Please note: This is an extract from Hansard only. Hansard extracts are reproduced with permission from the Parliament of Tasmania.

Second Reading

[2.50 p.m.]

Mr GREEN (Braddon - Minister for Infrastructure, Energy and Resources - 2R) - Mr Deputy Speaker, I move -

That the bill be now read the second time.

This legislation heralds one of the most important reforms in the history of Tasmania's transport sector. It will bring all of Tasmania's major port operations under the control of a single body for the first time. That body is the Tasmanian Ports Corporation.

Tasmania relies enormously on sea transport for its trade and, therefore, its port system must operate with maximum efficiency and effectiveness to guarantee the State's future economic prosperity. In providing for the truly statewide strategic management of its port sector, this reform will put Tasmania in the best position to confront the future challenges of a changing interstate and international trading environment.

Mr Deputy Speaker, the Bureau of Transport and Regional Economics has estimated that the national freight task will double over the period 2000 to 2020. This trend will pose great challenges for Tasmania and the ports merger will be highly beneficial in relation to the State's strategic planning for and use of transport infrastructure to confront these future challenges. From a Tasmanian perspective, our ports are handling ever- increasing volumes of freight and it is expected our freight task will exceed the national forecasts in the next 15 years.

The need for fundamental reform of the Tasmanian port system has been debated for many years and it has been the subject of several major inquiries over the past two decades. A common conclusion of these investigations was that Tasmania would benefit from improved State-wide strategic planning of its port operations. While the four major marine boards were converted to State-owned companies under the Port Companies Act 1997, this alone did not provide the reform needed to deliver the kind of benefits widely regarded as necessary.

Mr Deputy Speaker, the Government believed that reform of Tasmania's port sector would have to arise from the ports themselves. The Government was not interested in an 'arm up the back approach', but instead pursued a partnership with the ports to see how we could meet the State's future freight challenges most effectively. In June last year, this is exactly what happened, when the chairs and chief executive officers of the four port companies jointly resolved to work with the Government in examining how the operations of the four ports could be enhanced from a State-wide perspective. This initial agreement was formalised and further developed through the Committee of Review - Tasmanian Ports.

The committee was established in August 2004 and comprised the four board chairs of the current port companies, the Secretary of the Department of Infrastructure, Energy and Resources (DIER), and a non-voting independent chair. The committee undertook to review the structure of the current Tasmanian Ports System and to report on any alternative port company structures that, whilst retaining the four principal working ports, would achieve a range of fundamental improvements to the functioning of the system.

The Committee of Review developed terms of reference for the study and engaged experienced transport and maritime industry consultancy Meyrick and Associates Pty Ltd to undertake the review task. The committee unanimously resolved to formally support the recommendations contained in the final report of Meyrick and Associates, and to put these to the shareholder ministers for endorsement and suggested full implementation as a priority.

The key recommendation of the final report was the amalgamation of the four State-owned port corporations into one single port company. As with the current four companies, this new company would operate under the Commonwealth's Corporations Act 2001. Meyrick and Associates also recommended that the new single port company should be structured along business lines. It argued that the business lines structure, as opposed to a geographically based model, would deliver the greatest benefits relative to the current arrangements. Meyrick and Associates identified many potential benefits flowing from a merger of the four port companies. The Meyrick report has cited potential for a significant number of new job opportunities within the port and ancillary businesses and industries to be created.

Mr Deputy Speaker, it is well recognised that the current structure of our port system has a tendency to produce unnecessary duplication. Integrated planning will allow each port to build on current infrastructure strengths and to develop the facilities required to cater for the anticipated increase in trade, without the risk of wasteful duplication. An overarching ports strategy will result in greater predictability of logistics in the State, allowing the Government to ensure its supporting transport infrastructure across all modes is delivered more effectively. To that end, the port reform will further assist the development of inter-modal freight hubs around Tasmania.

Longer-term savings and efficiencies from the merged structure of an estimated value of between $2 million and $5 million per year will benefit Tasmania as a whole, contributing to our overall economic growth in coming years.

Individually, the existing port companies are small operations on a national scale and are vulnerable to changes in the shipping market over which they have little control. The new amalgamated company will be comparable in size to the Port of Fremantle, approaching the scale of the Port of Brisbane and significantly greater than the South Australian ports. An increase in size will allow TasPorts greater access to investment and infrastructure funding and a greater ability to strategically plan port development and business growth. A merged port corporation will also have a stronger and more stable cash flow. Over the next decade the new company's business and revenue is expected to grow by between 5 and 6 per cent per year, or about $50 million in gross port revenue over the period. Increased scale will deliver a better capacity to manage debt, and more flexibility to deal with the inevitable 'lumpiness' in expenditure associated with major capital development.

TasPorts will have a greater ability to respond to rapid change in the business and structure of freight owners and shipping providers, which will tend to result in fewer shipping lines with larger ships. Further, the company will be better able to meet the requirements of larger and more vertically integrated land transport operators, who now require larger terminals, higher throughputs and increased productivity improvements. There will be an enhanced ability to develop comprehensive solutions to customers' needs and to provide a single point of contact for customers.

A single corporation will provide staff at all levels with new opportunities for professional learning and growth, and career development. The consolidated TasPorts will have the ability to draw on a broader base of skills and experience than the existing ports on their own.

On 1 March this year, I announced that the Government agreed in principle to the committee's key recommendation. I also made a number of commitments in relation to the implementation of the amalgamation, principally that there would be no involuntary redundancies or relocations of staff and that the four ports would remain as working ports in their own right, servicing the State and their regions.

The Government understands the value of each of the individual ports to their regions and the close ties that exist with the communities in each region. Maintaining quality relationships across all ports, including the Bass Strait Island ports, and their serviced regions will be an important priority for the new board.

Mr Deputy Speaker, the amalgamation of four separate and long-standing port companies into a single new corporation is obviously not a simple process. Unless managed properly, it has the potential to be quite disruptive to the operations of the existing port companies and freight companies and create uncertainty for employees, particularly if it occurs over a protracted period of time. This is why the Government believes that a reasonable degree of urgency is required and why we are aiming to complete the ports amalgamation by the end of 2005.

To achieve this goal, it has been necessary to initiate the merger process on a number of fronts in advance of the passage of this legislation through Parliament. In order for the new company to operate effectively from day one, the appropriate structures needed to be established and supporting processes commenced well before the date of the merger taking effect.

In June, Cabinet approved the first five board appointments, these being the new Chair of TasPorts and the present chairs of the four port companies. On 1 July the Tasmanian Ports Corporation officially came into existence through its registration as a company with ASIC. Also in July, a short-term transition manager was appointed by the board. Selection of the new company's first chief executive officer started in late June and is now well advanced, with the intention that the CEO will begin their job at least several months before the company commences full trading activities.

A range of supporting activities are being run jointly by TasPorts and a project team within my department. The most significant of these are the legal and financial due diligence of the existing four port companies. The financial due diligence will include the provision of detailed advice to the new company in relation to financial modelling, strategic business planning and taxation issues. Mr Speaker, this change process is under remarkable stewardship and progress to date shows that the transition to a new amalgamated entity is set to take place smoothly.

I will now turn specifically to the legislation that I have brought before the House. TasPorts will come into being as a genuine trading port company by taking possession of the assets, liabilities and employees of the existing four port companies. This transfer will be achieved by gazettal notice, the authority for which will be provided by this bill. The Tasmanian Ports Corporation Bill in fact serves two main purposes. Firstly, it is designed to allow for the amalgamation of the four port companies into one, although only two of the 35 clauses in the bill deal directly with that issue.

Clause 20 deals with the transfer of port assets and liabilities to the new company. This will occur on a particular date upon the publication of a notice in the Gazette . Contingent on this bill having received royal assent, I anticipate that this notice will be placed during December 2005. Associated clauses ensure that, on transfer day, TasPorts inherits the legal identity of the four ports in relation to documents, legal proceedings and court orders pertaining to the transferred assets and liabilities.

Clause 24 provides for the statutory transfer to TasPorts of all employees employed by the four ports immediately prior to the transfer day. This legislative approach mirrors that used in 1997 to transfer employees of the former marine boards to the new State-owned port companies. The bill guarantees that all employees will retain the pay, conditions and accrued entitlements that they enjoyed immediately prior to transfer day.

Mr Deputy Speaker, obviously it will not be practical for every single employee to occupy the same position within the structure of TasPorts as they do with their current employer. For example, the new port will require only one CEO. The question of how all employees will be accommodated under the new company's structure will be an issue for the TasPorts board to consider in the lead-up to transfer day and thereafter. However, I reiterate the cabinet decision that there will be no involuntary redundancies or relocations during the merger process.

The second purpose of the bill is to replace the Port Companies Act 1997, the existing legislation which provides for the establishment and operation of the State-owned port companies. Accordingly, the bulk of the TasPorts Bill covers all the standard matters necessary to provide a legislative basis for a State-owned company. The Port Companies Act 1997 will be rescinded after the establishment of the new legislation and the companies that were set up under that act will be deregistered. The deregistration will take several months after transfer day and during this period the four companies will be 'shells' that are not trading and have no assets or liabilities.

Mr Deputy Speaker, this Government has always recognised the importance of public ownership of businesses which are fundamental to the State's economic and social wellbeing. This bill is consistent with this philosophy and similar legislation brought in by this Government concerning State-owned companies. It contains a provision that will prevent the shareholders selling the Government's interests in TasPorts without first obtaining the approval of Parliament.

The bill also makes provision for consequential amendments to several other acts, all of which are simple and straightforward. We are also using this opportunity to tidy up some outdated terminology in a number of other acts, mainly references to marine boards.

Mr Deputy Speaker, I am very pleased to be the minister that is introducing this historically significant legislation. The bill presents the opportunity for us to continue to meet the challenges arising from our economic success over recent years. This bill also represents the achievement of a reform that has been talked of for many years but, until now, has never been possible. For this breakthrough we can be particularly thankful to the current chairs of the ports of Burnie, Devonport, Hobart and Launceston and their desire to place the best interests of Tasmania above all other considerations.

With Tasmania's ports controlled by a single State-owned company, a new era will be ushered in where our port system can be planned and managed in a strategic and holistic fashion from a whole-of-Tasmania perspective. For a State that is critically dependent on sea transport, this reform is absolutely vital for our future economic prosperity and ability to develop our entire transport infrastructure in a more coordinated and efficient manner.

Mr Deputy Speaker, I commend this bill to the House.

[3.08 p.m.]

Mr WHITELEY (Braddon) - Mr Deputy Speaker, we will either have to have Minister Green's speeches earlier in the morning, or a bit shorter. That was an epic. This bill that we are here to debate today is certainly not simply a technical bill that will actually give birth to a new State-owned company. The words of the bill basically are in fact that, and here today we have a bill that will really in essence only do that, but the debate we need to have in this place today is more a philosophical debate on the benefits and the challenges of and the concerns surrounding a very strategic, important and very historic decision by this Government to amalgamate the four current ports in this State into one single State-owned corporation.

What I find interesting, Mr Deputy Speaker, as we commence this debate today is this: that we have a Labor government that has stood today to promote the benefits of an amalgamated entity of ports. What I find interesting is that often in this place it is the Labor Party that makes many accusations about the philosophical political stance of the Liberal Party when it comes to issues of rationalising government entities, government businesses and the like.

Mr Deputy Speaker, this is an important bill, and it is one that I know has not been taken lightly. The Attorney is quite right - which is not often the case in this place, but today she is - that this debate has been going on for many years.

Mrs Jackson - Michael Field started this in about 1980.

Mr WHITELEY - I think that could be correct. It has been a debate that has been going on in this place for a long time. What I want to do today is place on record, firstly, our support for this bill - we support the bill.

Mrs Jackson interjecting .

Mr DEPUTY SPEAKER - Order. I would ask members not to interject.

Mr WHITELEY - Secondly, I want to put on record our appreciation from this side of the House to your advisers, particularly Scott and the team over there who have made themselves available now on at least two occasions and have been able to deliver on the requests that we have made of them.

It would be fair to say that I believe there is support amongst the business community, amongst councils, and generally - and I will come back to qualify this shortly - amongst chambers of commerce, and certainly agreement and support amongst freight operators in this State, to see one single entity promoting the logistic freight causes of this State.

However, I have to say that it is not only understandable, but it is also to be expected that with that support comes an underlying hesitation that an integral part of four major cities in this State is today being historically altered in this place by the way in which we are opening up the door now for one corporation to accommodate four existing port entities. I say that because the community feels very deeply about its attachment to and association with their local ports.

Mr Deputy Speaker, I find the constant drone in the background quite -

Mr Green - It didn't seem to worry you while I was speaking.

Mr WHITELEY - We are just trying to make our points here and we have conversation by the Attorney.

Mr DEPUTY SPEAKER - Order. It is unparliamentary to talk. I will note, though, that there has been some chat, and I have just been a bit lenient on it. Interjections should cease.

Mr WHITELEY - Thank you, I appreciate it. It would be fair to say that the ports in each of the cities of Burnie, Devonport, Launceston and Hobart are an integral part of the community. The ports are made up of people who are thoroughly involved in local communities. They are ports that have shown their support for local communities in a number of ways, not the least being employment, community and charity support, the ways in which they have integrated their business and their economic input into local communities.

So it is with a degree of hesitation that communities watch on today, and Minister, I want to say this and place on the record to you, that whilst we do support this bill and we believe it will bring benefits overall in a holistic sense to the State, we in opposition do not have access to the information and processes that have been available to you. We do not have those budgets or those resources, and we are trusting today that you, as Minister for Infrastructure, on this occasion have done your homework, consulted widely, and attended to all the issues that would have been brought up as part of the Meyrick report. It is your responsibility today to get it right, and we hope you have, because there are a lot of questions still that will need to be answered, not necessarily today, because we speak in debate today pretty well in a vacuum, but within the next six to eight months, if not earlier, I am sure there will be many questions that will start to rise to the surface.

Mr Deputy Speaker, we have four very important ports. Not necessarily in any order, if you take the Launceston Port Authority, that also has responsibility for Flinders Island, and they have been a tremendous part of the northern community. They currently have 34 employees. They export nearly 4 million mass tonnes of predominantly bulk woodchips and import 1.5 million tonnes. They have a tremendous local economic input into the community. They have had an increase over recent times in container movements and they have had a greater focus on the provision of their bulk storage and better infrastructure. Their tonnage over the last few years has increased 20 per cent.

If we move along further down to Devonport we find another entity that employs 35 people with 3.195 million of mass tonne throughput in that particular port. For 13 years in succession, Mr Deputy Speaker, there has been a growth in the cargo throughput of that port. Devonport's container movements have grown by 30 per cent over the last five years and at the moment they have the 20-foot equivalent containers throughput of 165 000, whereas Launceston had 88 000. It is a tremendous port that is working well and efficiently and they have been obviously working closely with Patrick, who have invested heavily in Devonport with their new terminal handling and also obviously the lion's share of container movement in that port. They have tremendous amounts of bulk cement exports through Cement Australia and a dedicated terminal, and the list could go on and on. Not only that, they run, own and operate the airport in Devonport. So that is the Devonport port.

We move along further to the Burnie port in my home city, where 42 employees enjoy working in that particular port, with $4.182 million of mass tonne throughput, record cargo and container movements. There are container movements of 166 000, which I think is the fifth largest probably across the country. They have had a tremendous growth through the activities of Toll to the point where Toll has recently practically extended their two vessels by 32 metres, increasing their capacity by 25 per cent. There are 670 vessels through that port every year, with Gunns shipping 1.2 million tonnes of woodchip. The list goes on and on. A decision to sell their airport was made some years ago and is now owned by the Burnie Airport Corporation.

Then we move to Hobart which obviously, we would all agree, is not as dependent on its core port activities. Much of its profit, much of its revenue and much of its practical integrity, I suppose, is borne out of non-port activities; that is, they have a major infrastructure asset in the airport, which is a wholly-owned subsidiary company. They are the major holders of real estate tenures in this particular city and we all know that they are an integral part of the ongoing discussions of the Hobart waterfront proposal, and I need to ask you later in the debate some questions in relation to that. Stevedoring is a major part of the Hobart Ports' business, so much so that they are now involved in a new venture with the port of Melbourne which is Westgate Ports. They also have tremendous associations with the Casey station in Antarctica and they have also spent a lot of money in investment dollars in quarantine wash-down equipment for 240 containers a year from that.

What I am trying to do is just paint a picture of four vital ports in our State that we are all proud of. I am sure if we had time in this debate, every member of this Parliament would stand in their seat, whatever side of the Parliament, whatever electorate, and speak highly of the way in which the ports have developed over literally decades in this State. I can say quite unequivocally that I know, having even spoken to members on your side, that there is this underlying hesitation, wondering what the long-term impact will be on local communities, and I need to place that on the record. I want to place that clearly on the record because there is always the danger when we see a bigger entity, and you spoke at length in your speech about it being better, bigger, more efficient. Well, bigger is not always necessarily better. I agree that in some cases it is, but time will tell.

So I think what I am trying to say, Mr Deputy Speaker and to you, Minister, is that the Tasmanian ports system has served not only the community but has served the shippers associated with those businesses very, very well. There have been expansions in terminal areas, there has been improved throughput and all those things lead to positive economic growth and that has to be good for the State.

I think it is also fair to say that there has been a gradual but obvious change in transport and logistics surrounding transport over the last 20 years. In actual fact, it would be fair to say those changes have been dramatic, and what we need to understand today is that things have moved on considerably. Transport is characterised very clearly now by the desire of shipping services to be more integrated with the way in which they deal with the freight component and the freight task in this State, the way in which they link with stevedoring operations and other transport services, and there has been a definite moving towards the linking to more professional and efficient road and rail services.

It is also interesting to note that we have a meeting of historical moments potentially happening in our community right at this point in time. Not only are we standing in this place today to give our approval to a bill that will in six months eliminate four separate ports and give birth to one new one, we are actually having this debate in the context of a major multinational company seeking to take over another major multinational company to form one huge transport conglomerate. I am obviously speaking of the Toll potential takeover of Patrick. What I find interesting is that we are having this debate at that time and I believe, certainly in my electorate, those two pieces of historical decision making are giving more weight to the community's hesitation because they wonder what on earth their ports and their cities and towns are going to look like in 2006.

The minister has spoken in his second reading speech about the way in which the freight demand is going to increase astronomically over the next few decades.

Mr Michael Hodgman - I hope he's right.

Mr WHITELEY - I hope he is right too, Mr Hodgman, and I believe that we would all hope he is right, but that brings a range of challenges and we need to be very much aware that we need to be competitive and efficient but we also need to be responsive.

I want to speak quickly about some of the hesitations that people have in relation to the amalgamation of the four ports. It is a bit of double-edged sword really, Minister, because on one hand I can tell of my own experience having been an alderman and I have been part of the Burnie community all my life, where we have seen companies in the past that will remain unnamed quite clearly playing one port off against another, with those ports only being literally half an hour to 40 minutes apart - I think it might be actually 26 nautical miles - where you would have a company come to the Burnie port, get a price, move along the road a fraction, pick up a coffee on the way and screw the other port down, come back with a counter-offer, and so it went on, to the point where our ports were decreasing their margins of profitability on the back of retaining business over a competitive port just down the road.

So on that front this bill will be a plus in that when such companies come to deal again they will deal with one entity. They will deal with one chief executive officer and one board of directors and we would hope and trust that the Tasmanian economy would be the better for it and we would benefit economically from it. The flip side of that though is something that has been brought to my attention by a number of people who actually work within the ports at a higher level. Whilst they see that, they also see the danger of our being too hard in dealing with some of these companies and taking a bit more of a cocky attitude because we think we have now got it well and truly covered - 'You will do as you as we say or you will not do it at all'.

So that is a hesitation that is probably well founded and we would be very hopeful and, to a degree, somewhat confident that that would need to be watched into the future.

The thing that I want to move onto now is this: I have some concern in relation to the transfer of assets. As I said, this bill is not necessarily a bill that is dealing with the technical bits and pieces of a transfer; it is putting a new corporation in place. I understand that.

I have had a briefing from your department and they have answered my questions as best they can. I have been informed that KPMG have been engaged and they are currently in the process of doing an analysis of a potential balance sheet for the new TasPorts corporation, which I understand in summary - and maybe I have put my own interpretation on it - but I believe they will basically come to the new board with a list of 'ins', as in what you need in the way of assets to make your balance sheet viable, and a list of acceptable liabilities that the new port authority will take on. And then, as I understand it, they will potentially come to the new board with another sheet of paper that will have the assets that are not required and the liabilities that would be of benefit to be taken over by the Crown. So what we have is the potential for KPMG to come to a new board and say, 'Here is the balance sheet that you require. To achieve this you do not require these assets. You should not seek to take over this liability for whatever reason, because it may have been given under a certain condition or whatever, and we recommend that you do not take those on'. Instead, as the bill allows, those assets will be divested to the Crown, to Treasury, for them to dispose of.

Now, Minister, that is a big concern. It is my understanding that KPMG are closer to finishing that report than I probably understood. I want to hear from you today - and we may need to go into committee to do it - further detailing of that process and how it is going to work.

I think that we need to understand that, whilst the bill does take up the issue of the way in which shares would need to be dealt with - that is, both Houses of Parliament would have to have a say - it does not actually talk about the assets. Once we move out of this Chamber today and once this bill gets the support of the other House - I am not supposed to presume that, but I expect it will - after that, we lose control of those assets.

Now, what we have is a conglomeration of ports with assets totalling $0.25 billion. These are assets that have been built up in a community over 100 years or more. We have liabilities totalling just over $100 million with net assets totalling about $140-$150 million, and after-tax profits totalling nearly $10 million.

I need to hear more today about the process of the new port and the way in which it is going to take over these assets. I want to know how much influence your department will have in the final list of assets to be transferred. I do not want to cast aspersions on the first briefing I had so I do not want this to be taken personally, but I cannot recall in the first briefing that the issue of the potential to divest to the Crown was actually discussed. If it was, I apologise, I cannot recall it. What I can recall is that we were quite clearly informed that all assets from the four existing ports would be transferred over on whatever date it was - 31 December.

So either I did not get that information or something has changed over the winter recess. We on this side of the House are concerned about that. We are concerned about these assets because the Government could end up with literally tens and tens of millions of dollars worth of assets to sell and not necessarily seeing it go to the ports. In fact, by default, that would become a special dividend; not necessarily technically but certainly ethically it would become a special dividend that would be paid by the ports and could amount to tens of millions of dollars.

Minister, I would like to ask you today whether you would agree to table the ACCC response. It is my understanding that the ACCC have no problem with this amalgamation process and that the plan can go ahead. That is terrific, we are pleased about that, but I would also like you at the same time to table the submission that the department placed before the ACCC because I would be keen to see the case that was made and whether or not there was any mention in that submission of the way in which your department addressed the issue of potential loss of competition.

As I said, it is a double-edged sword. There are some benefits with one amalgamated port and there are some disbenefits as well, but we have a right in this place to see the submission put by the department and to see the response. I would hope that you would be able to give us that guarantee today.

There are also some concerns in relation to your second reading speech about the transfer of staff and I, as a spokesman on this, am pretty happy with that and it is pleasing to see all entitlements to all staff. We also understand that those who are working under contracts may very well have some opportunity down the track to indicate their desire to go and play golf - that is okay, and I understand that. But what I am concerned about is the issue of port harbourmasters. You have talked about the fact that the Government is giving a guarantee today that each of the ports will continue as working ports.

Obviously there is some question mark over to what degree and what specialities they might take on in the future - that will be the decision of the new board - but I would like to hear from you today that, as part of your guarantee that all ports would be operational and working ports, each of the ports will have their own harbourmaster.

It is my belief, having spoken to some people in the industry, that when shipping companies are dealing with local ports they are not too keen to speak with chairmen of boards, they are not too keen to speak with CEOs, they are more keen to speak to the harbourmasters when it comes to the safety and wellbeing of their vessels. I am not sure that a centralised harbourmaster-type arrangement would be in the best interests of each port, nor would it be in the best interests of our credibility or relationship with major shipping companies. I would be interested, Minister, to hear your view about this meeting of processes when it comes to the Toll purchase of Patrick versus the amalgamation of ports.

I would also like to hear some guarantees from you today in relation to the smaller ports, such as King and Flinders islands, Strahan and Stanley and to hear you speak about the fact that they, too, will be guaranteed a life beyond the current arrangements. I know Stanley are keen to discover your views on this, given that they have some very adventurous plans for their port. Flinders Island are still waiting, as are King, and they are very interested in infrastructure issues that affect their island. I know King Island are watching very closely, not this particular issue, but the issue of Patrick and Toll and how that might impact on the regular freight services into their island. I would be keen, Minister, to hear you put on record today your view of the world when it comes to the smaller ports.

At the moment, they have enough challenges before them dealing with their own parent port, for example, Flinders dealing with Launceston, and Strahan, Stanley and King Island dealing with Hobart in that they are already feeling somewhat aloof from the main game, and yet we are about to go another level again and they are going to be feeling that much more isolated, I suspect.

Minister, I would also like you to give us an update on the airport situation; this is one question that we did pursue through Estimates. We have an interesting arrangement here in that I believe the Meyrick report recommended that Hobart International Airport Pty Ltd, or whatever it is called, a wholly-owned subsidiary company, will continue to work as such, or to operate under that structure, and will be a wholly-owned subsidiary company of the new TasPorts Corporation. However, it is also my understanding that the Devonport port will not be taken into that, and will be treated separately as just a division of the Tasmanian ports.

I am interested to hear again your view of the future of those airports in the context that we will continue to have two airports that are run by the State and two airports that are owned privately all in competition with each other. Launceston is owned by the same company that owns the Tullamarine airport, and the Burnie airport is owned by the Burnie Airport Corporation which includes Australian Regional Airports and the Burnie City Council. I am very keen, Minister, to have your views on the record in relation to the future of Tasmanian airports and your view on why government should be involved necessarily in running two airports at this particular point of seeing the TasPorts Corporation trying to focus more on core port activities.

Minister, we support the bill. As I said, there are hesitations; some of those are understandable, some of those may be not well founded, but even from the strongest supporters of this bill today, there are questions and, as we all agree, the proof will be in the eating. As I said to you before, we put on the record that you have the resources of government, you have the ability, I suspect, to consult much more widely than those of us on this side of the House. Minister, you had better get it right because we are making a major decision for this State here today. We personally wish it well.

There are a number of chambers of commerce around the State that are somewhat shaky; they are supportive. I have to say, though, to be fair, that the Devonport chamber have expressed their concern both publicly and to me. I also have to put on record that some members of that chamber are relatively happy with the way it is progressing, but they would fit into the hesitant category. I think those people in business understand the reasons that we need these efficiencies; we cannot continue to have the duplication of major assets in these ports. They cost the State a fortune.

If I had the time - and I may at the committee stage, depending on how you go with your response - I could talk a lot about the way that this has developed historically and the way in which each of these ports has been undercapitalised because governments, having shares in each of those ports, have only had a certain amount of money and politically they have had to be seen to be fair and to share it out reasonably, not necessarily on the basis of priority. I accept that.

Mr Booth - Like Spirit of Tasmania III , for example.

Mr WHITELEY - Well, I do accept that, and I think this new regime will allow a central board; I have to say also, Minister, we congratulate you on your decision to locate the headquarters in Devonport. That is commonsense, and we were pleased to see that. We thank you for that commonsense decision.

I would like to speak a lot longer about this, Mr Deputy Speaker, but time does not necessarily permit it. I am conscious that we want to get this through this afternoon. It is a huge decision. The report by Meyrick and Associates is about 100 pages long. I have read it over a considerable period of time and I have made copious notes in relation to that and the way in which they have, I think relatively succinctly, gone to the heart of the issue. I also want to reflect on the fact that your department - I am not sure exactly how old it is now - made their views on the freight and transport task in this State clear from their perspective some time ago. It is a national issue, with the freight component growing exponentially across the nation, and we need to accept that we have to respond to that. We have to be in a position to be competitive. It is my understanding that once we get this new port under way I think it will actually be bigger that Fremantle, comparable to Brisbane, and bigger than any of the ports in South Australia. As I said earlier, bigger is not necessarily better, but obviously that gives us some understanding of the size of this new port.

The size or the capacity of freight being transported in this nation over the last 20 years has more than tripled and we have a huge task in front of us to be able to remain competitive in that environment, and I do not see that it is going to change too much in the future. We need to be competitive, not only on a national level, but also internationally. We are competing now with a huge growth in the online purchasing arena, where people now are able to buy things quickly and often cheaply and freight is a part of that. We need to be able to make sure that freight that is landing on the ground is able to be transported in a very efficient and affordable way.

So we are pleased to be able to stand in this place today and support this bill. There are a number of questions that I have placed before the minister. You may have missed some - I hope you did not. If you did, I am happy to prompt you and if we need to we will go into Committee, but we are pleased today to support the Tasmanian Ports Corporation Bill of 2005.

[3.42 p.m.)

Mr BOOTH - I would like to put it on the record that we will be supporting this bill on behalf of the Tasmanian Greens. I will be brief, as I do not think there needs to be a lot said. I certainly will not be giving the minister a blow-by-blow description of life in the universe, I will simply thank him for providing his advisers and for the briefing that he gave me, albeit briefly. I have already thought about this fairly extensively and the few issues that I had have been clarified in the briefing and I thank you for that, and also obviously for the enormous amount of work that has gone into what has been a very complex process.

We have talked about this extensively before, when the proposal was first mooted, and the consultation that went through with the ports corporations all coming out and supporting the amalgamation. The recommendations contained in the Meyrick review obviously indicated that it had broad support from the people who actually operate at the ports, at the coalface, and a recognition that we have to move into a new economy in regard to freight matters.

It does help to break down parochialism of course, which has prevented Tasmania moving forward and getting the sorts of efficiencies that we need to get in order to be able to compete in a global economy. If you are strangling your businesses through unnecessary costs or duplication, then you do end up reinforcing the issues where you have low commodity prices for things such as woodchips and the potatoes with the commodity trap that the farmers have fallen into. But we do need to be realistic that we can not maintain inefficiencies simply for the sake of sentiment, history, or parochialism.

Given that, I do congratulate all who have been involved. I am sure that the merger will not be totally supported by all. There will be some criticism of it, there will probably be some problems, and it probably will not be all seamless, but I certainly hope that it will be. I have been satisfied in terms of the general direction and the assurances in regard to matters such as career paths of individuals, the human face of these amalgamations, where people who have put their lifetime's work into places like this sometimes can lose their livelihood as the result of a decision for efficiency's sake, or a change in government policy. I am assured by the minister's advisers that those individuals - the human face of the ports - accept and generally support the amalgamation and accept that they in fact will not be losing entitlements or their career paths. In fact, I guess there is a point that there will be an enhancement as the advice I have from the advisers is that there are some opportunities for better career paths as a result of a bigger organisation and a better positioning in terms of exposure to a bigger critical mass and economy of scale.

As I said before, we do recognise the need to develop a critical mass and economies of scale with these kinds of industries to be competitive. Any money that is wasted on inefficiencies of course means that a dollar which is wasted on an inefficient operation is a dollar that then does not generate wealth in itself through some productive activity and it is a dollar that cannot be spent on health, education or infrastructure or other opportunities or investment that the Government may invest in to stimulate growth and other opportunities that in the long-term will be in the best interests of Tasmanians.

I had not intended to, but as a result of Mr Whiteley's contribution in regard to asset disposal, I will say that I share his concerns with the propensity of this Labor Government to plunder the assets that have been built up over generations by Tasmanians. I have been very disappointed at the disposal of these assets -

Ms Giddings - We build new ones, come on. What do you think the Affordable Housing Strategy is about? Building new assets.

Mr BOOTH - and by interjection, the minister, Lara Giddings, who has just returned from overseas pastures in Western Australia, now reminds me of the failure of the Affordable Housing Strategy. In fact, the level of homelessness in this community is no more self-evidently displayed by the cruel words that the minister responded with recently when I was forced to intervene in the case of a homeless woman and her son with a severe disability, and that particular minister who had the temerity to interject on me used the cruel words that she was in fact some form of by-kill from a growing economy. So I think that she ought to just reflect on the rhetoric that comes out her mouth at times and perhaps not open her mouth so readily.

In regard to some of the other investments she is talking about creating new assets, the sorts of assets that this Government is likely to plunder the public purse for and just spend like a drunken sailor are on things like the Meander dam, for example, which has been clearly indicated by documents that have been provided to me by Cabinet. Obviously somebody at the highest level does not agree with this wasteful process and the deliberate pillaging of the public purse and the deluding of the public who are going to supposedly invest in that project, and provided those documents and Crown Law advice to the effect that in fact that was a project that was economically unviable. It is quite clear that it is.

It is quite extraordinary that you can have a government here who comes into this House and pretends to be doing something or at least acknowledges, in the case of the ports, that it is financial and economically responsible for the future to create economies of scale, who will then turn around and, like Luddites from the last century, create another drain on the public purse and another project that is unviable. So I think they have some major problems in terms of the direction that they intend to go and I suppose it reflects their lack of experience in terms of business and a lack of understanding of what a strategic investment is and the sorts of things that need to be provided for the community in the future.

This asset-stripping is deplorable and I think there should be a very stringent public benefit test before any of these assets are sold. I have talked about the Hobart Ports Corporation's assets which are quite considerable and I am very disappointed that the Government intends to sell those assets and put that money, presumably, back into Consolidated Revenue, rather than -

Mr Green - No, ESIF.

Mr BOOTH - ESIF is the same thing.

Mr Green - Economic and Social Infrastructure Fund?

Mr BOOTH - Yes, but it is not something that you are putting back into the community, an asset that currently is enjoyed by the community for provision of certain things like open spaces or -

Ms Giddings - The Affordable Housing Strategy's come out of ESIF - goodness me!

Mr BOOTH - Do not talk about affordable housing; I have already talked about the cruel response that you have had about that.

Ms Giddings - It's really important. Well, you take the $40 million out then.

Mr BOOTH - If you are going to continue to interject, Ms Giddings, you are going to delay the process of this bill, you are going to distract me into things that are irrelevant to the process, and I had come into this Chamber in the hope that we might find tripartite support for what is, arguably, quite an important direction for the community to go in. Those frivolous sorts of interjections and absurd remarks from your corner are not helpful towards getting this matter resolved.

As I said, we do support the bill and, with those reservations in regard to the disposal of public assets, the act of creating the efficiencies of amalgamating into a single port is not going to make any difference as to whether those assets are stripped off or not, because they are going to be, whether it remains as four ports or one port, let's face it. That is another process and another argument for another day and is not something that we should be distracted from in terms of the reasons that this process has been proposed and will be carried out, assuming that it is supported in another place.

I do think that for the edification of Ms Giddings it might be worthwhile for this Government to consider going through similar processes of proper review, consideration and strategic planning, like any real business would carry out in the real world when they are spending their own money rather than the funds of the citizens of Tasmania on projects such as the Meander dam, and the Elwick Racecourse. When you made a decision to spend $115 million on a single ferry, for example, it might have been a reasonable idea to listen to the proper advice that you received, as you have in regard to the Meyrick report with this, and to act responsibly when you are spending public money.

Having said that -

Mr Green - I will bite down on this pen.

Mr BOOTH - I could say something about that but I will not, Minister.

Mr Green - It's infrastructure and equity injection, that's what it is, not as you try to portray it. You think we are throwing money into some black hole.

Mr BOOTH - Minister, if you want to have an argument about that sort of process, we can have that discussion at a proper time, in a proper place, but I put it to you that just because the Premier wakes up one morning - or you or Mr Kons wakes up one morning - and decides it would be a good idea to invest money in a project, it does not necessarily mean that it is. Those infrastructure injections and asset creations you are talking about need to be done very strategically with some sort of long-term plan and rational basis to make sure that you do not end up in 20 years' time with -

Mr Green - We thought we were supporting your philosophical point, and that was that tourism will provide a good long-term income for the State which will build assets on the back of it, and that is why we have made strategic investments.

Mr BOOTH - If that is what you thought, that is laudable that you have recognised, finally, that tourism probably will be the engine driver. It is in fact a significant engine driver of the new economy and something that will and does create significant levels of employment, as opposed to the old industries that you seem to support quite recklessly.

If you had some proper strategic analysis before you went into those projects you would not mind, but you cannot justify them; you cannot come into this House with the weight of evidence you have in regard to this particular bill and say to us, 'Look, here's the justification for what we want to do'. If you were able to do that, you would probably get tripartite support. We would have a cooperative approach to politics and the community would be a lot better off at the end of the day, but I do not want to get sidetracked into an ideological debate with you over those matters.

We are dealing with this particular bill - the Tasmanian Ports Corporation Bill - and as I said before, we do support it. I think this move, ultimately, will be in the best interests of all Tasmanians and for that reason we support it. As I said before, I hope the transition is as smooth as possible, and does not result in any hardship for anyone, and with the best will of all parties and if we can put aside all the parochialism that has held Tasmania back, it will help us move through this century and provide better opportunities not only for us but also for our children. If I said anything more, Minister, it would simply be to waste the Parliament's time and create more rhetoric on something that would be completely unnecessary. You have said what needs to be said in your speech. I thank you for the contribution and I hope, to quote a nautical term, that it is plain sailing in the future. With that I support the bill.

[3.55 p.m.]

Mr GREEN (Braddon - Minister for Infrastructure, Energy and Resources) - Mr Deputy Speaker, can I first of all say thank you very much to both members who have made a contribution today for their mainly positive view of what we are trying to achieve here. I recognise that this is a big change, as I said at the beginning of my second reading speech. It is a big change, there is no doubt about that. I understand why some people in the community would be supportive because in principle they can see exactly what we are trying to achieve here but at the same time be slightly nervous about it. It is a big change and when you are dealing with so many people at different corners of the State who are all making a contribution to the business that they are in at the moment and are happy with that, and when we wheel in for the betterment of the State overall and make the sort of decision that we are trying to make today, they think, 'Well, why don't you just go away, we are happy with what we are doing at the moment.'

The great thing about this whole process has been the maturity, not only of the port chairs and the CEOs of the existing port companies, but the boards and many of the employees that I have spoken to, including the union. They have all suggested that this is a sensible decision for Tasmania. I think that it shows just how far we have come in recent times as a community overall that we can face up to these decisions in a mature way and, as a result of that, move forward. That allows us to give us and future generations the best possible opportunity to take advantage of any economic advantage that the State is going to see in the future, to do that in a sensible strategic way, allow us to manage our assets in the most efficient and appropriate way, and integrate that in with all the other decisions we have to make about how we manage our freight task, our transport task, into the future.

So I do genuinely thank the members for their contributions to this bill today. I will try to answer some of the concerns, particularly those of Mr Whiteley. I hope as a result of that, he will be satisfied and we will continue to see a smooth passage of this whole process.

I also want to thank the Legislative Council - I notice there are a couple of Legislative Councillors in the Gallery today - for their support for the process that we established leading up to today - we wanted to set up a shelf company so that we could start to get things under way. I talked about it in the second reading speech but practically I wanted to make sure that the Legislative Council and responsible opposition members understood exactly what we were doing and why we were doing it. The reason that we wanted to do things in parallel - set up the shelf company and get the legislation drafted at the same time - was to compress the time frame as much as we possibly could, so that we minimise the impact on employees in particular and the uncertainty associated with that. The people who are here working with us today, who will see the passage of this bill, have worked extraordinarily hard to work in parallel with that process as we have gone through. That is why we have a better understanding of what the Government is trying to achieve overall, or what we are all trying to achieve really for the community.

I thank the Legislative Council for their indulgence and understanding as to why we would want to go down the passage that we have to get us to this point. I think that that in itself does show a maturity that says that we were taken on trust. There is no parliamentary requirement for us to set up the new shelf company with respect to TasPorts to get the process on. There was no legislative requirement for us to do that, but nevertheless we thought that it was important that we take people into our confidence and let them know exactly what we were doing and that has made a huge difference. I think people can quite clearly see that the Government has thought this position through at length with a view to minimising the impact. I think that if you reflect on the Cabinet decision first up - and it does relate to some of the questions that were raised by Mr Whiteley in regard to say, harbourmasters - underpinning everything that we have said with respect to the transition is the fact that there will be no forced redundancies or forced moves.

I will just reiterate that position now, and say to Mr Whiteley that yes, the positions held by harbourmasters are an important part of a port. They are pilots, they talk to ships' captains, they do all sorts of things. That position will be required within the four working ports. They might not be necessarily be called harbourmasters, I cannot guarantee that, but they will certainly be in that sort of capacity working within the port structures as they will exist on into the future.

With respect to the ACCC, I have a copy off the web site that deals specifically with what the ACCC said about the merger and it basically says this about the Tasmanian Government's proposed amalgamation of the Hobart Ports Corporation and the Port of Launceston Pty Ltd, Burnie Port Corporation Pty Ltd and the Devonport Port Corporation Pty Ltd:

'The Tasmanian Government approached the Commission regarding its proposals to amalgamate Hobart Ports Corporation … into a single entity.'

Then we have the file numbers and it talks about the market definition -

'The Commission considered the relevant market in this matter to be the Tasmanian market for the port-related services. The Commission's analysis was that the Commission found that no substantial lessening of competition would arise from the amalgamation. The Tasmanian Government is seeking to rearrange the corporate structure of the port corporations. The Commission has made market inquiries and found that it is unlikely to lead to change in the competitive environment of the Tasmanian port system.'

I do not have the submission that the Government made. Don Challen initially went there personally and advised the ACCC of exactly what the process was and that is on the public record on the web. But I am more than happy to table it if the member requires it.

Mr Whiteley - Is the submission available, Minister?

Mr GREEN - Well, I do not have the submission with me. I am not sure whether there are commercial-in-confidence aspects to the submission or not, so I am not going to give a commitment. I would be happy to brief the member sometime with respect to what we put forward but it is basically exactly what it is. Everybody understands who the shareholders are and how the port corporations operated under the old scenario.

Mr Whiteley - I am not asking you to give a commitment, Minister. I am just asking you to give a commitment to at least look at whether you can get it to us. There is a big difference.

Mr GREEN - To be honest with you, I am just not sure if there are any commercial-in-confidence aspects. As I speak about other points that you have raised, somebody might make a note -

Mr Whiteley - You are mishearing what I am asking.

Mr GREEN - I understand what you are saying. But somebody might make a note and let me know whether or not it is possible. The issue was also raised in respect to the issue of the assets transfer and it is specific in the second reading speech in that the Government has talked for some time about some specific assets that are deemed surplus here in the Hobart port. We do have KPMG looking at the business model for the new port company. What we are saying is that once a decision is made with respect to that, transfer to the Crown would take place at the transfer into the new port company itself.

It would be ridiculous for me to try to restate, given that it has been on the public record on so many occasions, what the intention of the Government has been with respect to those assets, but we think that it is appropriate that we do the financial modelling to understand what is going to be required by the company. You have to understand that the Government is coming at this from the point of view of making sure that we have a good, strong company operating here. We are not coming at it from the point of view of seeing what we can get our hands on as part of this process, and that is why, when it has appeared on the public record, be it from the parliamentary Hansard or the Estimates process where we have talked about the assets under the Hobart port, effectively, that is what we are talking about. So it is reasonable in those circumstances that we get KPMG to look at it to see whether it is appropriate to transfer those under the new scenario. In fact it might not be, so we will need to understand that between now and then, but the member can rest assured that that transfer will take place at the time of transition, so it will be clear as a result of that.

I do not really think that I can say much more with respect to that, because we have been on the public record -

Mr Whiteley - I will pursue that through committee.

Mr GREEN - Okay.

Mr Deputy Speaker, I think it is plain for all to see what the Government has been trying to achieve in respect to the ESIF. I do not want to get into a philosophical debate with the member for Bass, Mr Booth, on this matter, except to say that what the Government has tried to do by establishing ESIF is provide for economic and social infrastructure benefits for the State overall. We have not embarked on any philosophical, ideological fire sale of the State's assets with a view to putting that somewhere; what we have tried to do is manage debt, and at the same time establish a fund to allow us to progressively improve the State's infrastructure in a range of ways.

Mr Booth interjecting .

Mr GREEN - Well, it is a fact, and it has been very successful in many respects. In fact it was the ESIF that started to reinvigorate confidence in Tasmania in the first place, and that has made a big difference to the State. It started getting businesses coming back into the State, construction - all sorts of things - and it gave people a new confidence.

Assets surplus to requirements under certain scenarios - we have done that. We have foreshadowed this with respect to the ports, and as a result of the KPMG study, we will be in a position to understand exactly what we need to do.

It is actually quite complicated when the response, like any of the documentation that goes to the ACCC, is not accepted prima facie, I am told, so there are some letters and some correspondence that we could share with you in the beginning to start the process off.

Mr Whiteley - But you would have made a submission. The form of ACCC is that you make a submission.

Mr GREEN - Yes, and the other point is that once we stated exactly what we wanted to do, as I indicated myself, they went and satisfied themselves with affected parties to see what their view of the world was. So it is not simply our making submissions and their following that through and satisfying themselves with other parties. Anyway, Mr Whiteley says he is going to pursue that a little later on.

With respect to the King Island and Flinders Island ports, these are important integral parts of their infrastructure, and we recognise them as important parts of the State's infrastructure. Far from wanting to diminish their ability to operate, we think this new structure probably gives them a better chance to operate. We all know there are issues at King Island at the moment, particularly with the Patrick vessels and things that are happening out there in the external world with takeovers, and goodness knows what, that may have an effect, but these are the things that we have to be able to work through, and the establishment of this corporation, in my view, will give us a better chance to do it. But, having said that, we do obviously recognise the importance of King and Flinders islands ports to the economy and wellbeing of those islands, just as we recognise that the port infrastructure of Tasmania overall is extremely important, given that 99 per cent of everything comes through the ports. It is basically the same for those other islands as well.

Mr Whiteley - So, Minister, you have always talked about four ports remaining working ports. Are we talking about all ports, not just the four city ones?

Mr GREEN - Yes, effectively we have talked about those ports. King Island was controlled by Hobart Ports and was a working port as such. Flinders Island was controlled by Launceston and was also a working port as such.

Mr Whiteley - I am happy with that.

Mr GREEN - Stanley was in with Hobart Ports. There were some strange old mixes with respect to how it was all split up in the past but effectively they are working ports. I agree, and this may give us the opportunity to look at what we can do differently at Stanley. I think most people would accept that the commercial side, other than for fishing, in other words heavy freight coming into Stanley, is probably a thing of the past. It is hard to see how that could be recreated right at the moment; I cannot think of an opportunity. But having said that, the fishing port is going very well and we are seeing smaller tourist vessels coming in there now. There are opportunities and the whole precinct in itself is great precinct. There are probably opportunities for us to get on and work through that plan for that particular precinct for the benefit of the north-west coast and certainly Stanley. Anybody who has been there knows that it is the most magnificent site. You can see that there are opportunities for us to do something special down there, so I am quite looking forward to hearing what the new corporation has to say about that.

Are there any other things that you wanted me to answer?

Mr Whiteley - I'd like you to talk about airports. Which one are you selling?

Mr GREEN - We are not selling airports. We have said that on a number of occasions. I have said it publicly, I have said it in Parliament and I have said at forums, including forums with the chair of the Devonport Chamber of Commerce, who I know has raised this as an issue. We know how the existing wholly-owned subsidiary is run. We know that Devonport, as mentioned through Meyrick, has some liability questions associated with it. We understand that this airport is important. We know that there are some issues with it right at the moment with Rex pulling out, but up until then and I expect into the future it will still be going, and it has gone well. So it is my expectation that will continue to happen. I will obviously take advice from the new corporation when it is established as to how we will manage that on into the future. My view is, and I have said it publicly on a number of occasions, that we are not setting it up for sale. I am certainly not setting it up for sale and -

Mr Whiteley - Have you given consideration, though, as was claimed - I'm trying to think where - to getting Meyrick or someone such to do a report in relation to airports on the north-west coast, as you have done about ports in the State?

Mr GREEN - I am unaware of any indication that we are going to get a consultant in to do a report on airports on the north-west coast. It has certainly not been put to me. The set-up is the set-up as it stands at the moment. There have been recommendations made. We recognise the importance of the airport to Devonport and the scenario that presents itself allows the new port authority to look at how that can be best managed. I am satisfied with that approach. I think that is a sensible approach under the circumstances, bearing in mind that we understand that the airport is an integral, important part of the airport infrastructure generally. It is my expectation that it will continue to operate on into the future.

So once again I want to reiterate my thanks, particularly to everybody who has been involved in the preparation of the bill today. I know it has been an enormous task and they have worked very long hours. I probably should not say this right at the end, but I just want to reinforce that again; I appreciate the work that you have done, it has not been easy, I know that. I appreciate the contributions from the House as well. I think that, as I have said, indicates how we are prepared to move forward as a State now, compared to how we used to operate in the past. I firmly believe that this will make a difference to the State in terms of how we operate on into the future. It will give us a great deal of flexibility, particularly with respect to how we invest in our port and transport infrastructure generally to meet the growing demand that we know that we are going to face.

Bill read the second time.