Snowy Hydro Corporatisation Bill

Consideration resumed from an earlier hour.

Mr D. L. PAGE (Ballina) [2.51 p.m.]: I support very strongly the contribution made by the shadow treasurer and Deputy Leader of the Opposition prior to the luncheon adjournment. He and I, and a number of other members including the honourable member for Murray and the Leader of the National Party, have been in close consultation with water users in particular, but also with other people who will be affected by the Snowy Hydro Corporatisation Bill. I was amazed and disappointed that the Minister for Agriculture read a speech that was obviously written by Treasury, which indicates that he either does not understand the significance of the legislation for the agricultural sector or he is not particularly interested in the implications of the legislation. I should have thought his primary responsibility was to look after and protect the interests of agriculture in this State.

I will be pleased if the Minister for Land and Water Conservation makes a contribution to the debate because I suspect that he thinks much the same way as I do about this issue. I am the shadow minister for land and water conservation in New South Wales, and one of my responsibilities is to try to protect all water users, not just irrigators on the western side of the Snowy, and also to look after the environmental flow in the Snowy River, the Murrumbidgee River and indeed in the Murray valleys. I suspect that the Minister for Land and Water Conservation, with his responsibilities and his leanings, does not in his heart support what the Government has done. I believe that he, like members of the Opposition, believes that we should have a full water inquiry to sort out completely all the issues associated with water management before we take the critical step of corporatising and, subsequently, privatising the Snowy Mountains scheme.

Once the scheme is corporatised a monopoly will control all the water distribution as well as the electricity generation in this State. It is almost guaranteed that the Snowy scheme will be privatised. Because of the nature of the electricity industry, it is almost guaranteed that the buyer of the Snowy scheme will be a foreign-owned company. The type of company that has the money to buy the electricity assets of New South Wales and a scheme as large as the Snowy Mountains scheme is likely to be a foreign investor. We face the prospect of water distribution across New South Wales, both for irrigation and environmental flow, being controlled by some corporation that is not Australian.

I invite the Minister for Land and Water Conservation to contribute to this debate. If he does not, I can assume only that he does not agree with the position of the Government and the deal it has done with the crossbenchers in the upper House to get this legislation through. The Minister for Agriculture commented that he considered the interests of the irrigators in the Murrumbidgee and the Murray valleys. I ask the Minister for Agriculture, the Government and the Minister for Land and Water Conservation: if that were true, why would they not support the amendment moved by the Opposition in the other House, which was designed to provide water security for all water users? The amendment would have imposed on Snowy Hydro Ltd the obligation to make available for release the established minimum flow security volumes of 1,062 gigalitres per annum to the Murray valley and 1,026 gigalitres per annum to the Murrumbidgee valley.

If the Government were serious about providing water security for irrigators in the Murrumbidgee and Murray valleys it would have grabbed that amendment with both hands and supported it. But instead it rejected the amendment. The Minister also stated that he believed the irrigators would be properly looked after and that they would not have too many concerns. Let me enlighten the Minister for Agriculture, who ought to know this: Murray irrigators, but other water users also, are particularly angry about the deal done by this Government in cahoots with the crossbenchers in the upper House. Mr. George Warne, the Managing Director of Murray Irrigation, made some excellent points in a very powerful press release issued recently. He stated:

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The Snowy’s primary purpose - the very reason it was built - was to provide secure water to expand and secure the economy and infrastructure of inland Australia. Electricity generation was simply the means by which the scheme would be paid for. History has proven that a secure water supply is the single most important factor for the survival of inland communities.

There is a fundamental mistake in Government plans for the Snowy Scheme. It is not simply another electricity generator to flog off for a short term cash again. The Snowy is a critical part of eastern Australia’s water security arrangements and must be treated accordingly. The vital importance of water was recognised in plans to create the scheme, but looks likely to be forgotten now that a cash sale has distracted our leaders.

He should have said "our Labor leaders in New South Wales". He continued:

You don’t need to be a prize winning economist to work out that if a megalitre of water can only produce $80 worth of electricity but $800 worth of horticulture, or $500 worth of dairy produce, then maybe you should attempt to optimise the value of the water to agriculture.

The last point he made was:

Future generations of Australians will have to live with the consequences of flawed or biased legislation for more than a century unless there is the scope to agree on how a privately owned Snowy Scheme can genuinely accommodate the economic interests of existing dependent communities.

We are talking about a licence that will last for 70 years, with a 50-year extension. What happened in the other House provides no security for the irrigation community. It provides no security for environmental flow into the Snowy for electricity generation. But my main concern is looking after the interests of people who use that water, particularly those on the western side of the Snowy. The Government is under no obligation to take any account of the results of the inquiry. The bottom line is that the coalition does not trust the Government, because it knows that the Government’s primary interest is to maximise the sale price of the Snowy Mountains scheme. The Government wants to make it a fat, desirable cat so that when it is privatised the Government will get a lot of money.

Treasury is not interested in water flows or how the irrigators downstream will be affected. Treasury is not interested in the environmental flow into the Snowy, which is currently at 1 per cent. The Greens want 28 per cent. Treasury is only interested in making sure it maximises the value of the Snowy scheme. The effect of the legislation will be the sale of the Snowy Mountains scheme not just to private companies but to foreign companies. The Government, through its deal, has created a situation in which that whole arrangement will pass through this Parliament. There will be a water inquiry, but there will not be an obligation on the Government to accept the findings of the inquiry. We should be doing it the other way: the water inquiry should be conducted now so that all the water issues can be sorted out, and the legislation should not be passed until all those issues are resolved.

The Victorian Government also is interested only in maximising the sale value of the asset. The Commonwealth’s interest is to get rid of its current debt. Once it does that, it will free up approximately $800 million, which is a lot of money. That is why the Commonwealth is so interested in driving the agenda. I am concerned that this deal has been done. The Greens think they will get the right environmental result out of this legislation, but I believe they will be shown to be wrong. The irrigation industry in particular is not happy that this deal has been done, and we are now looking down the barrel of the Snowy corporation having a 75-year licence with a 50-year extension. We are talking about the management of one of the most important resources for Australia over the next 125 years, and the scheme will not even be subjected in any accountable way to an inquiry. I strongly support the shadow minister’s position on the legislation, and the Opposition will vote against it.

Mr SMALL (Murray) [3.02 p.m.]: I join my colleagues the Deputy Leader of the Opposition and the honourable member for Ballina in strongly opposing the legislation. I am disgusted that any government could consider selling off the Snowy Mountains Hydro-electric Scheme. During a very difficult time after the Second World War, Sir William Hudson had the foresight, initiative and productiveness to bring governments together to build one of the wonders of the world, and certainly the most significant project in Australia: the Snow Mountains Hydro-electric Scheme. The scheme, which was an outstanding technological feat and achievement for Australia, was built by many people from all over the world. Construction of the scheme took some 25 years, at a cost of approximately $840 million, which was a reasonable cost when one considers that the Federal Parliament House, which took four or five years to construct, cost $1.1 billion. The Snowy scheme provided 25 years of employment and the opportunity for so many people to come together. It diverted water to the west where, because of the arid nature of our nation, water was not available.

It is a disgrace that the Government is trying to sell off one of Australia’s most important assets. I cannot understand why governments sell off assets that bring benefits to the public, such as electricity, industry, food, recreation and environmental benefits. The Snowy Mountains scheme is of great importance in our arid nation. Yet, we all know that down the track the Government will sell it to overseas investors. The bill may be the corporatisation bill, but of course corporatisation is
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only a fast-track system to privatisation. Sure, it will provide dollars for the Federal Government to pay off its debt, and dollars for the New South Wales Government, but it is totally out of order to even suggest it.

The Snowy River has no doubt been denied the normal flows of water that it would have received before the Snowy Mountains Hydro-electric Scheme was built. I have been working with Paul Leete, the Chairman of the Snowy River Alliance, to establish a system to provide water to the Snowy River without taking water from the western side. I think all members would agree that the storage down to Dalgety could certainly do with an increased flow for environmental purposes. I have no doubt that when there are heavy downpours and snowmelts the Snowy River could share some of those water entitlements. However, the legislative process should have taken place in a consultative way instead of how it was done in the upper House, where the Greens and the Government forced the legislation through. I was appalled at the way the legislation was passed through the upper House. The Snowy Mountains scheme provides two major benefits, electricity and water for irrigation. They go hand in hand. There are also the benefits of environmental flows, recreation, industry production, domestic supplies and the enhancement of the rivers.

The water security that the Snowy Mountains scheme has provided for the eastern part of Australia to the west of the mountains has been one of the most significant achievements in Australia. The Murray-Darling Basin catchment is large; its suppply ranges from 2.5 million megalitres in a drought-stricken period up to 41 million megalitres in a wet period, so there is a huge variation. That is why the security of water in storages like the Snowy is so important. It is an insurance for irrigators, primary producers, consumers of food and consumers of electricity - which all go hand in hand.

The deal that was done in the upper House was both selfish and unrealistic. It took into account only environmental flows for the Snowy; it ignored the irrigators in the west. I remind the House that the purpose of the scheme was to provide water security generally, and specifically water for irrigation in the west. The Murray seeks to secure a minimum of 1,062 gigalitres and the Murrumbidgee Valley 1,026 gigalitres per valley each year. Ideally, those quantities should have been included in the amendments moved in the upper House, but there was no mention of them. Irrigators have made an enormous investment in the west and have boosted Australia’s economy by producing food and goods, and have helped to feed the rest of the world as well. People who live in cities probably do not realise that if it were not for the water provided to these irrigators, the price of food would be enormous in times of drought. It is only because the irrigators have had that assurance of water that they have been able to continue to produce their crops. The whole problem of corporatisation leading to privatisation is compounded because the duration of the licence will be 75 years, with the option of an extension for another 25 years.

What a sell-out! Paul Leete, the irrigators and I had hoped that there would be a water inquiry. We had agreed on matters to place before that inquiry, which would make it easier for the Government to draft its legislation. However, this legislation was forced through the upper House with amendments and has been brought to the lower House; and no inquiry has taken place. I understand that the legislation will not be proclaimed at this time but will lay on the table. I realise that amendments will not be agreed to today, because the Government has the numbers; but after the inquiry is held I hope that the legislation can be amended by agreement. Where does that leave people who have huge investments in rural land?

What assurances about water use will the Government give those people? Of course, no-one can give that guarantee, because water is provided by nature. The Government is trying to sell what nature provides; a God-given asset which we should all share. We have been able to harness that water for the benefit of the nation, but this Government thinks only about money and assets rather than benefits for the people of New South Wales. I say to honourable members: look further afield to the production beyond the mountains to the west. I read in the newspapers that the Government is spending money on developments in the west, but I am sickened when I read further that that development is in Parramatta. The Government has a short-sighted view of "west".

The privatised Murray irrigation scheme is marvellous. Under the former Government, the Deputy Leader of the National Party and the honourable member for Ballina were able to help the irrigators to the west. The Murrumbidgee and Coleambally irrigation areas were corporatised, and it is the greatest shame that they were not privatised when there was that opportunity. The Snowy scheme is under public ownership, but other areas of the Murrumbidgee and Murray are under irrigation ownership - quite a different story altogether. The Department of Land and Water Conservation plays an important role in managing river water so that the irrigators can take their share.

At the moment 8 per cent of water has been taken from the Murray for environmental flows. We have always had environmental flows, certainly for the past 30 or 40 years. That 8 per cent loss and the 19 per cent loss to Murray irrigators is a huge cost
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factor that will hurt the 2,500 families of irrigators in my area. That loss will have a great effect on the communities, the wage earners, and the towns that depend on the resources produced and the money received for crops. The Snowy Hydro Corporatisation Bill is an absolute disgrace. Introducing legislation before an inquiry is held is putting the cart before the horse - it does not make sense.

Consequently, we will have to fight to convince the Government to agree to amendments so that the bill will be fair and above board. However, that will not stop the sale, and that is most unfortunate. The end result is important, so I hope that the Minister for Land and Water Conservation and the Minister for Energy will be fair minded and take heed of the outcome, and consequently amend the legislation. I assume that later this year, or next year, this legislation will be proclaimed. Time will be given for everyone to have their say at the inquiry. I assure the Government that Murray irrigators will attend and have their say, as I will, in an endeavour to reach a sound compromise.

The west should not be ignored, and people in that area should be able to look forward to productivity gains from what is rightfully their share of the water. They have had enough taken from them without the Government trying to take water from them. Last year irrigators suffered the consequences of a 900,000 megalitre loss of water from the Hume Weir, through no fault of their own. Actually it was no-one’s fault, because the weir wall moved and it was necessary to release water. We have been trying to get water from the Snowy, and if everything was fair the Government would try to help us, but only minimal help has been received. I appeal to the Minister to please do what he can to ensure that approximately 300 megalitres is made available from the Snowy to help the irrigators in the west.

Mr GLACHAN (Albury) [3.17 p.m.]: The Snowy scheme is certainly an Australian icon and I am delighted to have a large part of it in my electorate. It has played an important role in agriculture in Australia. The people of my area are not complaining about corporatisation as such but about the way in which it has been handled. A water inquiry should have been held before corporatisation proceeded. I see this legislation as driven strictly by Treasury without regard for what will happen to agriculture and electricity generation.

It needs to be remembered that the Snowy scheme generates a huge amount of electricity without pollution. It is of enormous value when electricity suppliers face peak loads, because the Snowy generators can be started within minutes and quickly produce additional power. That cannot be done without water. Some groups are agitating for more water to flow down the Snowy River - an important issue that needs to be taken into consideration. However, that need should not overshadow the water needs of irrigators in the Murray and Murrumbidgee irrigation schemes.

One has only to fly across the Murray and Murrumbidgee irrigation areas to understand how important they are to agriculture and to Australia’s economy. They are amazing schemes that have revolutionised agriculture in Australia and brought enormous benefits to the people of those areas, and to Australia in general. It is important that the water issues are settled before corporatisation and that that be done with sensitivity. It is important that all these issues be taken into account, because Australia and Australians will be the losers if this matter is driven only by Treasury, which is concerned only about the money it will receive if the generation plants are sold. I join with my colleagues in urging the Minister to give a lot of thought to how this important water issue can be resolved.

Question - That the amendments be agreed to - put.

The Committee divided.

Ms Allan Mr Martin
Mr Amery Ms Meagher
Mr Anderson Mr Mills
Ms Andrews Ms Moore
Mr Aquilina Mr Moss
Mrs Beamer Mr Murray
Mr Carr Mr Nagle
Mr Clough Mr Neilly
Mr Crittenden Ms Nori
Mr Debus Mr E. T. Page
Mr Face Dr Refshauge
Mr Gaudry Mr Rogan
Mr Gibson Mr Rumble
Mrs Grusovin Mr Shedden
Ms Hall Mr Stewart
Ms Harrison Mr Sullivan
Mr Hunter Mr Tripodi
Mr Iemma Mr Watkins
Mr Knight Mr Whelan
Mrs Lo Po’ Mr Woods
Mr Lynch Mr Yeadon
Dr Macdonald
Mr McBride Tellers,
Mr McManus Mr Beckroge
Mr Markham Mr Thompson

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Mr Armstrong Mr O’Farrell
Mr Beck Mr D. L. Page
Mr Blackmore Mr Peacocke
Mr Brogden Mr Phillips
Mr Chappell Mr Photios
Mrs Chikarovski Mr Richardson
Mr Collins Mr Rixon
Mr Cruickshank Mr Rozzoli
Mr Debnam Mr Schipp
Mr Downy Ms Seaton
Mr Ellis Mrs Skinner
Ms Ficarra Mr Slack-Smith
Mr Fraser Mr Small
Mr Glachan Mr Smith
Mr Hartcher Mr Souris
Mr Hazzard Mr Tink
Mr Humpherson Mr J. H. Turner
Dr Kernohan Mr R. W. Turner
Mr Kinross Mr Windsor
Mr MacCarthy
Mr Merton Tellers,
Mr Oakeshott Mr Jeffery
Mr O’Doherty Mr Kerr

Mr Harrison Mr Cochran
Mr Knowles Mr Schultz

Motion agreed to.

Legislative Council’s amendments agreed to.

Resolution reported from Committee and report adopted.

Message sent to the Legislative Council advising it of the resolution.