Leasing Bill – Port Botany & Port Kembla

The Hon. PAUL GREEN [11.20 a.m.]: On behalf of the Christian Democratic Party I speak on the Ports Assets (Authorised Transactions) Amendment Bill 2013. This bill extends the scope of the existing Ports Assets (Authorised Transactions) Act 2012 to authorise, apply and facilitate the transfer to the private sector of the State’s port assets at the Port of Newcastle.

The Christian Democratic Party understands that the same restrictions that applied to the recent Port Botany and Port Kembla transactions will apply to the Port of Newcastle. Those restrictions require freehold title to land at the port to remain in State ownership and the lease cannot be for more than 99 years.The Christian Democratic Party notes some concerns surrounding the bill, and I note the contributions of Opposition members and The Greens. The Hon. Adam Searle pointed out that Newcastle is the largest coal port in the world and that its leasing should not be treated lightly. It is true that the Hunter region and the entire State’s economy depend on the port and the exports associated with it. I note the contribution of the Hon. Steve Whan in this debate last night in which he noted that other commodities are also exported from the port in significant amounts, such as aluminium, petroleum and steel, not just coal. In his contribution the Hon. Steve Whan noted that the Port of Newcastle is the gateway to the north-west of New South Wales for exports and that the management of such a port in the future, certainly through private stakeholders, would need to be mindful of the need to ensure that all those stakeholders who bring the products to the port are given a fair go in relation to fees and charges.

The Hon. Trevor Khan mentioned how some of those fees and charges would be noted. That sounded like a repeat of the Port Botany and Port Kembla process with the Independent Pricing and Regulatory Tribunal, the competition watchdog. In the worst case scenario the legislation may have to come back to the House to have those issues rearranged. We note that the Port of Newcastle will have an increased focus on containers. It was estimated that over the coming years Port Botany’s operations would expand from two million containers to approximately 10 million.

It therefore makes sense that Port Kembla and the Port of Newcastle would take on some of that burden in future. One would hope it would be appropriate to move containers throughout New South Wales and Australia from those ports because it would be wise to diversify the load on Port Botany. We understand that grains are also exported from the Newcastle area and we have seen a huge increase in the export of grain across the globe, particularly, as the Hon. Steve Whan noted, after the drought broke. We note that the Government says that now is the time for the sale of the Port of Newcastle. I reflect on the comments of the Minister, the Hon. Duncan Gay, in his second reading speech when he said:

The recent completion of the long-term lease of Port Botany and Port Kembla showed what can be achieved when the right asset is offered at the right time, with the right process.

I note the Opposition’s concern about the process. The Minister went on to say:
The success of the Port Botany and Port Kembla transaction dictates that the Government acts now to capture the current strong market demand for port infrastructure assets.

The lease of Port Botany and Port Kembla was about stabilising the financial needs of the Government and one of the major reasons for the position the Christian Democratic Party took was the vulnerability of the triple-A credit rating and the possibility that it would be reduced. If it were reduced to a double-A rating, overnight that would result in something like an instant $3.5 billion interest payment on the money currently on loan to New South Wales. The lease of the Port of Newcastle does not seem to have that same sort of urgency in relation to the vulnerability of the triple-A credit rating.

In delivering the recent budget the Treasurer spoke about how the budget is in a good place and how the $19 billion of savings has put us in the position of living within our means. Therefore, the urgency of the lease of the Port of Newcastle is not the same as the lease of Port Botany and Port Kembla. We are a little down the road now from the sale of Port Kembla and we have seen how the community received it. The community appears to be very excited about the injection of funds into that area. I noted a question on notice directed to the Minister for Roads and Ports, representing the Minister for Illawarra, on the outcomes of the funding from the sale of Port Kembla and how funding would be applied in the Illawarra.