EXPLANATORY STATEMENT
Select Legislative Instrument 2010 No. 173
Minister for Finance and Administration
Public Works Committee Amendment Regulations 2010 (No. 1)
Public Works Committee Act 1969
The Public Works Committee Act 1969 (the PWC Act) established the Public Works Committee to inquire into and report on public works referred to it by the Parliament. A public work is a work that is proposed to be carried out by or for the Commonwealth and for which moneys are appropriated by the Parliament.
Section 40 of the PWC Act provides, in part, that the Governor-General may make regulations, not inconsistent with this Act, prescribing all matters that by that Act are required or permitted to be prescribed or are necessary or convenient to be prescribed for carrying out or giving effect to that Act.
Subsection 6A(1) of the PWC Act advises that the Act applies to every authority of the Commonwealth. However, subsection 6A(3) provides that where the Governor-General is satisfied that an authority of the Commonwealth is engaging in trading or other activities, or is providing services, in competition with other bodies, the Governor-General may make regulations declaring that the Act does not apply to that authority.
The purpose of the Regulations is to exempt NBN Co Limited (ACN
136 533 741) and its wholly owned subsidiaries from the provisions of the PWC Act1.
The National Broadband Network (NBN) (announced by the Government on
7 April 2009), will connect at least 90 percent of all Australian homes, schools and workplaces with broadband services with speeds up to 100 megabits per second. All other premises in Australia will be connected with wireless and satellite technologies that will deliver broadband speeds of 12 megabits per second.
The Government established NBN Co Limited (NBN Co) on 9 April 2009 as a Government Business Enterprise (GBE). NBN Co’s responsibilities are to plan, rollout and operate the NBN, on a wholesale only open access basis. NBN Co operates as a fully corporatised commercial entity, independent from Government.
NBN Co is trading and providing services in competition with privately owned telecommunications firms, including:
- offering wholesale fixed broadband services in Tasmania (starting July 2010) and the five first release sites (starting 2011); and
- competing in the fixed fibre broadband sector throughout Australia as a wholesale only open access network provider;
NBN Co’s competitors are not subject to PWC oversight. Requiring NBN Co to be subject to the PWC would place NBN Co at a competitive disadvantage in relation to its network design and construction activities which are expected to differ between geographical areas and would require NBN Co to submit a multitude of different plans to the PWC for approval. This process would have a high compliance cost and reduce NBN Co’s ability to take advantage of economies of scale.
Exempting NBN Co from the PWC approval process will negate these compliance issues and will enable to NBN Co to compete on a level playing field with all parties subject to Commonwealth, state and local government laws including in relation to planning, stakeholder consultation and access to private property. NBN Co will remain subject to Parliamentary oversight, including Senate committee scrutiny and the tabling of its annual report in Parliament.
The Regulations will amend the Public Works Committee Regulations 1969, to include NBN Co Limited (ACN 136 533 741) and its wholly-owned subsidiaries as an exempt Commonwealth authority under subsection 6A(3) of the PWC Act.
The PWC Act specifies no conditions that need to be satisfied before the power to make the Regulations may be exercised.
The Regulations will be a legislative instrument for the purposes of the
Legislative Instruments Act 2003.
The Regulations will commence on the day after they are registered on the Federal Register of Legislative Instruments.
Overview
The Public Works Committee Amendment Regulations 2010 (No. 1) were introduced to amend the Public Works Committee Regulations 1969 and address a specific gap in the application of the Public Works Committee Act 1969. The Public Works Committee Act was established to oversee public works proposed by or for the Commonwealth, ensuring these projects adhere to parliamentary oversight. However, the Act faced a notable exception when NBN Co Limited, established to develop and operate the National Broadband Network (NBN), entered the market. Given NBN Co’s competitive role against private telecommunications firms, subjecting it to the Public Works Committee's stringent approval processes would place it at a disadvantage. This competitive imbalance could potentially hinder NBN Co’s ability to efficiently design and implement the NBN across diverse geographical areas, resulting in increased compliance costs and reduced operational efficiency. The Regulations, therefore, exempt NBN Co and its subsidiaries from the Public Works Committee Act, ensuring a level playing field and enabling NBN Co to effectively compete without the bureaucratic hurdles imposed on other Commonwealth authorities.
Scope and Application
The Public Works Committee Amendment Regulations 2010 (No. 1) provide an exemption under the Public Works Committee Act 1969 (PWC Act) for NBN Co Limited and its wholly-owned subsidiaries. The PWC Act generally applies to all authorities of the Commonwealth but allows for exemptions where an authority is engaged in trading or other activities in competition with other bodies. The Regulations specifically exempt NBN Co Limited, a Government Business Enterprise established to plan, rollout and operate the National Broadband Network, from the oversight of the Public Works Committee. This exemption recognises that NBN Co operates as a fully corporatised commercial entity independent from government and is competing in the fixed fibre broadband sector. Subjecting NBN Co to PWC oversight would place it at a competitive disadvantage due to the high compliance costs and inability to take advantage of economies of scale. The Regulations amend the Public Works Committee Regulations 1969 to include NBN Co as an exempt Commonwealth authority under subsection 6A(3) of the PWC Act. There are no conditions specified in the PWC Act that need to be satisfied before the Regulations may be made.
Key Provisions
The Public Works Committee Amendment Regulations 2010 (No. 1) amend the Public Works Committee Regulations 1969, as mentioned in section 40 of the Public Works Committee Act 1969 (PWC Act). These regulations, referenced in the explanatory statement, focus on the exemption of NBN Co Limited and its wholly owned subsidiaries from the provisions of the PWC Act. Under section 6A(3) of the PWC Act, the Governor-General may exempt certain authorities from the application of the Act if they are engaged in trading or other activities in competition with other bodies. This is the basis for the exemption of NBN Co, which operates in competition with privately owned telecommunications firms.
The regulations impose specific obligations on NBN Co and its subsidiaries, primarily by exempting them from the scrutiny and approval processes of the Public Works Committee (PWC) for public works. This exemption is intended to allow NBN Co to operate without the additional compliance burden that would arise from having to submit multiple plans and designs for approval by the PWC. This exemption is meant to ensure that NBN Co can compete on equal footing with other entities that are not subject to PWC oversight. The regulations also ensure that NBN Co remains accountable to Parliament through mechanisms such as Senate committee scrutiny and the tabling of its annual report.
Breaching the provisions of the PWC Act by not complying with the regulations would not directly result in specific criminal or civil penalties under these regulations. However, failure to adhere to the terms of the exemption could potentially lead to scrutiny or review by parliamentary committees, which could result in political or reputational consequences for NBN Co. Additionally, any public work that NBN Co undertakes which does not comply with other applicable laws could result in enforcement actions under those laws. The regulations themselves do not prescribe specific penalties for non-compliance with the exemption provisions but rather focus on the administrative process of exempting NBN Co from PWC oversight.