Australia an OECD ‘role model’

The Organisation for Economic Cooperation and Development (OECD) has urged the Australian Government to more vigorously promote competition in the infrastructure sector.

In a review of Australia's regulatory reforms that was published this week, the OECD said that reforms were the key to Australian economic resilience during the recession.

"Australia has been one of the most successful OECD countries in weathering the Global Financial Crisis," the OECD reported.

"However Australia still has a challenge to lift productivity to return to a higher long-run growth path and continued future prosperity."

The review made 27 recommendations to the Government, urging it to strengthen transparency in standard-setting and regulation and harmonise its Free Trade Agreements.

Eight recommendations focussed on improving competition policy, including one that the Government "consider more vicorous action to promote competition in telecoms and electric power".

In the telecoms sector, "failure to separate completely the network-monopoly elements from its competitive operations may be dampening competition and complicating regulation," the OECD reported.

The Government said that it agreed with the OECD's assessment of the telecommunications sector.

In its official response, the Government highlighted telecomunications regulatory reforms that were announced in September 2009 and prompted Telstra either to structurally separate or have a strong functional separation framework imposed on it.

It also expected the issue to be addressed by the up to $43 billion National Broadband Network (NBN).

"The Government is committed to the NBN being a wholesale-only open access network," it stated, in a document detailing its response.

"This means the infrastructure will be separate from retail service provision, as suggested in the review."

Australia's Finance Minister Lindsay Tanner said that ongoing regulatory reform was crucial in improving Australia's productivity to meet longer term fiscal pressures.

The review was highly encouraging, he said.

"The OECD has assessed regulatory management processes of 26 other countries, and Australia is rated amongst the best. However, our work is by no means done," he said.