Peter Andren (Calare, Independent) Share this | Link to this | Hansard source

I move:

That so much of standing and sessional orders be suspended as would prevent the Member for Calare from moving that this House:

1.

notes the growing public outrage at the majority decision of this parliament on March 30th to dispose of the Commonwealth shareholding in Snowy Hydro;

2.

notes legal advice suggesting the parliamentary motion to sell Snowy Hydro is constitutionally inadequate in the absence of specific legislation passed by parliament;

3.

recognises that the Murray Darling Association is gravely concerned that there are no guarantees that licensed irrigators will be protected in the future and that power generation will take precedence over water supplies;

4.

notes proposals to cap shareholdings by any one group either temporarily or permanently cannot be protected in legislation from future change;

5.

notes the remaining 72 years of existing licence agreement conditions will not be included in any sale agreement;

6.

notes in its February 2005 submission to the National Competition Council relating to the application of Lakes R Us to undertake water storage and release services, Snowy Hydro stated: “To allow the release of water to be subject to the arbitrary decisions of private individuals would be contrary to the public interest of protecting the environment”;

7.

notes the crucial role the Snowy Scheme plays in alternative energy, environmental management and water supply strategies that don’t necessarily coincide with the exploitation of these resources for private gain; and

8.

appalled that this motion and debate is about to be gagged, calls on the Australian Government to give notice it will rescind the March 30 motion approving the sale of its Snowy Hydro shareholding in the public interest and use its corporations powers under s5 l (xx) of the Constitution to prevent the sale of any shares in Snowy Hydro Pty Ltd pending a full and independently chaired public inquiry to be conducted into the actual capital requirements of Snowy Hydro, the 46 operational agreements between the three current shareholders and the impact of the proposed sale on all relevant parties.

This is the sale of stolen goods.

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! Is the member for Calare seeking leave to speak to the motion?

Peter Andren (Calare, Independent) Share this | Link to this | Hansard source

I am seeking leave.

Leave granted.

I am grateful for the fact that the government, contrary to my advice, has determined not to gag this debate. The Snowy Mountains scheme is the Vegemite of national infrastructure. The only important difference is that we own the Snowy. This sale is all about setting up the private sector to exploit the peak power market. It is Enronesque in its potential. It is about derivatives. It is about selling insurance. It is about building gas fired ministations to manipulate the power market and conserving water that should go to irrigators and the environment in order to maximise power returns at manipulated peak prices. It does not need a foreign gorilla to do this.

This is part of a process to set up a casino of power supply and manipulation of the supply market. The 10 per cent cap on shareholdings is a nonsense, as is the cap on foreign ownership. The 10 per cent cap will guarantee that shareholders with a lazy $300 million to spend can buy up to a 10th of the Snowy scheme under this offer—hardly mums and dads. I am sorry to disagree with the member for Riverina on this point—and I acknowledge her firm endeavours and passion around this issue—but there is no way in the world that her private member’s bill can enshrine in legislation a permanent cap on any sort of shareholding, as the Prime Minister admitted during question time.

This is a sly sale that has no mandate. It is the selling of stolen goods. There is no referendum, no inquiry and no agreement with the electorate at a state or national level. The parliamentary motions on the Senate and House Notice Papers six weeks ago clearly appeared on the day they were introduced. They were to be rushed through with minimal debate—thus was the hope of the coalition—with Labor approval to satisfy the revenue problems of the Iemma government in particular. It has been well documented that the debate was not semaphored—except to those who had a special interest in ensuring that the matter went through the parliament with the greatest of haste. The states had no motion on this and, like the federal parliament, they had no legislation. They made sure of that when their corporatisation legislation ensured that a sell-off did not have to go through parliament.

Why did the federal parliament not adopt the same strategy? Of course, the government, at that stage, did not control both houses, and, as I understand it, the Senate forced an amendment that ensured that any sale be referred to the parliament. There was never to be a full and proper inquiry, there was never to be a parliamentary inquiry and there was never to be a proper debate—as was shown on 29 and 30 March in a shameful process that tried to give the impression that this matter had the imprimatur of the parliament when there was absolutely no mandate and the matter had taken the public by shock. How arrogant, how devious, how appalling! How angry the people are who have come to see me in recent times. They have emailed, they have written and they have rung. They have been in parliament today. These are people who have had a long association with the Snowy Mountains scheme. They know that Snowy Hydro can look after its own infrastructure and its own upgrades well into the future and does not need any injection of taxpayers’ money to do so.

The only reason there was any motion in the parliament was, as I said, that the coalition did not have the numbers. The key to all this is the commercial-in-confidence elements of the so-called agreements—the 75-year water licences and the compensation deed that will see taxpayers forking out to compensate a privatised Snowy Hydro for shortfalls in any guarantees locked into the sale. That is where the taxpayer will be caught out in the future—having been asked whether they wish to buy back their own asset. Forty-six of these so-called agreements will not be open to public gaze.

Snowy Hydro delivers a $150 million dividend to the three governments and $50 million in taxes. It is capable of funding its own capital upgrades, estimated at $40 million a year—nothing like the $1.5 billion that Della Bosca and others allege is required and use to justify the sale. Snowy Hydro does not get, and does not need, state or federal government money to prop it up in any way. The $1.5 billion needed for capital upgrades, which Mr Della Bosca, Mr Iemma, Mr Brumby and this government bang on about, is the spending plan of a fully privatised Snowy Hydro expanding well beyond its current role to manipulate electricity markets in this country, at the expense of Australian consumers, irrigators and the environment, for the benefit, surely as night follows day, of major shareholders. In spite of any attempts to cap foreign ownership, that cannot be guaranteed into the future. Inevitably, down the track, overseas—or, indeed, Australian—mega power operators and market manipulators will have control of those processes and we will leave the way open to manipulation of that market to a degree that could be Enronesque in its outcomes.

Today’s joint announcement is simply the sticking of a collective federal and state digit in the dyke—or, at least, the dam of public opinion. Caps cannot be guaranteed beyond this parliament—and the government knows it. So, too, do the Labor Party and the state governments. Think again, Prime Minister. Think again, Labor. There at 13 million reasons why you should—and they all have a vote.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Is the motion seconded?

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I second the motion and I do so with pleasure. Australians are opposed to the sale of Snowy Hydro, and most members, if they are paying any attention to the public debate, would recognise that. There are a number of issues that need to be aired, and they were not aired when the motion first came through the parliament. People were very confused about what the issue was. Many members of the government did not even know that a motion was going to be introduced and that the government did not need to introduce legislation.

Today there is still a degree of confusion. We are told that there were something like 46 agreements within the original corporatisation of Snowy Hydro, which took place in 1997 and came into effect in 2001. We are told that those 46 agreements are part of the contractual arrangements that will be a condition of the sale. But no-one that I am aware of has actually seen those documents. There is no mandate for the sale of Snowy Hydro. I am as critical of the New South Wales government as anybody in this parliament—and no government has been to the people on this issue, including the Commonwealth government. There has been very little debate on this very important issue. There is confusion over the facts around the constitutionality and the legalities involved, the operation of the scheme and the various compensatory mechanisms that will or will not come into play if, in fact, the New South Wales government intervenes on the control of water and what that will mean to the generation of power or to any private business that will be deprived of the possibility of generating income from that source.

We do not know what the contract says. Anybody who has made application for a prospectus has not been provided with any great information on the sale documentation at all. Even though there is a 75-year water licence, which I think now has 72 years to run, we do not know what the compensation mechanisms may or may not be. How can we sell an asset which is essentially owned by the people of Australia without these questions being answered? It is time that the Commonwealth government took some leadership in this debate.

I am distressed to see this announcement today coming from the Hon. Nick Minchin and the Victorian and New South Wales ministers responsible for the sale. Nick Minchin says: ‘The Australian government will introduce legislation in June that imposes the following permanent restrictions on Snowy Hydro Ltd.’ There are a number of restrictions, which I will not go through—people can read them in the press release—but the fact is that this government and this parliament cannot make those restrictions permanent. Our Constitution provides that one government cannot bind a future parliament through legislation. That is the legality of the situation.

Where are the Labor Party on this motion? We have seen where they are in New South Wales. We have heard the argument that the New South Wales government has cash flow problems and needs the money. The New South Wales government has no debt. It has a cash flow problem that, hopefully, is temporary. By doing this the New South Wales government is selling the house to pay the grocery bill. There is no need for the New South Wales government to enter this arrangement. There is no need for the Victorian government to enter this arrangement. Least of all does the Commonwealth government need to take this step. In my view, the Commonwealth government has displayed some leadership in recent years through the National Water Initiative and other initiatives. We have started to look at the water debate across state boundaries.

Senator Minchin has been grinding away at the states, particularly Victoria, over many months now to make the sale possible. For the Commonwealth government to give up that leadership role with many things still unknown is quite disgraceful. I believe today’s announcement by the minister about the caps, the board structure, foreign ownership restrictions et cetera is nothing but a Clayton’s announcement on the sale document. Hopefully, the people of Australia will rise up against the bill that the government is going to introduce to the parliament.

What are the reasons for the sale? We hear the corporate mantra that governments should not be involved in the delivery of business services. These services are fairly significant. They involve water going into the Murray and Murrumbidgee systems and renewable power generated into the electricity grid linked to four states. This is very important for our future energy needs, particularly at a time when the Prime Minister and others are, quite rightly, talking about the need for a debate on future energy needs and the possibility of nuclear energy. So why aren’t we debating the Snowy Hydro issue in greater detail? This is our major construction achievement of 50 years ago—the crown jewel of looking forward, multiculturalism and a whole range of other issues.

The New South Wales and Commonwealth governments agree. They say that there is a need for growth in Snowy Hydro and that, for Snowy Hydro to go forward, there will be capital requirements. Investigation shows that turbine maintenance for Snowy Hydro should not be any greater than about $25 million per annum. The operational and general maintenance costs are probably about $15 million per annum. So there is a $40 million requirement annually, not the $200 million or the $1.5 billion over five years that many people are talking about.

Snowy Hydro generates a return of about $150 million each year and pays about $50 million in tax, so it does have the capacity to self-fund within those restrictions. The issue may well be that Snowy Hydro Ltd has greater ambitions than the supply of hydroelectricity—such as gas turbines and accessing the water market. The Parliamentary Secretary to the Prime Minister is putting in place rules which could see Snowy Hydro becoming a major player or a water baron when it comes to the access to water licences and in doing what it does in the derivatives market in insurance at the moment—selling at the peaks when it has a captive market to sell into and multiplying profits in that way. That is something in which some public administration really should be involved.

I do not know whether there are restrictions on that within the sale contract or not—but I do not think anybody else in this chamber knows either. Those are the sorts of things that people need to know before they can make proper decisions as to the sale, the long-term impacts on the downstream water users and the long-term impacts on power users on the eastern seaboard.

In conclusion, there will be a rally held in Canberra a fortnight from today at approximately 12 o’clock. We are calling on all Australians, if they are serious about the long-term needs of water and power generation in this nation and if they are serious about public ownership of much-needed instrumentalities, to make a stand. It is time that the people started to turn up and generate their power—the power to maintain these instrumentalities that were earned through the deaths and hard work of many Australians over many years. It is time that they turned up, put the heat on and poured water on these irrational governments that are making irrational decisions in some sort of rational economic debate. I challenge all Australians to be at that rally.

The fact is that the Prime Minister, through Nick Minchin—and I pay credit to the member for Riverina and others in this parliament—has come out today with this press release that puts up a bandaid approach in terms of ‘permanent restrictions’ when we all know they cannot be permanent. The Prime Minister admitted at question time that obviously they cannot be permanent. What is the point of introducing them if we are interested in the long-term needs of water and power generation within this country? It is time for people right across Australia to stand up.

I congratulate Alan Jones and the many others who have had the guts, in terms of their positions on radio and in newspapers, to articulate what people right across Australia are saying. It is very obvious in here that, privately, whether they be Labor, Liberal or New Liberals, members do not want it sold. But with the forces of party mechanisms they are being forced to participate in this farce of the sale of Snowy Hydro. I call again on all of the people across Australia who are opposed to this, or opposed to the privatisation of much-needed public utilities, to show up at the rallies in Sydney, in Cooma and the one in Canberra in a fortnight’s time.

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

I well understand the concerns that people have about the privatisation of Snowy Hydro. But once the New South Wales government’s decision to sell its 48 per cent stake was made, it was inevitable and unavoidable that the Commonwealth would also have to sell its 13 per cent stake. The retention of a 13 per cent share in a commercial company by the Commonwealth is not practical nor fiscally sensible. It is too small to have an impact. I think the Labor Party’s shadow minister for finance put it extremely well here in the chamber on 30 March this year when he said:

In my judgment, the key issue for the Commonwealth in this instance is whether there is any merit in retaining 13 per cent of a major organisation, Snowy Hydro. In my assessment, that fact alone makes it relatively pointless to oppose the sale of the holding, because 13 per cent is simply not enough to allow the Commonwealth to influence the decisions of the organisation in any material way, and I think it is a very unlikely scenario that any government would commit to buying the current shares that are going to be put on sale by the New South Wales and Victorian governments.

Consequently, concerns about the sale have been overridden by the determination of New South Wales to sell its majority stake whatever the position adopted by the Australian government.

The water security issues loom large, rightly. We are confident that security is there for irrigators, regardless of ownership. That security is governed by the Snowy water licence, which was issued by the New South Wales government. It was developed by the Australian, New South Wales and Victorian governments at the time of corporatisation, specifically to protect security. It guarantees the volumes for irrigators. While it is true that it is technically open to New South Wales to seek to vary the conditions of the licence, there is a massive disincentive deliberately built into it for the New South Wales government never to consider doing that. The terms of the Murray-Darling Basin agreement mean that any reductions to Snowy Hydro releases would be deducted from New South Wales water allocations. No government would dare do that, politically or economically—or, if it did, it would suffer the political odium.

The issue of environmental water is also of great importance. Releases of water for the environment—up to a 21 per cent increase in flows has been agreed—are also protected by the terms of the Snowy water licence. There is a qualified commitment by Victoria and New South Wales to return another seven per cent, around another 84 gigalitres, post-2012 to take environmental flows to 28 per cent. The responsibility for recovering and paying for that additional water rests exclusively with the New South Wales and Victorian governments. That is in black and white in the implementation deed, and they have recently committed to setting aside some funds from the sale to do that. Water For Rivers, the body set up by the three governments to undertake that environmental water recovery, is increasingly confident that it can meet the 21 per cent target on time. I think we will be seeing some more announcements on that pretty shortly, which will also deliver some more water to the Murray.

The timing of the release is also of great importance to irrigators. Here the Murray-Darling Basin Commission, Snowy Hydro and New South Wales government representatives have met several times to progress outstanding issues relating to water management that have been raised in this House, within the government and by the President of the Murray-Darling Basin Commission, the Rt Hon. Ian Sinclair. The parties are working towards finalising an agreement that will assist the Murray-Darling Basin Commission in managing the timing of releases from the Snowy. I am confident that we will see a sensible set of protocols to ensure that the timing of the release of the guaranteed volumes is to the satisfaction of irrigators and communities rightly concerned about environmental water flows.

With regard to foreign ownership: this has been touched upon in this House, not least of all by the Prime Minister. He has set a number of conditions over and above the normal foreign investment approval processes that give comfort to those who are concerned that Snowy Hydro would be dominated by foreign interests. Given the shortage of time available to us to pursue this matter, I seek leave to continue my remarks at a later date so that the debate is not closed today.

Leave granted; debate adjourned.