Hansard debates

Mr McGUIRE (Broadmeadows) (18:47:15) — It is good to hear the opposition will not be opposing this bill, and it does address a number of key propositions. There has been some critique by the opposition lead speaker, the member for Mornington, but I do want to look at the main strategy behind the bill first of all and then drill down into some of the detail.

The proposed changes aim to improve the operation of the Essential Services Commission Act 2001 and the Essential Services Commission (ESC) and implement the government's response to the review of the act. Just to give this some context, the government completed a review of the Essential Services Commission Act 2001 in December 2016. The review and government response were tabled in Parliament on 7 March 2017. The government's response supported a number of governance, procedural and other changes to improve the operation of the act and the commission. So that is the context and how these have come to the Parliament and into this bill.

The proposals in the bill were developed following consultation with various government departments and agencies, including the Essential Services Commission, as well as targeted stakeholder consultation, particularly with participants in regulated industries. So it had widespread consultation with the key stakeholders. And what did it attempt to do? This review is a legislative requirement, so it had to be done. The purpose was to determine whether the objectives of the act and the ESC were being achieved and were still appropriate and whether the ESC act was effective or needed to be amended to further facilitate the objectives of the act and the commission or whether to insert new objectives.

The review concluded that the Essential Services Commission is working well as an economic regulator — that is the first key point — but there is scope to clarify its role and to improve governance, procedural and administrative arrangements. The review made 10 recommendations to address these issues. The government response expressed broad support for the recommendations in the review, supporting nine of these recommendations and supporting in principle one recommendation. To drill down into the detail, four of the recommendations did not require legislative change and hence are not included in the bill.

Recommendation 1 proposed that a more extensive review of the future role of the Essential Services Commission be undertaken. The government supported the intention of this recommendation and proposed to clarify the ESC's role in a statement of expectation, so I hope that addresses some of the concerns raised by the lead speaker for the opposition in his contribution.

Recommendation 4 proposed the ESC publish on its website:

… a proposed timetable and process … for the review of its charter of consultation and regulatory practice.

The ESC subsequently implemented this recommendation.

Recommendation 6 proposed that the act be amended:

… to ensure that the timing of the tabling and public release of inquiry reports is consistent with parliamentary protocols.

That is basically standard procedure. The review was concerned that a final report could be released publicly before it has been tabled in Parliament. However, the tabling of documents is not a prerequisite to public release and therefore amendments to the act are not required. So that is where that issue landed.

Recommendation 7 proposed removing 'any unintended limitations to the making of codes of practice' under the ESC act. However, having reviewed the relevant provisions, it is not considered that there are any limitations that would prevent effective new codes of practice being made.

The bill proposes to require another review of the act to be conducted no later than 2026, with the report to be tabled by the first sitting day after 1 July 2027. So that is the next major review.

The bill only addresses the recommendations of the 2016 review and makes a few minor statute law amendments. Measures to address regulatory issues in industries regulated by the ESC, such as gas, electricity and water, will be included in separate, dedicated legislation, so I hope again that answers some of the issues raised by the opposition.

The bill contains a range of minor statute law provisions to tidy up the ESC act that were not proposed by the review. The proposal to abolish the ESC appeals panel arose from the review, and the review noted that this would reduce duplication of resources and continue oversight of the ESC by an independent body. The Victorian Civil and Administrative Tribunal Act 1998 gives the president of VCAT the flexibility to determine the appropriate composition of the relevant VCAT panel, depending on the nature and complexity of the matter. For example, relatively straightforward administrative law and procedural matters will be able to be dealt with by a single member while more complex pricing matters will be able to be addressed by a multiple-member panel with specialised expertise. This will lower costs for applicants for review, improving access to justice, and it is a commonsense way of trying to get the people with the best expertise involved on a case-by-case basis.

The VCAT act allows the Attorney-General to recommend to the Governor the appointment of permanent and sessional members who have special knowledge or experience, including any necessary specialised economic experience. So again that is trying to make sure that there is the right nous and experience in how this is approached to get to the best assessment.

The current scope and grounds for appeal will be retained in the ESC act. Most of the amendments to the VCAT act make equivalent provisions for dealing with procedures such as when a decision of an appeal panel is not unanimous and when a member of an appeal panel becomes unavailable.

In addition, the bill retains existing restrictions on what evidence can be introduced in an appeal to ensure that material before VCAT is limited to the material that was before the ESC at the time of its original decision. The bill retains existing restrictions on the orders that can be made in respect of a final decision and applies them to VCAT.

There is also the proposed inclusion of an explicit reporting power. This again was an issue raised by the opposition. This reflects that the ESC performs an increasingly important role in researching and reporting on the market structure and performance of regulated industries. That is not in the current act but is provided for in other acts and empowering instruments.

Including this function in the ESC act will provide for greater clarity and consistency. It also means that various aspects of the ESC's powers, such as the ability to require information be provided, are explicitly able to be used in support of the preparation of reports.

Summing up, this is a necessary review that had to be undertaken by law. It has occurred. The recommendations are now being implemented. There are some arguments at the margin on this, but we now have a situation where this has been established and there is no direct opposition. I commend the bill to the house.