|National Competition Policy
Competitive Neutrality Complaints Mechanism
Government and Private Businesses Competing on Equal Terms
One of the NCP Agreements, the Competition Principles Agreement (CPA) requires that government businesses are not to enjoy any net competitive advantage in the market place simply as a result of their public ownership. This is the principle of 'competitive neutrality'.
The CPA also requires that each State and Territory set up a complaints mechanism to oversee the application of this principle. The Government Prices Oversight Commission has been given this role in Tasmania.
Essentially the competitive neutrality principles require that all government businesses should be corporatised and pay all taxes and be subject to all regulations that the private sector are subject to. The principles also require that government businesses pay debt guarantee fees to offset the competitive advantage of government guarantees.
If full corporatisation of a government business is not feasible, then a 'full costing' model must be applied which takes into account all direct and indirect costs as well as taxes, guarantee fees and costs of government regulations.
The Government Prices Oversight Commission has prepared guidelines in relation to competitive neutrality complaints. These Guidelines set out an overview of the processes for the review of complaints from businesses or persons about alleged breaches of, and non-compliance with, competitive neutrality principles under the National Competition Policy (NCP). These Guidelines should be read in conjunction with the Competitive Neutrality Principles Application Statement and the Application Statement for Local Government issued by the Department of Treasury and Finance.
The Government has also released a number or other documents including:
- Guidelines for considering the Public Benefit under the National Competition Policy, March 1997;
- Full cost Attribution Guidelines for Local Government, June 1997 (hard copy only available);
- Guidelines for Implementing Full Cost Attribution Principles in Government Agencies, September 1997; and
- Significant Business Activities and Local Government in Tasmania, April 2004.
These can be found by searching the Publications pages of the Department of Treasury and Finance's website.
The Commissioner has written to all Tasmanian Local Government Councils outlining the Commission's approach to determining what business activities are significant when investigating CNP complaints.
Under the GPO Act, the Commission is to report on the competitive neutrality investigations undertaken during the year in its Annual Report.