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The Forum > Article Comments > Building economic activity: the role of the National Competition Council > Comments

Building economic activity: the role of the National Competition Council : Comments

By Alan Moran, published 24/1/2006

Alan Moran examines the role of the National Competition Council and the issue of access to monopoly facilities.

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In 1991 Wayne Goss helped to set in motion the process that led to the Hilmer Comittee and National Competition Policy. Sadly, his successors lacked his vision, and in Queensland NCP was not seen as a means of increasing the state's ability to cope with the changing demands of a global economy. The aim was minimal change, not getting vested interests offside and doing the minimum to qualify for the competition payments - which were a pittance compared to the potential gains from full support for NCP.

A classic case was the dairy review. This so-called independent review was stacked by industry members and chaired by their spokesman. They refused to let their (highly reputable) economic modellers do market testing, insisting that it would never be viable for fresh milk to be shipped in from NSW (a major source of potential gains). In fact, a massive flow of southern milk began from the day it was permitted. While the modellers found a net benefit from deregulation on their preferred assumptions, even without NSW milk, the committee asked them to model increasingly bizarre assumptions, then took the average outcome to show a huge loss.

An excellent Treasury study on separation of rail track and above-track services made a compelling case for separation. A couple of words in the conclusion were changed, to claim that the study demonstrated the need for continued unification.

The rigorous NCC were constantly vilified by Queensland change-deniers, and your statement that "State based decision making will assume greater importance" is of great concern.

Premier Bracks is now calling for new payments to the states to implement reforms he identifies as essential. The prospective beneficiaries of the reforms all live in states and territories - why should their governments demand payment before improving their welfare?
Posted by Faustino, Tuesday, 24 January 2006 10:16:37 AM
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