APC Act and the TPA.
Clause 4 sets out application and saving provisions to enable the
effective operation of the new provisions.
Currently the Auditor-General is required to prepare a performance report
in relation to Australia Post’s performance against its prescribed
performance standards (section 28D of the APC Act). This Bill will remove this
function from the Auditor-General and provide for the ACA to report on
Post’s performance against its performance standards (see item 10 of
Schedule 1 to this Bill, which repeals section 28D, and item 21 of Schedule 1,
which inserts proposed new section 50B which requires the ACA to report on
Post’s performance against its prescribed performance standards).
Subclause 4(1) provides that the Auditor-General will be responsible for
preparing a performance audit report (ie carry out his obligations under section
28D of the APC Act) in the financial year in which this Bill commences and each
previous financial year, as if section 28D had not been repealed.
For
example if the Bill commences in the 2003/04 financial year the Auditor-General
will assess the extent to which Australia Post met its prescribed performance
standards in the 2003/04 financial year and prepare a performance report by 1
November 2004. Subclause 4(1) ensures that the Auditor-General would also be
responsible for reporting on the extent to which Australia Post met its
prescribed performance standards in the 2002/03 financial year and prepare a
performance report by 1 November 2003.
The ACA’s first report to
the Minister assessing the extent to which Australia Post must meet its
prescribed performance standards will be for the financial year after the
financial year in which this Bill commences (see subclause 4(2) of the Bill).
For example, if the Bill commences in the 2003/04 financial year the ACA will
assess the extent to which Australia Post met its prescribed performance
standards in the 2004/05 financial year and report to the Minister by 15 October
2005 (under section 50B of the APC Act).
These application provisions
take into account the fact that the audit process may commence early in the
financial year and will ensure that the ACA will have sufficient time to
commence its new functions if the Bill does not commence until late in the
financial year.
In addition to providing for when the ACA first reports
on Australia Post’s performance against its prescribed performance
standards, subclause 4(2) provides that the first financial year for which the
ACA must report to the Minister under proposed new section 50B (ie report on
Australia Post’s performance in the supply of postal services) is the
financial year after the financial year in which this Act commences. For
example, the ACA must report on Australia Post’s performance for the
2004/05 financial year by 15 October 2005 if the Bill commences in the 2003/04
financial year.
This ensures that the ACA will have sufficient time to
commence its new functions if the Bill commences towards the end of a financial
year and will not need to report on performance in a partial financial
year.
Similar application provisions are necessary to deal with the
commencement of the new role of the ACA in calculating the cost to Australia
Post of complying with its community service obligations. Currently Australia
Post assesses its costs of complying with the CSOs. This Bill will provide for
the calculations of the cost of complying with CSOs to be undertaken by the ACA
rather than Australia Post (see proposed new section 50F, to be inserted by item
21 of Schedule 1 to the Bill).
Subclause 4(3) provides that the first
year for which the ACA must calculate Australia Post’s cost of carrying
out its CSOs (ie the calculation under subsection 50F(1) of the APC Act) is the
financial year after the financial year in which this Bill commences. For
example if the Bill commences in the 2003/04 financial year the ACA will be
required to calculate Australia Post’s costs of complying with its CSOs in
the 2004/05 financial year and this cost will be included in the report given to
the Minister under proposed section 50B of the APC Act by 15 October
2005.
To ensure that the CSO costings are calculated for the 2002/03 and
the 2003/04 financial years, subclause 4(4) provides that Australia Post must
include its CSO costings in its annual report prepared under paragraph
44(1)(g)(i) of the APC Act for the financial year in which this Act commences
and each previous financial year, as if the repeal of this provision (by item 20
of Schedule 1 to the Bill) had not happened.
Australia Post’s
report for the 2004/05 financial year will not include any CSO
costings.
Because Australia Post uses the CSO costings for the purpose of
determining its financial targets which are included in its corporate plan
prepared under section 17 of the CAC Act (paragraph 38(g) of the APC Act), it is
necessary for the ACA to calculate the estimated cost to Australia Post of
carrying out its community service obligations for the period of the corporate
plan (see subsection 50F(2), to be inserted by item 21 of Schedule 1 to the
Bill).
To enable sufficient time for the ACA to develop a methodology for
calculating CSO costs (if necessary) it is provided that for the purposes of
preparing a corporate plan under section 17 of the CAC Act that is given to the
Minister in the financial year in which this Bill commences or either of the
following two financial years, Australia Post is to take into account the costs
of complying with CSOs as calculated by Australia Post, as if paragraph 38(g)
had not been amended (ie to provide that its costs as calculated by the ACA that
are to be taken into account).
Subclause 4(6) of the Bill provides that the ACCC must require Australia
Post to keep records relating to Australia Post’s reserved services (ie
its obligations under proposed new subsection 50H(2) of the APC Act) within 12
months of the commencement of the Bill.
Currently subsection 28C(1) of the APC Act provides that regulations may
prescribe performance standards to be met by Australia Post. This subsection is
to be repealed by the Bill (see item 10 of Schedule 1 to the Bill) and the
regulation-making power will be included in proposed new section 50C
of the APC Act (to be inserted by item 21 of Schedule 1 to the Bill).
Subclause 4(7) of the Bill ensures that any performance standards prescribed
under subsection 28C(1) of the APC Act before its repeal by the Bill, continue
to have effect, notwithstanding the repeal of subsection 28C(1) by the Bill.
Item 1 inserts a definition of ‘ACA’s postal
functions’ into section 4 of the ACA Act. ‘ACA’s
postal functions’ is to have the meaning given by section 7A of the
ACA Act, which is to be inserted by item 3 of Schedule 1 to this Bill (see
clause notes below). Proposed new section 7A of the ACA Act defines ACA’s
postal functions as:
• the functions conferred on the ACA by or under
the APC Act;
• to advise the Minister on the performance of Australia
Post in the supply of postal services;
• to do anything incidental or
conducive to the performance of any of the above
functions.
‘ACA’s postal functions’ is not a term used
in the ACA Act. However, its inclusion in the ACA Act’s definition
section is consistent with references to the ACA’s telecommunications
functions and spectrum management functions included in this definition
section.
Item 2 - After paragraph 5(b)
Section 5 of the ACA
Act sets out the functions of the ACA. Item 2 of the Bill amends section 5 of
the ACA Act to include the ACA’s ‘postal functions’, which are
to be set out in section 7A of the ACA Act (see below), in the list of the ACA
functions.
This item inserts a new section 7A into the ACA Act. Proposed new
section 7A of the ACA Act sets out the ACA’s postal functions. The
ACA’s postal functions are:
• the functions conferred on the ACA
by or under the APC Act. These functions include the new functions to be
conferred on the ACA by this Bill, of monitoring the supply of Australia
Post’s postal services, assessing the extent to which Australia Post has
met the prescribed performance standards in the financial year, calculating the
costs for Australia Post in meeting its community service obligations, and
reporting to the Minister each financial year on these matters (see proposed new
sections 50A and 50B of the APC Act, to be inserted by item 21 of Schedule 1 to
the Bill);
• to advise the Minister on the performance of Australia
Post in the supply of postal services. One of the functions conferred on the
ACA by the Bill is reporting annually to the Minister on a range of matters
relating to Australia Post’s performance in supplying postal functions
(see proposed new section 50B of the APC Act, to be inserted by item 21 of
Schedule 1 to the Bill); and
• to do anything incidental to or
conducive to the performance of any of the above functions.
Item 4
– Subparagraph 8(1)(b)(i)
This amendment is consequential upon
the amendment being made in item 3 of the Bill.
Section 8 of the ACA
Act sets out the ACA’s additional functions, ie those functions which are
additional to its telecommunications functions, spectrum management functions,
and postal functions which are set out in sections 6, 7 and proposed new 7A of
the ACA Act (to be inserted by item 3 of the Bill).
This item amends
subparagraph 8(1)(b)(i) of the ACA Act to provide that the ACA’s
additional functions include such functions as are conferred on the ACA by or
under the ACA Act other than sections 6, 7 or 7A. The effect of this amendment
is that the ACA’s new postal functions described in proposed section 7A of
the ACA Act, along with the ACA’s telecommunications functions and
spectrum management functions, are not included in the meaning of the
ACA’s additional functions.
Item 5 – At the end of
subsection 50(2)
Subsection 50(2) of the ACA Act sets out matters
which the ACA must include in its annual report prepared under section 9 of the
Commonwealth Authorities and Companies Act 1997. This item inserts a new
paragraph 50(2)(h) to require the ACA to include a copy of any Ministerial
directions given to the ACA under subsection 50B(2) or 50E(1) (ie directing the
ACA to include a particular matter relating to Australia Post’s supply of
postal services in its report to the Minister under subsection 50B(1), or to
monitor and report to the Minister on specified matters relating to Australia
Post’s supply of postal services under section 50E) in the ACA’s
annual report.
This is consistent with the requirement for Ministerial
directions given to the ACA under section 12 of the ACA Act to be included in
the ACA’s annual report.
This ensures that there is a public record
of any directions given by the Minister to the ACA in relation to these
matters.
This item inserts a definition of the ‘ACA’ in the
definition section, section 3, of the APC Act. In the APC Act the ACA means the
Australian Communications Authority.
This item inserts a definition of the ‘ACCC’ in the
definition section, section 3, of the APC Act. In the APC Act the ACCC means
the Australian Competition and Consumer Commission.
This item inserts a definition of the ACA’s ‘postal
functions’ in the definition section, section 3, of the APC Act.
‘Postal functions’, in relation to the ACA, has the meaning
given by section 7A of the ACA Act. Section 7A of the ACA Act is to be inserted
by item 3 of Schedule 1 to this Bill (see discussion above).
The
ACA’s ‘postal functions’ as set out in proposed new section 7A
of the ACA Act are:
• the functions conferred on the ACA by or under
the APC Act. These functions include the ACA’s new functions of
monitoring the supply of Australia Post’s postal services, assessing the
extent to which Australia Post met the prescribed performance standards in the
financial year, calculating the costs for Australia Post in meeting its
community service obligations, and reporting to the Minister each financial year
on these matters (see new section 50B of the APC Act, to be inserted by item 21
of Schedule 1 to the Bill);
• to advise the Minister on the performance
of Australia Post in the supply of postal services (see new section 50B of the
APC Act, to be inserted by item 21 of Schedule 1 to the Bill); and
• to
do anything incidental to or conducive to the performance of any of the above
functions.
This definition is relevant to proposed new subsection 50G(4)
(to be inserted by item 21 of Schedule 1 to the Bill). Subsection 50G(4) limits
the matters on which the ACA may require Australia Post to keep records on, or
give the ACA information about, to matters relevant to the performance of the
ACA’s postal functions.
This item inserts a definition of ‘prescribed performance
standards’ in the definition section, section 3, of the APC Act. It
has the meaning given by subsection 50C(1) of the APC Act (to be inserted by
item 21 of Schedule 1 to the Bill). It means those performance standards
prescribed by regulation made under subsection 50C(1) of the APC Act.
This definition was previously referred to in section 28B of the APC Act.
However Division 1A of Part 3 of the APC Act (including section 28B), which
relates to performance standards and audits, is to be repealed by item 10 of
Schedule 1 to the Bill. The regulation-making power is being replaced by a new
regulation-making power in subsection 50C(1).
This item repeals Division 1A of Part 3 of the APC Act, which relates to
performance standards and audits.
The current Division 1A of Part 3 of
the APC Act is being repealed and reenacted in proposed sections 50B and 50D
within new Division 1 of Part 4A of the APC Act, with various modifications, to
reflect the new reporting functions of the ACA in relation to Australia
Post’s performance against prescribed performance standards to be
conferred in the Bill. It was considered preferable to include all the
ACA’s functions relating to monitoring and reporting on Australia
Post’s performance in the one Division (new Division 1 of Part
4A).
Division 1A of Part 3 of the APC Act enables regulations to be made
prescribing performance standards to be met by Australia Post (see subsection
28C(1)). This regulation-making power is to be transferred to new subsection
50C(1) (see discussion below on item 21 of Schedule 1 to this
Bill).
The definition of performance audit report in section 28B is no
longer necessary, and the definition of prescribed performance standards in
section 28B has been inserted into the general definition section of the APC
Act, section 3 (see item 9 of Schedule 1 to the Bill).
Subclause 4(7) of
the Bill ensures that any performance standards prescribed under subsection
28C(1) of the APC Act prior to the commencement of this Bill will continue to
have effect as if they were prescribed under the new regulation-making power in
subsection 50C(1).
The existing requirement, that the prescribed
performance standards must relate to the frequency, speed or accuracy of mail
delivery; or the availability or accessibility of post-boxes or other mail
lodgement points; or offices of Australia Post or other places from which
Australia Post products or services may be purchased (see subsection 28C(2)), is
to be mirrored in new subsection 50C(2) (to be inserted by item 21 of Schedule 1
to the Bill).
Section 28D of the APC Act requires the Auditor-General to
report on Australia Post’s compliance with prescribed performance
standards. The Auditor-General’s role of reporting on Australia
Post’s compliance with prescribed performance standards is to be
undertaken by the ACA, as part of the functions conferred on the ACA under item
21 of Schedule 1 to this Bill (see discussion below). A similar provision to
section 28D is being included in the new Division 1 of Part 4A to enable the ACA
to report on Australia Post’s compliance with prescribed performance
standards (see proposed new paragraph 50B(1)(b)).
Section 28E requires
Australia Post to prepare a service improvement plan that is given to the
Minister and tabled in Parliament if Australia Post has not met a prescribed
performance standard. A similar provision is to be included in proposed new
subsection 50D, with a Ministerial discretion to waive the need for a plan if he
considers it unnecessary (see discussion below for item 21 of Schedule 1 to the
Bill).
The Auditor-General will continue the role of reporting on
Australia Post’s compliance with the performance standards for the
financial year in which this Bill commences, as if section 28D had not been
repealed (see subclause 4(1) of the Bill). For example, if the Bill commences
in the 2003/04 financial year, the Auditor-General will report on Australia
Post’s compliance with performance standards for that financial year and
the first financial year for which the ACA must report on Australia Post’s
performance in relation to the prescribed standards will be the 2004/05
financial year (subclause 4(2) of the Bill).
Item 11 – After
paragraph 30(1)(ha)
This item proposes to amend the APC Act by
inserting a new paragraph 30(1)(hb).
The purpose of this amendment is to
legitimise existing business practices in which aggregation services collect
letters from small businesses, aggregate the letters and then lodge the letters
with Australia Post which delivers the letters to the addressee at a discounted
rate under the bulk interconnection service. It will enable small businesses,
which may not have the resources to barcode mail or which do not generate
sufficient quantities of mail to access Australia Post’s bulk discount
rate, to utilise aggregation services to access Australia Post’s bulk
discount rate.
This amendment provides a new exception to the reserved
services. Currently Australia Post has the exclusive right to carry letters
within Australia, whether the letters originated within or outside Australia,
subject to the exceptions to the reserved services set out in section 30 of the
APC Act. Section 30 lists those services that are not reserved to Australia
Post and may be supplied by any person.
Paragraph 30(1)(ha) of the APC
Act currently provides that “the carriage of a letter to an office of
Australia Post where it is then lodged for delivery under a bulk interconnection
service (within the meaning of section 32A)” is an exception to the
reserved services. This means that the carriage of aggregated mail (that is
mail that has been sorted and barcoded in order to get a discount from Australia
Post), which will ultimately be lodged with Australia Post for delivery under a
bulk interconnection service, from the aggregator to Australia Post is an
exception to the reserved services. A bulk interconnection service is a service
supplied by Australia Post in which bulk quantities of letters are delivered
within Australia at reduced rates, provided that certain conditions have been
met.
However, this exception does not currently cover the carriage of a
letter from the person who generated the letter to the place of aggregation.
Proposed new paragraph 30(1)(hb) provides that the carriage of a letter
to the provider of an aggregation service for the purpose of aggregation in
order to use a bulk interconnection service (within the meaning of section 32A)
is an exception to the reserved services. The effect of this amendment is to
allow competitors and users of Australia Post services to carry aggregated mail,
which will ultimately be lodged with Australia Post for delivery under a bulk
interconnection service, from the person who generated the mail to the
aggregator before the mail is carried to Australia Post for lodgment as bulk
mail.
The carriage of letters from Australia Post to the addressee in
this scenario is still reserved to Australia Post. This amendment merely takes
the carriage of the letter to the aggregator outside the reserved
services.
An aggregation service is to be defined in proposed new
subsection 30(1A) (to be inserted by item 13 of Schedule 1 to this Bill). An
aggregation service is a service that aggregates letters from different senders
and that is offered in order to allow the senders to use a bulk interconnection
service.
Item 12 – At the end of paragraph 30(1)(ma)
This item amends paragraph 30(1)(ma) of the APC Act to extend the exception
to the reserved services relating to document exchange services.
DX
services provide for the exchange of mail between members of the service.
Typically members of a DX service are professional people such as lawyers,
doctors and architects who use the service for the delivery of such items as
time-sensitive material or specialised documents such as architectural
plans.
Currently, the carriage of mail within a DX service centre or
between DX service centres is excepted from Australia Post’s reserved
service. However, the carriage of mail between members of the DX service and
the DX service centre is not. As this carriage is an important element of a DX
service, the amendments are intended to legitimise this practice. The
amendments also include some conditions on the new exception to ensure that they
do only legitimise current practices and do not have any unintended
effects.
Currently paragraph 30(1)(ma) provides that the carriage of a
letter, in the course of a document exchange service, from one DX service centre
to another, or within a DX service centre, is an exception to the reserved
service. Subsection 30(1B) of the APC Act defines a service centre for the
purposes of paragraph 30(1)(ma) to be “a place conducted by, or under the
control of, the provider of the service where, under the terms of the service,
all persons who, under those terms, are entitled to use the service
may:
a) deposit documents for carriage by the service; and
b) collect
documents carried by the service.”
Proposed new item 12 of Schedule 1 to the Bill inserts new subparagraphs
30(1)(ma)(iii) and 30(1)(ma)(iv). The proposed amendments provide for an
exception to the reserved services for the carriage of a letter in the course of
a document exchange service not only between service centres or within a service
centre, but also from a DX member to a DX service centre, or from the DX service
centre to a DX member, subject to certain conditions set out in subsections
30(1C) and 30(1D).
The effect of this amendment is that (subject to the conditions placed on
the exception applying in subsections 30(1C) and 30(1D)), the carriage of
letters between DX centres and DX members is no longer reserved to Australia
Post. It will enable DX operators to collect mail from and deliver mail to
their members. A discussed above, this amendment is proposed to reflect current
industry practice. Currently document exchange businesses include a pick up and
delivery of letters to their members as part of their service.
To ensure that the amendments only legitimise current practices and do
not have any unintended effects, new subsections 30(1C) and 30(1D) are to be
inserted. These subsections set out various requirements that must be satisfied
before the carriage of a letter between a DX member and a DX service centre will
fall outside the reserved service exception provided for in subparagraph
30(1)(ma)(iii) or (iv) (see discussion below for item 14 of Schedule 1 to the
Bill).
Item 13 – After subsection 30(1A)
This item
inserts a new subsection 30(1AA) which defines an ‘aggregation
service’ for the purposes of paragraph 30(1)(hb) (to be inserted by
item 11 of Schedule 1 to the Bill). Paragraph 30(1)(hb) adds a new exception to
the reserved services, to cover the carriage of a letter to an aggregator for
the purposes of aggregation in order to use a bulk interconnection services
(within the meaning of section 32A of the APC Act).
An aggregation
service is to be defined as a service that:
• aggregates letters from
different senders; and
• that is offered in order to allow the senders
to use a bulk interconnection service within the meaning of section 32A of the
APC Act.
An aggregation service is commonly utilised by small businesses
which do not have the resources to be able to barcode mail and which do not
generate sufficient mail to qualify for Australia Post’s bulk
interconnection service. An aggregator may sort and barcode the letters and
then lodge the letters with Australia Post.
This definition is relevant
to the reserved service exception for the carriage of a letter from a mail
generator to the aggregator (see new paragraph 30(1)(hb), to be inserted by item
11 of Schedule 1 to the Bill).
Item 14 – After subsection
30(1B)
This item inserts proposed new subsections 30(1C) and
30(1D).
This amendment is intended to ensure that a DX service provider
does not vastly expand its membership by utilising the new exceptions to the
reserved services (new subparagraphs 30(1)(ma)(iii) and (iv), to be inserted by
item 12 of Schedule 1 to the Bill) for the purposes of establishing an
alternative, end-to-end postal delivery network. Australia Post is concerned
that if a DX provider is enabled to carry letters between service centres to DX
members, the provider may vastly expand its membership (for example by simply
asserting that all residents in the Melbourne CBD are ‘DX members’,
or by signing up new members who do not have to pay a fee but can only receive
mail) for the purpose of establishing an alternative delivery network, taking
advantage of the proposed new exceptions. The restrictions placed on the new DX
exception in subparagraphs 30(1)(ma)(iii) and (iv) by new subsections 30(1C) and
30(1D) are intended to ensure that the amendments only legitimise current
practices and do not have any unintended effects.
These subsections
qualify the exceptions to the reserved services for the carriage of a letter
between DX service centres and their customers. As discussed above, new
subparagraphs 30(1)(ma)(iii) and (iv) (to be inserted by item 12 of Schedule 1
to the Bill) extend the reserved services to the carriage of a letter between DX
service centres and DX members.
New subsection 30(1C) provides that
carriage of a letter between a DX service centre and a DX member is only
excluded from the reserved services if, at the time of the carriage, all of the
six requirements set out in subsection 30(1C) are satisfied.
Firstly
paragraph 30(1C)(a) provides that the exception will only apply if the DX member
chooses to become a member by applying directly to the DX provider. This
requirement is intended to ensure that DX services cannot gratuitously expand
their membership by signing up individuals who would not ordinarily use a DX
service in order to establish an alternative, end-to-end postal delivery
network. For example, a large DX member such as a bank could not sign up one of
its customers to become a DX member without the knowledge of that customer. Nor
could the bank sign up the customer on the customer’s behalf. The
bank’s customer would need to apply directly to the DX service provider to
become a member.
The second requirement in paragraph 30(1C)(b) is that
the DX service must require a member to pay a periodic fee (at least annually)
to remain a member. Like paragraph (a), this is intended to ensure that DX
businesses do not gratuitously expand their customer base for the purposes of
delivering large quantities of mail currently reserved to Australia Post. The
imposition of a fee on DX members is likely to ensure that DX services will not
be able to expand that customer base to include people who would not ordinarily
utilise DX services.
Paragraph 30(1C)(c) requires that the DX member
must be allocated a unique identifier, such as a DX number, that is not a postal
address and does not include a street name, for the purposes of sending and
receiving letters carried by the DX service. This requirement ensures that a DX
provider cannot simply allocate a DX member a postal address or part of it, that
would enable an alternative, end-to-end postal delivery network to be set up,
based on delivery by postal addresses.
To ensure that DX providers do
not provide a ‘receive only’ service to customers at a greatly
reduced rate, paragraph 30(1C)(d) provides that the exception to the reserved
service only applies if the person is entitled to send and receive letters via
the DX service. This requirement, in addition to those above, reduces the risk
of a DX service expanding its customer base in order to establish an alternative
delivery network.
Paragraph 30(1C)(e) provides that there must be a
separate receptacle, such as a DX in box, for the lodgment or collection of the
DX member’s letters at the DX service centre.
Finally paragraph
30(1C)(f) ensures that to come within the reserved service exception, DX members
must be a government agency, partnership, educational institution, health or
community service provider, charity, religious institution or other person
carrying on a business or other undertaking not of a private or domestic nature.
This recognises that the intention of DX services is to exchange mail between
members of professional associations, and the like, and not the carriage of
personal mail between individuals. However, it does recognise that individuals
who are carrying on a business or other non-private undertaking may legitimately
be a DX member. It ensures that a DX provider could not take advantage of the
exceptions to the reserved service to deliver mail to the public
generally.
If one or more of the six requirements set out in paragraphs
30(1C)(a) to (f) is not satisfied then the carriage of the letter will not come
within the exceptions to the reserved services set out in subparagraphs
30(1)(ma)(iii) or (iv). For example a DX service could not carry a letter from
a DX service centre to a DX member if the member had not himself or herself
chosen to be a member and applied.
New subsection 30(1D) provides that
the carriage of a letter in the course of a DX service from a DX service centre
to a DX member does not come within the exceptions to the reserved services if
the sender has addressed the letter using only a postal address. The effect of
this amendment is that any letters addressed using only a postal address, and
not including a DX address, will not come within that exception to the reserved
services.
Item 15 – Section 32B
This item is
consequential upon amendments made in item 7 of Schedule 1 to the
Bill.
It amends section 32B of the APC Act to substitute the references
to the ‘Australian Competition Consumer Commission’ with references
to the ‘ACCC’. ‘ACCC’ will be defined in section 3 of
the APC Act to mean the Australian Competition Consumer Commission (see item 7
of Schedule 1 to the Bill). This amendment will ensure consistency of
terminology throughout the APC Act.
Item 16 - Subparagraphs
32B(1)(a)(i) and (ii)
This item repeals subparagraphs 32B(1)(a)(i) and (ii) of the APC Act, which
are regulation-making powers relating to bulk interconnection service disputes,
and substitutes new subparagraphs 32B(1)(a)(i) and (ii).
Bulk
interconnection services are provided for under section 32A of the APC Act.
They are services under which bulk quantities of mail are delivered by Australia
Post, within Australia, at discount rates, which are provided in recognition
that the customer has performed certain functions, which may ordinarily be
performed by Australia Post. This might, for example be the barcoding and
sorting of bulk quantities of mail.
The APC Act currently provides for
regulations to be made relating to the ACCC’s inquiry into disputes about
the rate of reduction offered by Australia Post. There is currently no avenue
for external adjudication of any of the other terms and conditions determined by
Australia Post. The amendment, therefore, extends the regulation-making power
to enable the ACCC to inquire into disputes about any of the terms and
conditions of a bulk mail service and to make recommendations in relation to
these.
The amendments are intended to ensure that persons who use bulk
mail services receive fair and reasonable terms and conditions in relation to
the supply of these services by making provision for the ACCC to inquire into a
dispute about the proposed or actual terms and conditions.
Section 32B of
the APC Act provides that the regulations may provide for inquiries into certain
disputes about bulk interconnection services. Bulk interconnection services are
defined in section 32A of the APC Act to mean a service supplied by Australia
Post under which bulk quantities of letters are delivered within Australia at
reduced rates, provided that certain conditions have been met.
Section
32B currently restricts the power to make regulations about disputes over the
amount of rate reduction that a person should get under a bulk interconnection
service (see subparagraph 32B(1)(a)(i) of the APC Act).
Item 16 of
Schedule 1 to the Bill proposes to repeal subparagraph 32B(1)(a)(i) and replace
it with a new 32B(1)(a)(i) which extends this regulation-making power to enable
regulations to provide for the ACCC to inquire into a dispute between Australia
Post and a person who wishes to use a bulk mail service, about not merely the
amount of the rate reduction, but also about other terms and conditions of that
bulk mail service.
The amendments are intended to relate to disputes
about bulk interconnection services, as defined in section 32A of the APC Act.
The proposed new subparagraph 32B(1)(a)(i) does not however refer to inquiring
into a dispute about a bulk interconnection service. This is to ensure that
ACCC can inquire into disputes about the terms and conditions of a bulk mail
service prior to these terms and conditions having been agreed between Australia
Post and the customer. Under the meaning of a bulk interconnection service in
section 32A, such a service is only provided to a person when Australia Post
accepts lodgment of mail in accordance with the agreed terms and conditions of
the service. If Australia Post does not accept lodgment then there is no bulk
interconnection service and arguably nothing for the ACCC to inquire into.
Consequently the proposed new subparagraph 32B(1)(a)(i) refers to enabling the
ACCC to inquire into a dispute between Australia Post and a person who is
obtaining or wishes to obtain a rate reduction for the delivery of bulk
quantities of letters by Australia Post in return for performing functions in
relation to the letters that may be performed by Australia Post.
The
effect of this proposed amendment is to enable the regulations to provide for
the ACCC to inquire into disputes about the terms and conditions of access to
bulk services, such as the time of day Australia Post is willing to accept
different categories of bulk mail. The amendment would still enable the
regulations to deal with disputes about the amount of rate reduction, as this is
a term and condition of access to the bulk mail service. This is specifically
provided for in new subparagraph 32B(1)(a)(i).
New subparagraph
32B(1)(a)(ii) enables the regulations to provide for the ACCC to make a
recommendation to the Minister about the terms and conditions of the bulk mail
service, including, but not exclusively relating to, the amount of the rate
reduction. Subregulation 27(3) of the Australian Postal Corporation
Regulations 1996 currently requires the ACCC to have regard to certain
matters, including Australia Post’s delivery of its community service
obligations, when making a recommendation.
It is also expected that any
recommendation by the ACCC will relate only to matters relevant to the terms and
conditions of lodgment of bulk mail articles and will not relate to the internal
management of Australia Post’s postal system. So, for example, the ACCC
may recommend that Australia Post should not impose unreasonable lodgment times
(for example, 2am) or unreasonable lodgment numbers (for example, over 100,000
articles) but would not recommend that Australia Post establish new Post office
outlets.
Item 17 – Paragraph 32B(1)(f)
Paragraph
32B(1)(f) of the APC Act enables regulations to provide for the Minister to
direct Australia Post to act in accordance with an ACCC recommendation in
relation to the rate reduction that should be given to a person under a bulk
interconnection service.
This item proposes to amend paragraph
32B(1)(f) of the APC Act to enable the regulations to provide that the Minister
may direct Australia Post to act in accordance with a recommendation made by the
ACCC under subparagraph 30(1)(a)(ii), in relation to the terms and conditions
that should be given to a person under a bulk mail service. These amendments
reflect the amendments being made to extend the matters into which the ACCC may
inquire (see item 16 of Schedule 1 to the Bill).
In addition the new
paragraph provides that the Minister may only direct Australia Post following
consultation with the Australia Post Board. This is consistent with the
requirement on the Minister to consult with the Board prior to exercising his
directions power under section 49 of the APC Act.
Item 18 –
After subsection 32B(1)
Proposed new subsection 32B(1A)
makes it clear that regulations made under paragraph 32B(1)(f) (that the
Minister may direct Australia Post to act in accordance with an ACCC
recommendation in relation to the terms and conditions of a bulk mail service)
must not authorise the Minister to make a direction that would require Australia
Post to alter its terms and conditions in a way that is inconsistent with the
required terms and conditions of a bulk mail service (as set out in subsection
32A(2) of the APC Act). Subsection 32A(2) provides that the terms and
conditions of a bulk interconnection service must specify the Australia Post
offices at which letters must be lodged, allow letters to be lodged at any
office specified, and provide for the rate reduction to include a transport cost
component.
This amendment ensures that the regulations must not for
example, authorise the making of a Ministerial direction that removed the
requirement that a bulk interconnection service must specify the offices at
Australia Post at which letters must be lodged for delivery under the service
(one of the required terms and conditions of a bulk interconnection service
under paragraph 32A(2)(a) of the APC Act).
Item 19 – Paragraph
38(g)
Paragraph 38(g) of the APC Act provides that the Australia Post
Board must have regard to the cost of carrying out Australia Post’s
community service obligations in preparing or revising a financial target for
inclusion in a corporate plan under section 17 of the CAC Act.
Item 19
amends this paragraph to provide that the CSO costs for which the Board must
have regard are those costs as calculated by the ACA. This amendment is
consequential upon the amendments being made to the calculation of the cost of
carrying out Australia Post’s CSOs. Currently Australia Post itself
calculates the cost. New section 50F of the APC Act, to be inserted by item 21
of Schedule 1 to the Bill, will provide that the ACA must calculate the cost to
Australia Post of carrying out the CSOs.
Subclause 4(5) of the Bill
provides that Australia Post’s calculation of its CSOs are to be included
in any corporate plan required under section 17 of the CAC Act in the financial
year in which the Bill commences or either of the two financial years following
this (see discussion above).
Item 20 – Subparagraph
44(1)(g)(i)
Subparagraph 44(1)(g)(i) of the APC Act requires
Australia Post to include an assessment of the cost of carrying out Australia
Post’s community service obligations in its annual report prepared under
section 9 of the CAC Act.
Item 20 repeals subparagraph 44(1)(g)(i).
This means that Australia Post will no longer be required to include an
assessment of its community service obligation costs in its annual report. This
requirement has been removed as the assessment of the cost of carrying out
Australia Post’s community service obligations will be included in the
ACA’s report prepared annually and laid before Parliament (under proposed
new subsection 50B of the APC Act, to be inserted by item 21 of Schedule 1 to
the Bill).
Subclause 4(4) provides transitional provisions dealing with
the timing for this amendment (see discussion above). It provides that
Australia Post’s annual report for the financial year in which the Bill
commences and each previous financial year must include Australia Post’s
calculation as if subparagraph 44(1)(g)(i) had not been repealed.
This item inserts a new Part 4A into the APC Act relating to the
monitoring of Australia Post. Division 1 deals with the role of the ACA in
monitoring Australia Post and Division 2 relates to the role of the ACCC in
monitoring Australia Post.
There is currently limited oversight of Australia Post’s
performance in its delivery of services. The Auditor-General monitors Australia
Post’s performance against the prescribed performance standards, and the
Commonwealth Ombudsman has the power to investigate complaints against Australia
Post. Due to Australia Post’s monopoly over certain services there is
limited competitive pressure on Australia Post’s performance in the supply
of services.
To ensure effective and independent oversight of Australia
Post’s performance and to improve its performance, this new Division will
give the ACA an oversight role in relation to Australia Post by providing for
the ACA to monitor and report on Australia Post’s performance in the
supply of postal services.
As part of this role, the ACA will take over
the current responsibility of the Auditor-General in assessing the extent to
which Australia Post has met its prescribed performance standards. It will also
be required to calculate the cost to Australia Post of fulfilling its CSOs, a
costing currently undertaken by Australia Post itself.
Proposed new section 50A provides that the ACA must monitor the supply of
postal services by Australia Post.
Postal services is not defined in
the APC Act but it is broadly understood to mean any services related to the
acceptance, collection, carriage and delivery of mail.
The ACA’s
monitoring role would include monitoring the supply of both Australia
Post’s reserved services, that is those services which are exclusively
reserved to Australia Post under section 29 of the APC Act, and the non-reserved
services. However, it is not intended that the ACA would monitor and report on
Australia Post’s supply of services not normally associated with postal
activities, such as the provision of banking and payment services.
Proposed new section 50B provides that the ACA must report each financial
year to the Minister on various matters relating to Australia Post’s
performance in the supply of postal services, including its performance against
prescribed performance standards, and the cost of the CSOs.
In
particular the ACA’s report must include:
• the ACA’s
assessment of Australia Post’s performance in the supply of postal
services for the financial year (paragraph 50B(1)(a));
• the
ACA’s assessment of the extent to which Australia Post met the prescribed
performance standards in the financial year (paragraph 50B(1)(b));
• a
statement as to the methodology used by the ACA in determining the extent to
which Australia Post met the prescribed performance standards (paragraph
50B(1)(b));
• the ACA’s calculation of the cost to Australia Post
of carrying out the community service obligations for the financial year
(paragraph 50B(1)(c));
• a statement as to the methodology used by the
ACA to calculate the cost of the CSOs (paragraph 50B(1)(c));
• any
matters relating to the supply of postal services that the Minister has directed
the ACA to include in the report (paragraph 50B(1)(d));
• any other
matters relevant to the performance of Australia Post in supplying postal
services that the ACA considers appropriate (paragraph 50B(1)(e)).
The
ACA must provide the report to the Minister as soon as practicable after the end
of the financial year, and no later than 15 October (subsection 50B(3)). The
Minister must arrange for the tabling of a copy of the ACA’s report or an
extract of the report (if the Minister has reached the view that certain
confidential information should be excluded) in both Houses of Parliament within
15 sitting days of receiving the report (subsection 50B(4)).
If the ACA
report includes information that Australia Post claims is
commercial-in-confidence, the Minister may table a copy of the report that
excludes such information if the Minister is satisfied that Australia
Post’s claim is justified or that it is not in the public interest to
table the information (subsection 50B(5)).
The report on Australia
Post’s performance against its prescribed performance standards, and the
ACA’s calculation of the cost of the CSOs (paragraphs 50B(1)(b) and (c)),
are matters on which there are currently reports prepared by different bodies (a
report by the Auditor-General in relation to performance standards, and
calculation by Australia Post in relation to CSO costs).
This report on
the ACA’s performance against its prescribed performance standards will
replace the existing Auditor-General’s performance audit report (see
discussion above on the repeal of the Auditor-General’s functions at item
10 of Schedule 1 to this Bill). Like the Auditor-General, the ACA will
determine the appropriate methodology to use in conducting the assessment of the
extent to which Australia Post has met the prescribed performance standards (see
subsection 28D of the APC Act). It must include a statement of the methodology
used in its report.
The ACA’s calculation of the costs to
Australia Post carrying out its CSOs under section 50F, and its report on these
costs under this new section 50B, replaces the existing arrangements whereby
Australia Post calculates these costs and includes its calculation in its annual
report under subparagraph 44(1)(g)(i) (see discussion above at item 20 of
Schedule 1 to the Bill).
The Minister is given the power to direct the
ACA to include a particular matter relating to Australia Post’s supply of
postal services in these reports (subsection 50B(2)). This will enable the
Minister to target specified matters of particular concern. The directions will
be included in the ACA’s annual report (see proposed new paragraph
50(2)(h) of the ACA Act, to be inserted by item 5 of Schedule 1 to the
Bill).
The ACA’s report on the ACA’s assessment of Australia
Post’s performance in the supply of postal services in the financial year
(paragraph 50B(1)(a)), any matters relating to Australia Post’s supply of
postal services the Minister has directed the ACA to include (paragraph
50B(1)(d)), and any other relevant matters (paragraph 50B(1)(e)), are new
matters which have not previously been monitored and reported on.
As discussed above, these amendments have been proposed to ensure effective
and independent oversight of Australia Post's performance and as a mechanism to
improve Australia Post’s performance in supplying postal services,
particularly in relation to its reserved services where it does not have
competitive pressure to perform.
In order to properly carry out these
functions, the ACA will have the power to request information from Australia
Post that is relevant to the ACA performing these functions (see proposed new
section 50G, to be inserted by item 21 of Schedule 1 to the Bill).
Clause
4 of this Bill sets out the application provisions that relate to the timing of
the ACA’s first report under this section (see discussion above for clause
4 of the Bill).
Proposed new section 50C replaces section 28C of the APC Act, which is to
be deleted by item 10 of Schedule 1 to the Bill.
The
provisions relating to performance standards are being transferred into the new
Division 1 of Part 4A of the APC Act to reflect the ACA’s new function of
monitoring Australia Post’s performance against these standards, a role
that was previously performed by the Auditor-General (under section 28D of the
APC Act).
Proposed new subsection 50C(1) provides that regulations may
prescribe performance standards to be met by Australia Post. Subsection 50C(2)
sets out the matters that the prescribed performance standards must relate to.
These new subsections mirror subsections 28C(1) and (2) of the APC
Act.
In addition, a new subsection 50C(3) is to be inserted. This
subsection provides that the prescribed performance standards may relate to
methods of determining the level of mail delivery service for a particular area.
The amendment is not intended to limit subsection 50C(1), which provides
that regulations may prescribe performance standards to be met by Australia
Post. This clarifies that subsection (1) provides a broad regulation-making
power relating to performance standards to be met by Australia Post. Proposed
new subsection 50C(3) simply gives one example of what the prescribed
performance standards may relate to.
There has been a concern raised
that Australia Post’s current method of polling communities to determine
whether to institute ‘to the property’ delivery services has made it
very difficult for communities to convince Australia Post to institute ‘to
the property’ delivery services. Currently Australia Post conducts
occasional polls of semi-rural communities to determine whether they should be
supplied with ‘to the property’ delivery services. These polls have
generally had a low response rate and Australia Post has treated nil responses
as a negative response. Consequently it is has been difficult for communities
to convince Australia Post to institute a ‘to the property’ delivery
service. This amendment would enable regulations to be made prescribing
standards relating to the processes used by Australia Post for polling
communities to determine whether delivery services should be provided ‘to
the property’.
Subclause 4(7) of the Bill ensures that any
performance standards prescribed under subsection 28C(1) of the APC Act prior to
the commencement of item 10 of Schedule 1 to the Bill (which
repeals section 28C) will continue to have effect as if they had been prescribed
under the new subsection 50C(1).
Subsection 28E(1) of the APC Act provides that Australia Post must prepare a
service improvement plan if the Auditor-General has reported in a performance
audit report that Australia Post has not met a prescribed performance standard.
The service improvement plan is designed to ensure that Australia Post meets
that prescribed performance standard as soon as practicable.
This section
is to be deleted by item 10 of Schedule 1 to the
Bill.
Proposed new subsection 50D(1) replaces
subsection 28E(1) with the necessary amendments to reflect that the role of
reporting on Australia Post’s compliance with the prescribed performance
standards will be undertaken by the ACA, not the Auditor-General. This
assessment will be included in a report prepared by the ACA under proposed new
section 50B (to be inserted by item 21 of Schedule 1 to the Bill). The
ACA’s report under section 50B will replace the performance audit report
previously prepared by the Auditor-General.
While subsection 28E(1)
obliges Australia Post to prepare a service improvement plan if the
Auditor-General reports in a performance audit report that it has not met a
prescribed performance standard, new subsection 50D(1) provides that Australia
Post is not required to prepare a service improvement plan if the Minister
considers it unnecessary in the circumstances. This amendment recognises that
Australia Post may often address the reasons for a failure to meet a performance
standard before its failure to meet the standard is noted in the relevant ACA
report. In such cases the requirement for Australia Post to prepare a service
improvement plan would be unnecessary.
Australia Post must give the
service improvement plan to the Minister on or before 1 March in the financial
year after the financial year to which the report relates (subsection 50D(2)).
This corresponds to the current subsection 28E(2).
The Minister must
arrange for the tabling of a copy of the service improvement plan before both
Houses of Parliament within 15 sitting days of the Minister receiving the plan
(new subsection 50D(3)). This mirrors the current subsection 28E(3) of the APC
Act.
Proposed new section 50E provides that the Minister may direct the ACA to
monitor and report to the Minister on specified matters relating to Australia
Post’s supply of postal services.
These additional reports may be
directed at any time, and reporting on such matters operates independently of
the ACA’s annual report prepared under proposed new section 50B. While
the Minister may direct the ACA to include a particular matter in the
ACA’s annual report, under subsection 50B(2), the directions power in
section 50E may be used if the Minister considered it desirable to have a report
on a particular matter prior to the time at which the section 50B report would
be prepared. The directions power in section 50E enables the Minister to direct
the time in which the ACA must report to him.
This amendment would enable
the Minister to target specific matters for monitoring if there was a general
public concern about a particular matter relating to Australia Post’s
supply of postal services.
The ACA must comply with a direction from
the Minister (proposed new subsection 50E(2)).
The Minister may publish a
copy of the report (proposed new subsection 50E(3)). The Minister may exclude
any information that Australia Post claims is commercial-in-confidence from the
report if the Minister is satisfied that Australia Post’s claim is
justified or that it is not in the public interest to publish the information.
This is the same as the Minister’s power to exclude
commercial-in-confidence material from the tabled version of the ACA’s
section 50B report (see proposed new subsection 50B(5)).
As part of the ACA’s oversight responsibility, it is proposed that
the ACA take over responsibility for calculating the cost to Australia Post in
complying with its statutory community service obligations.
Proposed new
section 50F transfers the role of calculating these costs from Australia Post to
the ACA. As there are direct linkages between the extent of Australia
Post’s reserved service and the cost to it of providing the CSOs, it is
important that it is costed accurately and independently.
Proposed new
subsection 50F(1) requires the ACA to calculate the cost to Australia Post of
carrying out its community service obligations for a particular financial year
after the end of that financial year.
Division 1 of Part 3 of the APC
Act imposes various obligations on Australia Post, including its community
service obligations. Post’s CSOs are set out in section 27 of the APC
Act. Essentially they are:
• to supply a letter service, whose
principal purpose is to carry, by physical means, within Australia, letters that
Post has the exclusive right to carry, and to carry letters between Australia
and places outside Australia;
• to make the carriage of standard
letters within Australia available at a single rate of postage;
• to
ensure that the letter service is reasonably accessible to all people in
Australia (regardless of their residence or place of business) on an equitable
basis, and
• to ensure that the performance standards for the letter
service reasonably meet the social, industrial and commercial needs of the
Australian community.
Currently Australia Post calculates the costs of
carrying out its CSOs. This calculation is considered by the Australia Post
Board when preparing or revising a financial target for inclusion in Australia
Post’s corporate plan under the CAC Act (paragraph 38(g) of the APC Act),
and is included in Australia Post’s annual report prepared under section 9
of the CAC Act (subparagraph 44(1)(g)(i) of the APC Act).
To enable
Australia Post sufficient time to prepare its financial target for the corporate
plan, the ACA must estimate the cost to Australia Post of carrying out its CSOs
for the period the corporate plan is to cover and give Australia Post a report
on these calculated costs in sufficient time each year for the Board to use the
calculation in the corporate plan (proposed new subsections 50F(2) and
(4)).
The ACA must report to the Minister and Australia Post on the costs
it has calculated for a financial year (subsection 50F(3) and paragraph
50B(1)(c)). The ACA’s report to the Minister is included in the
ACA’s report to the Minister under proposed new section 50B. The
ACA’s calculation of the CSO costs will be tabled in both Houses of
Parliament, as part of the section 50B report (proposed new subsection 50B(4)).
As the ACA’s calculation of the cost to Australia Post of carrying out the
CSOs will be publicly available as part of this section 50B report, it is not
necessary for Australia Post to include the calculation of the CSO costs in its
annual report (currently required under subparagraph 44(1)(g)(i) of the APC
Act). This requirement will be removed by item 20 of Schedule 1 to the
Bill which repeals subparagraph 44(1)(g)(i) of the APC Act.
The
ACA’s notice to Australia Post on its CSO costings must include a
statement of the methodology the ACA used to calculate the costs (proposed new
subsection 50F(3)). This methodology may be different to the one currently used
by Australia Post to calculate the CSOs if the ACA considers it appropriate. A
statement of the methodology must also be included in the ACA’s report to
the Minister (paragraph 50B(1)(b)).
Subclauses 4(3) to (5) provide for
application provisions relating to the calculations of costs of complying with
CSOs (see discussion above).
Proposed new section 50G enables the ACA to require Australia Post to
keep certain records and give the ACA information about matters in a specified
manner and form relevant to the performance of the ACA’s postal functions.
These amendments are proposed to ensure that the ACA can effectively
carry out its new postal functions by enabling it to get access to relevant
information in a useful form.
Paragraph 50G(1)(a) provides that the ACA
may require Australia Post to keep records about specified matters and in a
specified manner and form. However the matters must be relevant to the
performance of the ACA’s postal functions (subsection 50G(4). The
ACA’s postal functions are set out in section 7A of the ACA Act (see
definition in section 3 of the APC Act, items 3 and 8 of Schedule 1 to this
Bill). They include the ACA’s new functions of monitoring the performance
of Australia Post in supplying postal services, including assessing to what
extent it has met the prescribed performance standards. The ACA’s postal
functions also include its calculation of the cost to Australia Post in
performing its community service obligations.
Australia Post must give
the ACA copies of those records when requested by the ACA (paragraph 50G(2)).
The ACA may specify the manner and form in which Australia Post must give those
records (paragraph 50G(2)(a)). For example it would enable the ACA to require
the records be provided electronically, or to require that Australia Post
provide reports summarising the detail contained in the records.
The ACA
may decide when and at what intervals the records are to be provided to the ACA
(paragraph 50G(2)(b)).
Australia Post must also give any other
information to the ACA it requests that is relevant to the performance of the
ACA’s postal functions (subsection 50G(3)). To avoid doubt, subsection
50G(3) specifically states that the ACA may require Australia Post to prepare
reports consisting of details about the information contained in those records.
This may be useful if there are detailed records which require some processing
and analysis by Australia Post before being provided to the ACA. Information
requested by the ACA must be given to the ACA within the time it specifies
(paragraph 50G(3)(b)).
This power is similar to the ACA’s power to
make record-keeping rules in relation to requiring carriers or carriage service
providers to keep and retain records to assist the ACA in carrying out its
powers and functions relating to the monitoring of the performance of carriers
and carriage service providers (see Division 3 of Part 27 of the
Telecommunications Act 1997).
A similar power is also to be given
to the ACCC to enable it to carry out its new functions (see proposed new
section 50H to be inserted by item 21 of Schedule 1 to the Bill).
Division 2 – Role of the ACCC
Some competitors of
Australia Post have raised concerns that Australia Post is unfairly competing in
the market place by using its reserved services revenue to cross-subsidise its
retail activities. This new Division provides the ACCC with the mechanisms to
determine whether such cross-subsidisation is occurring. It will also enable
the ACCC to get access to information relevant to performing certain of its
other functions related to Australia Post.
Under proposed new Division 2 of Part 4A of the APC Act the ACCC may require Australia Post to keep and retain records, to prepare reports based on those records, and to pass those reports to the ACCC (proposed new section 50H).
Proposed section 50H – ACCC may require Australia Post to
keep records
Proposed new subsection 50H provides that the ACCC may require
Australia Post to keep records and provide copies of these records, or details
about information contained in the records, to the ACCC.
These
amendments are proposed to enable the ACCC to get access to relevant information
necessary to enable it to properly carry out its functions of determining
whether Australia Post is cross-subsidising its reserved services with the
non-reserved services, of inquiring into bulk mail service disputes, and
carrying out its functions relating to prices surveillance in relation to
Australia Post.
Proposed new subsection 50H(4) limits the
matters to which the ACCC can require Australia Post to keep records about. It
provides that the ACCC may only require Australia Post to keep records under
subsection 50H(1) that are relevant to the performance of the ACCC’s
functions in relation to prices surveillance, the performance of the
ACCC’s functions under section 32B of the APC Act, the financial
relationship between parts of Australia Post’s business that relate to
reserved services and parts that do not; and/or the financial relationship
between parts of Australia Post’s business that relate to reserved
services. This enables the ACCC to require Australia Post to keep records that
are relevant to the ACCC’s functions relating to inquiries into bulk mail
services under section 32B. It would also include the ACCC’s functions in
monitoring the cost of Australia Post’s reserved services under the
Prices Surveillance Act 1983. This Act is proposed to be repealed
by the Trade Practices Legislation Amendment Bill 2003, which is currently
before Parliament. The Trade Practices Legislation Amendment Bill proposes to
amend the TPA by inserting a new Part VIIA into the TPA relating to prices
surveillance. The proposed new Part VIIA essentially reenacts the provisions in
the Prices Surveillance Act, with some modification. Proposed paragraph
50H(4)(a) of the APC Act would enable the ACCC to require Australia Post to keep
records relevant to its prices surveillance functions in the new part of the
TPA, once enacted.
Subsection 50H(1) enables the ACCC to require
Australia Post to keep records about specified matters in a specified manner and
form. The specified matters must be relevant to those matters set out in
subsection 50H(4), as discussed above.
The ACCC may specify the manner
and form in which the records are to be kept (proposed new paragraph 50H(1)(b)).
For example, the ACCC may require records to be kept in an electronic format.
Proposed new subsection 50H(2) provides that the ACCC must
require Australia Post to keep records in relation to Australia Post’s
reserved services. This obligation reflects that one of the primary intentions
of these record-keeping powers is to enable the ACCC to scrutinise whether or
not Australia Post is cross-subsidising from the reserved services to the
services it provides in competition with others. Subclause 4(6) of the Bill
provides that the ACCC must fulfil this obligation within 12 months of the Bill
commencing.
Subsection 50H(2) does not limit the matters for which the
ACCC may require Australia Post to keep records under subsection 50H(1). It
merely places an obligation on the ACCC to require Post to keep records in
relation to Australia Post’s reserved services. In addition to this
mandatory requirement, the ACCC may choose to require Post to keep records in
relation to other matters where the ACCC considers it appropriate, so long as
they are relevant to the performance of the ACCC’s functions in relation
to prices surveillance, under section 32B of the APC Act, the financial
relationship between parts of Australia Post’s business that relate to
reserved services and parts that do not; and/or the financial relationship
between parts of Australia Post’s business that relate to reserved
services (see subsection 50H(4)).
Australia Post must give the ACCC
copies of those records when requested by the ACCC (paragraph 50H(3)(a)). The
ACCC may require Australia Post to give it reports consisting of details about
the information contained in those records (paragraph 50H(3)(b)). This may be
useful if Australia Post has kept detailed records which require some prior
summarising.
The ACCC may specify the manner and form in which Australia
Post must give those records or information details (paragraph 50H(3)(c)), for
example electronically. This would also enable the ACCC to require Australia
Post to provide audited records, which have been signed off at an appropriate
level of seniority within the organisation. Such a requirement may be imposed
to add to public confidence in the veracity of the records and reports. The
ACCC may decide when and at what intervals the records and information are to be
provided to it (paragraph 50H(3)(d)).
Subsection 50H(4) limits the matters for which the ACCC may require Australia Post to keep records under subsection 50H(1). The matters must be relevant to the performance of the ACCC’s functions in relation to prices surveillance, the ACCC’s functions under section 32B of the APC Act, and/or the financial relationship between different parts of Australia Post’s business. This is intended to ensure that ACCC has the power to require Post to keep records relevant to determining if Post has cross-subsidised its reserved services. In addition it includes ACCC’s functions relating to inquiries into bulk mail services under section 32B. As discussed above, it will also include the ACCC’s functions under the existing Prices Surveillance Act 1983, and the proposed new Part VIIA of the TPA relating to prices surveillance upon commencement of the Trade Practices Legislation Amendment Bill, which is currently before Parliament.
Proposed section 50I – ACCC may publish reports analysing
records
The ACCC may prepare and publish reports analysing the
information provided to it by Australia Post under subsection 50H(3).
This power provides a mechanism for appropriate analysis to occur in
relation to the records provided by Australia Post. It recognises that the
records and information provided by Australia Post to the ACCC may be in great
detail and without any analysis may not illustrate whether or not a particular
problem is evident. For example if records were obtained in order to determine
if Australia Post was cross-subsidising its non-reserved services then the
records themselves may not illustrate whether or not there was
cross-subsidisation without further analysis. This provision enables an
analysis of the information gathered by ACCC from Australia Post to be prepared
and provided to the public in a useful and intelligible form.
The Bill
does not specify how or in what medium the ACCC reports are to be published but
it would enable publication via the Internet. The ACCC must prepare and/or
publish a report where the Minister has directed it to do so (proposed new
section 50J).
Proposed section 50J – Minister may direct
ACCC to report
Proposed new section 50J gives the Minister the power
to direct the ACCC to prepare and/or publish a report analysing the information
in records kept under subsections 50H(1) and (2).
This amendment would
enable the Minister to require the ACCC prepare and publish a report analysing
the information in records kept under subsections 50H(1) and (2) if, for
example, the Minister determined that it was in the public interest. The
Minister may also choose to exercise this power if a particular interest group
had an interest in the outcome of any monitoring of Australia Post by the ACCC
for which the ACCC had requested the information.
It would only be
necessary for the Minister to use this power if the ACCC itself had not decided
to prepare and publish an analysis (subsection 50I merely enables the ACCC to
prepare and publish reports, it does not require it to do
so).
Proposed section 50K – Publication of confidential
information
The ACCC may include information that Australia Post
claims is commercial-in-confidence in a report published under section 50I or
50J. The information may be included where the ACCC is satisfied that the claim
is not justified or that it is in the public interest to publish the
information. This provision gives Australia Post the opportunity to request
that the ACCC not include certain information in the ACCC’s reports.
This new section provides for the recovery of the Commonwealth’s
costs in administering the new postal powers and functions imposed on the ACA
and the ACCC under the Bill.
Proposed new subsection 56A(1) provides for
the Minister to estimate the ACA’s costs in performing its postal
functions and the ACCC’s costs in performing its functions under the APC
Act for a financial year, and to direct Australia Post to pay a specified amount
to the Commonwealth based on this estimate. The ACA’s ‘postal
functions’ are defined in section 3 of the APC Act (to be inserted by item
8 of Schedule 1 to the Bill).
The amendment in effect provides for an
annual levy to be placed on Australia Post for the financial year in which the
Bill commences and subsequent financial years to fund the new roles of the ACA
and the ACCC.
While there is no legislative timing for the
Minister’s direction, it is anticipated that the Minister would direct
Australia Post to pay the estimated costs within the financial year to which
they apply.
It is anticipated that the Minister’s estimate of the
ACA’s and ACCC’s costs would be based on estimates determined by the
ACCC and the ACA for the costs, which they would provide to the Minister. The
Minister may also take into account other relevant considerations in estimating
the costs.
Subsection 56A(2) specifically provides that the
Minister’s direction may relate to costs that have not yet been incurred.
Subsections 56A(3) and (4) provide a mechanism to enable a
redistribution of costs if at the end of a financial year it is determined that
the actual costs of the ACA or ACCC are higher or lower than that previously
determined. Subsection 56A(3) provides for the Minister to determine that the
actual costs of the ACA and ACCC’s in performing their relevant functions
for a financial year are lower than the amount paid by Australia Post in respect
of that year (based on the Minister’s estimate under subsection 56A(1))
the Commonwealth must pay the difference to Australia Post.
The
Commonwealth must not pay if the difference is one thousand dollars or less
(subsection 56A(5)).
Subsection 56A(4) provides for a redistribution if
the actual costs are higher than that paid by Australia Post for a financial
year. If the Minister determines that the ACA's or ACCC’s actual costs
are higher than the amount paid by Australia Post, the Minister may direct
Australia Post to pay an amount no greater than the difference, to the
Commonwealth. Australia Post will not be required to pay the additional amount
if it is one thousand dollars or less (subsection 56A(5)).
Subsection
56A(5) provides for a discrepancy of one thousand dollars or less between the
estimated and actual costs without a need for redistribution at the end of the
financial year. This will avoid unnecessary administration for small
differences in amount.
It is anticipated that the actual costs of the
ACA and ACCC will be based on the costs provided to the Minister by the ACA and
ACCC and any other matters the Minister considers are relevant.
For
example the Minister may on 1 June 2004 direct Australia Post to pay by 20 June
2004 a specified amount to the Commonwealth for the 2004/05 financial year.
This direction would be based on the Minister’s estimate of the relevant
ACA and ACCC’s costs for the 2004/05 financial year. If after the end of
the 2004/05 financial year it was evident that the estimates were either too low
or too high, then the Minister may make a determination that corrects this
difference (ie the Minister may determine that the Commonwealth pay the
difference to Australia Post if the ACA or ACCC’s actual costs for the
2004/05 financial year were lower than the amount previously paid by Post for
that year, or that Post pay to the Commonwealth an amount not exceeding the
difference if the actual amounts were higher, see subsections 56A(3) and
(4)).
Subsection 56A(6) provides that the Consolidated Revenue Fund is
appropriated for the purposes of payments under subsection 56A(3) (ie payments
made by the Commonwealth to Australia Post in respect of the difference between
any amount paid by Australia Post and the ACA or ACCC’s actual
costs).
Subsection 56A(7) provides that, in section 56A, costs means an
amount that, in accordance with accrual-based accounting principles, is to be
treated as a cost.
This item repeals paragraph 90J(6)(c) of the APC Act and substitutes a
new paragraph. This amendment is necessary to update a reference to a repealed
Act. It removes a reference to the now repealed Criminal Justice Act
1989 of Queensland and replaces it with a reference to the Crime and
Misconduct Commission Act 2001 of Queensland.
Section 90J of the APC Act provides for when an Australia Post employee is permitted to use or disclose certain information or documents acquired or received in the course of his or her employment with Australia Post. In particular, the person may disclose the information or document as required by or under various State and Territory laws establishing Commissions (subsection 90J(6) of the APC Act).
Paragraph 90J(6)(c) provides for disclosure as required by or under the Criminal Justice Act 1989 (QLD). This Act was repealed by section 349 of the Crime and Misconduct Act 2001 (QLD). The Crime and Misconduct Act 2001 (QLD) establishes the Crime and Misconduct Commission (a merger of the Criminal Justice Commission and the Queensland Crime Commission). Accordingly, the reference to the Criminal Justice Act 1989 of Queensland in paragraph 90J(6)(c) of the APC Act is being replaced with a reference to the Crime and Misconduct Commission Act 2001 of Queensland.
This amendment will permit Australia Post employees to use or disclose
certain information or documents as required by or under the Crime and
Misconduct Commission Act 2001 of Queensland.
Item 24 –
Paragraph 90LC(5)(c)
This item repeals paragraph 90LC(5)(c) of the
APC Act and substitutes a new paragraph. This amendment is necessary to update
a reference to a repealed Act. It removes a reference to the now repealed
Criminal Justice Act 1989 of Queensland and replaces it with a reference
to the Crime and Misconduct Commission Act 2001 of Queensland.
Section 90LC of the APC Act provides for when a former Australia Post employee is permitted to use or disclose certain information or documents acquired or received in the course of his or her employment with Australia Post. In particular, the person may disclose the information or document as required by or under various State and Territory laws establishing Commissions (subsection 90LC(5) of the APC Act).
Paragraph 90LC(5)(c) provides for disclosure as required by or under the Criminal Justice Act 1989 (QLD). This Act was repealed by section 349 of the Crime and Misconduct Act 2001 (QLD). The Crime and Misconduct Act 2001 (QLD) establishes the Crime and Misconduct Commission (a merger of the Criminal Justice Commission and the Queensland Crime Commission). Accordingly, the reference to the Criminal Justice Act 1989 of Queensland in paragraph 90LC(5)(c) of the APC Act is being replaced with a reference to the Crime and Misconduct Commission Act 2001 of Queensland.
This amendment will permit former Australia Post employees to use or disclose certain information or documents as required by or under the Crime and Misconduct Commission Act 2001 of Queensland.
Item 25 – Subsection 25(1)
Subsection 25(1) of the
TPA provides for the ACCC to delegate to a member of the Commission it powers
under the TPA and various other Acts.
This item amends subsection 25(1)
to include the APC Act in the list of Acts in relation to which the ACCC can
delegate its powers. The effect of this amendment is that the ACCC may, in
accordance with section 25 of the TPA, delegate its powers under the APC Act to
a member of the Commission.