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REVIEW COMMITTEE'S COMMENTS ON SCOPING STUDY

Economic Insights was commissioned to undertake a targeted NCP scoping study of anti-competitive restrictions contained in uniform trade measurement legislation (excepting Western Australia) and provide a report on their findings to a Review Committee established to oversee the review process.

The role of the consultants' was to advise the Review Committee of the arguments for and against modifications to the legislation. Responsibility for the final recommendations on the future of the trade measurement legislation was to rest with the Review Committee.

In that capacity, a draft report was submitted to the Review Committee for consideration in March 2000. The Review Committee provided substantial comments to the consultants' and those comments were incorporated in varying degrees into a final draft report delivered to the Review Committee in May 2000.

However, the comments provided by the Review Committee concerning the consultants' cost/benefit analysis of the restrictions on the sale of non-prepacked meat and unit pricing of pre-packed goods were not reflected in the consultants' final report.

The following table summarises comments made by each jurisdiction's Review Committee members in response to the final report submitted:

Areas of specific concern to Review Committee jurisdiction representatives

Jurisdiction Representative	Primary Concern
Queensland - including Queensland Treasury in an oversight capacity	Cost of consultants' proposed strategy for consultation on further PBT work. Lack of value added in use of weighbridge scenario.
New South Wales	Cost of consultants' proposed strategy for consultation on further PBT work.
Victoria	Concerns regarding methodology used in assessing sale of meat restrictions. Cost of consultants' proposed strategy for consultation on further PBT work. Wants the National Measurement Act included in this review process.
Australian Capital Territory	Cost of consultants' proposed strategy for consultation on further PBT work. Flawed arguments in relation to section on sale of meat - lack of consumer representation and consultation in the arguments posed.
Tasmania	Methodology and argument supporting recommendations especially in relation to sale of meat - argument unconvincing. Factual errors. Cost of consultants' proposed strategy for consultation on further PBT work. Use of scenarios for weighbridge assessments does not add value.
South Australia	Lack of depth to argument supporting recommendations in relation to sale of meat and labelling requirements. Factual errors, particularly in relation to labelling of packaged goods. Cost of consultant's proposed strategy for consultation on further PBT work.
Northern Territory	Cost of consultants' proposed strategy for consultation on further PBT work. Flawed arguments in relation to section on sale of meat - lack of consumer representation and consultation in the arguments posed. Lack of value added by use of weighbridge scenario.
National Standards Commission - Observer status only	Level of analysis flawed especially in relation to sale of meat - detracts from credibility of the report. Report argument does not justify any requirement to carry out further PBT work.
Commonwealth - Observer status only	No comment made.

The bar chart below illustrates the primary concerns of the Review Committee membership of jurisdictions. This comprises QLD, NSW, ACT, VIC, TAS, SA, NT. Comments and direction from the Queensland Secretariat to the review, Queensland Treasury and Commonwealth Observers are not recorded in these statistics.

ISSUE NO OF JURISDICTIONS OPPOSED

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At its last meeting the Review Committee decided that despite these deficiencies in the consultants' report, they would accept the report and note the findings of the consultant and supplement the report with a report of its own outlining jurisdictional concerns and making alternative recommendations to SCOCA.

At that last meeting, the Queensland Treasury representative gave direction to the Review Committee on the matter of agreement in each jurisdiction. In summary, that direction was that while NCP principles require that each jurisdiction be comfortable with retaining restrictions, it may not be necessary for each jurisdiction to be uniformly accepting of the recommendations or issues raised in the consultants' report.

It was noted by the Review Committee that other suitable alternatives to proceeding with a PBT were available and that in the decision to proceed, Review Committee members should differentiate between the NCP requirement to review and the TMAC imperative for uniformity. Given that Western Australia was not party to the review, this was a pertinent point.

The Queensland Treasury representative emphasised that in this Review Committee capacity it is important to establish a base from which each participating state and territory can assess whether or not it supports retaining restrictions contained in the legislation.

The Review Committee was satisfied with the key recommendation in the consultants' report that no further investigation was required of most of the restrictions to competition in the uniform trade measurement legislation because the restrictions are justifiable.

However, all jurisdictions disagreed with the extent of further work recommended by the consultants before a case could be made for retaining restrictions on the sale of non-prepacked meat and unit pricing of pre-packed goods.

Review Committee agreement was reached in relation to perceived shortcomings of the consultants' report being:

• Lack of depth to arguments supporting outcomes related to the sale of non-prepacked meat and unit pricing on pre-packed goods;
• The outcome in relation to the sale of non-prepacked meat and the necessity for a further full public benefit test;
• Cost of consultants' proposed strategy for consultation on further PBT work;
• Methodology, especially lack of consumer consultation in the review process; and
• Factual errors in the document.

Review Committee members agreed that other restrictions identified in the report were relatively minor in the context of the broad application of uniform trade measurement legislation, and had been dealt with adequately in the consultants' report.

Review Committee members were comfortable with the consultants' work on developing objectives for government intervention in the use of measurement in trade and commerce.

Review Committee to conduct PBT work

The Review Committee rejected the consultants' proposed strategy for carrying out consultation in relation to further public benefit testing on issues relating to the sale of non-prepacked meat and unit pricing of pre-packed goods.

The consultants' proposed strategy was rejected mainly because Review Committee members could not identify in the consultants' report any reasonable justification for spending over $200,000 in the manner recommended by the consultants to test consumer sentiment, when other avenues for establishing whether the restriction delivers significant benefits for all consumers were available.

The Review Committee notes that TMAC has recently conducted public consultation on a number of proposed amendments to the uniform trade measurement legislation, which included the issues of the sale of non-prepacked meat and the unit pricing for pre-packed goods. Following public consultation, TMAC made a number of recommendations to SCOCA to amend the legislation. On 15 June 2001, SCOCA directed Queensland to draft a number of the recommended amendments to the Queensland trade measurement legislation and that these amendments be used as a model by the other participating States and Territories to amend their own legislation. One amendment relates to the unit pricing of pre-packed goods. The proposed amendment would remove the obligation for nominated pre-packed goods to be sold in prescribed sizes and instead requires that such goods (excluding fruit and vegetables) be unit priced when packed in random mass packs. As this restriction will be relaxed, the Review Committee does not consider it necessary to conduct a PBT.

Subject to SCOCA approval, the Review Committee considers that it would be cost and time effective for it to conduct the PBT on the sale of non-prepacked meat and to prepare a PBT report. Rather than developing an issues paper, the Review Committee could tap into TMAC consultation and conduct further direct consultation with stakeholders, as required. Once the PBT report has been approved by the Review Committee, SCOCA's approval will be sought to forward the Review Committee Report and PBT Report to CRR for approval. After consideration of CRR comments, the Review Committee will then submit, through SCOCA, the reports to MCCA for public release/approval.

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