STATE MEMBER FOR MALVERN
SHADOW TREASURER

Portfolio Speeches

Parliamentary Speech - Port of Melbourne

Mr M. O'BRIEN (Malvern) — I rise to speak on the Orwellian-named Delivering Victorian Infrastructure (Port of Melbourne Lease Transaction) Bill 2015, a bill that seeks to allow this Labor government to break its election commitments to Victorians, a bill that seeks to allow this Labor government to put its short-term political interests ahead of Victorian jobs, ahead of Victorian families, ahead of Victoria's farmers, ahead of our economy and ahead of our environment, and a bill that seeks to allow this Labor government to shackle the interests of this state not for a single term of Parliament but for the next three generations.

I am pretty confident that each and every member of this house today will have gone to meet their maker by 2086. By 2086 there will have been 88 separate minutes of silence or condolence motions for each of us here today, but Victorians will still be living with the consequences of this bill, should it pass. That is why this bill as it stands, and the appalling deal for which it stands, should not pass and why the coalition parties will be voting against it in this place. We will not stand by while Labor breaks its promises to the people of Geelong and people right across Victoria. We will not stand by while Labor creates a 70-year private port monopoly which will drive up costs for our farmers and exporters, drive up prices for Victorian families and cost jobs across the length and breadth of this state. We will not stand by while Labor kills any prospect of a second container port in Victoria for the next 70 years, all for the sake of a dirty dollar today.

This comes from a government that has in just six months wasted hundreds of millions of dollars to avoid building essential infrastructure. In previous incarnations Labor governments gave us the desalination plant disaster, the myki mess, the smart meter stuff-up and the pokies licensing lemon. We will not stand by while it adds this port rort to its list of financial disasters for Victoria.

Let us start with some facts about the port of Melbourne. It is the jewel in the crown of Australian ports. It is the largest container port in Australia. It handled 2.5 million 20-foot equivalent units (TEUs) in 2013–14. That compares with 2.2 million TEUs in Botany and 1.1 million in Brisbane. It is visited by more than 3000 ships a year, and the catchment includes not just Victoria but Tasmania, southern New South Wales and south-east South Australia. There was $92 billion worth of trade handled through it in the last financial year.

The coalition parties support this port. We worked very hard under the former Premier and former Minister for Ports, the member for South-West Coast, and another former Minister for Ports, the member for Croydon, to expand it. The $1.6 billion port capacity expansion project was conceived and implemented by a coalition government because we support our ports. We support them as being vital economic engine rooms for the state.

Our position on the port has been entirely consistent all the way through. We announced in 2014 that we would offer a medium-term lease of around 40 years over the port of Melbourne. This followed an extensive scoping study and considerable work. Importantly, this had to be done in conjunction with the development of Victoria's second international container port. This was absolutely essential, and the coalition government, based on advice and science, had determined that the port of Hastings was the most appropriate place for our second international container port.

The land had been set aside under the Bolte government. This has been a long-term project for this state. Western Port Bay, in which Hastings is situated, is a natural deepwater port, unlike the port of Melbourne and unlike the proposed Bay West site. That means it can handle much larger ships without the need for further major dredging or indeed blasting the heads. I note that the Minister for Ports is at the table and that in his contribution in question time today he refused to rule out blasting the heads of Port Phillip Bay.

Our position has been absolutely clear and consistent. We did and we do support a medium-term lease for the port of Melbourne, together with the development of a second container port for Victoria. Our position has been consistent, and that is in stark contrast to those opposite, because what Labor is proposing now is completely different from what it proposed before the election. Labor is proposing a private port monopoly instead of developing a second container port. It is proposing a lease of up to 70 years, compared with the 40 to 50 years it was talking about before the election.

As a consequence, this government has no mandate for this proposal whatsoever. This is not what Labor put to the people of Victoria, and the bill should not be passed because not only does it represent a broken promise but it is a dud policy too. This would be the largest privatisation this state has seen in over 20 years. It is vital for Victoria that we get this right. We cannot afford another desal-style disaster, and members opposite have got form. But this proposal is bad for jobs, it is bad for trade, it is bad for competition, it is bad for consumers and it is bad for the environment, and the coalition will not support it.

Let us go to the position of the Labor Party on ports. You need to be fairly flexible here, because it has done a Nadia Comaneci in terms of its backflips. When Labor was last in government the now Treasurer was the Minister for Roads and Ports. Here is the then Minister for Roads and Ports in August 2009:

In planning for future economic growth, and consistent with the Victorian ports strategic framework, the government has confirmed that Hastings is the preferred site for a second container port to supplement the port of Melbourne when it reaches capacity in around 2030.

No other port location offers the same overall advantages as Hastings and it holds major economic potential for the state of Victoria. Consequently there is a fundamental need to plan and prepare now for the future development to ensure that the opportunity is not built out or lost to alternative uses.

He sounded like the ambassador for Hastings, he really did. The same ports minister said that the best location for the second container port was Hastings, based on advice he had as minister. Having access to all the departmental research that being a minister provides, he knew that Hastings was the best place. But what did we see when Labor got into opposition? As usual, flip-flop. As usual, a cheap grab for votes and an attempt to forget what it said before. Here is the then Leader of the Opposition, now the Premier, on 5 March 2014 on 3AW:

Neil Mitchell: And you're not going to develop Hastings, you're going the other way?

Daniel Andrews: We think Bay West is a much better option. You and I were down in the great city of Geelong last week and if ever there was a region that needed an industry, that needed a real kick along, a Bay West port option; the freight and logistic potential, the jobs, jobs and more jobs that can come from that is significant; in fact it's huge and that's why we favour the Bay West option, Neil.

Even before that, on 20 November 2012, an article published in the Age and written by Josh Gordon headed 'Labor jettisons backing for Hastings port' states that:

Opposition leader Daniel Andrews said Labor supported a second container port in the Bay West area 'as the best option' to ensure economic growth and jobs into the future.

Labor used to be in favour of Hastings, then it was in favour of Bay West. I will briefly refer to an editorial from the Geelong Advertiser on 29 May this year. It tells you how much the now government, the former opposition, was out there spruiking Bay West and the jobs, jobs, jobs. The editorial says:

It —

being the then opposition, the Labor Party —

even briefed the Committee for Geelong on the port, complete with diagrams of where its jetty might be.

Now these plans look like a smokescreen, aimed at putting out a perception that it was never going to live up to once it won office and leased out the port of Melbourne.

I wonder: did the design of the jetty have flying saucers and spaceships, given that it apparently was going to be 70 years away? The people of Geelong and the people of Victoria were clearly not just led but misled by the Labor Party into believing that it was serious about building Bay West. It did not say to anybody 'in 70 years time'. There was not this little asterisk that said, 'Yes, we support Bay West and jobs, jobs, jobs for your great-grandchildren, but not for you and not for your kids or their kids'. Labor members were talking about Bay West now, and they lied. They lied to the people of Geelong and they lied to the people of Victoria. They are liars and they have no credibility.

The Treasurer got into it. He said:

Bay West is about jobs for Geelong, it is about jobs for Melbourne and jobs for Victoria.

One of the favourite quotes of my colleague the Deputy Leader of the Opposition from the now Treasurer is:

You don't build a port for ships …

Given he is now handing out a 70-year monopoly, what he meant was: you do not build a port at all. That is what he actually meant. He went on to say on 10 April 2014 on ABC radio 774:

We believe the Bay West option is a better one because it's close to existing transport links and it'll create thousands of jobs for Geelong.

When, when, when? So having backflipped first of all on being a supporter of Hastings, then being a supporter of Bay West, now Labor does not support any new port for 70 years.

On the length of the lease, I will refer to what the then shadow Minister for Ports, now the Minister for Local Government, said in the newspapers during the election campaign. This was at a time when people were paying a lot of attention to what the government and opposition were saying. The parties were putting out statements about their policy intentions and presumably what people could rely on if that party was elected. For all the talk now from the Premier who is saying, 'We always supported a long-term lease', here are the comments of the then shadow Minister for Ports in theAustralian Financial Review of 13 November 2014. You can get a little hint of the comments in the article from the heading 'Labor backs 40-year port lease'. It was not a 70-year port lease. It was not 99 years or 50 years; it was a 40-year port lease. The then shadow minister was quoted as saying:

We've said we will consider a lease that's around the 40 to 50-year mark …

So where has this idea of a 70-year port lease come from? It certainly was not put to the people before the election. This is just another Labor falsehood. It has no mandate; it has no credibility whatsoever.

The question is: when is Victoria going to need another container port? Because the port of Melbourne, even with the very significant increase in capacity that we undertook as a government, will still have capacity constraints. When last in government the then Minister for Roads and Ports, now the Treasurer, said that we would need a second container port around 2030. In his Port of Hastings Land Use and Transport Strategy 2009 he said:

… the government has confirmed that Hastings is the preferred site for a second container port to supplement the port of Melbourne when it reaches capacity in around 2030.

Even after the election the now Minister for Ports, who is sitting at the table, told the Public Accounts and Estimates Committee that it was about 30 years away. He said:

Our assessments in relation to the need for a second port is that we probably would not need a second port until 2045, maybe beyond.

So we had the former Minister for Roads and Ports saying 30 years, or around 2030, and we have the current minister saying around 2045.

What does Infrastructure Australia say? Remember that members opposite used to put a lot of store in Infrastructure Australia. Do you remember those days, Acting Speaker? The words of Infrastructure Australia were like the stone tablets handed down on Mount Sinai. Here is what Infrastructure Australia said in its Australian Infrastructure Audit released in April this year, so it is pretty recent. Talking about the port of Melbourne, it said:

Taking into account these expansions, there will be adequate capacity in the medium term. However, demand for container facilities at the port of Melbourne is projected to exceed capacity before 2031.

So Infrastructure Australia says we are going to exceed capacity at the port of Melbourne in 16 years time. What do these geniuses opposite want to do? They want to lock up the port of Melbourne as a monopoly for 70 years. It is an absolute dud proposal.

The response of industry groups and the public has been far from unanimous in terms of saying that this is a positive proposal. I refer to an article in the Weekly Times of 3 June. The headline — and I must be careful how I pronounce this, Acting Speaker — is 'Shipload of strife'. It says:

VFF president Peter Tuohey said proposed 800 per cent rent increases for stevedores at the port would put more pressure on exporters.

'It's clearly a case of fattening the pig before sale', Mr Tuohey said. 'And it is farmers and other rural Victorians that rely on it who'll end up wearing the cost of these higher rents'.

The Australian Dairy Industry Council said the proposed rent hike would cost dairy farms in excess of $1000 a year.

The Australian Competition and Consumer Commission has weighed in and said it is very concerned about this bill as well. An article in the Australian Financial Review of 16 March says:

Competition watchdog chair Rod Sims has called on governments to give the regulator authority to intervene in pricing disputes at Australia's ports as tensions escalate between stevedores and the port of Melbourne over a proposed 800 per cent rent increase.

'A regulator wouldn't allow prices to be set on somebody bidding for the assets', Mr Sims told theAustralian Financial Review, adding it could lead to an 'upwards spiral' in prices.

We are seeing that everyone who is involved with the port believes what the government is doing is a bad idea. It is bad to set up a monopoly, it is bad to have a 70-year lease, and it is bad to ensure there is no competition over that period of time.

When you look at what has happened and what has changed in Victoria over the last 70 years, you have to go back to 1945. World War II had just ended. In the last 70 years we have had 19 premiers in this state and 5.3 million Victorians have been born. That is 90 per cent of the population. Besides those on that side of the chamber, does anybody in this state have confidence that this government is up to understanding what the needs of Victoria will be in 70 years time? Does anybody seriously believe it is the right course of action to handcuff this state for the next three generations to a monopoly port at the port of Melbourne and kill off any competition or any second port? Apart from those who have drunk the Kool-Aid opposite, the answer is clearly no. Of course there is the compensation or the poison pill that this government wishes to put into this legislation — —

Mr Pakula interjected.

Mr M. O'BRIEN — I am pleased to welcome the Attorney-General back to the chamber after his earlier ejection. He is in a good mood because Carlton won on the weekend. In terms of compensation, I refer to clause 69 of the bill. The government is actually seeking authorisation for something that would otherwise be illegal. It is seeking to legislate as part of this bill an anticompetitive action that would otherwise be illegal. The law of the land says it is wrong, it is illegal, it is against competition law and it is against the welfare of the country to have monopolies of this nature, so through legislation the government is seeking to authorise a monopoly which otherwise would be illegal.

We do not know how much that compensation will be because the government has never actually explained it. It is not in the bill. It is hidden somewhere in the transaction documents which nobody else is allowed to see. So we have the government wanting Parliament to sign up to a blank cheque on open-ended compensation that it will not tell us about. 'Trust us', say the same people who said, 'Don't worry about the east–west link; we won't pay any compensation'. These are the people who said, 'The contract's not worth the paper it's written on'. Remember that?

We know the history of Labor when it comes to compensation. It is not just the east–west link. How about the pokies licences? Remember those? According to the Auditor-General, Labor lost $3 billion flogging off the pokies licences. In addition it lost a court case to Tattersall's. Victoria had to pay $542 million and a matter is still before the High Court in terms of the Tabcorp case, which could cost in excess of a further $700 million. Who was the gaming minister who set us off on that path? None other than the now Premier. He made a mess of the pokies, he made a mess of the east–west link and now he wants to make a mess of the port of Melbourne. We will not support that.

This is a bad deal for Victoria. It is not good for Victoria to have a situation where we have only one container port for the next three generations. It is not in Victoria's interests to have a situation where the only way you can expand that port to take care of the larger ships of the future will be to massively dredge Port Phillip Bay and to blast the heads at the opening to Port Phillip Bay. That is the only way the port of Melbourne will be able to handle the larger ships that will come to us not in the next year or 2, but in 50, 60 and 70 years time.

That is why if this bill goes through it will be an environmental disaster for Victoria. We will see massive dredging and blasting of the heads of Port Phillip Bay. Once you have blasted, you are not going to get it back. That is bad for the environment and bad for Victoria. The alternative could be that you do not dredge, you do not blast the heads and all those larger ships would just bypass Victoria entirely. You can imagine the owners of the port of Brisbane, the port of Sydney and the port in Kembla all rubbing their hands together thinking, 'If there's a monopoly in place in Melbourne, we will get all those larger ships in future, we will get the trade, we will get the jobs and we will get the economic benefits'. You will not see them going to Melbourne, and Victorians will miss out. We will lose out if this bill goes through.

There are a number of other issues in the bill that the opposition is very concerned about. Apart from the length of the lease and the monopoly aspect, one in particular is the proposed pricing regulation. The government is trying to give people some confidence that there will not be huge gouging by creating a monopoly port operator, but port charges will be the only type of charges subject to regulation, and even that regulation is fairly weak in many ways. It is supposedly capped at CPI for the first 15 years, but the sorts of companies that invest in ports are long-term investors. They are patient capital. They do not mind taking a little bit of a haircut in the short term because they know they will be able to gouge it out once those price restrictions are lifted.

At the bill briefing, the government confirmed that it is seeking to rely on the same regulatory model as the Australian Energy Regulator used for power prices. I am sure all Victorian MPs keep having members of the public coming to their offices, emailing them and knocking on their doors saying, 'How great it is that power prices are so cheap!'. Everyone thinks that it is just fantastic. The Australian Energy Regulator is doing such a great job. It keeps the price of electricity so affordable.

Let us do to our ports what we have done to our power prices? That is the proposition the Labor government is putting to Victorians. It is saying, 'Let us do to your port what we have done to your power prices'. That is not a good outcome for this state in any way whatsoever. This is not a good regulatory provision at all.

There are also a number of other aspects which are not regulated. Terminal rent is not being regulated at all, which is something that the Australian Competition and Consumer Commission (ACCC) is expressing concern about. Members opposite can attack us, but why would they be attacking the ACCC? Do they have no confidence in the ACCC standing up for the public interest in expressing concerns about what this government is doing. Why is the government not listening to the ACCC? It is a fraud perpetrated on the people of Victoria and particularly the people of Geelong, for whom this government has lost all credibility. I return to the editorial in the Geelong Advertiser of 29 May. Under the heading 'Our port was but a dream' it states:

Geelong's hopes for new port at Bay West appear to have been sunk.

With the state government announcing its plan to lease the port of Melbourne for 50 years, with a non-compete clause, it's hard to see how another container port would be built for a very long time.

And that is a shame.

The Labor Party campaigned hard against the port of Hastings proposal by the Napthine government.

It gave every indication that Bay West was its preferred location for a second port.

The Geelong Advertiser supported that view.

I can just imagine the then opposition leader and the then shadow Treasurer going down to theGeelong Advertiser offices — and I think a lot of us have been there — and sitting down with the editor, Mr Papps, saying, 'This is going to be fabulous for jobs. This is going to be great for Geelong. Get on board! Come on, you need to back us because we are going to deliver all these great jobs for Geelong'. And now we know what the truth is. The truth is that it was not only a cruel hoax but that it was a lie. It was a lie.

The ACTING SPEAKER (Ms Halfpenny) — Order! I refer previous rulings of Speakers to the attention of all members of the house and advise that words like 'lie' and 'lying' are deemed unparliamentary.

Mr M. O'BRIEN — I am happy to adopt the gentler wording of the Geelong Advertiser in its editorial:

Now it seems we have all been short-changed.

This is a blow to Geelong. We had hoped that port would form a valuable part of our future as a transport hub.

Clearly it won't now.

Here is the warning further on in the editorial:

… if you lie to the electorate you will be punished.

I assume I am allowed to quote the Geelong Advertiser editorial when it says:

… if you lie to the electorate you will be punished.

Punishment is what is going to happen to this government for its absolute mistruths about the port of Melbourne and the port of Hastings, and of course Bay West.

The government says this is only a 50-year lease. When you look at the bill, it has a little clause in there that says the government is able to extend the lease for another 20 years. All it takes is a decision by the Premier of the day and a little regulation. Again, at the bill briefing we were told, 'Oh, don't worry about that. We wouldn't be looking to do that ourselves. That would be something for a government years and years down the track'. It is not like this government wastes lots of money. It is not like this government cannot afford to pay for its promises. It is not like this government is the sort of government that would ever go back in six months time and say, 'Actually we could do with an extra billion or two. How about we exercise that option right now and have that 20-year extension?'.

The government should not talk about this arrangement as being a 50-year lease. This is a 70-year lease. The government says, 'It is not really a monopoly because of course if the port of Melbourne reaches capacity then there is an opportunity for another port to be built'. Who decides if it reaches capacity? What if you say that the port of Hastings needs to be built because the port of Melbourne cannot take those larger ships? The compensation still kicks in. What compensation? We do not know because the government has not told us.

This is an absolutely dodgy bill and a dodgy deal. This is not what the government took to the people of Victoria. This bill will kill jobs. This bill will kill trade. This bill will kill competition. This bill will be a noose around the necks of Victorians for the next three generations. It is bad for our economy. It is bad for our environment. The government has no mandate for this whatsoever. This is the sort of proposal which only a bad Labor government, desperate for money and prepared to sacrifice tomorrow for a dirty dollar today, would be putting up in this house. This is desal mark 2, this is myki on the water, this is the sort of deal which no sensible government should put to the Parliament and certainly no decent opposition should be supporting. I am very pleased to say we are not such an opposition. We will not support this bill. We will not support the dodgy deal that the government puts forward. This is a bad deal for Victoria and the government should reconsider it. It should withdraw it.

Although the government thinks it can get around this Parliament and avoid it altogether, it should remember it is trying to authorise things in this bill which would otherwise be illegal. If it thinks it can sell the port by getting around the Parliament, without the support of the Parliament, it should think again. To quote famous words: any such deal would not be worth the paper it was written on.

Contact Michael
Michael O'Brien MP

313 Waverley Road
MALVERN EAST VIC 3145

Phone: (03) 9576 1850
Fax: (03) 9576 1849


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