The purpose of this Memorandum is to remind Ministers and their agencies that they must identify whether any existing exceptions under section 51 of the Trade Practices Act 1974 (TPA) need to be remade before 20 July 1998.

The Competition Policy Reform (New South Wales) Act 1995 applied Part IV of the TPA (restrictive trade practices), to all NSW businesses and agencies from mid-July 1996.

All NSW Government departments, authorities, agencies and local governments were to take action to make sure that their practices complied with the new requirements by the commencement date.

Memorandum 95-31 set out the processes for implementing National Competition Policy in New South Wales. That Memorandum explained that some agencies would be exempted from application of Part IV of the TPA for 3 years from July 1995 by virtue of exceptions in New South Wales legislation. The Memorandum also stated that all such exceptions should be reviewed.

This legal basis for exceptions is found in section 51(1) of the TPA which excepts conduct which would otherwise contravene Part IV of the TPA where the conduct is authorised by Act or regulation.

The Competition Policy Reform Act 1995 (Cwth) (CPRA) amended section 51 so that these statutory exceptions must specify the nature of the conduct and must authorise it by express reference to the TPA.

Section 33 of the CPRA preserves the operation of prior exceptions for 3 years from the date of Royal Assent, that is until 20 July 1998. After that date, only those exceptions which satisfy the current section 51 will continue to operate. Other exceptions will cease to be valid, so that conduct in contravention of partIV will no longer be authorised.

States and Territories may re-enact invalid exceptions in the required form, subject to the notification requirements contained in the Conduct Code Agreement. The Conduct Code Agreement was signed by all jurisdictions as part of the National Competition Policy.

The Conduct Code Agreement also requires New South Wales to notify the Australian Competition and Consumer Commission by 20 July 1998 of any legislation that existed at the date the Agreement started (April 1995) and that will continue to except conduct under section 51 of the TPA.

It should be borne in mind that failure to remake an exception will mean that action against non-complying agencies can be brought by the Australian Competition and Consumer Commission or by individuals.

It is now important for all agencies within your administration to complete their reviews of exceptions under section 51 of the TPA.

In assessing whether to seek a continuation of an exception, agencies should be aware that any request will have to be considered by Cabinet. It should also be noted that in certain circumstances, the Commonwealth can regulate to override any exception.

Therefore, all applications for continuation of an exception should be forwarded to The Cabinet Office for evaluation, with full details of public benefits. Would you please advise the Director-General of The Cabinet Office by 13 March 1998:

1. whether you intend to nominate any legislation you administer for continuation of an exception under section 51 of the TPA beyond 20 July 1998; and

2. if you intend to do so, the justification on grounds of public benefit for why an exception should be remade.

Bob Carr
Premier

Issued by: Inter-Governmental and Regulatory Reform Branch, The Cabinet Office.
Telephone: 9228 5414
Date: 04-Mar-98