A COMMISSIONER of the country’s leading consumer watchdog has told a policy forum in New Zealand of the difficulties of regulating infrastructure industries.
Despite some success in the past decade of infrastructure regulation, several areas of contention remain, including consistency of regulation, its impact on investment decisions, the role and design of light-handed regulation and timelines and decisions reviews, according to Ed Willet, a commissioner at the Australian Competition and Consumer Commission (ACCC) and a member of the Australian Energy Regulator (AER).
“The question of what are the characteristics of a good regulatory framework is one that frequently occupies the minds of regulated firms, policy makers and regulators,” he told the Vector Policy Forum in New Zealand.
“The ACCC and the AER will continue to hone its regulatory practices to ensure that they are effective and ‘best practice’.
“It will also use the tools at its disposal to help to ensure that evolving market structures are not inconsistent with the objectives of efficient, national infrastructure sectors.”
Last month, Telstra heavyweight Phil Burgess said the ACCC had become outdated and had stunted investment.
Commenting on a High Court challenge concerning the amount the ACCC would allow Telstra to charge competitors for the use of its broadband network, Burgess said shareholder rights were being neglected.
“What regulators ought to be doing is protecting the public interest and creating an environment that is conducive to wealth creation and they’re not protecting the public interest when they reduce choices to consumers.”
Yet the key message Willet wished to impart to his New Zealand audience was that the Australian regulatory environment is constantly evolving.
“There is considerable focus on developing truly national utility markets and ensuring that regulation facilitates, rather than impedes this objective,” he said.
“Substantial effort has also been exerted to minimise the scope for regulation to distort investment decisions. This has lead to refinements in the application of incentive regulation.”
The “considerable and ongoing debate” of the application of “lighthanded regulation, particularly price monitoring regimes” was a further issue of concern to the regulatory body.
“Both the ACCC and the AER considers that price monitoring cannot be an effective way to regulate utility bottlenecks but recognises that it may be useful in some other circumstances,” he said.
“Regulation follows a ‘fit for purpose’ model but there is recognition of the need to ensure that regulation is applied consistently and in a timely manner. To facilitate this, changes have been made to the design and application of economic regulation as well as the institutions that apply it.”