COUNCIL OF AUSTRALIAN GOVERNMENTS
MELBOURNE, 8-9 JUNE 1993
COMMUNIQUE
INTRODUCTION The Council of Australian Governments held its second meeting in
Melbourne. The Council comprises the Prime Minister, Premiers and
Chief Ministers and the President of the Australian Local Government
Association. MABO The Council had a lengthy discussion of the issues which need to be
resolved in formulating an appropriate response to the High Court
decision in the Mabo Case which recognises a form of native title to land.
No course of action was agreed by this meeting and member
governments will be considering their positions further.
MICRO-ECONOMIC REFORM
The Council discussed a range of micro-economic reform issues. It noted
that progress is being made in the area of micro-economic reform
including reform in the electricity, water and transport areas. The
Council agreed that the momentum for reform needs to be maintained in
the interests of improving the competitiveness of Australia in the
international economy. It therefore agreed that a working group of
Commonwealth, State and Territory senior officials ( chaired by the
Department of the Prime Minister and Cabinet) should report to the next
meeting of the Council of Australian Governments with an agenda for
further micro-economic reform to be undertaken at a national level.
ELECTRICITY INDUSTRY REFORM
Since the National Grid Management Council ( NGMC) was established in
July 1991, relevant Heads of Government have extensively considered
the arrangements necessary to give effect to their decision to implement
a competitive electricity supply industry in eastern and southern
Australia. On this occasion they discussed two NGMC reports one on
the structure of the transmission network across eastern and southern
Australia and one on the NGMC's recent work including proposals for a
detailed timetable of the steps which need to be . taken to commence a
competitive market.
The Prime Minister, the Premiers of New South Wales, Victoria,
Queensland and South Australia and the Chief Minister of the Australian
Capital Territory agreed to have the necessary structural changes put in
place to allow a competitive electricity market to commence as
recommended by the NGMC from 1 July 1995.
These structural changes will includd-the establishment of an interstate
electricity transmission network with those States which are already
inter-connected, together with Queensland, working towards
implementation by 1 July 1 995 of the Multiple Network Corporation
( MNC) structural option outlined in the NGMC's report. Under this
proposal, the transmission elements of relevant existing electricity utilities
are to be separated out from generation and placed in separate
corporations. South Australia is considering the use of a subsidiary
structure pending the resolution of cost issues associated with separating
transmission from its vertically integrated authority. Resolution of those
issues would enable the adoption of the MINC model.
Tasmania reserves its position pending the outcome of its current
electricity industry review.
In making this commitment the Council noted that the establishment of
an interstate electricity market and the implementation of the MNC model
requires the settling of a number of important and sensitive issues
including market trading arrangements, grid pricing and regulatory
framework, budgetary impact on the States, the resolution of tax
compensation issues and reform arrangements for the Snowy Mountains
Scheme. It was agreed that there be a progress report on these, and a range of
operational matters under examination by the NGMC, to the next Council
of Australian Governments meeting. Heads of Government endorsed the
NGMC's commitment to consult closely with key stakeholders in carrying
through its work.
Heads of Government also agreed to the further examination, during the
_____ establishment of the MNC structure, of whether the network structure for
governments to work towards should be a national network corporation
or another option.
The conclusions of a response to the NGMC's reports prepared by senior
officials for Heads of Government which were endorsed are attached
( Attachment together with the NGMC's timetable of events leading
up to a 1 July 1995 commencement of a competitive electricity market.
WATER RESOURCE POLICY
As requested at its December 1992 meeting, the Council received a
report from officials on the current state of play in both urban and rural
water use. The report noted that, while progress has been made in
reforming pricing, allocation and other aspects of the industry, there are
still significant economic and environmental benefits to be derived from
adoption of a range of measures to overcome impediments to reform.
The Council has therefore asked a working group of officials, with an
independent chair, to develop and report on a strategic framework for
efficient and sustainable reform of the water industry, which, at the same
time, takes account of the technical and policy diversity that exists
across the States and Territories. The report is also to address the future
roles of the Council of Australian Governments and Ministerial Councils in
the reform process, other mechanisms and a proposed timetable for
implementation. The report is to be completed in time for consideration
by Heads of Government at the next meeting of the Council.
FREE AND FAIR TRADE IN NATURAL GAS
The Council received a report from the Australian and New Zealand
Minerals and Energy Council on removal of governmental impediments to
free and fair trade in natural gas. The report noted that, while Australia
has abundant reserves of natural gas, on present indications additional
interstate sales of gas will be required in the near term. Heads of
Government agreed to co-operate in the development of policies and
arrangements covering the gas industry which are pro-competitive,
facilitate the development of gas markets on commercial criteria and
remove impediments to free and fair trade in gas.
To this end, the Council has called for a further report from officials for
its next meeting on progress towards a pro-competitive framework for
the natural gas industry, within and between jurisdictions. In this
connection, officials have been asked specifically to review existing
regulatory arrangements, within and between jurisdictions, including
those applying to third-party access to gas pipelines.
INTERNATIONAL CONVENTION ON BIOLOGICAL DIVERSITY
The Council noted that the Commonwealth had consulted with the States
and Territories on the implications of Australia ratifying the International
Convention'on* Biological Diversity, in accordance with the
Intergovernmental Agreement on the Environment. It agreed that the
substantive obligations arising from the Convention could be met with
only minor changes to the current policy and program frameworks of
Australian governments. The Council'' supported the Commonwealth
proceeding immediately to ratify the Convention.
REVIEW OF MINISTERIAL COUNCILS
Heads of Government have acted decisively to apply discipline and
streamlining to governmental activities by halving the number of
Ministerial Councils. Heads of Government-have also agreed to a range
of efficiency and effectiveness measures in relation to the operations of
those Councils that remain.
The Council of Australian Governments has taken the decision to halve
the existing 45 Ministerial Councils to 21 following a review of the
scope, distribution and number of Councils. Details are provided at
Attachment B.
The reduction is to be carried out and support structures appropriately
reviewed by January 1994.
The decision will reduce costs associated with providing administrative
support for such Councils and costs associated with Ministerial and
officer travel and accommodation at meetings.
This rationalisation will also improve the quality of policy development
emanating from these Councils. Bringing together interrelated functions
and activities in this way will result in more integrated policy
development and will enable Ministerial Councils to take a strategic view
of the issues beyond the interests of a particular group.
The reduction in the number of Councils is to be achieved by the
combination of a number of existing Councils after consideration of
portfolio arrangements across jurisdictions, common membership,
existing back-to-back meeting arrangements and overlap of
responsibilities. Although in many instances existing Councils will be combined, this will
not mean that constituent Councils will necessarily lose their identity
______ entirely. In several cases, legislation requires that some combining-
Councils retain a separate identity.
The Council further endorsed recommendations to improve the efficient
operation of Ministerial Councils specifically relating to the powers,
scope, organisation, formation, chairing, meeting arrangements, agenda
prioritising and confidentiality of Ministerial Councils. In this regard the
Council agreed that meetings of Min~ sterial Councils would only take
place in the capital cities of Australia and Alice Springs.
Heads of Government reaffirmed that Ministerial Councils play a vital role
in the facilitation of consultation and cooperation between Governments,
and noted that when Ministers have the authority of their respective
Governments, then Councils determine matters to finality in their area of
concern quickly and efficiently.
CONCESSIONS/ FRINGE BENEFITS
The Council noted the work to date of the Commonwealth-State working
group set up at the December 1992 Council of Australian Governments
meeting to review the allocation of functional responsibilities in the area
of fringe benefits and concessions and identify and cost options for
reform. From 1 April 1993, the Commonwealth abolished the separate fringe
benefits income and assets tests for the Pensioner Health Benefits ( PHB)
card, extending the card to an additional group of part-pensioners and
older long term beneficiaries. States and Territories agreed to extend
their concessions to this group for the period 1 April to 30 June 1993,
on the basis of a Commonwealth commitment to meet their full additional
costs over this period. An initial payment of $ 1 7.5m was made to States
and Territories on 1 April 1993. The Commonwealth has agreed to
provide an additional payment of 8m for local government's direct
costs. The Council further agreed that a decision on the amount of
additional payment to the States and Territories for the June quarter will
be deferred until the 5 July financial Premiers' Conference.
The Council agreed that further work should continue on options for
longer term arrangements in this area and referred this matter for
decision at the 5 July financial Premiers' Conference. To cover the
interim period until the decision is made on long-term arrangements, the
Commonwealth agreed to continue interim compensation to States,
Territories and local governments for a period of one month, with this
funding to be paid retrospectively and to be taken into account in the
longer-term 1993-94 funding arrangements.
COMMONWEALTH-STATE ROLES AND RESPONSIBILITIES
The Council noted that the range and nature of government functions has
evolved rapidly in recent times and is continuing to do so. Policy interrelationships
have become more important, leading to a sharing of
responsibilities, among the various levels of government. In this process,
however, the respective roles of governments have become increasingly
blurred impacting on the efficient and'effective delivery of government
services. Consistent with the program of micro-economic reform which should
encompass all sectors of the Australian economy and our continuing
need to become more competitive internationally, the Council accepts
that there is an obligation on governments to ensure that their joint
working arrangements are as efficient and effective as possible. At the
same time, increasing efficiency and removing unnecessary overlap and
duplication of service provision will improve clarity and accountability and
enable governments to deliver better-outcomes to their citizens.
Recognising the progress that has already been made in clarifying roles
and responsibilities, the Council agreed that it would be useful to take
broad stock of the intergovernmental arrangements in functional areas
involving shared responsibilities and to identify priority areas where
progress can be made.
The Council agreed to establish a Working Group to identify those
functional areas which exhibit inefficiencies in existing intergovernmental
arrangements and where there is scope for clarification of the roles and
responsibilities. The Working Group is to be comprised of a
representative from the Commonwealth and each State and Territory
Government. Where appropriate, representatives from the Australian
Local Government Association will also attend. It will report to the next
-meeting of the Council of Australian Governments which will consider
what further work should be undertaken.
The criteria to be used by the Working Group in this process are at
Attachment C.
CENTENARY OF FEDERATION
The Council agreed to establish a broadly based National Advisory
Committee to develop an options paper identifying goals and strategies
for the centenary of federation in accordance with the attached terms of
reference ( Attachment D).
It further agreed that, after discussions with other Premiers and Chief
Ministers and with the Prime Minister aimed at achieving. a broadly
representative Committee, each Premier and Chief Minister will nominate
a representative to the Committee. The Commonwealth will chair the
Committee, and will appoint such further persons to the Committee as
might be needed to ensure that the Committee as a whole is broadly
representative of the community.
.7-
REPUBLIC ADVISORY COMMITTEE
The Council noted that the Republic Advisory and its consultations are
limited to clarifying the minimum constitutional change necessary for a
republic. In particular, the Council noted that the work of the Committee
was intended as a first step in an extended process of informed
community debate which will allow full expression of the range of views
held by Australians on this matter. It was agreed that the States and
Territories would be consulted by the Commonwealth in further
consideration of this issue.
FUNCTIONAL FOODS
The Council agreed that Governments should facilitate efforts by the
Australian food industry to capitalise on growth in export markets. They
noted that there is potential for growth in markets for functional foods, a
class of foods that have been derived from existing foods and
reformulated to perform a specific function relating to human health. To
this end the Council agreed that the current restrictions specified in the
Australian Food Standards Code, which inhibit the development of
functional foods, need to be reviewed as a matter of priority. The
Council noted that the National Food Authority is conducting a standard
by standard review and agreed that review of those standards relating to
functional foods should be expedited.
UNIFORMITY OF PUBLIC HOLIDAYS
Heads of Government have acted to overcome the wasteful situation
where parts of Australia are closed down while other parts remain open
because of the lack of uniformity in the observance of public holidays.
It has been agreed that there should be uniform Australian Public
Holidays and the dates on which Public Holidays are observed should be
certain. Christmas Day, Boxing Day and New Year's Day will be observed on
December, 26 December and 1 January respectively; Australia Day will
be observed on 26 January; ANZAC Day. on 25 April; and Good riday,
Easter Saturday and Easter Monday will continue to be observed on the
days set according to formulae traditionally followed for these public
holidays in Australia.
Heads of Government have agreed that a Working Group of officials will
be set up to ensure uniformity for substituted Public Holidays when
Public Holidays fall on a weekend. The Working Group will also examine
the observance of Labour Day and make a recommendation on an
appropriate date for its uniform observance. The Working Group will
report back to the next meeting of the-Council.
The Council has no intention of reducing the number of public holidays.
Rather, the objective is to achieve uniformity in the observance of public
holidays. This is an important micro-economic reform with the potential
to avoid the costs and disruption for business that occurs under the
present arrangements.
ATTACHMENT A
ELECTRICITY INDUSTRY REFORM
In relation to reform of the electricity industry relevant Heads of
Government: 1. Announced a firm commitment to have the necessary
structural changes in place to allow implementation of a
competitive electricity market -from 1 July 1995.
2. Confirmed their commitment to the establishment of an
interstate transmission network, separate from generation
and distribution interests, noting that the achievement of
this will require the settling of important and sensitive
issues, including:
market trading, grid pricing and regulatory
arrangements; the budgetary impact on the States;
the resolution of tax compensation issues; and
resolution of reform arrangements for the Snowy
Mountains Schemie.
3. Agreed that establishment of the interstate transmission
network be through adoption of the Multiple Network
Corporation model outlined in the NGMC report.
4. Agreed that jurisdictions in southern and eastern Australia
will work to have the Multiple Network Corporation structure
in place by 1 July 1995, consistent with the NGMC
timetable for the introduction of a competitive electricity
market ( in relation to 1, 3 and 4 Tasmania indicated that it is
reviewing the appropriate structure of its electricity supply
______ industry. and will report to COAG once a decision has * been
made) ( in relation to 3 and 4, South Australia indicated it is
considering the use of a subsidiary structure pending the
resolution of cost issues associated with separating
transmission from its vertically integrated authority.
Resolution of those issues would enable the adoption of the
Multiple Network Corporation model.).
Committed to further examine, during the course of the
establishment of the Multiple Network Corporation structure,
of whether the network structure for Governments to work
toward should be a National Network Corporation or another
option.
6. Reconfirmed the objective of competitive generation as
envisaged in the Nationa[-Grid -Protocol, noting that this will
involve merit order despa~ tch of individual generators to
ensure that the most cost-effective generation is despatched
and to enable private sector generation to compete on equal
terms.
7. Called for a report from the NGMC at the next meeting of
the Council of Australian Governments on the following
major issues associated with implementation of electricity
reform: the implementation of network pricing and market
trading arrangements to underpin competition in
electricity trading;
appropriate regulatory arrangements, noting that the
Hilmer inquiry into competition policy will report
during this period;
progress in the establishment of a high-voltage
transmission link between NSW and Queensland
( Northlink); and
demand management opportunities.
8. Asked the NGMC to address further major issues, including:
methodologies to ensure a consistent and commercial
approach to the valuation of transmission assets; and
the, implementation of effective system control.
arrangements for the integrated network, independent
of the generation sector, that meet the needs of
generators, distributors and major customers.
9. Noted that the NGMC will need to further consult widely and
visibly with major stakeholders.
3-
Agreed that the parameters for the 1994 review of the
NGMC be agreed at the next meeting of the Council of
Australian Governments.::
11. Requested the senior officials working group to report back
to the next meeting of the Council of Australian
Governments on:
whether a Memorandum of Understanding is required
between Heads of Government to advance the
establishment of an interstate transmission network
and, if so, what itf should contain;
progress in the resolution of the tax compensation
matter;
-progress in resolution of reform arrangements for the
Snowy Mountains Scheme; and
reform actions taken within the States to facilitate the
introduction of a competitive electricity market.
I 11'
Electricity Industry Reform
Task Name Duratioi
( Month:
Market Transition 2.02
Transition Arranclement s resolved 0.00
Arrc~ nne Trial Participants 1.00
Trial Education KlIsflralning 1! 0
Initial Market Trial 8.00
Transition Period 12.00
GoMpetive Trading Commences 000
Markel TradingNetwrk Picing 1.0
Publication of Transition Paper _ 0.00
Public Consultation/ Review 2 00
Approve Detailed Trial Proposals 0.00
Accounting Standards established 600.
Government Endorsement 6.00
Settlements Established 3.00
18.00
Publication at Regulation Report! 000(
Submitted to COAG 0.00
Gover! nment Endorsement 6.00
tLeg! ativ Ch anges by Gay._ 12.00 C
RegukIations in operoflon0.. 0
Structural Relarm 25.99
Publication of Structure Report _ 0.00
Government Consideration 6.00
Discussion by C GG 0.00
! mplmentaion Of Structural Retori 20.80 Start Q2
01-Jul-93
01 -Ji ul93
01-Nov-93
01-Jtil-94
03-Jul-95
01-Jul-93
01 -jul-93
01 -Jul-93
31 -Aug? 93
02-Mar-94
01 -Nov-93
) l -Nov-93
) 1 -Nov-93
I -Nov-93
12-May-95
0 Api--93 0-Apr-(
0 1 Apr93i
08-Jun-93 A(
) 6-Oct-93 1993 1994 1 1995
Q41 01 02 I0 3 04Q1 02
130Sep 9.
01-Nc
A-1M-Jul-93-Ag
131-Aug-93
rf1Au9 AOl Nc
YW01Nc
30 Sep-94
Jun-93 4 01 -Mar 94
01-Mar-94 ~ 001
v-93
v-93 1111 11 11102 M( I-. Jul 94 o.
-Jun-94
JUn 94 Q 3
-03-Jul-9!
03 Jill 9b
1\ 03-JuL
02-M4y-95
iy-94 02-M,
FA02-M( jy 9b
30-Juin 93
l'miuled 07-Ii i 93 slJbjtuc I IC. PuViuw 1,0
19
ATTACHMENT B
RATIONALISATION OF MINISTERIAL COUNCILS
Following a review of the scope, distribution and number of Ministerial
Councils, the Council of Australian Governments has agreed to reduce
the existing 45 Councils to 21 Councils as follows:
1. Agriculture and Resources Management Council of Australia
and New Zealand ( including-the Agricultural Council of
Australia and New Zealand, the Australian Soil Conservation
Council and the Australian Water Resources Council and the
Rural Adjustment Scheme Ministers' Meeting).
Ministerial Council on the Administration of Justice
( including the Australasian Police Ministers' Council,
Corrective Services Ministers' Conference and
Intergovernmental Committee on the National Crime
Authority).
3. Australian Aboriginal Affairs Council.
4. Australian and New Zealand Environment and Conservation
Council. Australian and New Zealand Minerals and Energy Council.
6. Australian Transport Council ( including the Australian
Transport Advisory Council and the Ministerial Council on
Road Transport).
7. Commonwealth/ State Ministers' Conference on the Status of
Women.
8. Conference of Commonwealth and State Labour Ministers.
9. Conference of Ministers for Immigration and Ethnic Affairs.
Cultural Ministers' Council.
11. Employment, Education and Training Ministerial Council
( including the Australian Education Council, the Ministerial
Council on Vocational Education, Employment and Training
and the Youth Ministers' Council).
.12. -Health and Community Services Ministerial Council
( including the Australian Health Ministers' Conference, the
Council of Social Welfare Ministers and the National Food
Standards Council).
13. Industry, Technology and Regional Development Council
( including the Australian Industry and Technology Council,
the Meeting of Commonwealth, State, Territory and New
Zealand Ministers responsible for Small Business).
14. Ministerial Council on Drug Strategy.
Ministerial Council on the Australian National Training
Authority.
1 6. Ministerial Council on Forestry, Fisheries and Aquaculture
( including the Australian Forestry Council and the Australian
and New Zealand Fisheries and Aquaculture Council).
17. Planning, Housing and Local Government Ministerial Council
( including the Planning Ministers' Conference, the Housing
Ministers' Conference, the Local Government Ministers'
Conference, the Construction Industry Ministerial Council
and the Heritage Ministers' Meeting).
18. Ministerial Council of Attorneys-General ( including the
Standing Committee of Censorship Ministers, the Ministerial
Council for Corporations and the Ministerial Council on
Financial Institutions).
19. Ministerial Council on Consumer Affairs ( including the
Ministerial Council on Trade Measurement).
Sport and Recreation Ministers' Council ( including the
Racing and Gaming Ministers' Conferences).
21. Tourism Ministers' Council.
The Ministerial Council for Common Services Provision will no longer
function. The above reduction in the number of Ministerial Councils is to be carried
out, and support structures appropriately. reviewed, by January 1994.
ATTACHMENT C
COMMONWEALTH-STATE ROLES AND RESPONSIBILITIES
A Working Group has been established to identify those functional areas
which exhibit inefficiencies in existing inter-governmental arrangements
and where there is scope for clarification of roles and responsibilities.
In identifying those areas that may be considered to merit priority
attention, relevant issues include:---
problems of duplication and overlap;
inefficiencies in delivery of services to clients;
incentives to cost-shifting between governments; and
lack of transparency and clear accountability and
unnecessary duplication in program monitoring.
The Council will consider, at its next meeting, what further work should
be undertaken. In areas where it is agreed that changes might be
considered, the focus would be on the following objectives:-
delivering better outcomes for citizens;
increasing the focus on client outcomes rather than program
inputs; removing unnecessary duplication of effort and improving
efficiency and effectiveness overall;
clarifying the policy and program objectives of the different
levels of government;
achieving administrative arrangements that are cost effective
and clearly setting out the different governmental roles and
funding responsibilities;
clarifying, lines of accountability and increasing transparency
of individual governmental roles in shared responsibility
areas; and
providing greater certainty in funding arrangements for the
level of government delivering programs.
ATTACHMENT D
NATIONAL ADVISORY COMMITTEEf ON THE CELEBRATION OF THE
CENTENARY OF FEDERATION
TERMS OF REFERENCE
The purpose is to obtain an options paper for consideration by the
Council of Australian Governments which identifies possible goals for the
celebration of the centenary of federation, the strategies by which those
goals might be achieved, and the involvement of various levels of
government, interest groups and the-community at large.
In formulating the paper, the Committee should set out goals and
strategies for centenary-related activities in the years leading up to, and
including the centenary, and draw on the views of the community
through wide ranging consultations.
The Committee should consider activities which will commemorate the
events being celebrated, consistent with the significance of the
achievement of federation. It should however take as an over-riding
objective the building of a better sense of national identity and purpose
for the next century and should give emphasis to activities that will have
enduring and worthwhile results that go beyond simply marking the
occurrence of the centenary.
Particular matters to which the Committee should have regard include:
1 The achievement of nationhood by the Australian colonies,
including the events leading up to the enactment of the
federal constitution.
2. The national achievements of the first hundred years of
federation.
3. Ways in which an enhanced sense of national unity, purpose
and confidence about the past and for the future could be
developed.
In considering the strategies for the achievement of proposed centenary
the Committee should bear in mind. the need to recognise activities
which are already in progress or planned on a separate course, for
example by the Constitutional Centenary Foundation or in connection
with the issue of whether Australia should become a republic, or the
Aboriginal reconciliation process.
The Committee's final report should be available to the Council of
Australian Governments by May 1994.