Kevin Rudd has said that if elected he will institute a vigorous deregulation program. This is to include the appointment of a deregulation minister and requirements that no new regulation may be introduced unless an existing one is scrapped.
It is to be hoped whoever wins the federal election will follow through with such a program.
Business regulation in Australia has assumed massive proportions. In many areas regulators' controls have become a Keystone Cops farce.
Nowhere is this more evident than in the regulation of gas supply. Sydney was once served by only one gas pipeline (from Moomba), with most of the gas under long-term contracts. In 2001, with a new pipeline bringing competition by delivering Bass Strait gas to Sydney, the already slender case for regulation disappeared.
However, the over-resourced regulators at the National Competition Council and the Australian Competition and Consumer Commission fought to retain their influence. The Government, with ALP support, rejected their claims for continued control, except over an unused pipeline service.
The regulation of this inconsequential service gave rise to a four-year legal battle between the owner of the Moomba pipeline and the regulators.
First, the pipeline owner sought the ACCC's agreement to a price for transporting gas on the regulated part of the pipeline. The owner's proposal followed established procedure which requires a price based on the value of the pipeline.
The ACCC rejected this and substituted its own price using an approach that it acknowledged to be "idiosyncratic''.
The pipeline owner appealed to the ACCC's review body which rejected the ACCC's approach. The ACCC then went to a higher body, the Full Federal Court, which overturned the appeal.
Finally, this led to the pipeline owner mounting yet another appeal, this time to the High Court which overturned the ACCC's approach and upheld the original appeal.
Doubtless this will not be the last word. The regulatory agencies will seek to have the law amended and, if unsuccessful, will couch future attempts to re-engineer prices in ways that appear to follow procedure.
This tendency on the part of regulators to affect investment returns is the very reason why governments limit the degree of discretion they are given. Regulators imposing low prices on businesses may not affect an existing investment but this is a sure fire way of deterring investment and suppressing growth.
The waste of taxpayers' money involved in the Moomba pipeline saga is nothing short of scandalous.
Whichever party is elected later this year, it must surely place the ACCC high on the list of targets where regulatory powers must be curbed and funding cut.
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