Queensland Competition Authority

Queensland Competition Authority
Statutory authority overview
Formed 1997 (1997)
Jurisdiction The State of Queensland
Headquarters Level 27, 12 Ann Street, Brisbane
Minister responsible
Statutory authority executives
  • Roy Green, Chairman
  • Prof. Flavio Menezes, Deputy Chair
  • Medeline Brennan QC, Member
Key document
  • Queensland Competition Authority Act, 1997
Website www.qca.org.au

The Queensland Competition Authority (QCA), an independent statutory authority that was established by the Queensland Government in 1997, promotes competition as the basis for enhancing efficiency and growth in the Queensland economy.[1]

The Authority is governed by a three-member Board. The Minister responsible for administering the Queensland Competition Authority Act is the Treasurer, Curtis Pitt.

Functions

The QCA's primary role is to ensure monopoly businesses operating in Queensland, particularly in the provision of key infrastructure, do not abuse their market power through unfair pricing or restrictive access arrangements.

Following a decision by the Queensland Government in 2012, their role was expanded to include responsibilities for the state’s regulatory reform, through the establishment of the Office of Best Practice Regulation (OBPR). The OBPR supports the Queensland Government’s strategy of reducing the burden of regulation on business and industry by 20% by 2018.

In support of the Queensland Government’s objective to improve productivity across the state, they also provide professional advice on productivity matters.

Responsibilities

In terms of their enabling legislation, the Queensland Competition Authority Act 1997 (the QCA Act), their main responsibilities are:[2]

Monopoly prices oversight

The QCA use pricing and other regulatory arrangements, based on sound economic and commercial principles, to encourage monopoly businesses to operate responsibly in the absence of normal competitive market forces.

Prices oversight prevents government and non-government monopolies or near-monopolies from abusing their market power by charging excessive prices for their products or services – because they either have no competitors or existing ones are ineffective.

The QCA may investigate the pricing practices of such monopolies or monitor their pricing practices, depending on the referral from the Ministers responsible for administering the QCA Act (at present [2014] the Treasurer and Minister for Trade). They only perform these functions on request from the Minister.[2]

The monopoly prices oversight powers of the QCA enable consumers to enjoy market prices, while businesses still earn a reasonable investment return – thus ensuring a beneficial outcome for all.

Third party access

Essential infrastructure that underpins economic activity should be accessible to all potential users.

The QCA regulate third party access to essential infrastructure so as to support competition by enabling competitors (i.e. ‘third parties’) to access infrastructure which cannot be economically duplicated, such as electricity and gas distribution systems, water storage and distribution systems, rail tracks and port channels. As an example, in the Queensland rail sector, they ensure track owned by Aurizon Holdings may also be used by other transport operators. This provides customers, such as coal miners, with options regarding the haulage of their product.

By opening up access, competition is enhanced in related markets such as electricity and gas retailing and rail transport.

Competitive neutrality

The principle of competitive neutrality requires that government business activities competing in the market with non-government or private-business activities do not gain an unfair competitive advantage by virtue of being government-owned.

Their potential advantage could result from being exempt from any of the following:

  • Commonwealth or state taxes and tax equivalent payments
  • debt guarantee fees
  • the procedural or regulatory requirements of the federal, state or local governments.

The principle of competitive neutrality does not extend to competitive advantage arising from factors such as business size, skills, location or customer loyalty.

General issues

Apart from the specific responsibilities outlined above, the QCA has a range of general responsibilities. In particular, under section 10(e) of the QCA Act, Ministers can direct them to investigate and report on matters relating to competition, industry, productivity or best practice regulation.

Reflecting the Queensland Government’s priorities, they have increased their focus on matters relating to regulatory reform and productivity since 2012.

Productivity

The QCA conduct inquiries into productivity related matters referred to them by the Queensland Government. They provide advice on ways to improve the productivity of the Queensland economy with an aim to increase economic growth and achieve higher living standards for the Queensland community.

Office of Best Practice Regulation

Queensland has over 65,000 pages of regulation. Complying with these regulations may cost the state economy as much as $2.5 billion a year.

The Office of Best Practice Regulation (OBPR) provides a transparent process to measure and, where possible, reduce the regulatory burden. It assists government departments as they work towards their goal of reducing regulation by 20% by 2018. All departments have targets to reduce the regulatory obligations in their legislation and regulations.

Responsibilities outside the QCA Act

The responsibilities, in addition to those under the QCA Act, include:

  • setting retail electricity prices under the Electricity Act 1994 and the enforcement of customer protections under the Electricity Industry Code and the Gas Industry Code
  • reviewing charges payable to bulk water suppliers for the supply of bulk water to south east Queensland distributor–retailers (under the south east Queensland Water Market Rules pursuant to the Water Act 2000)
  • applying competitive neutrality principles to local government business activities under the Local Government Act 2009.

Application

In undertaking their roles, the QCA work in the following areas:

  • Productivity
  • Electricity
  • Water
  • Rail
  • Ports
  • Gas
  • competitive neutrality
  • best practice regulation.

See also

References

  1. ↑ "What we do". Queensland Competition Authority. 2 October 2014. Retrieved 2 October 2014.
  2. 1 2 "Annual Report 2013-14". Queensland Competition Authority. 2 October 2014. Retrieved 2 October 2014.
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