The government backtracks over Port of Newcastle privatisation

Once again the NSW Liberal government has realised privatisation does not work.

The Greens welcome the government recognising that the privatisation does not work. 

Abigail spoke to the countless failures that have come with this government's agenda to privatise whatever it can.  

Ms ABIGAIL BOYD (17:32): On behalf of The Greens, I speak in support of Port of Newcastle (Extinguishment of Liability) Bill 2022. I will not repeat the history that has been so well covered by the initiator of the bill and by the Opposition in both Houses. I feel like this is the first of many similar bills that we will see in this place over the next five to 10 years as we try to unwind the worst of the privatisation deals that the Coalition Government has gotten away with over the past decade. This is a pretty bad one, as far as they go. Since being in this place, I have spent a long time looking into, for example, the energy privatisation contracts, which we managed to obtain by a call for papers at the beginning of this parliamentary term. I was shocked to see not just the headline transaction but then to delve into those contracts and to see the little landmines built into those contracts for future governments. Examples are the put-and-call option in the privatisation of Vales Point Power Station and the amount of liability that the State retains for the contamination at all of the power station sites across New South Wales.

We then look back at the press releases for those transactions and the statements that were made at the time by the Ministers in charge and Premier Berejiklian, and the careful language that was used to respond to questions about what is in those contracts. When we look back and find out what is in the contracts, what has been said has been clearly misleading, but it is not quite a falsehood. For instance, I do not need to remind members that Vales Point was sold for $1 million to Travis St Baker and co, and subsequently valued at 700 times that a mere two years later. When asked about why that was such a cheap deal, then Premier Berejiklian—perhaps she was Treasurer at that time—replied, saying, "Well, of course there were liabilities that transferred with that." When we look at the contracts, it is true that there were liabilities transferred as part of that sale. But what was hidden and not mentioned at the time was, of course, the vast quantity of liabilities that were not transferred with that sale. It is that sort of clever, weaselly wording that we see over and over when it comes to these privatisations. We saw it with the tolling contracts when we finally got to see those.

An ordinary citizen of New South Wales would think that when the contracts for privatisation of toll roads are entered into by this State, they are merely privatising that revenue stream, but no. When we get hold of those contracts, we discover a whole bunch of restricted covenants that prohibit the Government and future governments from doing things like building public transport options nearby and other types of restrictions that benefit the owner of the asset for not just the short-term but for decades to come. Looking at this particular transaction and understanding it now, the Hon. John Graham went to great detail to talk about the fact that the way that the Government spoke about it at the time, true to form, was very creative. But then when it came to the crunch and we found out more and more, we found out that, again, this was not a simple asset sale for a certain amount of money. This was, in fact, a sale that came with strings attached. In this case, the strings are obliging the Port of Newcastle to, effectively, compensate the other port operators for moving over a certain number of containers.

The fact that that was done and not disclosed at the time is bad enough. But look at the length of time until 2060-something and the impact that that has. We often say that the problem with this so-called asset recycling program that the Government runs is that it is about getting this kind of short-term sugar hit for the budget and then ending up with the long-term pain that comes with no longer having that public asset in the future. But when we look at the other dimension to it, as these contracts are showing us, it is not just the pain of not having that asset as a public asset; there is also a real financial penalty should we ever try to unwind it. As I said in relation the land tax and numerous other things that this Government is trying to push through, it always ends up having the effect of binding future governments to this Government's particular policy.

Here we have an arrangement that is doing more than just stopping the Port of Newcastle from getting on with the business that it needs to do. As members have said in this debate, it is also holding the State back. It is particularly holding back the Newcastle and Hunter region from diversifying and being able to use that port for other purposes. The Greens have paid particular interest to this dodgy deal, not just because it is incredibly poor financial management on the part of the Coalition Government. We have paid attention also because it gets in the way of allowing communities that have traditionally been reliant on coal and coalfired power to diversify and turn their assets and infrastructure for coal and coalfired power into something they can use for the future.

The Hon. Taylor Martin spoke about the Hunter and Newcastle region as well. We know that workers currently employed in coal and coalfired power there have so many opportunities to use their skills and talents in, for example, train manufacturing or in other industries that can make use of the infrastructure and, most importantly, make use of the Port of Newcastle. The Government very irresponsibly selling the port off has put that region on the back foot. So we are very interested in this bad deal being unwound.

I share the Opposition's concerns around the cost of this unwinding and the uncertainty of what it means for the other part of the arrangement with the other port operators. It is deeply unclear what the hit to the budget year on year will be, depending on what the Port of Newcastle may or may not do. However, I find it hard to believe that the cost of unwinding this arrangement could ever be greater than the cost of not unwinding it. It is not only holding back the economy of our State and the diversification of the Hunter region but also stopping us from getting more freight off our roads.

For all of those reasons, we wholeheartedly support the bill. We have some concerns over the drafting, and we note the amendment that the Opposition will move. Unfortunately, we see some problems with that drafting as well, so we will move an amendment to the Opposition's amendment to try to tighten that up. I can talk about that during the Committee stage. But, again, I call on the Government to stop doing this. I hope that this is the beginning of the Government understanding just how fiscally negligent it is to enter into these sorts of contracts with restrictive covenants.

I am very concerned about renewable energy zones being constrained in their generation capacity in order to maintain high profits for energy companies. I do not know how we will unwind the toll road situation, but clearly we need to. I put on record that The Greens agree that those ports should never have been privatised. They are absolutely essential infrastructure for this State. I encourage the Government and the Opposition, which is more likely to take this suggestion seriously if it gets into government, to think about the cost of nationalising the ports instead and taking them back into public hands. It will be costly to correct this Government's errors, but, unfortunately, we will need to do it.

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