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Legislative
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| Sandra Kanck Deputy Leader Australian Democrats Member of the Legislative Council |
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Legislative
Council |
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| Sandra Kanck Deputy Leader Australian Democrats Member of the Legislative Council |
Parliament Index |
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SOUTH AUSTRALIAN PORTS (DISPOSAL OF MARITIME ASSETS) BILL
The Hon. SANDRA KANCK: Let me say at the outset that the Democrats oppose the privatisation of essential economic infrastructure. We reject the myth propagated by neo- classical economists that only the market is capable of efficiently allocating economic resources. We believe it is foolish to transfer vital monopoly infrastructure to private ownership, relying on regulation only to ensure that the competing economic interests reliant on the infrastructure are catered for.
As a trading nation Australia is crucially reliant upon the efficient operation of our ports. Consequently, we believe the state government should continue to control our ports. Unfortunately, that is not an option with this bill. If it were, if this were a simple question of `to sell or not to sell', we would oppose the bill. However, we do not have that choice.
The passage of this legislation is not necessary for the privatisation of Ports Corp. The state government can sell without the consent of parliament. It has the ideological mindset that it can privatise and it is clear that it will. Under those circumstances, the Democrats will reluctantly support the passage of the legislation. By doing so we hope we can ensure, amongst other things, that the state receives the best return on the sale.
In the lead-up to consideration of the bill, on a number of occasions I have met and spoke with the minister or his staff members either in person or by phone or fax. I have met with the South Australian Farmers Federation, the South Australian Cooperative Bulk Handlers (which is now called Ausbulk), government officers and Malcolm Thompson from Sea-Land. I have received correspondence from relevant local councils and met with representatives of the Port Adelaide Enfield council. I have worked to get the best possible outcome for all parties that I could in any way negotiate. I note that the Labor Party is opposing the legislation.
Of equal interest, though, is that it does so without recognising the irony of its position. For the record, it was the Keating federal Labor and Bannon state Labor governments that took the first steps down this torturous path of competition policy that has paved the way for the wholesale privatisation of government assets. Now, they blithely ignore their complicity in the events that led us to this point and they are willing in the process to ignore the interests of the Ports Corp employees who have negotiated continuing employment and superannuation guarantees as part of the bill. Should the bill not pass the Legislative Council, those guarantees could well be lost.
On the issue of the current 150 or so employees, I note from correspondence I have received recently from the Australian Services Union that it details the breaking of promises by the government about employee security following the passage of legislation in this place to allow the sale of our electricity utilities. That does not augur well for Ports Corps employees. Despite the decision to oppose the legislation, I hope that the ALP will use the committee stage of this bill ( and the other two associated bills) to build in appropriate protections for it.
I think it is unfortunate that the Labor Party has been grandstanding on this issue. It is giving a false impression to the electorate that the vote against this legislation would result in its being defeated when that is, in fact, not the case. The reality is that the three bills with which we are dealing have nothing to do with whether or not the government can sell Ports Corp. What it does is to transfer some of the functions presently under the control of the Ports Corp as well as dealing with issues such as employee superannuation, third party access to port facilities, port operating rules, service standards and so on. As I say, the ALP is certainly misleading the public with the stance it has taken.
Like others I have been dealing with this issue through assorted briefings and meetings for a period of 18 months. After the government announced its intention-
The Hon. P. Holloway: Did you get any answers?
The Hon. SANDRA KANCK: I have some surprising answers: wait until you hear some of them. I sought to get a formal briefing on the sale and, when that briefing occurred, the first question I asked was: why are we selling? I cite the answers that the advisers and consultants gave to me: they are not direct quotes but they are from the notes I took down at the time. It was said: `It is the right time to sell; the timing is right.' We are going back to what seems to me to be a political slogan of `It's time.' `It's time' is a mantra but not a rationale for selling.
They told me that the times have changed in transport. That is not even an argument. We do not ride on penny-farthing bikes. I do not need to be told that transport is different from what it was 100 years ago.
Another of the reasons they gave me is that governments have got out of controlling rail and air transport in Australia so they should also get out of controlling maritime transport. I suppose if you accept the argument that we should all act like lemmings, it is a logical argument. However, it does not strike me as being a great way to formulate the economic future of our state.
Another reason given was that governments around the world are getting out of the ownership of infrastructure. Yet I note that Singapore-which is probably the busiest port in the world-retains its ports in government ownership. Therefore, it is very strange that our government has decided to opt out of it.
Another argument given was that private industry knows better how to handle transport. Obviously, if you look at the experience with rail transport on Australian National, you might come to that conclusion, but the fact is that our federal governments over the past decade have shown that they had no plans for transport in this country.
It is a system that is based on adhockery. So forget about any arguments about whether or not they can handle it. Of course they cannot handle it if they do not have a plan. You cannot compare the federal government's inept handling of Australian National and rail throughout Australia with South Australia's ports. The reality is that South Australian ports in government hands have been operated extremely well for decades. I seek leave to conclude my remarks later.
Leave granted; debate adjourned.
The Hon. SANDRA KANCK: When I was speaking earlier today I listed the very crazy reasons that I was given at my first briefing on this privatisation plan for privatising. They really were quite loopy reasons. It makes very little sense to divest oneself of ownership of an asset that has paid dividends and loan repayments to state coffers of $37 million in the previous two years. Once we sell that, that will be a lot of money that South Australia will forgo into the future.
I also find it interesting to observe that the government is opting for a 99 year lease rather than a direct sale. At one of the briefings I had I asked why this course of action was being chosen, given the argument that our Treasurer advanced last year that a long-term lease of our electricity utilities would produce a lower price than a straight-out sale.
Most strangely, that is not the case with the privatisation of the Ports Corporation. I was told that the price that we manage to get will be dependent on what restrictions are placed on the lease. So I asked what restrictions might or might not be considered. In the answers that I got it became clear that performance agreements would not be included because-and I remember earlier on the Hon. Paul Holloway asked whether I got answers, and I hope he is listening to this doozey of an answer-`this would be tantamount to saying that the government knows how to run the ports, which clearly it does not think it can, otherwise it wouldn't be selling them, would it.'
That is the sort of circular argument that we are seeing. We are seeing, through that, that the government's ideological drive to sell off government owned instrumentalities results in arguments that would have made the ancient Greek sophists proud. Never mind that the government has been operating our ports effectively for decades. Some of the restrictions that I was told would be incorporated into the lease include cross-ownership restrictions, and I note that this has been included in the bill.
It is an extremely important provision yet it is one that the Labor Party is opposing by virtue of its opposition to the bill. Given that it could be in the interests of the owners of the Fremantle port or the Melbourne port to close ours down, I consider the action of the Labor Party in voting against the bill to be totally irresponsible. In my negotiations with minister Armitage regarding the bill, he indicated that the state government would deepen Outer Harbor using proceeds from the privatisation. Since that time I have heard conflicting accounts from different sources, and unfortunately the bill fails to clear up the confusion. Section 12 provides:
The proceeds of a sale/lease agreement must be applied for one or more of the following purposes. . .
It then lists four alternative uses for the proceeds, including the option of deepening the harbour. I am very concerned about that and I want some guarantees from the government that it will meet its promises. I ask the government, in the response that it gives at the end of the second reading, to enlighten us all as to precisely what the funding arrangements are for the deepening of Outer Harbor. I am unwilling to advance the legislation to the committee stage without this being made very clear. I want to know who will be responsible for deepening the harbour, who is bearing the cost and when it will happen.
Of course, in reality the taxpayers will foot the bill whether it is done by the government after the privatisation occurs or via a discount in the price paid for the Ports Corporation. This salient fact highlights a profound flaw in the thinking behind the privatisation of the port. In 50 years when the facilities need another overhaul who will bear the cost of providing this benefit to the whole of the economy? The lessees? That is unlikely. The taxpayers? Almost certainly. One has to query the benefit to the South Australian taxpayer of this. Ports Corp has a $30 million debt which the taxpayer will retain as part of the sale and now it appears that the government will pay for the deepening of the harbour. So are we really going to be ahead in this game?
It is only as a consequence of the South Australian Farmers Federation and AusBulk indicating to me that they are satisfied with the agreements reached with the government that I am prepared to allow the bill through. They told me about a fortnight ago that they consider that the concessions offered by the government are adequate. Nevertheless, the bill is silent on the government's intentions regarding the deepening of the Wallaroo and Port Giles ports, so I would also like the Attorney-General to place on the record when any such deepening will occur and how those operations will be financed.
I have concerns about the possibility of a port being closed further down the track by the lessee when it is effectively out of the government's control. Such a possibility would be dealt with in the lease conditions, and I express concern that such an important issue is to be dealt with in this way rather than through the act. Based on the Hansard record of the debate in the House of Assembly, I believe the government would require `significant notice' giving the state government the first right of purchase in the event of closure. I ask the Attorney, when he sums up, to define `significant notice' and indicate how the value of a facility to be closed will be determined.
The House of Assembly heard some misleading statements regarding the alternative option of dredging the inner harbour. When I met Minister Armitage in September he told me that the scientific analysis of the Port River sludge found it was not as contaminated as everyone had expected. Yet he told the Assembly that dredging the inner harbour `was found to be hideously expensive and environmentally disastrous.' In the debate on the bill in the other chamber I note from Hansard that the member for Hart claims to have no knowledge of the report about the environmental implications of deepening the Port River. I do not know why he failed to ask the minister for a copy of PPK's Review of Dredging Options for the Port River because the minister was quite happy to provide me with a copy.
The report indicates that sediment in the Port River contains elevated concentrations of heavy metals but that it would not be impossible for it to be dredged and the sludge dried and disposed of to landfill; perhaps not impossible but not particularly desirable given the associated problems. Another issue associated with upgrading Outer Harbor will be the need to construct the long talked about third river crossing, a bridge over the Port River which this parliament approved five months ago with the passage of the Highways (Miscellaneous) Amendment Bill. It is absolutely vital to the efficient operation of the port that the new bridge is built. The Commercial Road bridge will not be able to handle the increase in grain rail traffic the expansion of Outer Harbor will bring.
In the other chamber the opposition claimed that trains of 80 to 100 carriages in length would travel through Port Adelaide and up Le Fevre Peninsula. My research shows that this is unlikely due to logistical difficulties and that more trains of a shorter length would be likely. Whatever the outcome in respect of the size of individual trains the increase in rail tonnage makes the third river crossing a priority. Travelling on track not built for these sorts of loads will slow down the passage of the trains, and the government must surely be considering efficiency in the matter of transport to Outer Harbor.
That is the economic case for the bridge being expedited, but what about the burden that will be experienced by some people living in homes alongside the track? The reasons for expediting construction of the third river crossing in association with the privatisation of the ports becomes stronger. When I last spoke to Minister Armitage I stressed this point and asked him to ensure that things are happening on this front, and I urged him to talk to the Minister for Transport about the importance of this bridge.
However, despite my urging, Minister Armitage had no guarantees regarding the crossing in the second reading explanation delivered on his behalf in this chamber. I urge the government to clarify the position of the state government on this matter. Gridlock on the rail line and consequent loss of tonnage could be a real risk if we do not get this right.
I turn now to the question of recreational anglers. What are the provisions for their access to jetties and wharves for fishing? At one stage I recall the Minister for Transport saying that the government would transfer jetties to her control, and the bill says that such access issues will be sorted out by agreement between the new owners. I ask the Attorney-General to set the record straight on this. There are thousands of recreational fishers in this state and the government should pay heed to the bumper sticker that many of them display that says `I fish and I vote'.
I would like to know whether any jetties have been transferred to Department of Transport control as part of the lead up to the sale and, if so, which ones? Will each local council have to go in and fight it out with the new owners or will there be a standard agreement? Will the new owners be able to place restrictions, for instance, on the times of day that fishers (and others) can access the wharves, or where on the wharves they can go?
I recall I spent many of my Christmas holidays as a child at Taperoo, and one of the exciting experiences was to go down to the wharves at Port Adelaide and Outer Harbor to look at what was happening. It was certainly a more dangerous place then than it is now with container shipping. At that time there were no restrictions on where people could move about. I would be concerned if, in the future, under privatised ownership restrictions were put in place.
Sea-Land, which operates the existing freight terminal, has trebled the amount of freight going through Outer Harbor. I note in this regard in the Advertiser of 10 July this year an article headed `Port streets out in front of rivals', which states:
Port Adelaide has held its lead as the country's most productive and efficient major port. One of its efficiency ratings- covering downtime-was almost three times better than nearest rival, Brisbane. . . The Bureau of Transport Economics has reported the key container terminal at Port Adelaide had a handling rate of 23.1 containers an hour, compared with the improved national average of 20.4. The previous average for the productivity of each container crane was 19.1. The port's efficiency measures were also above the national average, resulting from a good industrial record and work practices, and fast turnaround times at the container terminal.
Like other MPs I received, early in June, a copy of correspondence addressed to the Hon. Michael Armitage from Sea-Land, which operates the container terminal. As a consequence, I made contact with Malcolm Thompson, the director of that company, and went to Port Adelaide to meet him and discuss his concerns. I found him to be extremely helpful, particularly in terms of painting a picture of how our ports fit into the national scene and what opportunities exist to advance our ports in the stevedoring industry in South Australia. I know that the minister has been using the proposed sale of the ports as a means of pressuring Sea-Land, but I certainly saw no need to apply that pressure. The quotes from that Advertiser article show that that view, I believe, was justified.
Ultimately, if media reports are correct-and I have received no further correspondence from Sea-Land that would contradict that-then issues that were raised in Malcolm Thompson's letter, particularly about the extension of the terminal operating agreement, have been resolved. I am pleased to hear that but I want to use this debate to raise a related issue that has the capacity to weaken South Australia's ports.
The fact is that the profitability of our ports is being undermined by the commonwealth stevedoring levy which was struck at the conclusion of the national waterfront dispute in 1998. That levy was set at $12 per container and $6 per motor vehicle exported from an Australian port. It was designed to meet the redundancy costs of the 1 486 stevedores who lost their jobs in the negotiations that followed that highly publicised dispute. South Australia was already extremely efficient and of those 1 486 jobs that went only 11 of them were South Australian. Honourable members only need to reflect on the fact that we have car manufacturing plants such as Mitsubishi and Holden here in Adelaide to consider what a penalty of $6 per vehicle amounts to.
Sea-Land is paying $12 million through this levy or, to put it another way, is providing almost seven times the amount it will receive to fund payments for the 11 employees made redundant in South Australia. This is allowing Patrick Stevedoring in Melbourne to underbid Sea-Land. As a consequence, two major shipping services have already terminated port calls at Adelaide. Rather than trying to put more pressure on Sea-Land, this state government ought to be putting pressure on the federal government's Workplace Relations Minister, Mr Peter Reith, to get this levy renegotiated.
It is in the interests of a better price for the sale of our ports that the state government stand up to the federal government on this matter. It is not inefficiency on Sea-Land's part that has led to the termination of some port calls in Adelaide. The government should be aware that this action has also resulted in an annual $ 2 million revenue loss for the Ports Corporation.
I seek some information from the government as to what action it is taking because of the bearing this levy will have on the final price the government will receive from the disposal of these assets. Without intervention, it is a levy that will be in place for a decade, which could mean forgone income of $20 million in that time for the new owners. All potential buyers will discount the price they are prepared to pay for our ports unless the state government takes firm action.
In May this year, I received a letter from the Farmers Federation, and I would like to put on the record a couple of points that it made. It pointed out to me that 85 per cent of the average South Australian grain crop is exported, contributing, on average, $1 billion to the South Australian economy mostly in rural areas. It says that this would be further enhanced if the ports were developed. It mentions that industry is poised ready to spend $30 million on land based infrastructure improvements, subject to government providing the state based asset improvements. It goes on to say that improvements as recommended-that is, as recommended by SAFF-would place South Australia's grain ports in a strong position for future benefit to South Australia, fostering grain production and including prospects of attracting grain from Victoria for export. The alternative is for South Australia to remain uncompetitive with grain gradually being diverted from eastern Australia for export through Victoria.
Through the negotiations that I have been involved in on this piece of legislation, we have an undertaking, I believe, for the deepening of Outer Harbor. As a consequence, South Australia might now even be able to have grain being attracted from Victorian farms to be exported through Outer Harbor, with a boost to the South Australian economy as a result. While the Democrats have been playing a somewhat important part in achieving that outcome-I do not overrate our significance because I know that SAFF and AusBulk have been bargaining very hard-we maintain that the original impetus for this pressure to sell is a harebrained idea.
The decision the government has made to privatise Ports Corp is one that it takes at its peril. It leaves many farmers in the rural communities that their work supports disenchanted and could lead to a backlash in some regional electorates. That is clearly the government's choice, and obviously it will bear any negative consequences. Reluctantly, because we know that voting against this bill will not stop the government from privatising, the Democrats will be supporting the second reading.
