ACCC backs reforms to tackle Port of Newcastle’s price gouging

ACCC backs reforms to tackle Port of Newcastle’s price gouging

Statement from NSW Minerals Council CEO Stephen Galilee 

The ACCC last night backed the concerns of users of the Port of Newcastle and called for legislative reform to reign in the Port’s ability to use its monopoly power to repeatedly increase charges.

Under current Commonwealth regulatory arrangements, the ACCC has no role in relation to charges imposed by non-vertically integrated monopolies, such as the Port of Newcastle.

This situation has again been highlighted as a significant concern for the ACCC.

At a Senate Estimates hearing last night, Senator Susan McDonald questioned ACCC Chair Gina Cass-Gottlieb regarding concerns previously raised around the unregulated monopoly enjoyed by the Port of Newcastle.

The ACCC Chair outlined deficiencies in current competition legislation, reaffirmed the ACCC’s view that reform is needed, and confirmed the validity of concerns of Port users.

“SENATOR McDONALD: Your predecessor Rod Sims recommended a Part IIIB included into the Competition and Consumer Act to regulate non-vertically integrated monopolies like the Port of Newcastle. Is this something the ACCC is continuing to pursue?

ACCC CHAIR GINA CASS-GOTTLIEB: It is. We have recommended as part of a National Competition Policy Review, we have identified that Part IIIa has been shown to be seriously wanting where there is not vertical integration, where there is a capacity through monopoly to exploit customers in increased price, and we are proposing that there needs to be a regulatory framework that will enable, where it is appropriate for intervention, appropriate regulation.”

The ACCC went on to validate the concerns raised by NSW Minerals Council that the Port of Newcastle is an unregulated monopoly that would force all Port users to pay higher fees without any improvement to services:

“SENATOR McDONALD: Finally, the NSW Minerals Council issued a media release on 14 March saying, “The Port is able to increase these charges so significantly because it is a monopoly operating without any regulatory oversight on pricing, forcing users to pay more for the same services.” Is that an accurate description of what is occurring in Newcastle?

ACCC CHAIR GINA CASS-GOTTLIEB: It’s an accurate description of our concerns, yes.”

The Port of Newcastle is an important strategic asset for NSW, with a monopoly on the movement of almost all NSW coal to our key export markets. This means NSW coal exporters must use the Port to get their coal to customers overseas. There is no alternative Port to provide competition and choice for its major users.

The Port recently took advantage of its unregulated monopoly by tripling its Wharfage Charges for all port users, including for container movements, and coal exports.

Over the last decade the Port has repeatedly taken advantage of this situation, repeatedly using its unregulated status and monopoly power to increase charges.

Since privatisation in 2014, Navigation Service Charges at the Port have tripled.

Wharfage Charges at the Port have also tripled, and are now five times higher than 2014.

Wharfage Charges at the Port are now three times higher than at comparable Queensland coal loading ports, which are regulated by the Queensland Competition Authority.

It’s time for the ACCC to finally be given a regulatory role in relation to monopolies like the Port of Newcastle. This will provide Port users some protection from more rampant price gouging.

DOWNLOAD SENATE ESTIMATES FOOTAGE: https://vimeo.com/953758772/fd5d6cd29b?share=copy

ENDS – Contact: Brad Emery | bemery@nswmining.com.au | 0450620254