Coroner & Legal
FT and the Economic Regulator
The Government’s willingness to breach the spirit of national competition policy by its use of State resources to prop up Forestry Tasmania whilst imposing austerity on broader sections of the Tasmanian community has struck a discordant note with many of the affected.
A willingness by the affected such as FLAG (Friends of Lapoinya Group) other local communities and private growers to look at remedies and solutions has precipitated this note.
Competitive neutrality complaints are handled by the Office of the Tasmanian Economic Regulator (OTTER) pursuant to Economic Regulator Act 2009.
Section 48 sets out who can make a complaint:
“A person may make a complaint to the Regulator if the person–
(a) believes that a prescribed body has contravened any of the national competition policy competitive neutrality principles; and(b) is adversely affected by that supposed contravention; and
(c) has discussed that supposed contravention with the prescribed body.”
A recent Treasury discussion paper initiating a review of the role of the Tasmanian Economic Regulator discusses competitive neutrality arrangements:
”….. where a person believes that a public body has contravened any of the competitive neutrality principles. If that person is adversely affected by the alleged contravention and has discussed the alleged contravention with the public body, that person may make a complaint to the Regulator. After conducting the investigation, the Regulator must determine whether the complaint is justified or not.”
“The Government has the capacity to direct a State Government entity to alter its behaviour if the Regulator upholds a competitive neutrality complaint. “
Governments may compete in the private sector via a corporatised model such as a GBE or a State Owned Corporation (SOC).
At other times government departments and/or local governments may compete without a separate formalised legal structure, the provision of overnight camping facilities by local governments for instance.
In the latter cases the business activity is required to adopt full cost attribution.
But the competitive neutrality guidelines don’t entertain the possibility of a corparatised government business being deficit funded to the extent that Forestry Tasmania has been over the past few years.
If Forestry Tasmania were a government agency, as in the days of the Forestry Commission, it would clearly be required to adopt full cost attribution.
But under the rules that apply to government businesses conducted via a corporate entity the full cost attribution rules may not apply and the government can continue to provide deficit funds or equity transfers.
But that could lead to the absurd situation where a loss-making government activity competing in the private sector was corporatized so as to avoid full cost attribution.
That would obviously contravene the principles of competitive neutrality .
Certainly the spirit if not the letter.
So why isn’t the continued propping up of Forestry Tasmania using the resources of the State against the principles of competitive neutrality?
It might take a complaint to the Regulator to determine.
Read more of this pertinent observation. Tasfintalk here
• Peter McGlone: Is Minister Paul Harriss telling the truth regarding changes to the forest clearing policy? The Minister for Resources Paul Harriss announced last Sunday that he had amended the Permanent Native Forest Estate Policy to postpone the date by which broad-scale clearing and conversion of native forest on private land is to cease, from 1 January 2015 for an unspecified period while the PNFE policy is reviewed. But the Tasmanian Conservation Trust has disputed the truth of the minister’s claim to have changed the deadline for clearing because the deadline is a commitment contained in the Tasmanian Regional Forests Agreement and would require both governments to agree to the change. “The Minister for Resources needs to come clean with the Tasmanian public about whether the Tasmanian Regional Forests Agreement has been changed in secret,” said the TCT Director Peter McGlone. “The date for ceasing broad-scale clearing of native forest on private land is a commitment contained in the Tasmanian Regional Forests Agreement and either this agreement has been changed in secret by the Tasmanian and Australian Governments without the Tasmanian public being informed or Minister Harriss has made a serious error and does not have the authority to change the deadline”.
• Kim Booth: Is Harriss in Breach of RFA – or Has it Been Changed Secretly? The Minister for Resources Paul Harriss must come clean on whether he has secretly negotiated a formal change to the Regional Forests Agreement (RFA) with the Commonwealth, or whether he is in breach of the RFA with his announcement to overturn the January deadline for an end to broad-scale clearing and conversion of native forest on private land, Greens Leader and Forests spokesperson Kim Booth MP said today.