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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-10-27 Daily Xml
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STATUTES AMENDMENT AND REPEAL (TRADE MEASUREMENT) BILL

Committee Stage

In committee.

Clause 1.

The Hon. G.E. GAGO: There are some outstanding questions from the second reading debate which I intend to address under this clause. The commonwealth has the constitutional power for weights and measures under section 51(xv) of the constitution, which it utilised to establish the national system of units and standards of measurement throughout Australia. It is only the administration of weights and measures law in respect of transactions in trade and commerce that the commonwealth delegated to the states and territories.

In terms of the benefits of a national trade measurement system, under the current system changes to the uniform trade measurement legislation at different times in different jurisdictions have resulted in inconsistencies in trade measurement practices across the country. The Ministerial Council on Consumer Affairs recommended to COAG that commonwealth administration would be the best means of resolving the problems with the current administrative arrangements.

Central administration is expected to produce benefits for businesses, consumers and government. A single policy platform would allow government to provide a framework for consistent and timely adoption of a single set of technologies and processes for industry. Requiring compliance with a single set of requirements nationwide is likely to result in cost reductions and efficiency gains.

The national agreement involves the commonwealth using existing state and territory staff and infrastructure to continue performing trade measurement duties. In relation to some of the questions around staffing, I point out that 13 staff are currently employed in trade measurement in South Australia. Each staff member has received an offer of employment from the National Measurement Institute (NMI) on the basis that they will be employed by the South Australian government up to 30 June 2010. At this stage, 11 staff have indicated they are likely to accept the NMI's offer of employment. However, this is considered only to be a statement of intent, as employees will not sign an employment contract until June 2010.

For those who formally accept the offer of employment, salary scales will be similar and the offer will be on the basis that there will be no disadvantage to them when they commence duties with the commonwealth on 1 July 2010. Other terms and conditions of employment will be in accordance with the NMI's collective bargaining agreement. The Attorney-General's Department will redeploy any staff who do not accept the offer.

In terms of questions around assets and equipment, under the COAG agreement, the commonwealth will fully fund the ongoing administration of trade measurement from 1 July 2010. The COAG decision also agreed that states and territories will transfer existing trade measurement testing and other scientific equipment to the commonwealth at no cost. The total depreciated book value of South Australian trade measurement testing and other scientific equipment is estimated to be approximately $971,000 as at 30 June 2009. The majority of the assets are specific to the trade measurement function and as such there would be a limited market for them.

Once the trade measurement function is transferred to the commonwealth, the state will have no use for the testing and other scientific equipment. If the state were to retain the equipment, it would incur maintenance and disposal costs. Some trade measurement assets of historical significance to the state—and there are some fabulous historical pieces—will not be transferred to the commonwealth, and the government is currently looking at ways in which these can be preserved.

Trade measurement functions currently operate out of the premises at Thebarton which are owned by the state. The general area where the property is located has been identified by the Chief Executives Planning Council as an area having priority for biotechnology development. The property is currently designated to the Minister for Consumer Affairs for use as a trade measurement depot until 30 June 2010. The NMI has indicated that it will lease the current premises at Thebarton for a maximum of three years. The lease will be on current market terms and will be between the Department for Transport, Energy and Infrastructure and the NMI. The NMI may relocate to new purpose-built premises in the future, but this will be at no cost to the state. The land and the premises at Thebarton will remain the property of the state, with possession reverting back to the state at the end of the lease.

In relation to issues of fees and licensing, for those traders that use measuring instruments in the course of their business there will be significant cost savings. Under the new regime, traders will no longer be charged to have their equipment tested by the NMI. The Department of Trade and Economic Development confirms that this will save business over $600,000 a year.

The commonwealth will take over the licensing function and has indicated that it will adopt a full cost recovery model for licensing. Instrument repairers and weighbridge operators who are holders of current South Australian licences will be grandfathered into the system and will not be required to pay a licence fee to the commonwealth until the licence is due for renewal. Those holding licences in more than one jurisdiction will be required to obtain a national licence at the expiry of the first state licence.

The current fee to renew a licence is $216 per annum, plus $59 per certifier employed by the licensee to certify measuring instruments. Under the national system, the fee to renew a licence will be $550 (that is compared to the $216 plus $59) per annum, which includes the operation of one certifier. Additional charges apply for additional certifiers.

The biggest difference in the fee structure under the national system will be the introduction of a $125 fee for the different classes of instrument that may be serviced under the licence. The rise in licence fees is inevitable because, whereas the state government currently subsidises trade measurement operations in South Australia, the commonwealth seeks to adopt a full cost recovery model. This may have an impact on approximately 50 licensed repairers in South Australia and approximately 50 licensed businesses that operate public weighbridges in South Australia. There will, however, be a benefit for those licensees who operate in more than one state or territory.

Under the new system there will be only one licence fee payable to the NMI, which will allow trading anywhere in the country, whereas previously licensees were required to obtain and pay for a licence in each jurisdiction. Our licensing records do not allow us to search for details such as which licensees hold licences in other states, but our records show that nine interstate-based organisations are licensed to operate within South Australia.

In relation to budget savings, commencing in 2010-11, the impact on the state budget will be a loss of $566,000 in revenue that is currently collected by OCBA for trade measurement activities. This is offset by expenditure savings of $879,000, which represents the salaries and wages and goods and services expenditure that is expected to be saved. The result is a net saving to the state government of $313,000 per annum. This budget impact was included in the 2009-10 state budget as part of the business regulation savings initiatives and revenue offsets for the Attorney-General's Department.

In relation to inspections, there are no anticipated changes to the inspection regime under the commonwealth's administration of trade measurement. The inspection regime is expected to improve strategically, since testing will now be performed on a national basis.

In relation to service levels, the new national system is based on the trade measurement regulation currently administered by the states and territories under the uniform trade measurement legislation. The commonwealth has committed itself to ensure continuity of service and the maintenance of existing service standards provided by the states and territories. The NMI anticipates that it will investigate complaints in the same manner in which the state now deals with such complaints. On average, approximately 300 complaints are received each year.

In relation to transitional and consequential matters, whilst the bill repeals the trade measurement legislation, it also provides for certain transitional provisions, which are reasonable, appropriate and necessary for finalising any outstanding administrative or enforcement matters at the time of the transfer.

The bill also enables information associated with the administration of trade measurement to be provided to the commonwealth. This will allow the commonwealth to establish systems as soon as practicable so as to facilitate a seamless transition to a national regime with minimal, if any, adverse impacts on the community. On 1 July 2010, all state and territory trade measurement law will become redundant, once the new commonwealth law commences, and, as such, I seek support for this bill.

The Hon. T.J. STEPHENS: The minister spoke of benefits to business and then I think she went on to say that there are 50 licensed independent operators in this state and their fees are going to go from a couple of hundred dollars to about $500-plus, which will include one licensed operator, I think she said, and then extra fees for additional operators within that business. What offsets are there to those businesses that would make this new operation a benefit to business in this state?

The Hon. G.E. GAGO: The offsets pertain to those operators who operate their businesses in more than one state, or in more than one jurisdiction. As I have pointed out, currently, if your business operates across borders, these operators are required to have a licence in each separate state and have to pay fees accordingly. This national system will mean that only one fee is paid. However, those offsets will apply only to those that operate in more than one state.

The Hon. T.J. STEPHENS: Of those 50 businesses, how many actually operate businesses interstate and will receive that benefit?

The Hon. G.E. GAGO: As I have indicated, our current records cannot show how many are registered in more than one state. However, I believe I indicated that nine interstate organisations operate in South Australia at the moment.

The Hon. T.J. STEPHENS: So, basically, you are indicating that at least 40 of those 50 businesses will be disadvantaged by this transfer with extra fees. Is that right?

The Hon. G.E. GAGO: As I indicated, we do not have information showing how many South Australians are registered in more than one state.

The Hon. T.J. STEPHENS: Minister, you indicated that 11 of the 13 staff looked as if they would take up the offer. I assume that they are on similar salary conditions. Can you assure this committee that those people will not be disadvantaged in terms of such things as long service leave entitlements and leave entitlements?

The Hon. G.E. GAGO: I have already put on the record that there will be no disadvantage. Those people will be placed on similar salary scales, and it will be on the basis that there is no disadvantage to them commencing their duties with the commonwealth.

The Hon. T.J. STEPHENS: The minister stated that the South Australian property out of which we currently operate is not being given to the commonwealth government but that those premises will be leased to the commonwealth government and South Australia will retain ownership; is that correct?

The Hon. G.E. GAGO: Yes; we will lease that property for the first three years.

Clause passed.

Remaining clauses (2 to 6), schedule and title passed.

Bill reported without amendment.

Third Reading

Bill read a third time and passed.

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