Tuesday, 27 May 1997
The President (The Hon. Max Frederick Willis) took the chair at 2.30 p.m.
The President offered the Prayers.
ANSWERS TO QUESTIONS WITHOUT NOTICE
The PRESIDENT: I inform the House that answers to questions without notice received by the Clerk according to the resolution of the House dated 27 November 1996 will be published in today’s Hansard at the end of questions without notice.
STANDING COMMITTEE ON SOCIAL ISSUES
Motion by the Hon. M. R. Egan agreed to:
That the reporting date for the reference to the Standing Committee on Social Issues relating to the inquiry into the state of nursing homes in New South Wales be extended from 30 June 1997 to 30 September 1997.
HOME INVASION (OCCUPANTS PROTECTION) BILL
Bill read a third time.
Petition praying that a bill be passed to provide for a statewide referendum on legalising strictly and properly regulated voluntary euthanasia for the terminally ill, received from the Hon. Elisabeth Kirkby.
DEPUTY OPPOSITION WHIP
The Hon. J. P. HANNAFORD: I inform the House that the Hon. D. F. Moppett was appointed this day by the coalition as Deputy Opposition Whip.
ABORIGINAL AND TORRES STRAIT ISLANDER REFERENDUM THIRTIETH ANNIVERSARY
Suspension of standing orders, by leave, agreed to.
Motion by the Hon. Dr Meredith Burgmann agreed to:
That this House congratulate the Aboriginal and Torres Strait Islander people of Australia on their successful campaign to achieve citizenship rights on this day 30 years ago.
ENERGY INDUSTRY PRIVATISATION
Adjournment (S.O. 13)
The PRESIDENT: I have received from the Leader of the Opposition a notice under Standing Order 13 of his desire to move the adjournment of the House to discuss a definite matter of urgent public importance, namely:
The sale by the New South Wales Government of the electricity generation, distribution and transmission assets in New South Wales.
Question - That the matter is urgent - put.
The House divided.
Mr Bull Mr Lynn
Mrs Chadwick Mrs Nile
Mr Corbett Rev. Nile
Mrs Forsythe Dr Pezzutti
Mr Gallacher Mr Ryan
Miss Gardiner Mr Samios
Mr Gay Mr Rowland Smith
Dr Goldsmith Mr Tingle
Mr Jones Tellers,
Mr Kersten Mr Jobling
Ms Kirkby Mr Moppett
Mrs Arena Mr Obeid
Dr Burgmann Ms Saffin
Ms Burnswoods Mr Shaw
Mr Cohen Ms Staunton
Mr Dyer Mrs Symonds
Mr Egan Mr Vaughan
Mr Johnson Tellers,
Mr Kaldis Mrs Isaksen
Mr Macdonald Mr Primrose
Mrs Sham-Ho Mr Manson
Question so resolved in the affirmative.
Urgency agreed to.
The Hon. J. P. HANNAFORD (Leader of the Opposition) [2.49 p.m.]: I move:
That this House do now adjourn.
Paddy McGuinness in an article titled "Self-interest and Privatisation" asked the question "What is going on here?" It is an appropriate question because the Government has done a major backflip with the proposal to sell the State’s electricity generation, distribution and transmission assets. The Daily Telegraph on 21 April 1995 reported:
On 20 April 1995 Bob Carr got a standing ovation when he told the Labour Council he would be a bulwark against privatisation.
The Premier was quoted as saying:
What I want to do in NSW is to promote a public sector in health and transport, electricity and water which stands as a shining contrast to these reckless experiments in privatisation in the conservative States.
The Premier stated further:
. . . when anybody sees the contrast, they will see it as proof positive that the Labor way is the better way.
That was 21 April 1995. Only 12 months later, on 16 May 1996, Premier Carr made the following comments in the other House in answer to a question from my colleague the Hon. Ron Phillips:
The Opposition had seven years in which to do it -
that is, privatisation of electricity and electricity reform -
and did not tackle it. In line with the agreement of the Council of Australian Governments, this Government is restructuring the industry.
Premier Carr made the following further comments:
The Government is able to tell the business sector that over the next five years electricity prices for business in this State will reduce by around 25 per cent as a result of our reforms. But note: restructuring, not privatisation . . .
Let me underline it again so that even the dopiest member opposite can grasp it and understand it - and boy, for that category the competition is intense - it is restructuring, not privatisation. If the Opposition wants privatisation it can go and talk to its old mate, Jeff Kennett, who has sold off lock, stock and barrel, every last item of the power industry in Victoria. This Government is maintaining the power industry as a public asset and is driving efficiencies and delivering reductions in the price of energy to the private sector of 25 per cent over the next five years. The Opposition when in government did nothing on electricity reform. The credit for reform lies on this side of the House.
So much for the Government being prepared to be consistent, and so much for the Government telling the truth!
The Hon. R. S. L. Jones: Are you going to oppose it?
The Hon. J. P. HANNAFORD: The Hon. R. S. L. Jones asked whether the Opposition will oppose privatisation. The Opposition supports the concept of privatisation, but how to privatise is another issue. The Opposition will wait to see what form of privatisation the Government embarks upon and will monitor the situation closely. As the Hon. R. S. L. Jones knows full well, the Opposition is consistent in its approach and is honest with the electorate about its approach. On that interesting point, the first couple of paragraphs of the article by Paddy McGuinness headed "Self-interest and privatisation" ought to be examined in detail. They state:
The Labor Party is a strange political animal. When it is in government it seems to have no great difficulty in entertaining proposals for privatisation of government business enterprises, and so lessening its direct influence over the economy. When it is in opposition it bitterly opposes privatisation and so insists that the direct economic power of the government which it opposes should be maintained.
Thus in Victoria, the Labor Opposition has fiercely opposed privatisation of the electricity generation industry; in NSW the Labor Government has just announced that it wants to emulate the Kennett Government’s privatisation of the industry. In Federal Government, Labor blithely went into large-scale privatisation, even of that once sacred cow of Labor populism, the Commonwealth Bank, foreshadowed privatisation of airports and seriously contemplated privatisation of Telstra. But once in Opposition it suddenly discovered that it was vitally important to the interests of the nation that such privatisations should not proceed.
Then followed the remark that I used in my opening:
What is going on here? Now that the last lingering vestiges of the socialist objective have been abandoned by the great majority of the Labor Party, the argument about privatisation is being conducted in more pragmatic terms. The argument should be about the costs and benefits of privatisation in any specific industry or situation, not about ideology.
He said further:
Clearly the most adverse immediate effect of privatisation is the mass sackings it can involve.
It is clear that the Leader of the Government in this House is prepared to abandon the traditional Labor ideology. That is a remarkable turnaround, even for the Leader of the Government, as during the past 20 years he has moved from the Left to the Right and led the campaign against lotto and the advocates of privatisation of lotto in 1979. Today the Leader of the Government advocates privatisation; but how does he propose to implement privatisation? Last Thursday the Treasurer, in what might best be described as the most gutless way, after the House had adjourned and when most honourable members had gone home, slipped a little note under everyone’s door that issued the following invitation, "I would like you to come with me" - almost like a lover’s note.
I suppose that is one way to approach the members of the Left - with gentleness and care, and then slip a lover’s note under their doors which states, "Come with me, march with me down the new road, the new ideology of the Labor Party." He was not game to stand up in front of them and look them in the eye and say, "I want to take the Labor Party in a new direction." Today, however, in the Labor caucus, he did that. But the most gutless member of the Labor Party on this issue has been the Premier. From where would one expect leadership to come on an issue such as this?
One would expect leadership from the Premier. One would expect the Premier to be prepared to say, "This is where I am taking the Labor Party and this is where I want to take New South Wales." But, is he prepared to do that? Is he prepared to put his stamp of leadership on the State or on the Labor Party? No, he is not. The Premier said, "I will be the umpire. I do not want to make a decision; I do not want to show leadership. If there is to be blood on the floor, let it be Egan’s blood, not mine. I will stand back like Pontius Pilate, at the appropriate time, depending on how far things go. I will wash the blood from my hands, but I will wait to see whose blood it is before I wash them."
That is exactly what the Premier has done. Why has he done that? Because he said to the Labor Council in 1995, "I and the Labor Party of New South Wales will be the bulwark against privatisation." As I am prompted by one of my colleagues, Premier Carr is all bull. In January this year, just two years into government, the Premier gave the Daily Telegraph an exclusive interview about the directions in which he is taking the Labor Party. That article, headed "A year on, Carr’s alive and kicking", makes interesting reading. The Premier is quoted as saying, "I didn’t come through all this to lead a do-nothing government." The article, referring to the issue of electricity some 12 months after the Premier bared his soul about privatisation to the Labor Council, reported:
"If you back your instincts and if your instincts are finely honed, then you can force change," the Premier says.
For a Labor Premier, Mr Carr’s instincts are remarkably pro-business. "I’m more pro-business than Greiner," he says proudly.
He illustrates this by talking about the power industry - how his government has cut the number of electricity distributors from 25 to six.
He predicts this will drive down the cost of electricity by 25 per cent by 1999 and stimulate new industries and new jobs. And, he says, "We’ve done it without privatisation".
"We’ve restructured Pacific Power into two competing State-owned generating companies." Mr Carr says, "They’ve been far more radical in Victoria, selling off the lot."
"We didn’t have their need to do that - we didn’t have their huge debt blowout and we already had a more efficient industry anyway.
"So I felt it made sense to keep ours State-owned, provided that we do get genuine competition. We must keep up the pace of efficiency reforms but we can get efficiency, restructuring and competition without a fire sale of public assets."
The article continued:
What the Premier does not say is that he was a late convert to the idea of competitive State-owned electricity generators. Initially, he was in favour of full privatisation.
"He was enthusiastically flogging proposals for a full sell-off," says one minister who insisted on being unnamed.
I wonder whether that was the Treasurer. The article went on:
"It took us a long time to convince him this was not in our best interests but ultimately he came around."
Says Mr Carr: "Sure, I don’t get my way all the time. But I am prepared to back my judgment and my instincts and argue for them. If the argument of others makes sense, I listen and can be persuaded."
He also says: "If a powerful argument (for privatisation of power suppliers) emerges in five years’ time, then it emerges."
Honourable members understand the gutlessness of the Premier over this issue. Having been in favour of privatisation he was then persuaded to oppose it. In opposition he argued strongly against privatisation and berated the coalition Government for its privatisation proposals. He then came to government and said to the Labor Council that he would be the "bulwark against privatisation". Twelve months later he said he was not an advocate of privatisation and
that there would be no privatisation. He then set up the leader of the Government in this House.
Honourable members will recall the debate last year about the corporatisation of electricity authorities. At that time the Premier said the debate was about corporatisation and that there would be no privatisation. Honourable members and the public know that they cannot believe or trust anything the Premier says. The word and the views of the Premier cannot be accepted. The more the Premier says he will go in one direction the more one can be certain that he will go in the opposite direction.
The Hon. Patricia Forsythe: About-turn Carr!
The Hon. J. P. HANNAFORD: Talk about a U-turn Carr! On this issue the Premier has decided that he does not want to be regarded as doing a U-turn. He has decided to act like Pontius Pilate and be the umpire and that he will leave the running of the issue to the Treasurer. That is the most deceitful activity he could indulge in, because honourable members will recall that in the past few weeks a number of questions have been asked of the Leader of the Government about privatisation and he has spoken only about corporatisation. Last Thursday the Treasurer sneaked a document under everyone’s door about this privatisation proposal. Does anyone believe that that document was produced on Thursday morning? Does anyone believe that the Treasurer has not been working on this proposal for the whole of this year? No-one will believe that the Treasurer has not been working up this proposal for a long time.
The coalition welcomes the decision to privatise the energy industry. The coalition believes that is the direction in which the Government should go but that the form of privatisation is open to discussion. Environmental issues need to be addressed. The protection of jobs has to be discussed. Those issues will be considered down the track and the Opposition will monitor closely what the Government does about them. When the State Bank was privatised the former Government made certain that the issue of jobs was addressed.
The Hon. Janelle Saffin: How?
The Hon. J. P. HANNAFORD: The former Government provided a three-year transition period.
The Hon. J. R. Johnson: With guarantees.
The Hon. J. P. HANNAFORD: Did I hear the Hon. J. R. Johnson say that the Government would guarantee their jobs?
The Hon. J. R. Johnson: With guarantees you sold the bank. We are picking up the bills.
The Hon. J. P. HANNAFORD: And that was well known, because the State had a liability in relation to those issues. On page 27 of today’s Sydney Morning Herald the Treasurer is quoted as saying that 3,000 jobs would disappear from the energy industry. The article stated:
And he said that whether the industry was sold or not, present employment of about 13,000 would soon fall to 10,000 - but any businesses privatised would be sold only on condition there would be no forced redundancies.
What is the position? Where is the Government going? Will 3,000 people be sacked before privatisation so that base employment is guaranteed? What will the Government tell the unions? Will the Government provide any leadership or direction to the unions because last week they were left hanging out? The unions believe they have been totally set up by the Government. No wonder the union movement is aggressive on this issue! For the unions the issue is not merely ideological; the issue is direction, consistency and security for their members. What assurances has the Government given to them? At this stage they have been given nothing.
The coalition will monitor closely what the Government does in that regard and it will ensure that clear guarantees and assurances are given. The coalition is aware that there is significant opposition from within the Labor Party to this privatisation proposal and that it will face significant opposition from the unions. Notwithstanding that, the coalition believes that the Government should proceed with this proposal. I remind the Leader of the Government of what he said to Quentin Dempster on Stateline on 11 April:
Oh, Quentin, can I state this principle; it would be an obscenity to sell any asset, and I’m talking about any Government at any time, to sell any business asset to use that for recurrent revenue. That would be an absolute financial obscenity, any Government in any part of the world that sells a financial asset, should be using whatever revenue they get to retire debt, not for day to day consumption.
The Treasurer must adhere to that. The coalition does not believe that one asset should be sold, as was the practice in Wran and Unsworth days, to sustain recurrent expenditure. The target should be the retiring of all debt. The Government should go in that direction. I hope the Treasurer will repeat what he said on 11 April. On one occasion the Premier said that one asset should be used to try to improve other assets. That is not an inappropriate direction to take. One can trade in a home to buy another home.
The Hon. M. R. Egan: Or a car to buy another car.
The Hon. J. P. HANNAFORD: Or a car to buy another car, or if one is lucky enough to win the lottery the money could be used to upgrade the family home. A big win might result in the purchase of an additional asset, perhaps a home by the beach. However, the winnings should be used to improve one’s asset position and not for recurrent expenditure. I hope the Government adheres to that principle; the Opposition will be seeking to make certain that it does. The issue for the Labor Party is one of ideology. I remind the House of a comment made by Paddy McGuinness in a recent newspaper article, "The argument should be about the costs and benefits of privatisation in any specific industry or situation, not about ideology."
It is now recognised that the leadership of the Labor Party has abandoned ideology in favour of pragmatic salvation. The Government knows it is in great political danger. It knows that the next election is out of its grasp and it wants to sell the assets of New South Wales so it has the cash to try to buy the next election. Honourable members are used to the Labor Party trying to buy elections. It bought the 1995 election with promises to western Sydney about tollways. It did not adhere to that promise; it was broken within days. The Labor Party bought the last election with its promises about reducing hospital waiting lists and with its commitment of funds to achieve that objective. It did not deliver on that promise. It would take hours to go down the list of promises made by the Government to try to buy the election.
The electorate is now much more cynical after having experienced the deceitful, dishonest and discredited Premier, Bob Carr. The Premier and the Leader of this House can proceed with the proposed privatisation. As I said, the Opposition supports the concept of privatisation, but the Government should not believe for one minute that the privatisation of the energy industry will enhance Labor’s position in the electorate. The business community will certainly support the proposal but it has had enough of the Government in other respects. The comments that are being made about the Government in boardrooms around Sydney have to be heard to be believed. I do not often give credit to the Leader of the House, but I acknowledge that the business community says that he is still trying.
The Hon. J. H. Jobling: Very trying!
The Hon. J. P. HANNAFORD: Those are exactly the words that were used. So far as the Premier is concerned, he is very trying because he is not being seen to deliver. The business community will welcome privatisation, as it supported privatisation when the coalition was in government. The Government will not gain any votes whatsoever from the business community on this issue. The throwing away of ideology for cheap political gain will lead to the erosion of the traditional support base. The community will say that the Labor Party stands for nothing, that it has no direction and no purpose.
That being so, why should the traditional support base of the Labor Party vote for it at the next election? The middle class expects certainty, honesty and consistency from government. They know the New South Wales Labor Party has none of those attributes. They know that Bob Carr is the most deceitful, dissembling and inconsistent leader that this State has ever had and they will reject him completely. That should not deter the Treasurer, because the community expects a consistent economic message from him. The community knows that the Treasurer is still trying to keep his hands on the financial reins of this State. By doing so, he is able to send -
[Interruption from gallery.]
The DEPUTY-PRESIDENT (The Hon. Ann Symonds): Order! The Chamber is in the middle of a very important debate. I do not want to ask the attendants to clear the gallery. However, members of the public should remain quiet while the Chamber is conducting debate. If they wish to raise matters, they should do so with the appropriate Ministers and interested parties.
[Interruption from gallery.]
The DEPUTY-PRESIDENT: Order! I will leave the chair and the House will resume when the gallery has been cleared.
[Sitting suspended from 3.18 p.m. until 3.21 p.m.]
The Hon. J. P. HANNAFORD: I have said twice that in the interest of the economy of the State the Treasurer has an obligation to pursue the privatisation of the energy industry. Although the Opposition supports the concept, it will examine the detail of the program. That is where the real debate will be. I hope the Labor Party unanimously stands behind the Treasurer. I am disappointed that until now the Premier has lacked the intestinal fortitude to do so publicly.
The Hon. M. R. EGAN (Treasurer, Minister for Energy, Minister for State and Regional Development, Minister Assisting the Premier, and Vice-President of the Executive Council) [3.22 p.m.]: I seek leave to incorporate in Hansard a document entitled "A Plan for a Secure New South Wales", which is a discussion paper prepared by me for distribution to Pacific Power and electricity unions at the consultative meeting on 22 May.
The 1997 State Budget has been very well received by the public.
That’s because it took some bold decisions in order to provide better security and protection to New South Wales citizens, their families and their communities.
People want and appreciate good schools, good hospitals, good transport, a good environment, and more support for their families.
As I said at the time of the Budget - people want government that is protective and supportive, not mean and shrivelled.
But they not only want security now, they also want it for their kids in the future.
They won’t cop governments which mortgage the future, which spend up big now, but leave the bills for their kids to pay.
And that’s another vital reason the 1997 New South Wales Budget is popular - because it not only provides better services, but does so responsibly by paying all the bills.
As I see it, there are two challenges for Labor.
The first is how to keep delivering better services and benefits, and a fairer sharing of both the benefits and the costs.
The second is how to maintain a distinctive ‘Labor’ profile, that distinguishes us from our conservative opponents, but yet is relevant to contemporary Australia, rather than to the past.
For many in the Labor Party, a continued adherence to public ownership of Government businesses is seen as a distinguishing feature. But why?
It does not make sense if it actually defeats our purpose of providing better and more fairly shared public services and providing new social and economic infrastructure that meets contemporary needs.
Continued public ownership of utilities is pointless if it provides no continuing social or economic benefits and if the public investment tied up in it can be invested elsewhere to achieve better results for the community.
As I see it, if dogma defeats our overriding purpose of achieving a more protected and secure community, then the dogma must go.
As Tony Blair puts it: "What works is what matters".
At present there are around $22 billion of public assets tied up in the New South Wales electricity industry.
It’s time to start the debate about whether those assets can be put to better use.
This paper outlines a plan that would:
•Retire all of the State’s budget sector debt. New South Wales could enter the next century, having hosted the Olympics, without a single dollar in debt being carried by the next generation of the State’s tax payers.
•Rebuild the State’s infrastructure - for example, rebuild all old hospitals, provide modern water and sewerage systems to rural New South Wales, reconstruct all unroadworthy bridges in regional New South Wales and repair country river systems.
•Make a huge stride forward in social justice - for example, solve the problem of Aboriginal housing and rehouse the disabled now confined to unsatisfactory boarding houses.
•Generate thousands of new jobs, especially in rural and regional New South Wales, providing one of the greatest examples of job creation since Franklin Roosevelt’s New Deal.
This represents an historic redistribution of public investment from old capital to areas which are the new priorities of our modern community.
It is a bold plan for a Labor Government looking forward to the new century.
This discussion paper is put forward to kick-off debate within the New South Wales Labor movement.
What Would the Sale of Electricity Utilities Mean?
During our first two years in office, we’ve managed to reduce the total net debt of the New South Wales budget sector by $1,700 million. But the debt still stands at $13,200 million.
The sale of our electricity utilities would raise up to $22,000 million, according to accounting firm Arthur Andersen.
This would allow us to completely eliminate our budget sector net debt. That would mean annual savings to the Budget (ie. the difference between interest paid and dividends received) of around $500 million each year.
In other words, we could have around an extra $500 million each year for better schools, better hospitals, better public transport and roads, a cleaner environment, safer streets and neighbourhoods, and better community services.
In addition, we’d have around $3,000 million left over for almost immediate new capital investment in social and economic infrastructure and environmental enhancements.
That is, more new jobs and better facilities for the people of New South Wales.
The country town water supply and sewerage program is a good example. This program is scheduled to provide water and sewerage services to around 500 country towns over the next 10 years at an estimated cost of around $600 million in current prices.
Why wait ten years? The program could be completed over a couple of years with immediate economic benefits to 500 country towns, significant improvements to the environmental quality of our rivers and waterways, and the creation of 12,000 jobs in rural and regional New South Wales.
Early completion of the program would also relieve the Budget of annual costs of approximately $60 million for each of the next 10 years.
There are many other such examples:
•Air condition all school class rooms in country New South Wales and Western Sydney.
•Build school halls for every school.
•Build 30 to 40 new schools by accelerating the capital program in the high growth areas of the Central Coast, Western Sydney and the North Coast.
Rebuild older hospitals across the State to ensure first class facilities and services to all communities. For example, the 50 year-old Wollongong Hospital needs rebuilding now. But under existing policy finding the estimated $80 million for the work will take a number of years.
There is also a need to bring forward Stage 3 of the Wyong Hospital.
•Improve transport and safety in country New South Wales by, for example, realigning or eliminating country railway level crossings.
•Improve public transport in Western Sydney by providing cross-regional bus and light rail services.
•Accelerate rail capital works such as the fourth generation train and signalling upgrades.
Meeting other contemporary needs
Provide supported accommodation - group homes - for 2,200 people with disabilities who are currently in the care of ageing parents.
•Fund the backlog of flood and drainage mitigation works in areas such as Lismore, Hunter Valley, Gosford/Wyong and Western Sydney.
•Provide a world-class aquatic centre for the Hunter region, comparable to the Homebush facility.
Any proposal to sell electricity assets will no doubt evoke a strong initial response that it is contrary to ALP policy. It is not.
The 1992 ALP State Conference adopted a comprehensive case-by-case approach to the sale of business assets.
The resolution, which was passed overwhelmingly (and with support from the majority of the Left) specified a broad range of social and economic factors to be taken into account. These included:
1. The direct and indirect social usefulness of a public asset, service or utility.
The usefulness of the electricity industry goes without saying. Sale of the industry will not mean that these services will cease to be provided or that the quality of service will decline.
Private owners will have as much incentive as publicly-owned businesses to provide electricity. Government regulation will continue to be used to ensure that the community is not exploited, the genuinely needy are assisted and our great social justice objectives are pursued.
The gas industry has been predominantly owned by the private sector through AGL. Private ownership has not precluded the effective delivery of gas for 160 years.
2. The original purpose of the enterprise and whether that purpose remains valid, is being appropriately addressed through existing arrangements or could be satisfied by alternative arrangements.
The provision of electricity is not redundant; however, in my view, its provision by Government is. When large-scale electricity generation was first established in the late 19th Century, capital markets were primitive. Government had to do the job themselves or give monopolies to private companies to generate power.
This is no longer the case. As demonstrated the world over, a competitive private sector can now produce and distribute electricity effectively.
The Government would not reduce its commitment to funding electricity social programs; neither would it reduce its commitment to environmental measures.
3. Where the original purpose has become redundant, other social, redistributive or regulatory roles that may have evolved.
The separation of regulatory and commercial affairs by this Government allows it to focus on what it does best - regulating in the public interest. That leaves the private sector to run commercial businesses in a competitive market - a job for which it is best equipped.
4. The retention value of the enterprise measured against its sale value (incorporating both commercial and non-commercial functions).
Selling the electricity industry would provide a net gain to the Budget of around $500 million per annum.
The costs of the industry’s non-commercial functions would not substantially affect this, as they are either already provided for in the Budget or recovered from the industry.
5. The current structure of the market place (i.e. monopoly, oligopoly or competitive) and the public sector’s role as a competitor and/or regulator in that market.
The electricity industry currently operates in a combination of competitive and regulated markets. The Government will retain pricing, licensing and other regulatory arrangements to ensure that the public interest continues to be protected.
However, with the opening of a national electricity market there is a strong argument for increasing the level of competition in New South Wales.
There is no sustainable argument that the Government, the taxpayers, the environment, consumers and the economy would be worse off if we had more than one owner of the major electricity utilities in New South Wales.
6. The impact on specific groups in the community, especially those groups that are already disadvantaged.
The Government has already addressed this for the electricity industry. It provides funding for electricity services for those in need in society, especially pensioners and those on life support services.
7. The impact on employment, skills, training and conditions and the protection of the existing workforce.
The sale of the electricity businesses will provide significant opportunities for regional growth and quality, skilled employment particularly if utilities such as Pacific Power are able to access private capital markets for funds to invest in growth opportunities. All employment protection measures currently in place would continue to apply until improved arrangements are negotiated (for example, see comments on Pacific Power on page 21).
8. The existing competing demands on the New South Wales public sector and existing budgetary constraints and/or the alternative sources of funds for public sector investment.
There is very strong and growing demand on the New South Wales Government to deliver core government services in the areas of health, education, transport and law and order in a tight budgetary climate.
This is the role of government and one that the New South Wales Government does not resile from. In using its scarce resources, a Labor Government will always have a very strong preference for providing government services to satisfy contemporary priorities rather than further investing in services the private sector can provide at no loss to the community.
9. Current environmental impact and the need to continue and enhance environmental protection.
The recent reforms established substantial environmental protection initiatives, including the reduction of greenhouse gas emissions spearheaded by the Government’s Sustainable Energy Development Authority.
Any distributor or retailer - public or private - flouting its obligations risks being stripped of their licences. New South Wales is ahead of all other States in this area and these environmental requirements will not be compromised.
10. The administrative economies of scale and coordination that is facilitated by public ownership and control.
The current structure of the generation and distribution sectors was considered by the Government in 1995. As it was developed in light of then forthcoming competitive markets, it would be appropriate for a privatised industry.
11. Appropriate weighting of long-term as well as short to medium-term considerations.
In the long term, our electricity businesses will be facing only increasing commercial and competitive pressures. In the short to medium term, the sale of the businesses will provide additional Budget flexibility for the Government as well as potentially funding a number of major capital projects.
12. Where the money is going i.e. ensuring that proceeds from the disposal of assets are responsibly directed to priority public capital needs.
The magnitude of the Budget benefit from privatising is around $500 million per annum, as long as the proceeds are applied to repaying debt.
Money remaining (after the budget sector debt has been eliminated), which could be up to $3,000 million, could then be used for priority public infrastructure needs.
It is against these objective criteria that we should examine any sale of business assets.
We are a modern, social democratic Labor Party governing in a mature, mixed economy at the end of the 20th Century.
Our position must be determined in this context.
Deregulation or Re-regulation
It is important to understand that electricity utilities, whether they are sold or remain in public ownership will not be operating in a ‘deregulated’ environment.
The recent New South Wales reforms to the electricity industry have been monumental. Rather than deregulate the industry, the reforms have essentially involved a ‘re-regulation’.
In other words, we’ve gone from regulations focussed on controlling government monopolies to regulations which focus on creating a competitive market in electricity generation and retail and getting better environmental results.
Governments should have three aims in regulating economic and social affairs. These are:
•to enable the size of the pie to increase for the whole community;
•to ensure that neither the community nor any sections of it are exploited in making the pie bigger; and
•to make sure that the benefits of a bigger pie are shared across the community.
It does not follow that the government needs to own businesses to achieve its social and economic objectives.
The food and clothing industries are good examples. Governments regulate food standards, transportation, retail and employment activities. But they do not own, nor do they need to own, the food, clothing or retail industries to ensure that the community can obtain food and clothing.
The recent electricity reforms are also a good example of achieving a proper balance between regulation and markets.
Markets have been created for the commercially competitive elements of the industry - generation and retail - while the monopoly network will continue to be subject to price regulation by the Independent Pricing and Regulatory Tribunal (IPART).
All sections of the industry will continue to be subject to safety and environmental regulations.
One of the major aims of our electricity reforms was to reduce the real price of electricity by 20 per cent in the five years to 2000. This target is well on track and is likely to be exceeded.
It gives New South Wales’ firms a competitive edge in winning orders in domestic and international markets and is therefore a tremendous stimulus for new investment and new jobs.
But lower prices are not our only goal. We also continue to lead the world with our initiatives in greenhouse gas requirements and the funding and promotion of renewable energy technologies. But none of these regulations or funding initiatives depend on public ownership. Greenhouse gas requirements apply to all retailers in New South Wales, whether publicly or privately owned.
The plan will not stop continuing government intervention to achieve Labor’s social and environmental goals.
Increased Opportunities, But Increased Risks
It is naive to think that the great economic and social changes over the last few decades will soon cease. Change will continue at an increased pace. Governments need to reap the benefits of these changes while softening the impacts of change and protecting the essential values of the community.
Change was always going to impact on the electricity industry. Technological change now allows for smaller, decentralised, more cost effective and more environmentally friendly generating units, in stark contrast to the history of large, centralised, costly, greenhouse gas belching power stations.
New South Wales either had to gear up for these changes or risk losing a competitive edge against other States or other countries. While the changes we have introduced mean that electricity is no longer a monopoly business with guaranteed returns, the result will be an industry in New South Wales that can set the challenge, rather than being under challenge.
The electricity industry will also be affected by similar reforms in the gas and telecommunications industries. It is likely that these reforms will lead to convergence of these industries due to similar customer bases, network characteristics and market structures.
AGL’s acquisition of an interest in a Victorian electricity distributor and Great Southern Energy’s acquisition of the Wagga Wagga gas business are but the first stages in this process. As well, a number of distributors are seriously considering entering the telecommunications market and two have recently announced a new range of mortgage products.
These changes will completely re-paint the face of the electricity industry over the next decade. There will be better products and better services for consumers.
But there will also be different commercial benefits and risks for industry owners.
No longer is electricity a monopoly business with guaranteed returns to government. It is an increasingly commercial and competitive business with increasing risk to its profits.
The choice for government is whether it regulates and oversees this industry to secure good social and economic outcomes, or whether it owns the industry, thereby risking billions of dollars of taxpayers’ money in commercial business enterprises, rather than investing those funds in social and economic services and facilities that are the core areas of government responsibility.
The Special Case of Pacific Power
Whatever may be decided about the future ownership of electricity utilities generally, Pacific Power represents a special case.
Pacific Power is not just the owner of the Eraring Power Station. It is also the owner of a significant coal business, a domestic and international engineering services business and an alternative generation business (hydro, gas, wind and solar).
Pacific Power is the only existing Australian based energy business that has the capacity to develop as a comprehensive international energy business.
It is now capable of developing a large power project from first concept through design, construction, operations, maintenance and later refurbishment.
Pacific Power has a high level R&D commitment to hydro, wind, solar, gas and other environmentally friendly, renewable power technologies - and it has proven expertise in the environmental and performance management of power stations.
The employees and management of Pacific Power have enormous enthusiasm, professionalism and expertise. These qualities could be lost if Pacific Power’s growth potential is limited to New South Wales and Australia.
Employment opportunities in Pacific Power would evaporate as a result.
New South Wales and Australia are mature markets where overall demand for energy will grow only slowly. Few, if any, opportunities for new coal fired base load power stations will arise in the foreseeable future (any new demand is most likely to be satisfied first by significant existing oversupply and then by a range of much smaller and varied energy sources).
Yet our Asian neighbours are literally bursting with new opportunities - opportunities to which Pacific Power could respond. The World Bank has estimated investment in Asian power developments of US$27 billion per year up to 2010.
This represents a huge potential for coal, gas, hydro and solar generation as well as transmission and distribution projects. Even obtaining 1% of these projects would provide opportunities for New South Wales electricity businesses totalling $3.5 billion.
Pacific Power already has an impressive record of success in winning significant projects in Asia (success in China, in Vietnam and exciting opportunities on offer in India).
This early success can only be consolidated into a permanent and expanding business growth strategy if Pacific Power receives significant injections of capital. This will not be funded by the State Government. Our overriding focus is on providing high quality services to the people of New South Wales.
Any commercial business opportunity has risk attached to it. Private firms, financial institutions and capital markets are geared up to manage such risks - State Governments are not.
As obviously worthwhile as all these projects and opportunities are, the State Government will not go into debt or cut core services to provide the capital which is a prerequisite of Pacific Power’s international growth and success.
In simple terms, without these and other growth opportunities, around 1,000 jobs will be lost in New South Wales by 1999 (550 in Pacific Power).
If the growth opportunities are exploited, around 4,000 quality jobs will be secured or created in New South Wales over the next 5 years. So at one level, the argument is simple.
Pacific Power needs capital to grow. The State Government will not go into hock or risk core services to provide capital for commercially risky non-core projects. Therefore Pacific Power must secure private capital in order to offer existing and new employees secure jobs and exciting career opportunities.
But the argument becomes compelling when Pacific Power’s unique environmental opportunities are considered. Pacific Power has the expertise to move quickly and innovatively for the environmental benefit of New South Wales and beyond.
Allowing Pacific Power the capital to grow will create a new energy company, able among other projects to:
•Reduce greenhouse gas emissions in New South Wales:
-The Illawarra combined cycle gas turbine co-generation plant will reduce carbon dioxide emission by 1.3 million tonnes per year.
-Wagga Wagga gas turbine will reduce carbon dioxide emission by 0.35 million tonnes per year.
•Position New South Wales as the environmentally friendly State, in distinct contrast to Victoria.
•Confirm the Crookwell Wind Farm - Australia’s first grid connected wind generator and support further wind farm developments.
•Support the Olympic Solar Village - the world’s largest solar suburb.
•Advance Pacific Solar - leading solar technology exporter.
These projects also have significant regional development impacts in New South Wales.
For example, the Wagga Wagga gas turbine requires $85 million in investment and will create around 850 jobs. And the Illawarra Eco Energy Park requires $300 million in investment and will create around 2,000 jobs.
The international, regional development, environmental and employment outcomes of providing Pacific Power private capital in order to grow are so significant that I would advocate two fundamental guarantees being given to every employee of Pacific Power.
•A job for a minimum period of three years - no sackings, no voluntary redundancy programs - guaranteed employment for at least three years for all existing Pacific Power workers who want to be a part of Pacific Power’s growing future; and
•An issue of shares in the new Pacific Power to those employees who have helped build Pacific Power and will continue to be part of its success.
My proposal of an employee share issue and job guarantee would create a real stake for Pacific Power’s employees in the future success of the business.
The Government does not need to own the electricity industry to ensure that it achieves desirable economic and social outcomes.
The market for electricity businesses is currently very strong with high prices being realised and is an opportunity that should not be missed.
Selling the businesses means that the Government does not have to bear the increasing risks of continued ownership.
There is a significant annual benefit to the Budget, and thus the people of New South Wales, of hundreds of millions of dollars on an indefinite basis, which can be applied towards better government services.
The social and economic benefits of selling our electricity utilities, I believe, are very clear.
It is now up to the opponents of sale to join the debate by identifying any specific social and economic advantage which they might argue can only be gained by retention.
In other words, it is time for the New South Wales Labor movement to assess the demands on a modern Labor government and how they can best be satisfied.
Our fundamental aim is to provide security, protection and social justice for the people of New South Wales.
This paper proposes unlocking public capital from old assets and reinvesting it in economic and social infrastructure that will satisfy contemporary community needs.
The Labor Party has established in its 1992 conference resolution a comprehensive checklist to assess the merits of my proposal.
Within the context of established Labor policy and principles, let the debate begin.
The Hon. R. T. M. BULL (Deputy Leader of the Opposition) [3.23 p.m.]: The Opposition has initiated this debate because it is important that all members of the House have an opportunity to air their views on the important announcement that has been made by the Treasurer. His position has been extraordinary. Bearing in mind the answers he has given to some of the questions I have asked him in the last couple of weeks, his position has involved somersaults and backflips, some with pike. He has expressed ignorance of many matters related to the energy industry. For example, when I asked him whether Pacific Power needs a significant capital upgrade he said:
Pacific Power’s major generating activity is the Eraring power station. From year to year capital expenditure is undertaken to keep infrastructure such as power stations up to the mark. I am not aware of any of the ordinary requirement for a capital upgrade of Eraring power station.
So it went on - a complete farce! But honourable members now know what was on the Treasurer’s mind and what was on the minds of some members of the Government. This debate will provide a good opportunity for all members, including those from the left-wing of the Labor Party, to enlighten the House as to their views on this proposal. All members of the public, particularly those who are interested in privatisation, know how strongly the Government is divided on this issue. The Treasurer has obviously followed the strong lead provided by his counterpart in Victoria, Alan Stockdale. It is interesting to compare their respective roles. Many in the know in Victoria concede that Alan Stockdale is the driving force behind the privatisation program in Victoria and that Jeff Kennett is very much one for taking the credit. I suspect that will be the case in New South Wales.
The Treasurer has some philosophical integrity. Over the years he has demonstrated a genuine understanding of what State governments and private enterprise should be involved in. He also knows the benefits of privatisation. His announcement of last Thursday was a bold one. The Treasurer is to be compared to Bob Carr, who is an opportunist. He has no philosophical background. He has come from left, right and centre doing somersaults on this issue. At some stage in the future, given that the privatisation will no doubt receive the approval of both Houses of Parliament without too much fuss, the Premier will probably take the credit for it. However, everyone knows that it is the Treasurer who has the philosophical understanding of privatisation and what it means in relation to the delivery of services in the best possible way to the people of New South Wales.
The political ideology on this issue is interesting. Undoubtedly the Labor Party is now divided into new Labor and old Labor. Not long ago privatisation would have been like a bad smell to members of the Labor Party. Indeed, it still is to some. However, generally speaking the Labor Party has done a complete somersault on privatisation. During the time Paul Keating was Treasurer and Prime Minister the Commonwealth Bank and Qantas were privatised. Prior to that privatisation was virtually unheard of in the Labor Party. Labor has come a long way from its former ideological base. It has become a pragmatic party that will make decisions based on what is in the best interests of the people of this State and not necessarily what is in the best interests of the ideology still harboured by some of its members.
As I said, the Treasurer’s announcement was extraordinary. There was not even a possibility that one of the generating units might have been privatised, and now the proposal is to privatise the generating units, the various distributors and the wire network. A few years ago I had the benefit of visiting the United Kingdom with the then Minister for Energy, and studying the privatisation program. On radio station 2BL this morning the Treasurer was asked to compare the UK experience with what he proposed for New South Wales. He was correct in saying that the problem with the Thatcher experiment was that monopolies were privatised without first restructuring the industries to set them up in a competitive environment.
The New South Wales energy industry must be in a competitive environment before the privatisation process is concluded. There must be genuine competition between distributors and generators not only within New South Wales but on the eastern States national grid. That is vitally important for the whole concept of competition in the energy industry. Since studying the privatisation of electricity and water in the United Kingdom - I am yet to be convinced about the privatisation of water utilities, and I do not know if the Treasurer is yet convinced - I was convinced that privatisation of the energy industry in New South Wales was a good option. I suspect I may have believed the Government should retain one generator and privatise the other two, and use the retained generator as a base to gauge the performance of the privatised entities.
The generating capacity in New South Wales is divided into three distinct units: the Macquarie unit, which is Mount Piper and Wallerawang, the Hunter group and the central coast group. The separate generating units were corporatised in preparation for full privatisation. Some years ago I was frustrated when the then Leader of the Opposition, who is now the Leader of the Government in this House, opposed the coalition Government’s attempts to fully corporatise the energy units in New South Wales. The coalition Government was forced to accept a compromised corporatisation.
I cannot remember the exact details, but the coalition’s objective was to fully corporatise the three generating units so that they could satisfactorily compete against each other on a commercial basis. That would have set up the generators for eventual privatisation when the Government decided to move along that path.
Unfortunately, the coalition was thrown out of government before it could do anything with the distributors. The Treasurer knows that at some stage the 23 New South Wales distributors amalgamated into larger, more efficient units. The coalition would have done things differently to the Government which, two years ago, simply announced that the distributors would be separate units.
Hopefully, the coalition would have managed a better consultation process and explained to county councils the benefits of distributors amalgamating into larger distributing units. The process of privatising the electricity industry is extraordinarily interesting and necessary for the future of New South Wales. However, honourable members should take a couple of issues into account when considering privatisation. I address my comments especially to left-wing members of the Labor Party who have difficulty understanding the benefits of privatisation.
The first issue relates to emission standards. Emission standards are close to the heart of the Hon. R. S. L. Jones and other honourable members, and should be close to everyone’s heart. It will be almost impossible for any State government in the future to regulate itself to meet the standards imposed, not necessarily by the current Government or by world organisations. Any agreement entered into in the future will make it more difficult for coal-fired power stations to meet emission standards. It will be difficult for the Government to privatise its generators and then impose whatever emission standards are correct at the time. I understand that Australia has not yet signed up to the Toronto agreement, which provides for a 10 per cent reduction in emissions.
The Hon. I. M. Macdonald: That is shameful.
The Hon. R. T. M. BULL: It is not shameful, because Australian standards are higher than the standards in most other countries. It is fine for European countries to reduce their emissions by 10 per cent, but they would not come within a bull’s roar of Australian standards. Honourable members must understand that it is difficult for the Government to impose controls over emission standards for its own generators. The second issue, which is important, is the cost of new infrastructure. No State government in the future will be able to bear the cost of replacing the power stations owned by the Government at present. Luckily the power stations in New South Wales have been updated fairly recently, given the disaster that occurred when Liddell power station fell apart.
The Hon. I. M. Macdonald: Given the Wran Government’s building program.
The Hon. R. T. M. BULL: In the time of the Wran Government when poor old Pat Hills was Minister and the lights went out in New South Wales, as the honourable member would remember. Since that time there has been an extensive upgrade of power stations at enormous expense, as the Hon. I. M. Macdonald knows. Honourable members must be cognisant of the fact that no State government in the future will be able to afford to replace the necessary generators. It will be much easier for private enterprise to raise the capital needed to refurbish and replace generators in the future. Since the announcement on Thursday the debate about privatisation has been interesting. The Minister for Agriculture, Mr Amery, spoke out this morning. I am not sure what faction he belongs to. Is he a troglodyte or a Terrigal?
The Hon. D. J. Gay: He would have to be a trog.
The Hon. R. T. M. BULL: That is good. The dictionary definition of troglodyte is "cave-dweller". Of course, the cave is the office adjacent to the Legislative Assembly Chamber, where the trogs have held their meetings for many years. The real cave-dwellers in the Labor Party are not Richard Amery and the trogs; they are the poor left-wing individuals. The real cave-dwellers are the vacuum in the Labor Party, the no-ideas section of the Labor Party, which is the left-wing. I feel sorry for the Treasurer as he must conduct intellectual debates on privatisation with people who have no idea what privatisation means - the benefits of privatisation to the people of New South Wales and the importance of the fundamental issue that they are confronting. It is good that the trogs are speaking out.
The Deputy Premier, Dr Refshauge, does not know whether he is coming or going. He does not know whether to step into the faction or out of it. He has been left high and dry by the Premier and the Treasurer. The Minister for the Olympics has not had time to consider the issue but I suspect that he would be onside. Poor old Refshauge has been left like a shag on a rock; he deserves all the ridicule he has received for his stupid comments in the media over the past few days. The third issue relates to a trade sale versus a float. It is important that privatisation of the electricity industry include a trade sale and float mix. The Australian market is not large enough for a float of all these units, whether they be generators or distributors. Obviously, some units will have to be disposed of by trade sale. The Victorian experience showed that
a number of people in the market are available to purchase any or one of the units. The Opposition is of the view that there should be a mixture to allow New South Wales investors to participate.
The Hon. I. M. MACDONALD [3.37 p.m.]: I make it clear at the outset that the Australian Labor Party will vigorously debate the privatisation of New South Wales energy resources. I will debate these issues vigorously, as will a large number of my colleagues within the party, in the Parliament and in the union movement. I take no backward step on that. For a number of years Labor members have been sceptical of the so-called benefits of privatisation. Recent evidence, to which I shall refer in my speech, gives cause for people to think twice about privatisation issues. Opinion polls conducted in New South Wales and in other States over the past five or six years clearly demonstrate that the majority of Australians oppose the privatisation of essential services.
Honourable members should remember that there was a massive swing against the Kennett Government in the recent by-election in West Gippsland, Victoria, which has links with the power industry. People were not prepared to elect an Australian Labor Party member to that seat; they elected an Independent, who attacked the Government vigorously on many of these issues. If people think that privatisation is good politics they should think twice, because opinion polls and election results over the past few years demonstrate the pitfalls and difficulties. The Australian Labor Party has to be more concerned about these issues because privatisation is probably opposed more within Labor Party heartland electorates than it is in cosy north shore Liberal Party seats.
The Hon. R. T. M. Bull: You wouldn’t understand what this is all about.
The Hon. I. M. MACDONALD: The Deputy Leader of the Opposition has the gall to pretend that he is a National Party member but in rural areas privatisation is a dirty word. The Deputy Leader of the Opposition ought to talk to country people about the privatisation of water rights. The honourable member would be thrown out by rural people for some of the statements he has made in the House today. National Party people out in the bush are sceptical about the benefits of privatisation and the so-called benefits of economic rationalism. Broadly, my arguments on the privatisation of the electricity industry fall into several categories. First, I believe that it is imperative that there be government ownership of essential infrastructure. Second, I believe that if arguments for the privatisation of the electricity industry were applied strongly in public policy they could lead to questions of whether water, hospitals, schools, national parks and even the Opera House should be privatised. Where does one draw the line?
In the past week the goalposts relating to so-called core government business have been moved. A few years ago - in fact, up until last week - electric power generation was considered to be a core government business. The Victorian experience of privatisation of the power industry has revealed pitfalls. In Victoria privatisation has resulted in a massive loss of jobs and a downgrading of service quality, which is becoming increasingly apparent. All industries that have been privatised, whether they be power, the railways or ambulance services, are showing a decrease in service quality. The privatisation of electricity in Victoria has not delivered pricing benefits to the people; it has been shown that the ordinary consumer does not benefit greatly. Also, major negative consequences have occurred for industrial relations.
I believe that privatisation affects jobs and conditions and therefore affects many thousands of families across the State. Despite whatever anyone else says, I believe that in the end the majority of the ownership of power stations will go overseas. Foreign corporations will have the capital to be able to afford to buy into our large power stations and distribution companies. In Victoria several hundred million dollars has been expatriated in the past year from privately owned companies, and it is my belief that would happen here as well. There is no way that the Australian capital markets will be able to bear the massive privatisations that are to occur in the next year or so - the privatisations of Telstra, the TAB and, potentially, the electricity industry. The Australian Labor Party has a commitment to corporatisation; that was the party’s approach during the most recent election campaign. I endorse that approach and believe that any other approach would break promises.
It is my belief that we need to examine the long-term fiscal effects of privatisation. There is a shrinking government sector and a shrinking ability to raise revenue for whatever government works may be encountered in the future. It is important for honourable members to ask themselves how future generations will be able to afford the necessary infrastructure development and the financial and community services needed for society’s increasingly entrenched unemployment. Privatisation will lead to job losses and difficulties in regional New South Wales. There is no doubt in my mind that job losses will occur and I do not believe for one second that
there will be a massive increase of jobs, whichever way the proceeds of the proposed privatisation are distributed.
The trouble with ideas on privatisation in this State, in Canberra and in other States is that they are pushed most particularly by people within the rarefied academic circles of Treasury - boffins who have secure and rather well-paid jobs - who take approaches and make statements without considering in any shape or form the social consequences of their actions. Fortunately, in recent times the Sydney Institute has adopted a slightly different stance. Recently the institute invited Professor John Ralston Saul to speak on his work The Unconscious Civilisation. Professor Saul’s book is seminal. He takes on at an important level the major theories of the economic rationalists who believe in privatisation of the public sector.
Professor Saul made it clear that there is a major role for the public sector in infrastructure and in certain sectors of the economy, and in his lecture at the institute argued strongly that such was not against the public interest. I was very attracted to two ideas put forward by Professor Saul. In his book he mounts an attack on what he describes as "lazy capital". The competitive spirit of capitalism in its purest form is supposed to be a struggle of competing ideas about industry that leads to a synthesis of improved competition and improved productivity, and Professor Saul argues that the level playing field supported by economic rationalists is the exact opposite of that.
The privatisation of major public utilities encourages lazy capital - it encourages people who perceive a big profit easily made for their money - and it therefore discourages the alleged competitive model that the Treasurer and other economic rationalists are so eager to promote. We need to challenge the views of the economic rationalists, and that is done dramatically by Professor Saul in his works. I commend to all honourable members Professor Saul’s book The Unconscious Civilisation and the speech he made to the Sydney Institute in which he put paid to the idea that privatisation is a rosy path to the future.
Professor Michael Pusey from the University of New South Wales has studied societies that have gone down the path of privatisation in the past 20 years and has concluded that economic rationalism in those countries has led to what one could call the 30:30:40 society, the society in which 30 per cent of the people are unemployed, 30 per cent are in junk jobs and 40 per cent have secure full-time jobs. In most cases the advocates of economic rationalism are looking after the 40 per cent in secure jobs. Professor Pusey has also pointed to the impact of that sort of society on Australians. The social picture he paints is not a very pretty one. The figures show that anyone who lives in a family below the top 20 per cent of household incomes will lose out and the broad middle class will collapse.
The only certain winners will be those families in the top 10 per cent of household incomes, that is, double income earners with no kids and, of course, the big corporations. The facts we can glean that are relevant to Australia are that ordinary salary earners are going to go backwards, most families are going to go backwards and the prospects for the public sector and small business are generally gloomy. Corporations have been the only winners. Cuts to electricity pricing in Victoria and, even under corporatisation, in New South Wales have been heavily slanted towards larger corporations. I believe that we have to study the opposing ideas in some detail, and I obviously do not have the opportunity to do that in the time available to me today.
Honourable members may rest assured that I shall take every possible opportunity to put forward my views in the next three to four months. I believe that privatisation has been heavily promoted to governments by firms which will benefit directly from it. Those firms include the international consulting and finance firms of the privatisation industry which sell advice about privatisation and are paid to run the sale process, and the firms that want to take over the profitable parts of public services - the so-called lazy capital. These are often multinational firms with global interests worth more than the governments they lobby - firms like EDS, Generale des Eaux and Serco.
The Business Council of Australia, which represents Australia’s largest firms, many of whom are transnationals, has been a major lobbyist for privatisation and contracting out. Of course, the council has an interest in privatisation because the end results are worthwhile. A few weeks after TABCORP in Victoria was sold by the Kennett Government for $600 million, despite being put on the market for $1 billion, it was worth $1.8 billion. TABCORP now has the ability to be a potential bidder for the Sydney casino project, if Mr Packer pulls out. An enormous profit was made on that sale at public expense. United Kingdom studies have recognised the main beneficiaries of privatisation. As Lord Parkinson, a conservative member of the House of Lords, said:
The net result is that shareholders have done rather better out of it and customers have done rather less well.
On the 10th anniversary of the first privatisation, the public is starting to realise not only that the sell-offs have made millionaires who run former state enterprises, but have cost consumers something like $9 billion.
One must look behind the figures and to the results of privatisation. In the United Kingdom companies have been prosecuted for providing inferior services, such as water of poor quality, but the managers of those companies make millions of dollars. When a government decides to privatise an industry the managers of companies within that industry take up the offer of sale, not the ordinary people. Some people talk fancifully about selling off public utilities because the mums and dads will buy these massive corporations. However, the privatised services often end up in the hands of large companies.
The Hon. Patricia Forsythe: They did it with superannuation. They’re in superannuation.
The Hon. I. M. MACDONALD: No. The Hon. Patricia Forsythe should take note that the privatisation of energy generation in Victoria ended up in the hands of large overseas corporations. Australia’s foreign debt runs at the ratio 3:1 or 4:1 compared to the private sector debt. Australia needs an active and important public sector that is not involved in a number of areas and not confined to running social security, foreign affairs and other departments including the Parliament. The previous Liberal Government set about establishing agreements. For example, the Port Macquarie Base Hospital had one agreement for construction and finance and another to provide public hospital facilities for a service fee. The service fee was largely calculated on the top cover of private health insurance rebate. However, the rebate was designed to reimburse private hospitals for their costs. It is a disgraceful financial rip-off for New South Wales. [Time expired.]
The Hon. J. H. JOBLING [3.52 p.m.]: It is unusual that the Opposition in this House, which brought this motion forward for debate, finds itself virtually supporting the concept and philosophy of the Treasurer’s privatisation proposal. This probably will be the only time in my experience, and I suspect in my parliamentary career, that the Treasurer and I will agree about very much at all.
The Hon. D. F. Moppett: I don’t. He lied.
The Hon. J. H. JOBLING: I shall refer to some of the lies, as my colleague reminds me. The Treasurer seized upon a process that was started by the Fahey Government. Indeed, the coalition would have been undertaking this privatisation if it had remained in government. The Treasurer finally realised that it was only a matter of time before New South Wales had to go down the path Victoria had taken by announcing the sale of electricity generation, distribution and transmission. No doubt the Treasurer watched with growing envy as Victoria sold parts of its electricity generation and returned the money to that State. Let there be no doubt that private ownership in Victoria has sharpened the competitiveness of that State. The results achieved through the privatisation of Victorian generators are becoming evident in this State.
New South Wales is beginning to feel that heat. Without doubt the leaner and meaner Victorian generators would disadvantage electricity generators in New South Wales. Slowly, but eventually, the New South Wales Treasurer came to a conclusion and sensibly decided to move to privatise sooner rather than later. He saw an Aladdin’s cave of possibilities that I am sure he has outlined in the discussion paper he has distributed to the unions and staff of the favoured Pacific Power. I am surprised this particular Government did not think of this proposal sooner. Labor sentiment and attachment to outdated notions of public ownership must not be allowed to block the proposal for the sale of the New South Wales electricity industry. The Opposition wants to see the legislation and the details of the Government’s proposal for looking after the industry workers. The debate has begun but it must not be restricted to old ideologues with the old Labor Party ideology.
The Hon. Dr Meredith Burgmann: You’re not calling us old, are you?
The Hon. J. H. JOBLING: Labor must at least come into the twentieth century. I say to those members opposite complaining about being old ideologues or having old ideology: if the cap fits, they will have to wear it. New South Wales would suffer if Victorian generators and distributors were to be the only privately owned competition in the trans-State market using the advantages and flexibility that would come from the commercial necessity to win contracts. Indeed, this privatisation proposal would be an example of the New South Wales Government going down the right track - if its members allow it to do so. The Leader of the Opposition clearly said that this decision was a long overdue abandonment of the Labor Party’s stated policy views and removed any difference between the two political parties on privatisation.
Whilst this proposal is another broken promise by Bob Carr, who promised to be a bulwark against
privatisation, the Leader of the Opposition welcomed the policy reversal. Many times in the past the Labor Party has described privatisation of State assets as selling off the family silver. Bob Carr and the Hon. M. R. Egan did everything in their power to block the sale of GIO and the State Bank of New South Wales. Therefore, it is ironic that now they are embarking on a privatisation proposal that dwarfs those asset sales in size, magnitude and long-term ramifications for this State. When I look at the Treasurer is it Brutus I see - the man who was indeed an honourable person? One wonders whether his colleagues stand behind him and, if so, where are the knives. The knives will be revealed at the Labor Party conference in Orange this weekend and during its national conference on the October long weekend.
The Hon. D. J. Gay: Beware the Ides of March in 1999!
The Hon. J. H. JOBLING: As my colleague says, it makes one wary of the Ides of March in 1999. The Treasurer should well remember this debate, or would he have us believe that he is the New Deal Franklin D. Roosevelt? He is trying to borrow his Premier’s love of American history, but I suspect he has managed to simply get the wrong person at the wrong time and in the wrong place. Perhaps a reading of earlier statements will explain why members of the Left are so unhappy. A press release by the Minister for Energy of 21 April 1995 states:
With the introduction of a national grid and the new competitive regime for Government enterprise, it is vital that the NSW electricity industry be well-positioned to take advantage of the new opportunities.
In the next few months I will be consulting widely.
Honourable members should note well the final line, which states:
"Privatisation, however, is not on my agenda," Mr Egan said.
Oh, really! In a ministerial statement about electricity reform on Tuesday, 30 May 1995, the Treasurer said:
In contrast to the reforms of the Opposition’s colleagues in Victoria, these reforms are not driven by an ideological belief in perfect competition, nor are they driven by a privatisation agenda or attempts at creative accounting in order to deal with a debt problem.
Well, well, well. Interesting, is it not? Who are honourable members to believe after they read the media release by the Treasurer on 1 September 1995, which stated:
The NSW Government today ruled out the privatisation of Pacific Power when it released a report into the organisation's future by a group chaired by Professor Fred Hilmer . . .
Energy Minister Michael Egan said the Hilmer report argued persuasively to disaggregate Pacific Power but did not alter the Government’s commitment to keep the power stations in public hands.
Another lie, another broken promise. The Minister for Energy further emphasised that whatever option the Government chose the generators would not be privatised.
Pursuant to sessional orders business interrupted.
QUESTIONS WITHOUT NOTICE
VICTIM IMPACT STATEMENTS
The Hon. J. P. HANNAFORD: I ask the Attorney General whether Justice David Hunt has rejected a victim impact statement in a murder trial, stating that the legislation was poorly drafted. What action will the Attorney take to rectify the deficiencies alluded to by Justice Hunt?
The Hon. J. W. SHAW: That is not the fact. I cannot believe that the Leader of the Opposition framed such a question. I wonder whether he has read the judgment, as I have. It is crystal clear that the Chief Judge at Common Law, Justice Hunt, accepted the victim’s impact statement, acknowledged it, noted it and sympathetically dealt with it. However, it is true that at the end of the day he held that it did not assist him to determine the sentence of the offender involved. As I am sure the Hon. J. S. Tingle, who moved the relevant amendment dealing with the relatives of homicide victims, would accept, it was always contemplated that a sentencing judge might not regard victim impact statements as necessarily relevant to the determination of sentences; that is, to the quantification of penalty. Indeed, section 23C(3) of the Victims Rights Act, which was dealt with by this House last year, provides:
The court must receive a victim impact statement given by a family victim under this section and acknowledge its receipt and may make any comment on it that the court considers appropriate. However, the court must not consider the statement in connection with the determination of the punishment for the offence unless the court considers that it is appropriate to do so.
The implications in the honourable member’s question are quite without foundation. I exhort him and other members to read the comments of Justice Hunt in that regard.
DETENTION OF CHILDREN AND JUVENILES
The Hon. FRANCA ARENA: My question without notice is directed to the Minister for Community Services, Minister for Aged Services, and Minister for Disability Services. Given the ill-informed comments made in this House last week by the Hon. Virginia Chadwick and the Hon. Patricia Forsythe concerning the secure detention of children and young people, could the Minister please provide the House with some accurate information on the legal position regarding the restraint of children in care?
The Hon. R. D. DYER: I welcome the opportunity to clear up some of the ill-informed and misleading information that was touted last week by some members opposite on this complex issue. Last week I got it right, but today I give additional information for the benefit of the Hon. Patricia Forsythe and the Hon. Virginia Chadwick. It is testimony to the total ignorance of the Opposition that it so persistently asserted in this House last week that I had the power to lock up children for their own good. It should come as no surprise, certainly not to the Hon. Virginia Chadwick, that the Department of Community Services has no legislative power to restrain or lock up children and young people, except in the most extreme circumstances. It was a deliberate intention in the development of the Children (Care and Protection) Act 1987 to disallow the provision in the previous legislation which deprived children of their liberty for welfare reasons. Part 5 of that Act states:
The welfare and interests of children are to be given paramount consideration . . . Children are entitled to special protection and to opportunities and facilities to enable them to develop, physically, mentally, morally, spiritually and socially in a healthy and normal manner and in conditions of freedom and dignity.
Generally, only those children and young people who have been charged or convicted of an offence and whose detention has been ordered by the court may be detained under the Children (Criminal Proceedings) Act 1987. In 1989, when the Hon. Virginia Chadwick was Minister, the power of the Department of Community Services to detain children and young people was tested. In that case the Supreme Court took the view that a child should not be detained other than as authorised by law. This view was subsequently upheld by the Court of Appeal in 1991. It is very surprising that the Hon. Virginia Chadwick seems to be suffering from some form of amnesia on this topic, or perhaps she believed herself to be above the law when she was Minister.
If the department were to lock up a child or young person without clear authority, the department would be acting unlawfully. If the person subsequently were found to have been detained unlawfully, the State would be exposed to a damages claim for false imprisonment. The Children (Care and Protection) Act 1987 is presently being reviewed under the chairmanship of Professor Patrick Parkinson. The legislative review process has involved wide community consultation. Many submissions from parents, community groups and interested individuals and organisations have been received.
One issue under consideration by the legislative review is how the legislation can best address the care needs of adolescents with extremely challenging behaviours. This is a difficult and complex subject. Obviously it is conceptually too difficult for the Opposition to grapple with. It requires a fine balance between, on the one hand, a concern for the welfare and safety of children and young people and, on the other hand, a recognition that in our society we do not deprive people of their liberty without due legal process.
PACIFIC POWER PRIVATISATION
The Hon. R. T. M. BULL: I address my question to the Treasurer, Minister for Energy, Minister for State and Regional Development, Minister Assisting the Premier, and Vice-President of the Executive Council. Is it a fact that the Treasurer stated in this House on 22 May that he was unaware of concerns by unions regarding the privatisation of Pacific Power and demands from them that no such action be taken by the Carr Government? Is it also a fact that the Treasurer met with those same unions on 22 May, the day his discussion paper was released, to discuss their objections to the privatisation of Pacific Power and that his office, on 21 May, the day before the discussions took place, declined to comment to the Daily Telegraph on this issue? Is it a fact, therefore, that the Treasurer knowingly misled this House on his dealings with the unions and demonstrated contempt for both this House and his own Labor Party colleagues?
The Hon. M. R. EGAN: No, the honourable member is wrong again. On Thursday he asked me a question about a report in the Daily Telegraph of Thursday, 22 May, which I had not seen at that time. The article is headed, "Unions Pull Plug on Sale". As at that time I had not seen the article. After the honourable member asked me his question he furnished me with a copy of it. It is true that a spokesman of mine is quoted in the article. But my
media spokesmen regularly, in fact every minute of every hour of every day, receive calls from the media to which they respond. They do not refer any of those to me.
LEARNING ACTIVITIES FOR THE AGED
The Hon. J. KALDIS: My question without notice is addressed to the Minister for Community Services, Minister for Aged Services, and Minister for Disability Services. Would the Minister inform the House of the details contained in a recently released report entitled "Never Too Late to Learn"?
The Hon. R. D. DYER: I assure members of the Opposition that the report entitled "Never Too Late to Learn" does not, in fact, refer to the Opposition - although it well might. Yesterday, I launched a report prepared by the New South Wales Consultative Committee on Ageing which highlights the importance of lifelong learning. The report "Never Too Late to Learn: A Report on Older People and Lifelong Learning" promotes the benefits of ongoing mental stimulation, no matter what a person’s age.
There is hope yet for members opposite - they are not too old to learn and they are not too old for mental stimulation. Education and training enables us to participate effectively in the range of activities that make up our cultural, social and economic life. Effective participation is not just a matter of developing specialised skills. It also involves formal and informal knowledge about what it means to be part of one’s local community, pursuing personal goals and interests and developing and maintaining social and technical skills.
The report argues that lifelong learning is important because continued learning is essential to assist older people to feel secure in a changing environment; the benefits of learning include increased mental and physical well being, which can slow down the effects of degenerative conditions such as dementia; access to learning can help with the transition from paid work to retirement; and it promotes older people’s independence. The benefits of lifelong learning are considerable.
However, the current participation of older people in learning activities is very low. Less than 2 per cent of older people attend TAFE or university and less than 5 per cent participate in the adult and community education sector. For that reason the Government - the first time for any government - provided funding to the Little Bay Coast Centre for Seniors, which engages in exactly this type of promotion of lifelong learning. The Government has stated its commitment to ensuring social justice for the people of New South Wales in the social justice directions statement released in October of last year. Access to lifelong learning is a social justice issue for older people, and a key concern for government in developing ageing policy.
NEW SOUTH WALES TAX RATE
The Hon. J. H. JOBLING: I ask the Treasurer, Minister for Energy, Minister for State and Regional Development, Minister Assisting the Premier, and Vice-President of the Executive Council a question without notice. Is the Treasurer aware that the Auditor-General stated in volume 1 of his report to Parliament in 1997, which was released to honourable members today, that New South Wales is the highest taxed of all Australian States, paying approximately $1,673 per capita in 1995-96 compared with only $1,176 in Queensland and $1,298 in South Australia? And yes, even Victoria has lower taxes. Has the Treasurer received advice as to the scope and size of reductions in rates of State taxation from the mooted sale of electricity generation, distribution and transmission assets?
The Hon. M. R. EGAN: New South Wales also happens to subsidise the other States to an enormous extent each year on a per capita basis - to the tune of more than $800 million per year. When a comparison is made between what the citizens of New South Wales pay in income tax to the Commonwealth Government and what the citizens of other States pay, it can ben seen that New South Wales subsidises the other States to the tune of $1,200 million per year. That equates to more than $200 for every man, woman and child in New South Wales. On a number of occasions I have made it clear that it is quite appropriate for the people of New South Wales to pay their own bills. It is not appropriate, however, for the people of New South Wales also to have to pay the bills that are chalked up by the Queensland, South Australian, Western Australian, Tasmanian and Northern Territory governments.
Reverend the Hon. F. J. NILE: I ask the Attorney General a question without notice. Has Prime Minister Howard broken his promise to prohibit the possession, production, sale and hire of X-rated, hard-core pornographic videos in the Australian Capital Territory and the Northern Territory? Has the X-rated pornographic industry persuaded Mr Howard’s Government to relabel X-rated videos with a new classification of NVE - non-violent erotica - which is code for hard-core
pornography? Has the New South Wales Government urged Mr Howard to fulfil his promise to prohibit X-rated videos so that there continue to be uniform classifications in Australia in conformity with the New South Wales Government’s policy that prohibits X-rated videos? Will the proposed Federal classification change create a loophole in the New South Wales law whereby previously prohibited X-rated videos will be freely available for sale and hire in suburban video shops under the misleading label of NVE? If so, will the Minister take steps to prohibit NVE videos in New South Wales?
The Hon. J. W. SHAW: My understanding is that there was a promise by the Federal coalition before the last Federal election to abolish or ban X-rated videos, which, as honourable members will know, are available in the Australian Capital Territory and the Northern Territory. One assumes that that proved difficult to implement or perhaps impractical. In any event, as I understand it, the Federal Cabinet has decided to adopt a somewhat different strategy. It appears that Federal Cabinet has endorsed a proposal for changes to the existing film and video classification guidelines concerning X-rated videos and films. I have received correspondence from the Commonwealth Attorney-General broadly outlining the Commonwealth proposal. The Commonwealth is proposing that the existing X classification be abolished and that a new classification category for non-violent, sexually explicit videos be established.
The material in the current X category, which the Commonwealth considers undesirable, will not be permitted in the new category. Under the agreement entered into by the Commonwealth and each of the States and Territories as part of the cooperative legislative scheme for censorship in Australia, any amendment of the classification guidelines requires the agreement of all censorship Ministers. The Commonwealth Attorney-General has proposed that this issue be discussed at the next meeting of censorship Ministers to be held at Brisbane on 17 and 18 July. I am in agreement with this course of action and await detailed information from the Commonwealth on its proposals before New South Wales formulates any final or definitive position in this respect.
The Hon. R. S. L. JONES: My question without notice is directed to the Treasurer. Has he had an opportunity to examine the performance audit report of the Auditor-General on the Eastern Distributor? Is the Treasurer aware that the Auditor-General raises a number of very serious questions about the Eastern Distributor? Will the Treasurer prevail upon the Premier and other Ministers to assess this report very carefully before ramming the legislation through both Houses in the next three days?
The Hon. M. R. EGAN: I have received a copy of the report. I have not had time to read it in any detail. I will, however, do so, and I will also refer the honourable member’s question to my colleague the Minister for Roads.
PACIFIC POWER PRIVATISATION
The Hon. C. J. S. LYNN: My question without notice is directed to the Treasurer, Minister for Energy, Minister for State and Regional Development, Minister Assisting the Premier, and Vice-President of the Executive Council. Only yesterday did the Treasurer state that 3,000 jobs will be lost from Pacific Power regardless of privatisation? What does the Treasurer intend to do about that significant loss of employment?
The Hon. M. R. EGAN: The New South Wales electricity utilities, of course, are becoming more efficient and, over time, will require fewer people to do the job that they have been doing up until now. A significant reduction in the staffing of all electricity utilities has taken place not only under this Government but also under the previous Government. That trend, of course, is occurring not only in New South Wales utilities but indeed in all other States and in many other parts of the world. That means that a government can be judged on how it handles the transition. This Government is very proud of the fact that it has a policy of reducing staff, where it is required to reduce staff, by natural attrition and voluntary redundancy only. That will continue to be this Government’s policy.
ERARING POWER STATION PRIVATISATION
The Hon. JENNIFER GARDINER: I ask the Treasurer, Minister for Energy, Minister for State and Regional Development, Minister Assisting the Premier, and Vice-President of the Executive Council a question without notice. Is it a fact that the Labor Government is planning to privatise Eraring Power Station by selling the lease option as early as October this year? Is it a fact that no legislation is needed to carry out the sale? When is the Treasurer planning to tell his left-wing colleagues of his plan? What will be done with the sale proceeds?
The Hon. M. R. EGAN: I have a feeling that the Hon. Jennifer Gardiner has asked a question that someone in the lower House must have drafted for her last week.
HEAVY VEHICLE NUDGE BARS
The Hon. ELAINE NILE: I direct my question without notice to the Treasurer, representing the Minister for Transport. Is the Minister aware of the fatal accident that occurred yesterday in South Dowling Street, Kensington, in which a 67-year-old man was killed instantly when his car slid underneath a Grace Brothers Removals tabletop truck? Is the Minister aware that nudge bars, which prevent cars sliding under the backs of trucks, are only recommended but not required by law? Will the Government require large trucks, as a condition of vehicle registration, to have nudge bars fitted?
The Hon. M. R. EGAN: The honourable member has asked what seems a very sensible question. I confess that I was not aware of yesterday’s fatality, nor, until the question was asked, was I aware of anything called a nudge bar. I will certainly take up the matter with the Minister for Transport.
DEPARTMENT OF COMMUNITY SERVICES FOSTER CARE
The Hon. PATRICIA FORSYTHE: My question without notice is directed to the Minister for Community Services, Minister for Aged Services, and Minister for Disability Services. I refer to the issue of the two children found living in a humpy in the bush at Shalvey. In the weeks since the Minister told the House that his department had tried 26 different services before it could locate placements for the girls, has he or his department had discussions with any of those non-government agencies regarding their capacity to provide substitute care for children, especially those he describes as "difficult children"? Notwithstanding the Minister’s answer to an earlier question from the Hon. Franca Arena, what steps is he taking to overcome what are apparently gaps in the existing system whereby 26 agencies had to be contacted before assistance could be found?
The Hon. R. D. DYER: I have given full responses to previous questions regarding the two children in question. I have, in particular, indicated that placements have been found for the two children - one in foster care and the other in another form of placement. The honourable member’s question raised matters of detail. It is simply not possible for me to know in detail what telephone calls have been made between the department and service providers. The coalition when in government had the unenviable record of transferring substitute care of children from the government to the non-government sector. In the process 100 beds disappeared from the system.
The Hon. J. P. Hannaford: Does the Minister not support the Usher report?
The Hon. R. D. DYER: The Usher report did not recommend that 100 beds should disappear from the system. I assure the House of that. I am determined to maintain the 52 beds that still remain in the government system so that we have some possibility of coping with the difficult child.
NURSING HOME ENTRY FEES
The Hon. ELISABETH KIRKBY: My question without notice is directed to the Minister for Community Services, Minister for Aged Services, and Minister for Disability Services. Is the Minister aware of recent comments by the Commonwealth Minister for Family Services, the Hon. Judi Moylan, who promised that 27 per cent of nursing home beds would be reserved for financially disadvantaged residents? Have industry figures shown that between 50 per cent and 65 per cent of nursing home applicants could fall into the financially disadvantaged category? Despite the promised $5 per day Commonwealth subsidy for concessional residents, what action has the Minister taken to ensure that a two-tier system of aged care does not emerge through the introduction of nursing home entry fees?
The Hon. R. D. DYER: The first thing I must point out is that responsibility for nursing homes in New South Wales still rests with the Federal Government. Last year there were proposals that aged care, including nursing homes and hostels, would pass from the Federal Government to the New South Wales Government. The New South Wales Government, and for that matter other State Governments, at the very least expressed reservations about that proposal, mainly on the basis that the Commonwealth did not indicate what funding would be available to the States and Territories if such a transfer of responsibility were to take place.
The New South Wales Government has said very clearly to the Federal Government, and to the Hon. Judi Moylan in particular, that it will not entertain a proposal to transfer those aged care functions to the States unless it receives assurances
regarding adequate funding and unless other conditions are met. At the moment negotiations seem to be going nowhere. If the Government is not to see the colour of the Commonwealth’s money, it is not anxious to take over that responsibility. Having regard to this State’s unfortunate experience with the Federal Government regarding the Commonwealth-State disability agreement - in relation to which the Commonwealth is trying to reduce funding under the renewed agreement, which is due to take effect from 1 July - the Government would be foolish to entertain taking over another responsibility, namely aged care, in the absence of firm financial guarantees.
As to the other aspect of the honourable member’s question, relating to nursing homes, although this is not presently a matter falling within the control of the New South Wales Government I must express concern on behalf of the Government about the nature of decisions taken by the Federal Government in respect of nursing homes, in particular the decisions providing for what I have described as an accommodation bond - in effect a fee, and a very substantial fee at that - which will be levied before a person is admitted to a nursing home. Indications have been given by the Hon. Judi Moylan that certain percentages of nursing home beds will be kept aside for disadvantaged patients within nursing homes. The Federal Minister has also said that the proportion of nursing home beds that will be preserved for disadvantaged clients will vary according to the socioeconomic status of the suburb or locality in question. For example, she has said that a higher proportion of nursing home beds will be reserved for disadvantaged clients in the western suburbs of Sydney than in the northern or eastern suburbs of Sydney.
I am concerned about the whole scheme proposed by the Hon. Judi Moylan, particularly against a background of church organisations and other aged-care providers such as the Uniting Church, which is a large provider of beds for aged persons, querying whether on the financial terms proposed by the Federal Government it will be possible to set aside beds for disadvantaged patients on the basis contemplated by the Hon. Judi Moylan. The Government believes she needs to go back to the drawing board to refine her proposals, to ensure that equity prevails in the allocation of nursing home beds, and to ensure that the fees are not a disguised form of death duty, as I suspect they are turning out to be.
NURSING HOME ENTRY FEES
The Hon. ELISABETH KIRKBY: I ask a supplementary question. In view of the Minister’s answer, will he confirm to the House that State-run nursing homes such as Allandale in Cessnock will be fully funded by the State Government, and that it will be possible for disadvantaged people to gain entry there, even though the funds being provided for aged services by the Federal Government are what I might call derisory, particularly the $5 per day supplement?
The Hon. R. D. DYER: No such nursing homes within New South Wales are run by my administration. However, I shall be delighted to refer the question to my colleague the Minister for Health.
AGE OF RESTRICTED CONSENT
The Hon. Dr MARLENE GOLDSMITH: My question without notice is addressed to the Attorney General. He would be aware that under section 66A of the Crimes Act the age below which a child cannot give consent to sexual intercourse is 10 years. He would further be aware that a child between the ages of 10 years and 16 years may be considered under law to have given restricted consent to sexual intercourse. Given that 10-year-olds are overwhelmingly prepubescent and therefore not physically, much less emotionally and psychologically, ready for sexual intercourse, will he consider amending the Crimes Act to raise the age of restricted consent?
The Hon. J. W. SHAW: The provisions in the Crimes Act are longstanding, and I would be reluctant to give an off-the-cuff response to a proposition of that kind. Obviously, there are significant criminal offences even in relation to consensual sexual intercourse with children between the ages of 10 and 16. It should be borne steadily in mind that ordinarily the age of consent in regard to heterosexual activity is 16 years. I appreciate some of the subtleties of the question because there is a somewhat different legal test adopted with respect to children between the ages of 10 years and 16 years. At the risk of being accused of avoiding the question, I need to say that it needs more careful consideration than an answer to a question without notice. I will certainly take note of the honourable member’s suggestion that the matter should be reconsidered.
INVESTMENT AND INFRASTRUCTURE DEVELOPMENT
The Hon. JAN BURNSWOODS: I address my question without notice to the Treasurer. What is the Government currently doing to promote and encourage investment and infrastructure development in the central west?
The Hon. M. R. EGAN: I am particularly grateful to the Hon. Jan Burnswoods for her question, coming as it does after all the nice things she has said about me in the last four or five days. Last week I told the House about four workshops across regional New South Wales aimed at promoting and encouraging investment and infrastructure development. The Government is funding the workshops as part of the Institutional Investment Information Service. I explained that members of a body called the Australian Council for Infrastructure Development, otherwise known as AusCID, will speak at the workshops, and that the members include many of Australia’s largest construction, engineering and finance companies. Each workshop will involve a site visit and the presentation of at least three investment-ready local projects.
Last week I outlined the projects in the Hunter that will be discussed, and I was pleased that the Hon. D. J. Gay and the Hon. J. H. Jobling indicated an interest in attending those workshops. I am pleased to tell honourable members today a little about the three projects to be presented at the workshop for the central west. The first is a proposal for a minerals processing park at Lithgow, which would allow for the high-tech processing of minerals and alloys using environmentally friendly technology. Unlike the technology used in the old steel industry, it generates little waste. The project has the potential to employ hundreds of people. It has significant import replacement and export potential, as current processing activity is largely based overseas.
The project will take advantage of Lithgow’s natural advantages, namely, its existing infrastructure for power, transport, water, education and training; its skilled labour force; nearby raw materials; and export facilities. The second project to be discussed at the central west workshop will be the Menindee Lakes irrigation scheme. At present the lakes can hold about two million megalitres of water, although about one-quarter of that is lost each year to evaporation. It is proposed to seek private sector funding to build a water regulator between Lake Menindee and Lake Cawndilla and some supporting infrastructure that would allow for better water management and reduce annual water evaporation by between 50,000 and 100,000 megalitres.
Some of the saved water could then be sold to irrigators in the area and the balance could be used for additional environmental water flows. Irrigation development based on this proposal would create jobs and provide a shot in the arm for the pastoral industry. The final project to be discussed at the workshop - I am sure the Hon. D. F. Moppett will be interested in this - will be the removal of Dubbo railway freight yards from their present site on the northern edge of the central business district to the northern outskirts of the city. The potential new site already has a dangerous goods accreditation and is near a number of successful business enterprises including the regional stock saleyards, Boral, Jetstream and Fletcher’s international abattoir.
The estimated cost of the project is $18 million, but it will produce savings for business of about $5.25 million each year as a result of a more efficient movement of freight. The benefits will also include a substantial number of jobs during the actual move. As I said last week, in addition to the benefits of bringing some of Australia’s largest investors to the bush, these workshops provide project proponents with a practical understanding of how to present their projects to investors. This is a terrific and practical initiative which will be welcomed by people in the bush. I invite members of the House who may not be able to attend the workshops in the Hunter to attend those in the central west.
SYDNEY OUTDOOR FURNITURE
The Hon. D. J. GAY: My question is directed to the Attorney General, representing the Minister for Local Government. Is the Minister aware that today in an address to the Local Government and Shires Associations conference the Lord Mayor of Sydney, Frank Sartor, said that he would go overseas to source outdoor furniture for Sydney? Will the Government allow such a major contract to go overseas when companies located in New South Wales are capable of undertaking this type of work?
The Hon. M. R. Egan: To whom did you address your question?
The Hon. D. J. GAY: I addressed my question to the Attorney General, representing the Minister for Local Government, but I am happy for the Treasurer to answer it. Is the Minister also aware that companies in the Hunter region to which I have spoken could successfully fulfil the design, construction and instalment of this outdoor furniture for Sydney?
The Hon. M. R. EGAN: I certainly was not aware of any statement by the Lord Mayor at today’s shires associations conference. However, I would be concerned if the city of Sydney was looking overseas for outdoor furniture, because the furniture industry in New South Wales is second to none. I have been pleased to visit not only the offices of the
New South Wales furniture industry association at Hurstville but also its annual trade exhibit at the showground. Indeed, this year’s exhibition was held only last weekend, but I was unable to attend.
I have also been pleased that the New South Wales Government has been able to assist the association with its trade fairs in Japan, where a great deal of interest has been shown in the first-class products manufactured in New South Wales. I will personally ring Mr Sartor, because he owes me a favour. I appointed him as director of the Public Accounts Committee of the lower House when everyone was telling me not to do so; I thought he was the best applicant for the job. I will take him to the New South Wales furniture industry association and I will make sure that he is personally aware of the first-class products being manufactured in New South Wales. If he does not take any notice of that he should be ashamed of himself.
NARRABEEN SEAWALL CONSTRUCTION
The Hon. I. COHEN: I ask the Treasurer, representing the Minister for Urban Affairs and Planning, a question without notice. Can the Minister indicate why local government and, more recently, private beachfront property owners at Narrabeen are constructing seawalls in contravention of the current coastline manual? When will they receive clear direction from the Government on coastal planning and development? What is delaying the release of the New South Wales coastal policy prepared by the Coastal Committee, which has taken two years to progress from the draft stage?
The Hon. M. R. EGAN: I apologise to the Hon. I. Cohen but I did not hear his question. I am informed that he asked the question of me in my capacity as Minister representing the Minister for Urban Affairs and Planning, so I am sure I would not have been able to answer it even if I had heard it. I shall refer the question to my colleague the Minister for Urban Affairs and Planning and obtain a response as soon as possible. In answer to the previous question from the Hon. D. J. Gay -
The PRESIDENT: Order! If the Minister wishes to elaborate on a previous answer he may provide a supplementary answer at the end of question time.
ENERGY INDUSTRY PRIVATISATION
The Hon. M. J. GALLACHER: My question without notice is addressed to the Attorney General, and Minister for Industrial Relations. Will the Minister give this House a guarantee that if the unions carry out their threats of industrial action in relation to the privatisation of the New South Wales electricity sector, he will enact the essential services legislation to ensure that businesses and families are not left without power?
The Hon. J. W. SHAW: I regard the question as speculative and hypothetical.
PHARMACY BOARD UNEARNED INCOME
The Hon. Dr B. P. V. PEZZUTTI: My question is directed to the Treasurer. The Auditor-General’s report on the Pharmacy Board of New South Wales contains a statement about unearned income. Can the Treasurer enlighten me about what unearned income is for the Pharmacy Board?
The Hon. M. R. EGAN: Unfortunately I cannot advise the honourable member what the unearned income of the Pharmacy Board is. However, as the Hon. Dr B. P. V. Pezzutti has pointed out the matter to me, we both recall the proposed Spigelman tax on unearned income which, although announced, did not see the light of day. I have no idea what the unearned income of the Pharmacy Board of New South Wales is. I shall find out for him.
STERILE FRUIT FLY RELEASE PROGRAM
The Hon. ELISABETH KIRKBY: My question without notice is directed to the Minister for Community Services, representing the Minister for Agriculture. Have orchardists in the Narromine district noted a vast increase in Queensland fruit fly infestation in the 1997 season compared with previous seasons? Can the Minister provide details of the sterile fruit fly release program in the Narromine area? Can the Minister further provide details of the sterile fruit fly release program in the Wagga Wagga district?
The Hon. R. D. DYER: At this stage I am unable to enlighten the honourable member about the depredations of the Queensland fruit fly in either Narromine or Wagga Wagga. Contrary to what I just said, I have now been supplied with some information. Area freedom for the New Zealand market and other important export markets was regained for the entire Murrumbidgee irrigation area on 14 January 1996 following outbreaks in three areas during the 1994-95 summer. There have been no declared outbreaks of fruit fly for over a year. The whole of the MIA-Hillston area remains area free for interstate trade.
The Sunraysia region of New South Wales and Victoria lost area freedom on 15 March 1996, and subsequent trappings at Red Cliffs, Victoria, and Mourquong, New South Wales, on 28 March 1996 have extended the quarantine period. In early June 1996 the United States market accepted a 15-kilometre radius quarantine zone surrounding declared fruit fly outbreaks, instead of the previous 80-kilometre radius zone. That is a major step forward in negotiations and has enormous market access implications for growers and exporters in the fruit fly exclusion zone, or the FFEZ. That change in requirements results in a 70 per cent reduction in area adversely affected in a declared outbreak.
The standard post-harvest disinfestation method is to hold the consignment for 16 days at 1 degree centigrade for oranges, which is costly and may decrease skin appearance of fruit in the American market. Funding has been provided for fruit fly roadblocks and a program was carried out in the MIA during the 1996 Easter break, mainly as a public awareness campaign about fruit fly quarantine issues. New South Wales Agriculture will conduct roadblocks over traditional high-risk periods to further enhance the maintenance of area freedom. The use of the Ardlethan tin mine as a dump for Sydney’s putrescible waste so close to the FFEZ could erode -
The Hon. J. H. Jobling: Did they tell you what the acronym means?
The Hon. R. D. DYER: Members opposite have such short attention spans that they do not realise that I have already identified what FFEZ stands for. The use of the Ardlethan tin mine as a dump for Sydney’s putrescible waste so close to the FFEZ could erode the perception of export market about the fruit fly free status of Murrumbidgee Irrigation Area produce. Use of the mine could compromise market access for about $200 million wholesale value-added worth of agricultural produce. The answer I have given does not entirely cover the matter raised by the Hon. Elisabeth Kirkby. That being the case I shall, as I indicated at the outset, approach my colleague the Minister for Agriculture to make sure that full information is conveyed to the honourable member.
STERILE FRUIT FLY RELEASE PROGRAM
The Hon. ELISABETH KIRKBY: I ask a supplementary question. To clarify the situation further: when the Minister takes this issue to his Cabinet colleagues, I ask him to ascertain whether it is a fact that the sterile fruit fly program in Wagga Wagga and Narromine was not as successful this year as it was in 1996, and, if not, why not?
The Hon. R. D. DYER: At this stage I have exhausted my knowledge of the fruit fly. However, I shall approach my colleague the Minister for Agriculture and obtain precise details to respond to the Hon. Elisabeth Kirkby. It may well be that in due course I shall be as erudite regarding the fruit fly as I am regarding the rabbit calicivirus.
DEPARTMENT OF COMMUNITY SERVICES FOSTER CARE
The Hon. VIRGINIA CHADWICK: I refer the Minister for Community Services to the case of two girls aged 11 and 13 who were recently living in a humpy in bush near Blacktown Pistol Club at Shalvey. I further refer the Minister to his refusal last week to admit that the department did not act during five months of inquiries and requests for assistance from the girls’ mother. Will he now concede that the department should have acted sooner to place the girls in a secure environment? Given that the Minister’s department has now placed one girl in a secure facility, Ormond, does he concede that his department should have acted earlier to place at least one of the girls in secure care?
The Hon. R. D. DYER: Last week I detailed extensively the inquiries that had been made by the Department of Community Services regarding the two girls in question. It is simply not true to say that premises in New South Wales are secure in the sense meant by the Hon. Virginia Chadwick. Ormond used to be a juvenile detention centre but that is no longer the case. It may well present the physical characteristics or appearance of a juvenile detention centre. However, it is no longer a detention centre. Most of the clients at Ormond live in cottages on the site. They are not behind the wall, so to speak.
The Hon. Virginia Chadwick: Have you been there?
The Hon. R. D. DYER: Yes, I have been there, I have visited the cottages I have in mind and I know what I am talking about. It appears that the knowledge of the Hon. Virginia Chadwick is quite outdated. The history of this matter stretches back to 1990. Four years of the history of these girls relates to the administration of the previous Government. They were prone to absconding - to running - and, regrettably, that still appears to be the case. The girls have been given placements -
The Hon. Virginia Chadwick: Are they still in there?
The Hon. R. D. DYER: It is my understanding that at this stage they are. However, they do have a history of running, and they had such a history under the previous Government.
EAST CIRCULAR QUAY DEVELOPMENT
The Hon. R. S. L. JONES: I ask the Treasurer, representing the Premier, whether it is a fact that the tower option for east Circular Quay, if negotiated by the Premier with the Hong Kong Shanghai hotel group, would not cost the State one cent. Is it also a fact that such option would bring about the demolition of the eyesore now being built and open visual access to both the Opera House and the Royal Botanic Gardens, as many people in Sydney want? Why has the Premier not negotiated with the group for this option, and will he do so when he has established for himself that this option will not cost the State anything?
The Hon. M. R. EGAN: By "the tower option", I take it that the Hon. R. S. L. Jones is referring to the option promoted many years ago by Mr Tom Forgan, who was responsible for the Australian Technology Park. Is that the option referred to by the Hon. R. S. L. Jones, the large tower at the southern end of the precinct?
The Hon. R. S. L. Jones: Yes.
The Hon. M. R. EGAN: To my memory, that option involved a revolving tower. There was a problem in that a shadow would be cast over the Royal Botanic Gardens. When that option was on offer I was a great supporter of it. Unfortunately, not too many people were. My understanding is that at this stage any change would involve a cost to the taxpayer of some $700 million. In any event, I shall refer this question to my colleagues the Minister for Urban Affairs and Planning and to the Premier.
ASSESSMENT OF CHILDREN AT RISK
The Hon. J. F. RYAN: I refer the Minister for Community Services to claims made by the honourable member for Bathurst, Mick Clough, about a three-year-old girl with severe bruising, that Department of Community Services staff accepted reassurances from the de facto partner of the girl’s mother and decided that no further action was required. Is that standard operating procedure for departmental staff in assessing whether a child is at risk?
The Hon. R. D. DYER: The question relates to a particular casework matter being handled by the Department of Community Services. I have been advised that this notification is being investigated thoroughly in accordance with the normal departmental policies and procedures. The family in question is cooperating fully with departmental staff and referral agencies. In addition, the Department of Community Services is providing support to assist the family. I have said before and I repeat that I am always prepared to discuss particular cases with members on a confidential basis when they have concerns about case management decisions.
HONOURABLE MEMBER FOR BATHURST
The Hon. D. F. MOPPETT: Is the Treasurer aware of the following comments of his colleague the honourable member for Bathurst, that were reported in the Central West Sunday newspaper:
If we do not recognise the damage we’re doing to facilities, particularly in country NSW, we’ll be a one term government. At the next general election we could lose 20 seats and our entire representation in the bush.
Why is Mr Clough so upset with the Treasurer and the Labor Government and the way the Government is running the State? Is it because the Treasurer considers the honourable member for Bathurst to be irrelevant to decision-making processes, or is it because the Treasurer considers that the honourable member for Bathurst is always crying wolf in respect of other issues he raises in the press?
The Hon. M. R. EGAN: The member for Bathurst, Mr Mick Clough, is a great advocate on behalf of his constituents. In fact, he is one of the great country members of this Parliament, as are Mr Bill Beckroge, the member for Broken Hill, Mr Harry Woods, the member for Clarence, and one or two others. That does not mean that I do not often disagree with Mr Mick Clough; nor does it mean that he does not often disagree with me. In fact, I cannot recall the last time Mick Clough agreed with me. But I am sure that one day we will strike an agreement on some matter. It does not surprise me that in items in country newspapers Mr Clough has made claims that I would reject outright.
I suggest if members have further questions they place them on notice.
SYDNEY OUTDOOR FURNITURE
The Hon. M. R. EGAN: Earlier in question time I answered a question from the Hon. D. J. Gay about outdoor furniture in Sydney. The Hon. D. J.
Gay has informed me in the meantime that the Newcastle firm to which he was referring is the Treloar Group in Rutherford. Whilst I am probably not as well acquainted with this firm as is the Hon. D. J. Gay, I am aware of the company and I know it produces first-class outdoor furniture. I am sure that at some stage most honourable members watched the Atlanta Olympic Games. I draw to the attention of the House that the seats on which people sat in that Olympic stadium were made -
The Hon. Dr B. P. V. Pezzutti: They were made in Melbourne.
The Hon. M. R. EGAN: In Melbourne.
The Hon. Dr B. P. V. Pezzutti: In Geelong actually. Tim Fischer told me that.
The Hon. M. R. EGAN: In Geelong. I will not hold the honourable member responsible for a little error like that. If the seats in the Atlanta Olympic stadium can be made in Australia, Sydney outdoor furniture can also be made in Australia.
The Hon. Dr B. P. V. Pezzutti: Are you going to break his arm? That’s what I asked.
The Hon. M. R. EGAN: I will not break his arm. As I said earlier, I am a great supporter of Councillor Sartor because I employed him -
The Hon. Dr B. P. V. Pezzutti: He’s a mate.
The Hon. M. R. EGAN: He is not a mate. I am certainly on very friendly terms with him, but I would not say he is a mate in the sense that the Hon. Dr B. P. V. Pezzutti implies.
The Hon. Virginia Chadwick: Not in the Richo sense.
The Hon. M. R. EGAN: Not in the Richo sense, no. Councillor Frank Sartor certainly has been an outstanding Lord Mayor of Sydney, as he was an outstanding director of the Public Accounts Committee, until he was wrongly removed when I was no longer chairman of that committee. There will be occasions when I disagree with statements or decisions made by the Lord Mayor of Sydney as I disagree on occasions with the honourable member for Bathurst, Mick Clough.
MEREWETHER STREET WHARF DEVELOPMENT
The Hon. M. R. EGAN: On 22 April the Hon. I. Cohen asked me a question without notice regarding Merewether Street wharf development. The Minister for Urban Affairs and Planning has provided the following response:
In response to the first question, the Minister for Urban Affairs and Planning is aware of the proposal to build a $40 million hotel and condominium development on land presently owned by the Honeysuckle Development Corporation. This proposal offers Newcastle much needed jobs, investment and economic stimulus at a time when the City is most in need.
Newcastle City Council has procrastinated over the rezoning of Honeysuckle Development Corporation’s land and the determination of an appropriate set of development controls for the hotel site.
The Minister has therefore exercised his powers under Sections 101 and 100A of the Environmental Planning and Assessment Act to direct Newcastle City Council to forward any Development Application for the hotel/residential site to him for his determination. Further, the Minister has announced the establishment of a Commission of Inquiry to consider the Development Application for the hotel proposal, before giving his determination.
The Minister is also aware that a land owner on the opposite side of Wharf Road has submitted a Development Application to Newcastle City Council for a hotel up to 10 storeys. The Minister understands the design of the Honeysuckle development has been considerably modified to address the issue of view sharing with the adjoining hotel. This modified proposal was the outcome of a recent mediation process involving all stakeholders and was supported in principle by urban design advisers to Newcastle City Council and the Honeysuckle Development Corporation. This issue will be addressed in the independent Commission of Inquiry.
The advertisements referred to were to raise public awareness of the proposal and to correct considerable misinformation which was circulating in relation to the proposal.
The hotel and residential development proposal has always guaranteed that a minimum 8.0m wide foreshore promenade will be provided along the harbour waterfront. In addition, a further 3000 square metres of waterfront public space is included in the proponent’s scheme. The issues of access to the harbour and the size of the buildings will be considered in the Commission of Inquiry.
GREENHOUSE GAS EMISSIONS
The Hon. M. R. EGAN: On 23 April the Hon. R. S. L. Jones asked me a question without notice regarding Greenhouse gas emissions. I provide the following answer:
NSW unarguably leads Australia in creating a competitive electricity market that delivers both economic and environmental benefits.
The Electricity Supply Act of 1995 requires that conditions be imposed on each retail supplier’s licence, to ensure retailers develop strategies based on the principle of achieving the reduction of greenhouse gas emissions.
On 21 April the Government issued draft environmental guidelines for retail suppliers selling electricity in NSW. The guidelines establish a benchmark of reducing greenhouse gas
emissions from the electricity sector to 5 per cent per capita below 1990 levels by the year 2001. This is an ambitious but achievable goal.
Retailers must report the greenhouse gas emissions arising from the production of the electricity which they supply. The guidelines require each electricity retailer to develop and implement plans and strategies to reduce these greenhouse gas emissions. Retailers performance will be reported and assessed against the benchmark established in the guidelines.
The draft guidelines are currently the subject of a public consultation process and the final guidelines will be released shortly.
The threat of global climate change caused by the emission of greenhouse gases from burning fossil fuels is an issue that all responsible governments must address. The New South Wales Government is addressing this threat by encouraging businesses in NSW to take advantage of the opportunities arising from the electricity reform to reduce emissions while reducing costs and creating jobs. The Guidelines provide a further incentive for retailers to make the most of these opportunities.
ROADS AND TRAFFIC AUTHORITY SERVICE OUTSOURCING
The Hon. M. R. EGAN: On 23 April the Hon. Virginia Chadwick asked me a question without notice regarding Roads and Traffic Authority service outsourcing. The Minister for Roads has provided the following response:
The Roads and Traffic Authority (RTA) outsourced its graphic, building, mechanical and electrical services some years ago, prior to the election of the Carr Government.
The Auditor-General’s ‘Performance Audit Report’, which was tabled on 17 April last, referred to the outsourcing. The report stated that the RTA was not able to produce for review a cost/benefit analysis between internal and external service provision. The report indicated that the Premier’s Department had advised that, in that particular instance, the RTA had not complied with the ‘Guidelines for Competitive Tendering and Contracting Out’ issued by the Premier’s Department.
In this respect, the Minister for Roads has been informed that in 1992 a consultant was commissioned to review, in detail, all sections of the RTA’s Technical Services Directorate in the context of its organisational structure, business purpose-objectivity and contribution, strategic direction, economic viability and its role, responsibilities and accountabilities within and on behalf of the RTA. The graphic, building, mechanical and electrical services were functions undertaken by sections of the Technical Services Directorate.
This review was undertaken prior to the issue of any policy or guidelines for contracting-out or market testing. The scope of the review provided for the examination of the impact upon the RTA, both financial and operational, if any service area was closed, sold or contracted out.
The RTA’s graphic, building, mechanical and electrical services were outsourced on the basis of the review findings.
While the review was undertaken prior to the issue of any formal policy and guidelines, the review process broadly encompassed the steps outlined in the ‘Guidelines for Competitive Tendering and Contracting Out’. In this regard, I have been informed that during the review more than a thousand reports, files, and documents relating to the Technical Services Directorate’s operations were reviewed and analysed. More than 300 interviews were conducted, including interviews with people external to the RTA, and more than 200 questionnaires and specific responses were completed and analysed.
All Ministers appreciate the need for agencies to comply with requirements set down by the Premier.
DEPARTMENT OF HOUSING REDUNDANCIES
The Hon. M. R. EGAN: On 23 April the Hon. D. F. Moppett asked me a question without notice regarding Department of Housing voluntary redundancies. The Minister for Housing has furnished the following answer:
The Scheme referred to is part of the Department’s strategy to improve the standard of service to Departmental clients by upgrading and reconfiguring the skills available. The team-based client service structure was implemented in the Department following the Mant review (1992/93). While many staff have enthusiastically embraced the new ethos of client service, and have acquired the necessary skills for this role through training, there are still areas where improvement is needed. It is clear that the Department needs to change the mix of skills and qualifications in service provision, to build a professional service approach and to ensure that the Department has the capacity to meet the needs of the increasing proportion of clients with disabilities and those who are experiencing serious social disadvantage.
The Department has developed a broad staffing strategy to support the reform program and to achieve a different mix of competencies in client service areas. This includes permanent relief pools, new entry-level training programs, traineeships and cadetships and a new classification of specialist senior client service officer to which appropriately qualified graduates will be recruited.
The Approved Early Retirement Scheme (Voluntary Redundancy) is intended to assist staff who do not have the commitment or the requisite skills to meet the demands of the new client service approach, and to provide opportunities for the Department to recruit new and different skills into these areas. The Scheme has been offered across the State. The Scheme and the upgrading of skills in client service will be applied consistently across all Regions.
The Scheme will not lead to any reduction in the level of client service across the State, as positions affected by redundancy will be replaced by positions requiring different qualifications and experience.
FUTURE USE OF COCKATOO ISLAND
The Hon. M. R. EGAN: On 23 April the Hon. Elisabeth Kirkby asked me a question without notice regarding Cockatoo Island heritage value. The Minister for Urban Affairs and Planning has provided the following response:
Cockatoo Island is owned by the Commonwealth Department of Defence with the result that the New South Wales Government has limited power to act in relation to the heritage and planning issues of the site. However, the Heritage Council has been consulted on the overall issue and in 1989 endorsed guidelines and specifications for the island’s redevelopment. This was produced by the then Department of Planning and the Department of State Development. Heritage and public access issues were dealt with extensively in the document.
The Heritage Council believes that the studies prepared for the Commonwealth will ensure that it receives the best possible advice on future options for this important site. Updated studies are currently being prepared.
The Heritage Council does not oppose the sale of the Island provided that the conditions of any sale or redevelopment are clearly stated and accepted from the outset. The Commonwealth recently established contact with the Department of Urban Affairs and Planning and National Parks and Wildlife Service regarding the future of Cockatoo Island.
It is expected that the Commonwealth will continue to consult with the Department of Urban Affairs and Planning and the Heritage Council before making any further moves to sell the Island and that there will be opportunities for public comment.
CHAIN VALLEY BAY MINE SUBSIDENCE
The Hon. R. D. DYER: On 23 April the Hon. I. Cohen asked a question concerning the Chain Valley Bay mine subsidence. The Minister for Mineral Resources has provided the following response:
I understand that legal proceedings have been initiated by local residents against Powercoal Pty Limited with respect to their operations in the Chain Valley Bay area, and that matters are currently before the court. On the basis of this present position I am not at liberty to comment.
STREET SAFETY LEGISLATION
The Hon. J. W. SHAW: On 22 April the Hon. A. G. Corbett asked a question concerning street safety. I provide the following answer:
Commissioner Ryan has advised me additional powers are required to enable police to deal with certain behaviour in public places. This matter is currently within the Cabinet process and it would be inappropriate for me to comment further at this time. However, I can assure the Honourable Member that I will consult widely on any proposed legislative changes.
The following answer to a question without notice was received by the Clerk during the adjournment of the House:
Health Care Service Signs
17 April 1997
Mr Samios asked the Treasurer, Minister for Energy, Minister for State and Regional Development, Minister Assisting the Premier, and Vice-President of the Executive Council, representing the Premier, Minister for Arts, and Minister for Ethnic Affairs, and the Deputy Premier, Minister for Health, and Minister for Aboriginal Affairs -
Is it not a fact that the President of the Croatian Intercommittee Council for New South Wales, Mr Tom Beram, in a letter dated 14 February 1997 to the Premier, stated that advisers to the Minister for Health had informed him that health care interpreter service signs with messages in the Croatian language bearing the heading "Yugoslav language" would be replaced with new ones showing the Croatian language listed in alphabetical order? Is it not also a fact that the old incorrect signs are still displayed at the Royal North Shore Hospital? What actions will the Premier take to ensure that the error is promptly rectified and that the correct signs are displayed? Was the promise made to Mr Beram by the advisers to the Minister for Health yet another example of the Carr Government’s broken promise?
(a) The President of the Croatian Intercommittee Council for New South Wales, Mr Tom Beram wrote to the Premier in February 1997 to express concerns about incorrect interpreter service signs.
(b) During a meeting in 1996 between Mr Beram and the Office of the Minister for Health, Mr Beram was advised that the policy of the NSW Health Department was that all interpreter service signs bearing the message ‘Languages of Yugoslavia’ had to be replaced with new signs listing languages, including Croatian, in alphabetical order.
(c) All Health Care Interpreter Services have purchased new signs and posters and are in the process of replacing more than 300 signs located throughout the NSW Health system.
(d) New signs have been supplied to the Royal North Shore Hospital. Incorrect signs at Royal North Shore Hospital have now been replaced and all health care facilities within the Northern Sydney Area Health Service have confirmed that correct signs are in place.
Questions without notice concluded.
Adjournment (S.O. 13)
Debate resumed from an earlier hour.
The Hon. J. H. JOBLING [5.05 p.m.]: Earlier I was referring to the reasons the New South Wales public has doubts about Treasurer Brutus. When the Electricity Supply Bill was introduced on 12 December 1995 the Treasurer in his introduction said:
As outlined in the Electricity Reform Statement released in May, the Government’s reform program has three main elements. These outcomes will be achieved within a framework which preserves the public ownership of existing businesses.
Another lie! Labor has it wrong again. On 22 October 1996, in answer to a question from the
Leader of the Opposition about energy industry competition, the Treasurer said:
But, as for privatisation, which has been the course adopted in Victoria, I made it quite clear in the legislation that I introduced in this Parliament last year that that is not on the Government’s agenda.
No wonder his colleagues do not trust him! I asked the Treasurer a question about whether there was any proposal regarding the privatisation and selling off of Eraring Power Station. The Treasurer’s answer was no. But that was another lie to this House. On 26 November 1996 the Hon. J. M. Samios asked the following question about energy charges:
Is the Minister comfortable with the fact that by maintaining his ideological opposition to privatisation in New South Wales, he is exposing taxpayers to these potentially massive losses?
The Treasurer’s answer was that the Government had corporatised electricity entities. There was no mention of privatisation. In the other House the Premier has clearly said he is acting as umpire; he is standing aside from the debate, just like Pontius Pilate. Does the Premier wash his hands of this exercise? What a dreadful role for the Premier. Mr Phillips asked the Premier:
How does the Premier justify his decision to split up Pacific Power when prior to the election he said he was opposed to it because it would lead to privatisation?
The Premier answered:
No we did not. We constantly argued against privatisation of electricity generation as is occurring in Victoria.
No wonder the people ask: can you trust the Labor Party? Can you trust Bob Carr? On 16 May 1996 Mr Phillips asked the Premier a question relating to the proposals to privatise sections of the New South Wales power industry as follows:
Did the Treasurer hold privatisation discussions . . .?
The answer was:
Let me underline it again . . . it is restructuring, not privatisation. If the Opposition wants privatisation it can go and talk with its old mate, Jeff Kennett, who has sold off lock, stock and barrel, every last item of the power industry . . . This Government is maintaining the power industry as a public asset . . .
What absolute hypocrisy by the Premier and the Treasurer! Consideration should also be given to other statements made by the Premier: "The Carr Labor Government will maintain the electricity generator in Government ownership", from Labor’s cleaner and cheaper electricity and energy policy of 1995; "What I want to do in New South Wales is to promote a public sector in health, transport and electricity which stands as a shining contrast to those reckless experiments in privatisation in the conservative States. When anybody sees the contrast, they will see it as proof positive that the Labor way is the better way to go", Bob Carr, Daily Telegraph of 21 April 1995; "This Government is maintaining the power industry as a public asset", Bob Carr in the Parliament on 16 May 1996; "I want the public enterprises performing so well by 1999 we can say New South Wales has proven public ownership of electricity generation and hospitals makes sense", Bob Carr in the Sun-Herald of 23 April 1995.
There are few things as certain in politics as the fact that by the early years of the next century electricity generation in New South Wales will be in the hands of private companies. The only question is whether the power industry unions and the Labor Party machine will recognise this inevitability and decide how much smarter it is to go along with the plans as outlined. It is interesting to note that the Hon. M. R. Egan spent his early years on the Left of the Labor Party. By the time he finally entered the New South Wales Parliament in 1978, after his fourth attempt, he had become a member of the Right, just like the Olympics Minister who now lives on the North Shore and not in his electorate.
In 1979, as a feisty young backbencher, the Hon. M. R. Egan led the attack against Neville Wran over Labor’s decision to hand over to private enterprise the new gambling game lotto rather than have it run by the State Lotteries Office. The Treasurer has indeed travelled a long way in two decades and has taken many of his friends with him. I ask the simple questions: why were the crossbenchers told about this but the Labor Party Left not told? And why was it left until 5 o’clock last Thursday to clandestinely slip a note under the doors of left-wing Labor Party members after the House had risen?
Reverend the Hon. F. J. Nile: The crossbenchers were not told.
The Hon. J. H. JOBLING: I am sorry. If the crossbenchers were not told, I stand corrected. Certainly the left-wing of the Labor Party was not told. Obviously, if the Minister had consulted the accountancy firm Arthur Andersen to work out the conservative value of $22 million, the Government had known about this for quite a long time. No doubt the Labor Party, the Treasurer and the Premier have been clandestinely plotting this privatisation, probably for three, six or nine months. That is
confirmed by an article in the Newcastle Herald of 17 May 1997 which stated that there are international efforts to sell Wangi power station. The article stated:
Pacific Power is preparing in readiness for an international campaign later this year to sell Wangi power station. In the meantime the public might be informed.
I wonder how the conference in Orange next week will deal with this information. I wonder whether the October State ALP conference will be asked to endorse this massive sell off which concerns so many people. It is interesting that the secretary of the socialist Left, the Hon. I. M. Macdonald, is quoted as saying:
Mr Egan was on a kamikaze mission which would create enormous dislocation and lead to long-term division in the ALP. Corporatisation and privatisation is the policy of the ALP backed up by the left Caucus secretary, the upper House MP, Ms Jan Burnswoods, who said the Egan paper was a blatant attempt to bribe caucus into walking away from Labor’s long-term philosophy . . .
The Hon. ELISABETH KIRKBY [5.12 p.m.]: It is interesting that the Hon. J. H. Jobling wonders what the rural conference of the ALP will think when asked to debate this matter. The most important debate on this matter will be held at the State conference on the October long weekend. Today I received a press release from Damian O’Connor, the ALP Assistant General Secretary, which stated:
The final decision in the electricity privatisation debate must be made by an ALP State Conference . . .
The electricity privatisation issue is the biggest privatisation ever proposed in Australian history. If that issue isn’t appropriate for a State Conference, it’s hard to see what is . . .
The 835-delegate ALP State Conference is the supreme decision-making body in the New South Wales ALP. It comprises unions and rank-and-file delegates from all areas of the State.
Prior to and following Federation there have been problems regarding many public utilities and authorities - after all, it took us a long time to achieve a common rail gauge. That was what I might describe as the stuff-up which allowed the road transport industry to take such a hold. Although the present debate is about privatisation of electricity it is important to consider what role gas will play in power generation in the eastern States in future years. The Australian Financial Review of two days ago reported that there are now seven different applications from prospectors for gas in New South Wales and that New South Wales has large gas reserves. It has been common for generations for all gas, from the days of coal gas until the days of natural gas, to be in public hands.
So, why is it considered to be so strange and weird that the control of electricity should be in private hands? The Democrat’s Internet magazine, Eco Watch, mentioned the environmental implications of the sell off of electricity generation and the benefits that everyone might enjoy if more natural gas were available for the generation of electricity and for home heating and cooking. That may be possible within a short time. Honourable members ought to be reminded that in Geneva in 1996 nearly every country in the world, led by the United States, agreed to work towards legally binding targets for reduction in greenhouse emissions. Woefully, Australia, led by environment Minister Robert Hill, stood with 13 members of the Organisation of Petroleum Exporting Countries and Russia to resist this push. Australia’s appalling excuse was that the Government did not want to put Australian jobs, particularly those in the coal industry, at risk.
Since that time my Federal leader, Senator Cheryl Kernot, has asked a series of questions and made a number of speeches proving that the Government’s position is immoral and illogical. She pointed out that the coal industry had already lost 40 per cent of its jobs in the past 12 years, that the fastest job increases worldwide were in pollution prevention technology, and that the economic model on which the Government was basing its policy was incorrect, had never been submitted to peer review and was, in fact, ridiculed by domestic and international experts. Senator Kernot further pointed out that subsidies to fossil fuel industries created a playing field weighted heavily in favour of polluters.
Before the United States President, Bill Clinton, visited Australia, Senator Kernot asked the Government whether Mr Clinton would raise our embarrassing international position. Indeed, when the President later visited Australia he was emphatic about global responsibility on greenhouse emissions. This year world leaders meet in Japan to finalise legally binding targets and, in the lead-up, Senator Kernot will be pushing the Federal Government to remove its blinkers and adopt a responsible position. By quoting that document I am not suggesting that the Australian Democrats will support the privatisation suggested by the Treasurer.
Our policy is that privatisation is not ruled out unless it is in areas which we believe can and should only be provided by government. If the intention is to place greater emphasis on the
provision of electricity through natural gas, and the greater use of natural gas - which is far more environmentally friendly, and I can see the value of our electricity assets in power stations, transmission lines and coal reserves, which are not environmentally friendly - what the Premier and the Treasurer are trying to do could well be supported by the Australian Democrats. In 1995 the Australian Democrats senator, John Coulter, stated in the Federal Senate:
Much has been said in this chamber about the problems of greenhouse, which will impact in terms of environmental damage on future generations. How are their needs and those costs going to be registered within this simple model of bottom line economics?
Moreover, in the energy area, there are a number of cross-industry comparisons that need to be made. Are we going to see, as I suspect we are, competition within the electricity industry in isolation from other ways of providing for the energy needs of people? For example, in many of the remote areas, it would be cheaper to provide alternative sources of energy rather than providing electricity.
Are we going to see competition between the electricity suppliers to supply electricity into those areas at least cost?
I suspect that is exactly what we are going to see. As a good example, in relation to western New South Wales, under the Greiner government - a Government of the Right, a government given to energy efficiency and reducing government employees - we saw the minister for energy, Neil Pickard, get rid of his energy advisers and then proceed to conduct an inquiry into the provision of electricity to western New South Wales. Not surprisingly, what we saw then was advice coming to him from people in the electricity industry. They were the only people left to provide that sort of advice.
We then saw the government of New South Wales go ahead with a massive 4,200-kilometre grid extension at enormous cost to provide electricity to a very few consumers in western New South Wales. I understand the cost to provide just the grid connection for that electricity worked out at some $88,000 per household. The government chose to subsidise that cost and said to people living in that area, "You can have an electricity connection for only $55,000". Of course, those remote stations, which had already gone into solar and wind generators backed up with diesel and battery, found that they could provide an alternative source of electricity for themselves for only $35,000. So, not surprisingly, the very expensive building of that grid system has not provided the connections it might have provided and it therefore has not returned the benefits to the state of New South Wales that it might have done.
It seems to me that there is a lesson here in that one saw electricity being treated as a commodity on its own. Sure, one could have competition within that; one might get the least cost of electricity, but that is not to say that one would necessarily get the least cost of the energy services which electricity in a number of other moieties would make possible. Only in that way, with proper costing, with the full internalisation of externalities, will one see the best interests of society served, even in an economic sense.
Those are sensible words. In the months ahead honourable members have much to think about after the Treasurer and the Premier have fought their proposal through the national conference in October. The possibility of generation of electricity through gas turbines and greater use of natural gas has led to the proposal of the Minister being supported by Greenpeace. Obviously, if natural gas is piped into people’s homes and into some of the smaller towns of New South Wales, it will be very much cheaper than building transmission lines over great stretches of country. For those who are worried about the possible health dangers of electromagnetic radiation from power lines and transmission towers, natural gas is underground and those health considerations - if they are proved to be true health concerns - will be alleviated. Earlier in his remarks the Leader of the Opposition quoted from an article in last Saturday’s Sydney Morning Herald by Mr Patrick McGuinness. Mr McGuinness made a statement that deserves repetition. He said:
What is going on here? Now that the last lingering vestiges of the socialist objective have been abandoned by the great majority of the Labor Party, the argument about privatisation is being conducted in more pragmatic terms. The argument should be about the costs and benefits of privatisation in any specific industry or situation, not about ideology.
I was pleased to note that Patrick McGuinness, who normally does not support the Australian Democrats, in that statement supported Australian Democrat policy. He further stated:
If the sale of electricity generation enables the interest burden of existing government debt to be reduced, while ensuring cheaper and more efficient electricity generation, then it is clearly beneficial in economic terms. The issue then becomes one of whether it is beneficial in social terms.
All honourable members will have to think about that issue. Mr McGuinness concluded:
But it is clear that where there is a serious shortage of capital for investment in social infrastructure facilities like hospitals, schools, public transport, and so on, and a community which is extremely resistant to an increased burden of taxation, the most practicable way of investing in these is by selling off investment in industries such as electricity generation which can as well be provided under government regulation by the private sector.
The most important words in that paragraph are "government regulation". If we go down the road suggested by the Treasurer then electricity generation must be strictly regulated by government. Certainly emissions will have to be regulated by government because as yet Australia is not meeting the required world standards. The Federal Government is dragging its feet and in the eyes of the world Australia is beginning to look ridiculous. Finally, I also received a media release from the
honourable member for Clarence in another place who is the parliamentary secretary to the Premier. He said:
One of the important policy matters that need to be decided, as we approach the turn of the century, is where public money and effort is best put and where private enterprise is best.
It is quite clear that the private sector couldn’t and wouldn’t be able to provide to the communities expectations, a full and effective health or education service.
It is equally clear that the private sector can, with appropriate regulation provide electricity services . . .
This debate is more than just about electricity, it is about where and how public money is spent.
In the months ahead honourable members will also have to think about those words carefully before a final decision is made and before the legislation which will allow the sell off to take place is debated. I was interested to hear the Hon. J. H. Jobling talk about the sale of Wangi power station. Wangi power station is on the point of being mothballed and I do not believe that it could be sold. It should have been mothballed many years ago. [Time expired.]
The Hon. D. J. GAY [5.27 p.m.]: This is a matter of lies, deceit and utter gutlessness. The Premier of New South Wales has allowed a subservient, incompetent, innumerate Minister to take the blame for something that is his responsibility. This week on radio the Premier said that he would be the umpire in this matter. This is the bloke who is meant to be leading this State: the Premier of New South Wales. Honourable members opposite cannot tell me that old Scissorhands, the bloke who cannot add up, the bloke that invented Eganomics, who does not have any formal basis or any formal training, sneaked out on Thursday evening without the express permission of the Premier.
When honourable members read the comments in the press and realise that the people of the western division will be disadvantaged, they will understand that the word "Egan" should be replaced by the word "Carr" and the word gutless should be read into it. That is what this announcement was: it was the lowest and sneakiest thing I have seen. Today this Labor Treasurer who represents the Premier said in answer to a question about the loss of 3,000 jobs in the power industry, "We were proud of our record." This Labor Treasurer said he was proud of that record that resulted in 3,000 jobs being lost. That is what will happen. And not only that! Last Thursday the Deputy Leader of the Opposition asked a question in this House about privatisation - a question that would have interested the Hon. Jan Burnswoods. The question was:
I address my question without notice to the Treasurer. Is it a fact that unions have demanded that the Labor Government rule out the privatisation of Pacific Power and that they have passed a resolution that would result in the current atmosphere of uncertainty being cleared? Is this a slap in the face for the Premier, Mr Carr, who has raised the possibility of selling a power station to fund infrastructure? Can the Treasurer give his left-wing colleagues in this House an iron-clad guarantee that his Government will not privatise power stations?
The Treasurer replied:
I am not aware of any such meeting or decision. I do not know where the Deputy Leader of the Opposition got his information from, but certainly nothing has been conveyed to me.
The Hon. Patricia Forsythe: But he conveyed it later on.
The Hon. D. J. GAY: He may have conveyed it later on. He presided over the body of Caesar and delivered a speech that was truly reminiscent of Shakespeare’s Julius Caesar. The Treasurer is the New South Wales Labor Party’s Brutus. He is not Cassius, although he has all the attributes of Cassius - except that I suspect Cassius was more honourable. The Treasurer’s statement that night was followed by statements from the Labor Party Left. During the weekend two statements were made, one by the Leader of the Opposition, Peter Collins, and one by the Leader of the National Party, Ian Armstrong. Some media representatives suggested that the statements were contradictory, but I do not believe they were contradictory in the slightest.
The Leader of the Opposition said that the Opposition was in favour of privatisation. That is hardly surprising given that the coalition took to the electorate at the last election a policy of privatisation of the power industry. The statement by the Leader of the National Party was to the effect that the Opposition will not support Labor’s privatisation unless it can be demonstrated that benefits will flow to businesses and to the people of New South Wales, in particular those in the bush. We will stand by that statement. The coalition won 52 per cent of the vote at the last election. Recently the Australian Labor Party sought to introduce a gerrymander - but was thwarted in this House - to enable it to win the next election with only 46 per cent of the vote. At the last State election, the coalition won 52 per cent of the vote but Labor won government with 48 per cent of the vote.
The coalition does not believe that the result was legitimate but accepts that the Government won
sufficient seats to control the lower House. The coalition also accepts that the upper House has a responsibility to allow the Government to adhere to its mandate - unlike the Canberra colleagues of members of the Labor Party, who would not acknowledge the clear mandate given to the Federal coalition by more than 60 per cent of the Australian people to govern and to put into effect the policies that it took to the people at that election. This Government does not have a mandate to privatise the New South Wales power industry. I draw the attention of honourable members to page 12 of a document entitled "Labor’s energy policy - cleaner and cheaper energy". This was the policy put to the people of New South Wales before the last election, the policy on which Labor received a mandate to govern. The Australian Labor Party’s policy document states in part:
The Carr Labor Government will:
•maintain the electricity generating industry in Government ownership
That is the only mandate that the Government has, and we as members of the Opposition have an obligation to the people of New South Wales to allow the Government to deliver on that mandate. The Opposition had a policy of privatising energy -
The Hon. M. R. Egan: You what?
The Hon. D. J. GAY: Leading into the last election the coalition’s policy was to privatise the power industry.
The Hon. M. R. Egan: No, it was not.
The Hon. D. J. GAY: Yes, it was. It would be better for the sake of argument if it had not been our policy, but indeed it was. The Opposition has always been a supporter of privatisation, but it does not support Labor’s concept of privatisation. I put honourable members on notice - particularly members on the crossbenches and left-wing members of the Labor Party, because I know that people other than left-wingers are concerned about this issue - that the Opposition will evaluate any legislation that is introduced piece by piece, ramification by ramification and job losses by 3,000 job losses! The Treasurer said he was proud of Labor’s record.
Although the Opposition has always been in favour of the privatisation of the power industry in New South Wales, the Government does not have a mandate to do so, and any proposed legislation for this purpose will be examined in detail to see how New South Wales workers, regional communities, consumers and business organisations will be affected by it. I remind honourable members that the Treasurer designed his budget in his own office. The man whom the Hon. Jennifer Gardiner called "Egan the Abolitionist" - referring to his proposal to abolish seats - now proposes to abolish government ownership of electricity in New South Wales.
The Hon. J. H. Jobling: Egan the untrustworthy.
The Hon. D. J. GAY: Egan the untrustworthy. Or Egan the innumerate, because the Treasurer cannot add up. He has freely admitted to the club industry that when he had the cuisenaire rods out and balanced on the edge of the table and had his fingers going and his boots off - and half the staff left the office - he got the numbers wrong. He had hoped to raise about $70 million from the club industry but in fact he will raise $150 million.
The Hon. D. F. Moppett: The battery in the calculator was a bit low.
The Hon. D. J. GAY: He cannot operate a calculator. Someone who cannot read a daily newspaper could not possibly operate a calculator. He would have had the abacus out, I am sure. His fingers were moving but his eyes were looking in another direction. This is the man who is asking New South Wales to trust him with the carriage of a $22 billion privatisation. The reality is that the power industry is worth close to $30 billion. If the Government could not realise at least $30 billion from the privatisation of the power industry, something is wrong with the Treasurer’s calculations. The Treasurer is asking us to entrust him with that amount and also with the proceeds of the $1.2 billion the Government will get from the privatisation of the Totalizator Agency Board.
The Hon. E. M. Obeid: It is $1.5 billion.
The Hon. D. J. GAY: The Hon. E. M. Obeid suggests it will be $1.5 billion. I would stoop to question the education background of the Treasurer that qualifies him to handle such ventures. However, members should be aware that he is one of two sole shareholders in Great Southern Energy who recently purchased the Wagga Gasworks for a sum of $56 million. I am reliably informed that the purchase price was between $16 million and $20 million more than that offered by the nearest bidder. I question the numeracy, the diligence and the competence of a Minister who has the responsibility for that department. He has to sign off on it, he has to watch those things.
I question the Treasurer's ability to handle a $22,000 million transaction given that he did not show due diligence or competence in a $56 million transaction between Great Southern Energy and the Wagga Gasworks. I doubt that any member of this House would feel secure knowing those facts. The Hon. Elisabeth Kirkby referred to those in the Western Division who paid $55,000 for power connection. I know of many who have paid $5,000, $10,000 and $15,000 to have power connected to their private homes or farms. Will those power lines, for which people have paid large sums of money, belong to an overseas company?
The Hon. Franca Arena: What do you mean they are paid for?
The Hon. D. J. GAY: People paid a connection fee. The Hon. Franca Arena is a lovely, caring member of this House but unfortunately she is not acquainted with the many problems faced by people in regional New South Wales.
The Hon. Jan Burnswoods: That is a terrible slur. She is very well acquainted with the problems of those living in regional New South Wales.
The Hon. D. J. GAY: She is not acquainted with this subject. When people have no power connected to their property they have to pay for a connection. Who will own those power lines? Who will look after the Western Division? When overseas power companies come in and take the cream, will there be some left over? Who will look after these property owners? Who will deal with community service orders? Honourable members are aware of the outrageous situation with NorthPower, Advance Energy and Great Southern Energy. Service is not being delivered through the privatisation of those companies. We need to know whether there will be an environmental flow into the Snowy River out of the Snowy Mountains scheme and whether water will continue to flow to the Murrumbidgee Irrigation Area. Too many questions remain unanswered. [Time expired.]
The Hon. PATRICIA FORSYTHE [5.42 p.m.]: Last week David McNicholl, writing in the Bulletin, made the following interesting observation about our Treasurer:
I didn’t think it was possible for a Treasurer to look more self-satisfied than Peter Costello, but New South Wales Treasurer Michael Egan, who presented his State budget a week before Costello’s Federal one, makes Costello look almost shy and retiring. Egan could well consider changing his name by deed poll to Ego. Down with Treasurer Ego.
Today we are discussing the ego not only of the Treasurer but that of the Premier - somebody who believes he and his Treasurer can fool the people of New South Wales; that they can say one thing one year, make promises and commitments in an election climate then act differently when they are in government. Nothing could be more important to be discussed in this House today than the future of electricity in New South Wales. It was appalling that the Government chose not to support debate on this issue today. The people of New South Wales need to know the Government’s position. They need to know the direction proposed by the Government not merely on the issue of electricity but on the broader issue of privatisation.
The people of New South Wales could be confused because of the different signals that have been sent by the Government on this subject over a long time. My colleagues have referred to the clear commitment from the Government in its 1995 electricity policy, in which it was made perfectly clear that a Carr Labor Government would maintain the electricity generating industry in government ownership. Since then we have seen more examples of U-turn Carr or, as one of my colleagues said earlier, Dodgem Carr. Perhaps it would be more appropriate to refer to him as Dodgy Carr, because throughout 1995 and 1996 he consistently maintained, as he said on 16 May 1996 in the other place, "This Government is maintaining the power industry as a public asset." Technically speaking, he may have been correct; that may have been the situation on that very day. But quite clearly that was not part of his plans for the future.
Members of the Opposition were bemused about why the Government chose not to sit last Thursday night to proceed with legislation, given that it is well behind in its program. The Government appeared to have an earnest desire to adjourn at the conclusion of private members’ business at 4.15 p.m. Now the Opposition understands why. The Government was keen for Government members to leave the House so that the Treasurer could slip a little note under the doors of honourable members asking them to accompany him, no doubt on a journey - on a Pauline conversion; a road to Damascus. It is important to debate the issue today. Much has been heard from members of the Labor Party in recent days. Last Friday’s Newcastle Herald reported:
Left Caucus secretary Ms Jan Burnswoods predicted there would be a "huge fight" in Caucus about Mr Egan’s plans.
It is appropriate, if that fight does occur, that it should occur publicly so that the community is made aware of the issues and of the thinking of the Labor Party. The Newcastle Herald also stated:
Mr Egan conceded there would be fiery debate from the proposals but denied the release of the document late last evening ambushed left-wing Labor MPs strongly opposed to sell-off.
When the House adjourned last Thursday at about 5 o’clock, no doubt the Treasurer had lookouts from his office counting the left-wing members as they left the building so he could quietly get his message out, hoping perhaps they would not notice. But of course, Treasurer Ego would want them to notice; he would want to be the centre of attention, to have the headlines day after day, disappointed perhaps that his budget had not gone down well with the Labor heartland, that it was put down by the Council of Social Service, for example, as not helping the battlers of New South Wales. He most certainly will have a debate across the community on this issue.
It is important that all members have the opportunity to put their views on the record. The community is confused about the direction of this Government. The Premier gave the true believers of the Labor Party and the community a solid commitment prior to the 1995 election that energy would remain in government ownership. He repeated that commitment in May. In the Daily Telegraph in April 1995 he said that "there would be no chance of anything like that" - referring to electricity privatisation in New South Wales. History is now telling a different story. The Newcastle Herald referred on 23 May to "a move Mr Egan compared to US President Mr Franklin Roosevelt’s social spending in his New Deal". This Government seems to be carried away by the history of the United States. Any suggestion that the Treasurer may one day be the Franklin Roosevelt of New South Wales is laughable. Undoubtedly this issue is causing a clear division within the ranks of the Labor Party. On this issue last Saturday’s Newcastle Herald reported:
The privatisation of the NSW power industry could have a bigger impact on jobs in the Hunter than BHP’s steelworks closure, Mr John Mills, MLA Wallsend said yesterday.
On one hand we have the dire predictions of members of the Labor Left; on the other hand, the Treasurer is painting a rosy picture. The Treasurer was not willing to participate in today’s debate; he was content merely to table his discussion paper. It is important to put the facts on the record. An article in last Saturday’s Newcastle Herald stated:
A spokesman for the Construction, Forestry, Mining and Energy Union, Ms Lorraine Usher, said the plan was a betrayal of a government promise not to privatise the industry.
‘Almost a year ago to the day we had the Premier assure the public reforms to the power industry were about restructuring, not privatisation,’ Ms Usher said.
The article further stated:
The Deputy Secretary of the Electrical Trades Union (ETU), Mr Bill Wooldridge, said his union would also oppose the move and was demanding urgent discussions with Mr Egan.
I do not know whether those discussions have taken place. Perhaps it is the Treasurer’s intention simply to slip a note under union doors as well. A clear division is being created between Labor Party members who are thinking ahead and Labor Party members who are content to live in the past. However, those among them with a conscience, be they in the Left faction or the Right faction, are in a difficult position. They know that the Government has clearly put its position on the record both prior to the last election and in many statements since. The coalition’s direction has always been clear and consistent in this regard. Recently I had the opportunity to read Labor Essays 1997. The shock of losing the Federal election has all Labor Party members focusing on "renewing and revitalising Labor". I shall refer briefly to an essay by Lindsay Tanner, the shadow Federal minister for transport and former State secretary of the Federated Clerks Union. In defining the new position of Labor, in the chapter headed "Building an Inclusive Society", Mr Tanner wrote:
Labor must commence the process of repositioning itself for a return to government in a world which will be quite different from that left by the Keating government in 1996.
Among the key elements of repositioning, Mr Tanner said that Labor needed "a coherent framework of principles for public ownership, industry assistance and regulation". I suggest that the word "principles" is a contradiction in terms for the New South Wales Carr Government. In his essay Mr Tanner further wrote:
There is enormous confusion in the community regarding Labor’s position on privatisation, regulation and industry assistance.
One can only imagine what Mr Tanner thinks about the present state of confusion in the New South Wales Labor Party. He wrote further:
Selling a government-owned insurance company is acceptable because the market is reasonably contestable, the externalities are of only moderate importance, and the product is not used by everyone. Selling the water supply would be clearly unacceptable: the product is used universally, the externalities are fundamental to human existence, and contestability is very low. These concepts should be regarded as indicative rather than immutable, but it is vital for Labor’s credibility that we develop some framework to deal coherently with public ownership issues.
What must Mr Tanner be thinking about events in New South Wales? It is important to reflect on this issue in terms of Labor’s heartland, areas such as Newcastle. I shall quote further from the editorial in last Saturday’s Newcastle Herald under the heading "Power sale offers benefits". It is important that we start to place on record some of the facts in this debate. Undoubtedly the sale of electricity assets would represent a significant amount of money for New South Wales; it is important in terms of debt repayment. The editorial stated:
What the parliamentarians [who oppose privatisation] and the unions are ignoring is that the same thing could happen in the NSW power industry even if its assets remain in State Government hands. The industry is going to have to be able to compete, regardless of who owns it, or jobs will be lost to interstate operators who can supply power at a lower cost.
The editorial referred to loss of jobs in the industry, forced redundancies, et cetera. The first point in the editorial is that, regardless of what happens, New South Wales must compete in an efficient and effective manner. Who owns the electricity assets? The editorial further stated:
With government pricing tribunals watching the industry to guard against unfair pricing and collusion, users should be better off than in the days of government monopoly supply.
The real point of the exercise is what will be done with the proceeds of the sale of the power utilities that have been estimated conservatively at up to $22 million.
The Hon. Jan Burnswoods: Billion.
The Hon. PATRICIA FORSYTHE: It should be $22 billion. The retirement of State debt is most important and should not be taken lightly. I shall look closely at commitments made in terms of disability services, which is of great interest to me. The editorial concluded by comparing the situation in New South Wales to what is happening in Victoria, and stated:
It is ironic that Mr Egan is following the model set by one of the politicians most despised by traditional Labor Party members, the Victorian Premier, Mr Kennett.
On 7 March 1995 Premier Carr said, "If the State Liberals get a majority in their own right, they will attempt to do what Jeff Kennett is doing in Victoria, that is, carve the electricity generator into half a dozen stand-alone companies, making them easy to privatise later." I am opposed to that. However, in Victoria the runs are on the board, the dollars are in, electricity is competing effectively and New South Wales is missing out. [Time expired.]
The Hon. ANN SYMONDS [5.57 p.m.]: I suppose we should be grateful that the Opposition has given us the opportunity to begin the public debate on this important issue.
Reverend the Hon. F. J. Nile: Before Cabinet and caucus.
The Hon. ANN SYMONDS: I have heard what the process will be. In response to a question from a journalist about how the decision would be made, the Treasurer said that the Government would make the decision after a debate in caucus, within the party and among the trade unions. I suppose, therefore, that that is what the process will be. The debate will occur throughout the land and in party sectors. I do not know to what extent we will be able to influence the Government’s decision making, because we have heard in some sectors that financial institutions are already looking at ways to structure the purchase of the Mount Piper power station.
I take issue with the comments of the Hon. J. H. Jobling, who cast aspersions across the Chamber at the "ideologues" on this side. I am concerned about the imprecise use of language these days. I am not sure whether the honourable member, who tried to insult honourable members on this side of the House by pointing at them and calling them ideologues, understands the true meaning of the word "ideologue". Honourable members should read the definition of the word "ideology". Ideology relates to visionary theories of the operation of society and to ideas about systems and about the structure of social life. The word has also been used in relation to the ideologies of classes or individuals.
I am very proud to admit that I come from the working class, which was the basis of my entry into the Labor Party, and I am very proud of the history of the Labor Party. One of the reasons I speak in this debate is my enormous fears for the future of the Labor Party. The Labor Party has been extraordinarily successful. To a great extent there has been bipartisan support for establishing the common wealth in this country. That common wealth has been based on the proceeds of primary production and other endeavours in this very wealthy and naturally gifted society and has been distributed through the public sector. The way in which the common wealth has been distributed through the public sector has characterised our society in creating what we like to think of as being a fair go for all.
It is a great disappointment to me that the public sector as it was structured on our common wealth is disappearing and has largely disappeared because of the actions of Labor governments. One of the features of public sector provision that
allowed for an equitable standard of living in our society is something that was supported by the National Party. In this rush to privatise and to note the so-called benefits of private operations we have forgotten the notion of cross subsidisation that was entrenched into so much of the service delivery in this country and was supported by the National Party. It is my belief, in fact, that the National Party was founded as the Country Party to look after the equitable interests of people living in the rural sector.
Reverend the Hon. F. J. Nile: National socialism.
The Hon. ANN SYMONDS: Yes, of course. The Country Party was determined to make sure that people were not disadvantaged in access to transport, electricity, mail services or communication services if they happened to live 500 miles beyond Bourke. Why should people who live in Balmain have access to services and people who live in remote areas be disadvantaged? The wealth producers were living in the remote areas producing the wealth on which the public sector organisation was established. I am completely disillusioned. Mr Carr gave assurances that this Government would not go down the Kennett path of privatisation. I am alarmed that in proceeding down that path we have so many examples that should alert us to the dangers of proceeding in the same way as the United Kingdom has and in the same way -
The Hon. M. R. Egan: We’re not, absolutely not.
The Hon. ANN SYMONDS: We do not know that. I do not understand why the Treasurer interjects with such vehemence when we have to date been given no evidence of the plans under which we will avoid all of the pitfalls. I am gravely concerned about intentions to give over to the private sector something that has been in public ownership for so long. What will happen to community service obligations, for example? I point to the recent sale of the State Bank of New South Wales. I recognise that the Fahey Government agreed to the sale of the bank. Part of the sale agreement was that the State Government would be liable for bad debts. The bank was sold for $567 million, yet so far this year the Government will pay $134.4 million to meet the bad debts of the State Bank.
The issue of community service obligations is important. Having community service obligations as a part of the restructure of the system entrenched in privatisation means that the private sector will make the profits and the Government will have to pick up the obligations to ordinary people. What will happen when Hilmer is triumphant? In this debate we are talking about Hilmer’s competition policy. Hilmer is the architect, surely, of the whole plan. We are proceeding down the path of competition policy and we are breaking up what were public sector monopolies and giving them over to private sector monopolies.
The Hon. M. R. Egan: They are not monopolies.
The Hon. ANN SYMONDS: I would like to think that might be the case, but that has not been the experience in the United Kingdom. Why is everybody saying that we will be so much better off -
The Hon. M. R. Egan: Because the UK did not set up a competitive market. The honourable member should know that, and I suspect that she does.
The Hon. ANN SYMONDS: It very quickly aggregated itself into the hands of a very few people -
The Hon. M. R. Egan: No, it didn’t, it was just transferred from public ownership into private ownership.
The Hon. ANN SYMONDS: What is the reason for breaking up the energy industry and selling it off? Australia rated the cheapest out of 14 countries assessed on the price of electricity. The United States, which is apparently the model for everything these days, had the second-highest electricity charges and the United Kingdom rated sixth cheapest. If something is working effectively in the interests of citizens, I do not understand why it has to be given away and changed. Pacific Power, as it was operating at the end of 1994, was the seventh-most profitable organisation in Australia. What is all this nonsense about needing capital injections? I cannot tolerate the ridiculous obfuscation that is going on.
The Treasurer can keep telling us that New South Wales will not go down the same path as that followed by the British, but he will have to work very hard to convince me that there is public benefit to be gained from the sale of Pacific Power. New South Wales is in a superb position to market itself into the Asian region. I do not know why we have to give that opportunity to the private sector when we could market ourselves in our own terms from our current position as public owners of a very
efficient electricity operation. People constantly quote Victoria as a great model of success yet in Victoria people are dying, literally, because of deregulation policies. I shall not go into detail about specific deregulation policies -
The Hon. Dr Meredith Burgmann: There are the ambulances.
The Hon. ANN SYMONDS: Ambulance services and nursing homes have both been affected. One of the by-products of the oh-so-wonderful English system to which the Treasurer aspires is the death of many old people each year because the essential service of electricity - winter heating - is denied old people because of private sector pricing policies. I am utterly opposed to New South Wales selling off its common wealth. Our common wealth ought to be cared for, monitored and promoted by government. People seem to have forgotten what the role of government is. The role of government is surely to make sure that every citizen in this society has access to dignity, care and protection. That is not a question of managing. If it were only a question of management, why would we not privatise government as well? What is the point of our being here? Should we contract out government to Coopers and Lybrand and be done with it? I ask the Treasurer to reconsider the role of the Government and the traditional goals of the Labor Party.
The Hon. M. J. GALLACHER [6.09 p.m.]: I place on record some of the concerns of central coast residents about the Government’s proposal to privatise the New South Wales electricity industry. Unfortunately, the difficulty for central coast residents is that they are not represented in caucus by any left-wing members of the Labor Party. The Labor Party members who represent central coast electorates are all right-wingers and, of course, they will fall well and truly into line with the Treasurer and Mr Carr on this matter.
The Hon. Jan Burnswoods: What about Jill Hall, the member for Swansea?
The Hon. M. J. GALLACHER: She is leaving us; she is not a true State member. She is jumping ship because she knows that the Government will go down the gurgler in 1999. The Opposition’s concern about the effect of the proposed sale is focused on one aspect and that is jobs on the central coast. During the last few months I have had meetings with representatives of the Electrical Trades Union and the Construction, Forestry, Mining and Energy Union, who have painstakingly outlined their concerns for the work force. It is important that someone in this Chamber stands up for members of both unions who come from the central coast.
Munmorah power station has 97 staff and Vales Point has 517 staff. Both power stations are under the threat of the guillotine from this proposed sale. The central coast work force has a right to be concerned. The unions are not simply clouding the water and trying to stir up a hornet’s nest. They are simply placing on record the basis for their concern and are calling on the Government to ensure that their members will be protected when the sale takes place. Eraring power station, which is on the western side of Lake Macquarie, has 284 personnel. It will probably continue to function after the sale by the Government of the electricity industry.
Eraring power station is the most recently constructed of all the power stations in the State and operates effectively and efficiently, and it will be easily sold. However, as with the other power stations, the number of personnel will be open to rationalisation. The concerns of left-wing members of the Labor Party cannot be ignored. They are not members of the coalition who are trying to argue the toss with the Government about its proposed changes. Members of the Labor Party have serious concerns about the eventual outcome of the proposal. Irrespective of the attitude of the Opposition to this debate, union members have been asking the same questions as some Government members. What safeguards will be put in place to ensure that those working at the various power outlets throughout the State will be protected? What will be offered to them to ensure that their mortgage payments are met and that their families do not go without? The coalition is concerned also about the outcome for the mines that supply thermal coal to Munmorah and Vales Point power stations. In recent months concerns have been raised about quotas and it does not take much to work out that those quotas will be in jeopardy once privatisation takes place. The concerns of the unions may well result in a realistic rationalisation of the quotas of those mines.
The work force at the power stations on the central coast do not come only from the lower end of Lake Macquarie; they come from throughout the central coast. Many travel some distance to work and the likelihood of them finding work on the central coast once they have been retrenched is most unlikely. I suspect that many of them, if they are ever to work again, will have to sell their homes, uproot their families and move away. The union and left-wing Government members raised these concerns in the public arena. The threat of electricity blackouts is also of concern. Earlier this afternoon I
asked the Attorney General what he will do if the power workers continue their threat to the electricity supply. He simply avoided the question and refused to answer it.
Members of the Opposition are not the only ones asking these questions. As I said earlier, Government members, the unions and members of the work force are asking the same questions. Indeed, the New South Wales community wants answers to those questions as the winter months approach. I conclude my remarks by repeating that the coalition is committed to ensuring, first and foremost, that the proceeds from the privatisation of the electricity industry must be used to retire all State debt and, second, that the people of New South Wales realise exactly what the Government is about and that they go to the 1999 poll with the knowledge that they cannot trust Labor or Bob Carr: he is a man whose word cannot be relied upon.
The Hon. Dr MEREDITH BURGMANN [6.17 p.m.]: I want to briefly state my views on the subject of this debate. I support the Labor Party position, which is that there should be community debate on the Treasurer’s proposal. That has never been a problem in the Labor Party. In fact our leader recently referred to it as our blood sport. I remind the Hon. Dr B. P. V. Pezzutti and the Hon. M. J. Gallacher that when they talk about divisions within the Labor Party, they are not talking about divisions on a stated party position. The party policy implies that the left-wingers are not the ones who have divided the party; the party has been divided by those who have deviated from present party policy. In relation to asset sale and private sector infrastructure the policy states:
The Party in NSW is committed to the development of a strong, dynamic and relevant public sector. The public sector plays an essential role in assisting ecologically sustainable economic development and social justice objectives.
It also plays a vital role in economic restructuring through services to industry and addresses market failure through appropriate standards, monitoring and regulation.
Australia’s chronic balance of payment and foreign debt problems place limits upon growth in size and function of state and federal public sectors.
It is clear that if the New South Wales electricity industry is sold it will be sold mainly to foreign interests because they are interests with the necessary capital at this time. That will, of course, increase Australia’s foreign debt rather than reduce it. The party policy rejects the notion that income-producing enterprises should not be owned by the State. It then says:
However, the Party believes that support or opposition to asset sales or private sector involvement in infrastructure projects should be based on a broad, objective and factually based approach. Each case should be considered on its merits.
I agree with the proposal that each case should be considered on its merits. The policy of the party includes criteria for judging a proposed asset sale. I want to relate them to the proposed sale of the electricity industry. The first criterion is:
1. The direct and indirect social usefulness of a public asset, service or utility.
Obviously electricity has not only a direct but an indirect social usefulness. The next criterion reads:
2. The original purpose of the enterprise and whether that purpose remains valid, is being appropriately addressed through existing arrangements or could be satisfied by alternative arrangements.
It is clear that under the reforms introduced by the Government the present arrangements for generation and distribution of electricity are totally appropriate. The policy continues:
3. Where the original purpose (as discussed above) has become redundant, the other social, redistributive or regulatory roles that have evolved must be taken into account.
4. The retention value of the enterprise measured against its sale value. Any calculation of retention value should incorporate both commercial and non-commercial functions.
One issue that arises from that criterion is what happens to community service obligations when a public asset is privatised? A great deal of evidence suggests that CSOs either disappear or the Government continues to pick them up. In a large number of partial and full privatisations the CSOs are still being picked up by the Government. The criteria continue:
5. The current structure of the market place (ie. monopoly, oligopoly or competitive) and the public sector’s role as a competitor and/or regulator in that market.
The Labor Party’s policy of disaggregation of the electricity industry has already produced competition. The competition entering the industry via the disaggregated Victorian industry is evidence that there is no monopoly in New South Wales, and that there is, therefore, a competitive market. The policy continues:
6. The impact on specific groups or regional areas especially those groups or areas that are already disadvantaged. The assessment should include all factors including the real costs of compensation and/or support that will be needed if the role of the public sector were to change.
The privatisation of the electricity industry will have one specific effect on the central coast area, which is already badly affected by unemployment. The Electricity Commission formerly employed 250 apprentices in that area. Because of downsizing policies it now employs only six. The central coast has one of the highest suicide rates in Australia. Honourable members know Australia leads the world in rural youth suicide and privatisation will inevitably lead to further unemployment in this important area, which already has, as I have said, enormous unemployment. The criteria continue:
7. The impact on employment, skills, training and conditions and the protection of the existing workforce and/or the reform of industrial relations practices in any new enterprise or project.
I need only talk about what has happened in the Hunter region following its abandonment by BHP. The electricity generation industry and related coalmining areas around power stations such as Eraring need a continuing public presence. The next criterion reads:
8. The existing competing demands on the NSW public sector and existing budgetary constraints and/or the alternative sources of funds for public sector investment.
The budget that was brought down a few weeks ago showed that through good management the Government has been able to dramatically increase the amount of money allocated to schools and hospitals. There is certainly no need for a further injection of funds into the budget. The policy continues:
9. The current environmental impact and the need to continue to enhance environmental protection.
I was not born yesterday! I do not believe that private organisations whose only criterion for success is earning a buck will ever take environmental problems as seriously as public enterprise. No-one has ever demonstrated to me that private organisations properly look after the environment, whereas public organisations have a reasonable record in relation to the State’s environment. The tenth criterion reads:
10. The administrative economies of scale and coordination that is facilitated by public ownership and control.
I have already talked about that. The final criteria are:
11. Appropriate weighting of long-term as well as short to medium term considerations; and
12. Where the money is going, ie. ensuring that the proceeds of the disposal of assets are responsibly directed to priority public capital needs.
Unfortunately I had to sit through the entire speech of the Hon. M. J. Gallacher while I was waiting to commence my contribution. I disagree with him; I do not believe that the retirement of debt is the most pressing need in this State. I am not a flat-earther who believes that somehow a balanced budget brings enormous wellbeing to the State. I have never known a properly managed deficit to bring down a State’s financial structure. The Labor Party’s energy policy states:
6.1.1 Labor’s energy policy is based on two broad principles. Firstly, energy is a basic commodity and necessity that needs to be exploited efficiently and distributed equitably, while still allowing for appropriate returns to be made to either public or private investors . . .
6.1.2 Secondly, energy production, distribution and use must be carried out in such a way that ecological and environmental constraints are not compromised.
I have already talked about the problems that will occur if the sensitive matter of electricity, particularly electricity generation, is put in the hands of private enterprise, which has shown no real interest in CSOs or in protecting the delicate environment of the State. I am reminded of the most famous buy-off, the sale of Telstra by the Federal Government. Environmental groups were bought off by a $1 billion environment fund, but the groups that believed that that was highly exciting and that the Liberal Party was perhaps worth supporting are now coming to the ALP in droves saying, "You never told us what they would be like! How can we stop them mining in national parks? How can we stop sandmining? How we can stop them selling uranium to France?"
I tell them they should have known before the election that that is what the coalition would be like. They should have known the attitude to environmental issues of any coalition that is run by the rural rump, the National Party. As to whether the sale of the electricity industry will help the State budget, it should be remembered that at present the industry returns $800 million in revenue annually. Retiring the State debt would not necessarily make up for the enormous loss that will be incurred if the family silver is sold. A public document which reviewed the Labor Party’s loss at the recent Federal election dealt with the problems that the community will have when governments sell the family silver and foreigners take control of our economy. The electricity industry is a basic core industry. We should look at why it was placed in public hands in
the first place. The Electricity Commission was formed in the 1950s because the private companies producing electricity were unable to stop brownouts and blackouts in the 1940s and 1950s. I am old enough to remember the brownouts and blackouts of the 1940s.
With a privatised industry in Victoria there are not only blackouts and brownouts but power surges which destroy all the electrical equipment in homes. My understanding is that it is not possible to take out proper insurance against damage as a result of a power surge. The other day on the radio I heard a man in Victoria who had many thousands of dollars worth of electrical equipment ruined by a power surge. He was not eligible for insurance because it was not an act of God, it was an act of a private electricity company unable to prevent a power surge from occurring. I want to quote from an open letter from Mr Jack Merchant, the New South Wales branch secretary of the Municipal and Shire Employees Union - MEU. Normally I would not quote someone such as Jack Merchant but he made a lot of sense in his letter. He said:
The difficulty for the NSW Parliament is that should these assets be sold and the monies used to balance the State books the short term outcomes may look attractive - however where would future revenue 5 years down the track come from, additional charges, State taxes and no doubt a GST would be the only answer.
There is no need to sell these assets, previous speeches to the NSW Parliament by the Carr Government and numerous amounts of correspondence to the Unions, the industry workers and communities have trumpeted the Labor reform as opposed to the Victorian Thatcher right [wing] approach.
Anyone who has travelled to Britain recently would know that one cannot drink the water as a result of Thatcher privatising the water industry in that country. I was warned about cryptosporidium by my friend the Hon. Ann Symonds and she was absolutely right. The water tastes terrible and it is poisonous. I am very pleased that at last there is an appropriate government in Britain. Finally, I shall quote my leader in another place. Let me underline it again so that even the - [Time expired.]
The Hon. Dr B. P. V. PEZZUTTI [6.32 p.m.]: I contribute to this important debate to give a bit of history. The Hon. Dr Meredith Burgmann talked about the blackouts of the 1930s. I remember vividly in 1987, in the lead-up to the election which was won by the Greiner Government in a rout, not only were there constant blackouts through the winter but importantly trains did not run on time and the rail system was in a state of collapse as it is now. At that time there was also the most fantastic collapse of the health system. Now we are in the same boat. The chance of the Labor Party winning the election in 1999 is zero.
In the lead-up to the process of privatisation of the electricity industry, which we knew would happen, the corporatisation under this Government of the power distributors gave it ownership of the property. That sounds pretty straightforward, but there was no compensation. In fact, as I stand here a court action is under way in the Supreme Court in which Tenterfield Shire Council is seeking compensation for the assets sequestered from the council to the ownership of the Treasurer, the Hon. Michael Egan, and the Minister for Police, Mr Whelan, the two shareholders of NorthPower.
It may not seem much but the electricity industries on the north coast and the near north of the State have lost 500 skilled jobs straight away, a reduction from 2,000 to 1,500, and by July 1998 another 500 jobs will go, reducing the number employed in electricity generation down to 1,000. More importantly, one would not have minded so much if electricity prices had gone down and the price of New South Wales electricity thereby became more competitive with electricity prices from just over the border in south-east Queensland so that we could have attracted skilled workers to the area to replace those lost skilled jobs. However, that did not happen. NorthPower has the most expensive power in New South Wales and the most expensive industrial and business tariffs in the country.
The cheapest power in New South Wales is about 7 cents per kilowatt hour, on the north coast, and NorthPower charges more than 10 cents per kilowatt hour. So no benefits were gained there. Having read the annual report of NorthPower I noticed that the Treasurer was paid a dividend of more than $12 million this year and also instead of Commonwealth company tax we pay $12 million in tax, so that is $25 million or thereabouts. There is also an amount of $6 million in interest payments over and above the interest incurred when all the constituent county councils were aggregated. We had debts of about $70 million on aggregation. The Treasurer in his answers to me in the House did not think that was a commercially appropriate level of gearing.
The Treasurer retired out of State Treasury to NorthPower $70 million worth of State debts. Then he asked the people of the north coast when they paid for their electricity to pay off the State debt. Over and above the $6 million of interest paid they now pay $12 million of interest on that $140 million debt. This might seem to be pretty small beer to
people who talk about $22 billion worth of assets being sold. This is the largest sale of assets ever undertaken by a government. When Labor does them it does them big. It means that 1,000 jobs have been lost in probably the highest unemployment area of Australia. To give honourable members some idea of what happens, this is how NorthPower sacked its employees according to an article I have. It states:
The rumour spread at NorthPower depots this week that if you were called to see the boss and he shook your hand, you were right.
If he didn’t look you in the eye and handed over a blue folder, you were gone.
When Roger . . . was given a blue folder he was devastated.
A long-term employee of NorthPower, he knew staff were being offered redundancies but didn’t think he would be one of them.
But the blue folder was in his hand. That night he had to tell his wife "NorthPower don’t want me any more".
He doesn’t know what he will do.
His "blue folder" gives him a few options, but he finds none palatable.
"I can take voluntary redundancy, but in the end I’m out of a job and have a wife and two kids," . . .
"If I stay they’ll find me "meaningful" work - things like tree-lopping and lawn-mowing.
"There’ll be people screaming they want their power connected and I won’t be allowed to do it.
"The union said they lined us up like cattle and led us to the slaughter. They were right.
"The letter in the folder said I had been identified as having no future role in NorthPower’s core business.
"It said NorthPower was committed to handling this with dignity.
"Then you walked out with the folder, in front of your workmates.
There’s no dignity in that."
This Government snatched the State-owned assets and now it will sell them. To make them more attractive the Government has got distributing companies, which are owned by the Government, to do the dirty work, to sack the 1,000 workers, to reduce the work force by half. I find this fascinating. If honourable members think this will result in cheaper electricity, they should not hold their breath waiting for that to happen. On the north coast NorthPower has imposed the most expensive tariffs in the State. In the Northern Star there is a lovely picture of the Hon. Janelle Saffin, a member of the Left who issued a press release. The Hon. Janelle Saffin visited Grafton to announce that NorthPower’s residential electricity bills had been cut by 15 per cent. The Hon. Janelle Saffin omitted to mention that the electricity supply was still the most costly in the State. The article in the Northern Star also stated:
Likewise, NorthPower business prices were the most expensive at 10.05 cents/kW compared with the cheapest 7.99 cents/kW, offered by Australia Inland Energy.
Of course, domestic consumption is just as expensive. That does not tell the full story. NorthPower has now introduced bi-monthly billing. In a letter to the editor of the Northern Star Mr B. J. Cooper of Ballina stated in part:
I would like to issue a warning to all owners of small shops to check their NorthPower bills very closely.
The last power account that I received had a debit of $17 on it to make the amount up to the minimum charge -
The consumer incurred a $17 charge for being careful with the use of electricity. NorthPower has introduced a minimum charge as well as bi-monthly billing. That is pretty clever. NorthPower suggested that the rate per kilowatt hour has been reduced. That may well be so, but the charges have increased. In the recent budget the Treasurer has added a new charge. It is a way of ensuring that once the industry is privatised the Government will still be able to rip funds from the consumer. We are talking about $33 million per year being taken out of the northern area, and 1,000 fewer jobs. The Government is ripping-off $33 million per year by the corporatisation of NorthPower and the transfer of ownership from the local community to Mr Egan and Mr Whelan in lieu of Treasury. Electricity charges are no cheaper and now the Government proposes to privatise the energy industry.
I do not object to the privatisation of electricity assets but I am particularly interested in one aspect, that is, the Snowy Mountains scheme. I have inspected that scheme, one of the great icons that the Labor Party holds dear. It was the beginning of multiculturalism and Labor said it was introduced by Ben Chifley. Only recently on ABC radio I heard a replay of Mr Chifley announcing the beginning of the Snowy Mountains scheme. This is similar to the Keating Labor Government lining up to sell the Commonwealth Bank and Qantas - though Labor said it would never sell Qantas. When the Federal Government talked about selling part of the Commonwealth Bank it insisted it would not sell more than 50 per cent. Mr Keating sold that too. Now Mr Egan, every inch a Labor Treasurer, has
lined up to do something the Carr Government said it would never do, that is, sell the Snowy Mountains scheme - an Australian icon - to anybody who will buy it.
The Government is also responsible for stemming the flow of water down the Snowy River. The Hon. J. R. Johnson was a member of the Standing Committee on State Development when it heard evidence about the fishing industry. Witnesses before that committee stated, "Before you corporatise, privatise or sell off the Snowy Mountains scheme please turn on the tap so we can get about 25 per cent of the original flow in the Snowy River." Mr Deputy-President you no doubt remember that evidence. At Cooma the witnesses pleaded with the committee to do that. Questions have been asked about the fact that the river is stagnating and about the problems caused by willow trees, et cetera. Even if it means a drop in price, before the Minister flogs off the 56.8 per cent of this icon still owned by New South Wales, will he please let the river run and ensure that we get back our heritage. I think that is the most important issue.
Reverend the Hon. F. J. Nile: All they want is 25 per cent of the water.
The Hon. Dr B. P. V. PEZZUTTI: All we want is 25 per cent of the flow of water that used to go down the river, to make it a real river again and to give that part of the country back its dignity. There are more power stations in this State generating electricity than one could poke a stick at. The Hon. Dr Meredith Burgmann talked about privatisation, but Neville Wran privatised the power generation system in this State when he sold Eraring power station and leased it back. Eraring power station is not owned by the New South Wales Government: it is owned by Westpac, whose headquarters are in South Australia, I understand. When the lease expires in the near future the Government has only the right to re-lease it. I support the Treasurer’s proposal but I cannot understand the cant and the way the Government has gone about it.
If a private company had taken over NorthPower as it was formerly structured and had tried to shed 1,000 jobs and rip $33 million out of that entity, the Hon. Dr Meredith Burgmann and the Treasurer would have been outraged, Mrs Lo Po’ would have been screaming her head off about rip-offs and there would have been an inquiry by the Independent Pricing and Regulatory Tribunal. The Carr Government is doing exactly that. It is worse than any private organisation has ever been in this State. I cannot put into words how annoyed I have been and how angry I am about the way in which the Government has dealt with NorthPower. The privatisation cannot come quickly enough because at least we might be given some understanding of the accounts, and I believe that is in the interests of the people of New South Wales.
[The Deputy-President (The Hon. J. R. Johnson) left the chair at 6.46 p.m. The House resumed at 8.30 p.m.]
Reverend the Hon. F. J. NILE [8.30 p.m.]: It gives me great pleasure, as Leader of Call to Australia, to take part in this debate, which has been called on by the Opposition. The Opposition has sought to attack the Government and to criticise this historic decision, but it is a decision which the Opposition would make, and perhaps had planned to make as a vote-winning policy for the 1999 election. The Treasurer and the Premier have pre-empted that decision, and that could be the cause of the Opposition’s anger and the basis of its criticism of the Government. The Government has announced its dramatic proposal to sell off all the electricity utilities in New South Wales for $22 billion or more. It has taken a major step, probably the biggest step in the history of the State. The Treasurer said it should be discussed, and he launched the discussion. We were pleased today to receive the discussion paper prepared by the Treasurer and Minister for Energy entitled "A Plan for a Secure New South Wales".
The plan will result in benefits to the State. The Labor Party has realised that socialism is dead, and that the State will not benefit if the Government runs everything, as happens under a socialist and communist government. Although some left-wing members of the Australian Labor Party are not overjoyed about the privatisation, they would be a remnant. One has only to visit, as I have, the countries allied to the former Union of Soviet Socialist Republics, including East Germany and Poland, to see what happened when the government ran everything. Those countries were run into the ground, and the ordinary people suffered. I have not discussed the privatisation of electricity utilities with the Government. The Hon. J. H. Jobling claimed that some special arrangement had been made with members of the crossbenches. Call to Australia only became aware of the decision when it was announced.
The Hon. R. S. L. Jones: There have been no deals.
Reverend the Hon. F. J. NILE: There have been no backroom deals. The policy of Call to
Australia is smaller government, bigger people, and stronger families, and to get government out of all the areas which can be better run by private enterprise. The Government is meant to be the servant of the people, not the other way round. However, I recognise that safeguards are necessary. The Treasurer made it clear that there will not be a repeat of the experience in the United Kingdom under the Thatcher Government, whereby important public utilities were sold to single owners and there was no competition in those areas. Safeguards must be put in place against exploitation, and controls must exist over price setting to benefit the people of this State.
As the Labor Party emphasised, there must be social justice in regard to jobs, and the Government has guaranteed not only that sackings will not occur but that people will not be pressured to take voluntary redundancies for up to three years. Workers in the electricity industry will be in a far stronger position than other workers in this State who are not guaranteed employment for three years. They would therefore have an opportunity to take voluntary redundancy or other measures if they were no longer required because of modernisation, updating of equipment, and so on. The benefits must outweigh any disadvantages. The Government said this privatisation will allow it to completely eliminate the budget sector net debt and interest payments on that debt of about $500 million a year.
That money could be spent on providing better schools, better hospitals, better public transport and roads, a cleaner environment, safer streets and neighbourhoods, and better community services. Call to Australia would want an assurance that the policy to eliminate the budget sector debt was enshrined in legislation and guaranteed. We do not want the Government or its Ministers to be tempted to use the $22 billion for other purposes. Legislation must guarantee that the income will be used to offset the budget sector net debt and that those savings will show in increased expenditure of up to $500 million on better schools and hospitals, not for other projects. If the Hon. M. R. Egan remains as Treasurer that money will not be wasted because of his strict control over expenditure.
This is not a model of the Thatcher Government; neither is it a model of the Kennett Government. Kennett may have done similar things but he did them differently. Those who have been watching the events in Victoria have noted what seems to me to be a degree of political brutality, muscle or ruthlessness. Mr Kennett has the numbers so he rams legislation through both Houses. He does not appear to take much interest in public opinion or to be concerned about what people think of him; he just does things. For those reasons, there has been great unrest in Victoria, and the Kennett Government may be voted out of office in due course. As the Treasurer said, such a major change must be handled with sensitivity, which I believe is happening. I do not think that the Kennett Government produced a discussion paper when it privatised the energy industry in Victoria.
The Hon. M. R. Egan: He didn’t.
Reverend the Hon. F. J. NILE: That is what I am getting at. Kennett acted as fast as possible and until all hours to get the measure through the Parliament, and everyone had to accept it. He made no attempt to carry the people with him. Even Liberal voters were probably put off by the approach. Privatising the energy industry is a revolutionary move; therefore, it must be handled with care and sensitivity. The people must be involved; the Government must not create fear in the community. Although it seems dramatic and revolutionary to be talking about selling electricity utilities, as has been pointed out, the previous Federal Labor Government launched its privatisation policy with Qantas and the Commonwealth Bank. It even set in motion the sale of Telstra, which Mr Howard is now following through.
I believe that Mr Keating planned to sell off Telstra. If the Federal Labor Government had been re-elected, perhaps it would have sold the whole of Telstra. We now know that socialism did not and will not work. Some of us who had the opportunity to visit the nations behind the Iron Curtain before and after the Berlin Wall was broken down could see the changes. Indeed, comparisons could be made between West Berlin and East Berlin or West Germany and East Germany. East Germany did not have the money to restore buildings damaged in World War II, whereas in West Germany modern skyscrapers had been constructed in place of war-damaged buildings. While the East Germans lived in virtual poverty the nations that encouraged enterprise became prosperous and the benefits flowed on to the people.
The Hon. M. R. Egan: I was in East Berlin in 1989, and nothing had happened since 1945.
Reverend the Hon. F. J. NILE: That is right; East Berlin was almost stuck in history. I agree with the Treasurer that it was almost a parable. One could see it with one’s own eyes. I also had the opportunity of visiting the Soviet Union under the communist regime and later after communism had been removed. I could see the changes that had
occurred. Under socialist policies the communist regime had factories making products that no-one wanted to buy. The way the communist regime operated was ridiculous. I noted over the years, however, that the political party that ran the Soviet Union and other countries behind the Iron Curtain ensured that it looked after its own. It had special shops, hospitals and doctors for the new ruling elite, the ruling class. They certainly took care of themselves. The ruling elite could shop at tourist shops for goods and luxuries from the West that were not available to the working people. The so-called workers paradise did not exist; it was a myth.
Call to Australia is pleased to support the proposition presented by the Government. I know that the House is not debating legislation to privatise the energy industry, but I will do all I can through the Call to Australia party to explain the proposals and the benefits that will flow to the people of this State. The benefits include rebuilding older hospitals across the State; building 30 to 40 new schools across the State; building a new hall for every school without one; immediately completing a long-term overhaul of sewerage services for 500 country towns; making every country railway level crossing safe; providing new bus and light rail services for western Sydney; delivering planned new trains immediately; building better community services, such as new accommodation for 2,200 disabled people; and building better community facilities
Which members of Parliament could say no to that? To say no would go against our best policies, our motives for being here and the reasons that people elected us to this place. As I said, this matter must be handled with care. There must be an education program. I am sure the Government will provide a way of sharing what is involved not only with the Parliament but with the wider community. Obviously that will need to happen because I assume that some of the more left-wing radicals will distribute misinformation to union workers and others further away from this place to create a backlash against the project.
I do not need to tell the Government that it needs an information and education program so that people will understand the benefits of the proposal. The Government needs to be able to explain to the unions that under its proposal the power plan will generate, according to the Government, more than 75,000 new jobs each year for more than four years from one end of New South Wales to the other. These projects will require bricklayers, carpenters, electricians and building labourers. There will be many future opportunities for jobs, which will greatly reduce the unemployment level and benefit all the people of New South Wales. Call to Australia congratulates the Government and the Treasurer on an imaginative proposal. We will be pleased to follow it through in the following days.
The Hon. D. F. MOPPETT [8.45 p.m.]: It is an old aphorism that the first casualty of war is truth. In the war being fought between the left and right factions of the Labor Party there is no doubt that the greatest casualty has been truth. This Government committed itself to corporatisation of the electricity industry but not privatisation under any circumstances. Whatever our private views about the rights and wrongs of privatisation of the electricity industry, I believe that the core issue before the people of New South Wales is the Government’s failure to keep faith in this regard. Honourable members should look at the alternative in the Federal sphere. The goods and services tax proposal is being pumped up on all sides, but the Prime Minister remains rock solid to his commitment not to introduce a goods and services tax in his first term.
How does one judge the veracity of the New South Wales Carr Labor Government? It will say anything but do exactly what it wanted to do all along. This has been an extraordinary turn. I was in Parliament House on Thursday evening after the Legislative Council had adjourned for the day; indeed, I think the Legislative Assembly had also adjourned for the day. I heard whispers in the corridor as the Treasurer was just entering his historic press conference at which he announced this measure. That gave me an immediate insight into one of the Treasurer’s other important programs.
The Hon. M. R. Egan: You got very excited, didn’t you?
The Hon. D. F. MOPPETT: Yes, I did; I knew something was happening. It suddenly gave me insight into and perception of the debate we have been having for some months about -
Reverend the Hon. F. J. Nile: Was he going to announce the abolition of the upper House?
The Hon. D. F. MOPPETT: - the abolition of the Legislative Council. No - there was another chapter. I suddenly saw it. The Treasurer wants to abolish the Legislative Council and create strata units on level 12 that will be sold off to the highest bidder. This Chamber will become a McDonald’s franchise. That is the way the Government and the Treasurer look at their commitments to the people of New South Wales. It is not often that I speak in the Chamber, but only recently I reminded Government
members of the icons of the Labor Party, the icons that have seen that party through thick and thin.
The Hon. J. M. Samios: What would Jack Lang say now?
The Hon. M. R. Egan: What would I say about Jack Lang?
The Hon. D. F. MOPPETT: That point has certainly been made clear; any words that could be exchanged between the Treasurer and Jack Lang would indeed be terse. The precursor of the Treasurer would have been behind Colonel de Groot, pushing him forward to seize the opportunity and try to thwart Jack Lang in what he was doing. In actual fact, I think the Treasurer is striving to be the first awardee of the Peter Walsh medal. I am sure he will take over the Cassandra column and lead New South Wales into a new era of economics according to him. The person who would really turn in his grave if he were in his grave, but of course he is still with us, is Neville Wran - the man who seemed almost obsessed with the building of power stations. I would love to hear his view of this move.
The Hon. B. H. Vaughan: He would turn in his grave if he were still in it! That is quite a comment.
The Hon. D. F. MOPPETT: The trouble with Government members is that they do not listen carefully enough to contributions made. I did not say "if he were still in it"; I said "if he were in his grave". Neville Wran will be staggered at the convolutions of this Government. This issue is the greatest exercise in sheer hypocrisy that I have ever known. I think of even minor matters such as the privatisation of the Government Cleaning Service under the coalition Government. Most of the cleaning services had already gone to private companies but a residual amount of cleaning, in schools in particular, was carried out by the Government Cleaning Service. I recall the strong rearguard action from the Labor Party: the coalition Government had approached a line that it would not cross.
I am sure that some Labor Party members spoke about that issue. It was felt that the coalition Government was demolishing some of the sacred traditions of services to the State and putting at risk the health and hygiene of those in our schools and hospitals. If the Labor Party could rise to such heights of rhetoric and exaggeration in regard to the Government Cleaning Service, what should its members be saying about the sale of electricity generation? This issue is not about the provision of power by government-owned utilities. One of the paradoxes in this argument, of which I am sure the Treasurer is aware, is that, while electricity generation grew up under government domination, gas energy has always been in private hands.
I do not consider that the quality of electricity will be affected by privatisation; the voltage in power lines will not change and ammeters will not go crazy because electricity generation is no longer a government service. The important consideration in this debate is the fabric of our society. I question the impact that this cataclysmic decision for the Labor Party will have on our society. This decision is about future shock and the community divisiveness that it will produce. I would never try to diminish the importance in our community of the Australian Labor Party. It will be split down the middle, not only between Left and Right but between its country and metropolitan wings. I assure honourable members that in the country there is no enthusiasm for this decision. Importantly, there has been no time to absorb news of the decision and adjust to potential results of privatisation of the power stations. As I have said, I am not ideologically committed to government ownership.
The Hon. R. S. L. Jones: But you’re a rural socialist.
The Hon. D. F. MOPPETT: I deny that; that is a tag that is bandied about that has no real meaning. It will be interesting to find out how on earth the Government intends to flog off some of the power stations. Some of the power stations have been put in mothballs or cocooned for some time. Some that were built in the flush to which I have referred, in the time of Premier Neville Wran, were found to be faulty in design - I remember a problem with salt-water cooling of one of the plants. Almost within 10 years of commission, the technology of those power stations was redundant. New South Wales is oversupplied with power, and it is my belief that the Government will face a great deal of difficulty in selling off some of the white elephants in the power generation industry.
There is a great deal of detail to be examined. However, I believe that the Government is committed to its decision, despite the semblance of a debate in caucus and the idea that there may be a debate at the Labor Party rural conference in Orange at the weekend. I challenge the Treasurer to deny that the sale documents are ready to go. I am sure that if someone waddled in with $20 billion to spend, the Treasurer would not want to let that person out of his sight until the deal was concluded by October. The Treasurer must realise the
importance of considering the broader perspective. There is more to this issue than simply the cost of power generation and the ideological conflict between government and private ownership.
A number of authors have spoken about the importance of recognising various classes of capital in our society. There is human capital, being the people; there is money capital, which is very important, and that is the preoccupation of the Treasurer; there is infrastructure capital that has been built up over the years - buildings, roads, water supplies, electricity and so forth; and, most important, there is social capital. It is social capital that is being put most at risk by this reckless proposal of the Government. For a cohesive society people need to believe that they understand what is predictable, what the parameters of public decision are and to what extent they can be secure in the expectations of their community - not their personal security but the security of the community.
I assure honourable members that in many rural communities the sense of having social capital, the sense of having some predictability about the future of the community, has been severely eroded, as has been documented by many people. Many factors such as the drought and the decline of trade in many rural industries have led to erosion of the sense of social capital. A significant factor has been the rationalisation of many services. My colleagues have spoken about the shedding of jobs in organisations such as NorthPower and Advance Energy. It seems that we are now to face another round of job cuts. Apart from the economic effects to which I have referred and worry about the security of the economy of the whole community, there is a public reliance that somehow or other we cooperate in certain areas.
Most people would be horrified to think that the whole of the education sector could be handed over to private enterprise. That would be a shock to the public’s comprehension of a just society. The argument, of course, is whether the sale of electricity generation impinges on social capital. The Treasurer is saying that it does not, and I agree with him. In my opinion, people will, given time, adjust to the idea of a private company producing electricity. The Australian Gas Light Company produces gas, and it would be no different if a private company were to produce electricity. The social fabric of society would not be changed all that much. I still say, however, that the Government’s timetable and its repudiation of a promise not to privatise is the cause of trauma and shock in our society.
The Hon. R. S. L. Jones: Are you opposed to it, then?
The Hon. D. F. MOPPETT: I believe the Government should take a great deal longer over this decision. Communities should be given a great deal of time to consider the impact of the privatisation of electricity generation. As the Hon. R. S. L. Jones will recognise, in the past few weeks I have consistently asked the Treasurer whether rural community impact studies have been prepared on this subject. The Treasurer has told me that they are confidential.
The Hon. M. R. Egan: To what are you referring?
The Hon. D. F. MOPPETT: Rural community impact statements.
The Hon. M. R. Egan: No, in relation to the budget and Cabinet submissions.
The Hon. D. F. MOPPETT: Because the Treasurer said they were entirely a matter for Cabinet consideration. I want to speak about that issue on another occasion, but I remind the Treasurer briefly that a submission of the Local Government Association stated that rural community impact studies should be made public so that at least rural communities could understand the depth to which the Government considered the dislocation that would be occasioned.
The Hon. Ann Symonds: We are going to have commercial confidentiality.
The Hon. D. F. MOPPETT: Commercial confidentiality will be the next excuse so that this significant area of public policy is once again disguised and kept from the community. I remind the Treasurer that he ought to slow up and contemplate these matters. I refer to Dr Martin Martie, an eminent American author, who talked about how belief systems provide an umbrella of security in the community. The Treasurer is running the grave danger of closing that umbrella and blasting apart these communities - the many ordinary families and citizens of New South Wales - whatever way the wind blows in this economic hurricane that he believes will somehow lead us to a better world. I hope that in the long run the community embraces this decision, but the present timetable is not one that edifies the Government. The Government’s breach of promise to the community that this privatisation would not happen in this term is a serious charge.
The Hon. JENNIFER GARDINER [9.00 p.m.]: I have pleasure in supporting this motion moved by the Leader of the Opposition. I was particularly interested to listen to Government members who have spoken in this debate. I was fascinated by the remarks of the Hon. Dr Meredith Burgmann, who said that the Labor Party’s position was to support the opportunity to engage in a debate on the issue. It was a fairly dramatic rewrite of the Labor Party’s position because at no stage did Mr Carr or the Hon. M. R. Egan say during the last State election campaign, "Hey, folks, when we get into government we are going to engage in a debate on privatising the power industry!"
Their comments were more like the comment by Mr Carr on ABC radio on 7 March 1995, just before the election, when he said with a straight face, "What I am afraid of is that if the State Liberals are to get a majority in their own right, they will attempt to do what Jeff Kennett is doing in Victoria, that is, carve the electricity generator in this State up into half a dozen stand-alone companies creating a situation where they were easily privatised. Now, I am opposed to that." The Labor Party’s energy policy is quite clear, as other honourable members have pointed out, but rereading it reveals some rather ironic words.
The policy says, "In the last six years immense pressure has built for a different approach to energy policy." This certainly is a different approach, but that might have been a cryptic way of warning Australian Labor Party members of what was to come. Of course, in setting out the detail of the policy the ALP said that the Carr Labor Government would maintain the electricity generating industry in government ownership. That is fairly clear language and again the policy document uses some ironic words. The policy also stated, "We the Labor Party will work with energy unions to promote a greater level of work force skills, formation, job redesign and ongoing development." Perhaps the unions should have read the words "job design" more carefully than they might otherwise have done.
I am particularly interested in this matter from the viewpoint of one key electorate: Bathurst. In abandoning its ideology and in a pragmatic attempt to buy the 1999 election, which is what this matter is all about, the ALP has cut into support levels of many of its long-time and traditional supporters, of whom one is obviously the sitting member for Bathurst. Bathurst is a marginal electorate directly affected in a dramatic way by this policy flip by the Labor Government. Mr Clough’s reaction to last Thursday’s avoidance of parliamentary behaviour by the Treasurer is worthy of note in this place. Mr Clough described the Treasurer’s plans as the idea of a megalomaniac. He said that the theory that lower electricity prices will result was pie in the sky.
He also predicted that 300 power workers at Wallerawang and Mount Piper power stations will lose their jobs, contractors will take over and jobs in the coalmine in the electorate would also be adversely affected. This pragmatic decision to privatise the electricity industry is one thing in ALP policy, but it is another to ditch a key seat like Bathurst, which was won in 1981 by only a handful of votes when Mick Clough returned from the wilderness. At that time Lithgow was added to the seat of Bathurst, which enabled Mick Clough to win the seat by about 31 votes. Of course, Lithgow is the part of the Bathurst electorate that is most dramatically affected by this proposal; it is also the city from which the Labor Party was hoping to draw its next candidate.
The Hon. D. F. Moppett: He will have resigned by then.
The Hon. JENNIFER GARDINER: I do not think he would bother seeking preselection. It will be interesting to see if he even bothers to turn up at the conference at Orange.
The Hon. M. R. Egan: I’ll be there.
The Hon. JENNIFER GARDINER: Well, that will be a change. The Treasurer says he will turn up for a change.
The Hon. M. R. Egan: I am always at the country conference. I went to the last one.
The Hon. JENNIFER GARDINER: Not the one before.
The Hon. M. R. Egan: No, I wasn’t at the one before.
The Hon. JENNIFER GARDINER: And did not turn up at the Tamworth Cabinet meeting either.
The Hon. M. R. Egan: I was overseas.
The Hon. JENNIFER GARDINER: In Massachusetts, yes.
The Hon. M. R. Egan: Winning jobs for New South Wales, I might say.
The Hon. JENNIFER GARDINER: But not for country New South Wales. That brings me to the comments of the Hon. I. M. Macdonald in this debate.
The Hon. B. H. Vaughan: What about joining our party?
The Hon. JENNIFER GARDINER: No. I will get to that in a minute. I am expecting National Party membership forms to be handed out here. The Hon. I. M. Macdonald, who is a member of the task force established to fight the Treasurer’s plans, asked: where do we draw the line on the question of privatisation? What area of government will be next?
The Hon. B. H. Vaughan: Bondi Beach.
The Hon. JENNIFER GARDINER: The Hon. B. H. Vaughan helpfully suggests that it could be Bondi Beach - another icon. Mr Carr and the Treasurer have drawn the line, and it is around the Bathurst electorate, which has obviously been written off for the next election. The Hon. I. M. Macdonald confidently told us that job losses in regional New South Wales will result from the privatisation of the electricity industry. On one hand Premier Carr made a paltry promise at the Tamworth Cabinet meeting that he would find 400 government jobs - a very kind offer considering the many jobs he stripped from places like Tamworth, Wagga Wagga and Lismore! Mr Carr has not delivered on that promise. Now his party tells this House that its latest policy will lead to regional job losses.
No doubt the likes of the Hon. I. M. Macdonald will turn up at the forthcoming country conference in Orange at which there will be a public stoush for the television cameras, but the Hon. I. M. Macdonald and those of his ilk - the Hon. Ann Symonds and the Hon. Dr Meredith Burgmann - know that it is all for show. It does not matter how many Left members turn up at the conference, or how many of the old guard, like Mick Clough, who support them attend that conference, the argument is over. We in the National Party know that Mr Carr has already announced that the Right has won the debate. He attended the annual conference of the dairy farmers association after the caucus meeting.
The Hon. B. H. Vaughan: We kept him late, too.
The Hon. JENNIFER GARDINER: Yes, he was late. All the delegates had to stand around waiting for the Premier to turn up to open the twenty-fifth annual conference. Eventually he turned up wearing a big grin as if he had just eaten a bowl full of Bega cream! He announced to the dairy farmers that it was okay because the Right had won the debate.
The Hon. Dr Meredith Burgmann: He didn’t even wait.
The Hon. JENNIFER GARDINER: He didn’t even wait? Well, it just gets worse! The electricity sell off is the final piece of evidence that the Labor Party has written off the Bathurst electorate and its history. Last week Mr Clough said that the Premier needs to wear protective clothing as he adjudicates the debate. It is obvious that Mr Clough ought to wear protective clothing. Today in question time the Treasurer said that Mr Clough is a great country member. The Australian Labor Party is sending Mr Clough to his political grave at the same time as his prediction - that the Carr-Egan Government will be a one-term government - comes to pass. Today’s Sydney Morning Herald, under the heading "Foreigners welcome to buy power: Egan", reported that in a wide-ranging interview Mr Egan revealed that he had decided before coming to government that the New South Wales power industry should be privatised, although he had not expected to mount a push for its sale in this term.
The Sydney Morning Herald reported further that the Treasurer revealed that he had decided three or four months ago that the Government could mount a push for privatisation this term. He argued that Labor was "hemmed in" without the sale and described the sale proposal’s initial reception as "very good". Obviously at that stage he had not met anyone from the Labor Party or the labour movement - he was still holed up in his media conference. It is interesting to ponder the message contained in the Treasurer’s words that the Government is "hemmed in" and to ponder the timing that accompanied his supposed thought process. Honourable members can calculate that three to four months ago was the time that the Labor Party reconciled that it was destined to be a one-term government and that it had to have a strategy meeting to decide how to get itself out of the hole it had dug for itself. This policy is the result of that meeting.
The Hon. Ann Symonds said that she was grateful to the Opposition for allowing this debate to commence - the Opposition is happy to oblige. The Hon. Ann Symonds said also that she did not know to what extent she would be able to influence the Government’s decision. I have already answered that. She also was concerned about the imprecise language used in Parliament these days. Perhaps I can use precise language to describe the predicament of the Hon. Ann Symonds and the Labor Party on this issue. I could use words like: ambushed, disappointed, deserted, betrayed, irrelevant, defeated, disillusioned, alarmed, worried, obfuscated, opposed, forgotten and Hilmered.
The Hon. Ann Symonds: That about sums it up, yes.
The Hon. JENNIFER GARDINER: The Hon. Ann Symonds confirms that I have summed up the situation. I rather get the impression that she would like to join the agrarian socialists in the National Party. I have a membership form in my pocket for her.
The Hon. Ann Symonds: I should have done it years ago.
The Hon. JENNIFER GARDINER: The Hon. Ann Symonds suggests she should have done it years ago.
The Hon. M. R. Egan: I will nominate her.
The Hon. JENNIFER GARDINER: The Treasurer wants to nominate her as a member; we will consider it. The Hon. Ann Symonds has enormous fears for the future of the Labor Party. No doubt this would be of greater concern to her than the fate of the Labor Government, nevertheless her fears will be vindicated when the betrayal of the ALP supporters and the Labor movement is judged at the next State election.
The Hon. Dr MARLENE GOLDSMITH [9.12 p.m.]: This clearly is a matter of great public importance and I congratulate the Leader of the Opposition on giving the House the opportunity to debate it. There is indeed no logical reason for governments to own power stations; that is clearly the strong view of members on this side of the House. Although it has taken many years for members on the Government side of the House to come around to that view, even the slow learners in the Labor Party eventually learn that socialism simply does not work - that is, apart from the members of the Left, for whom I shall continue to hope, as I am an optimist. The person who perhaps mounted the best argument for governments not owning power stations was the Treasurer in the paper he tabled in the House today. As honourable members will recall, he did not bother to make a speech; he merely tabled a discussion paper that he had prepared for distribution to Pacific Power and electricity unions on 22 May. On page 16 of that paper he stated:
The choice for government is whether it regulates and oversees this industry to secure good social and economic outcomes, or whether it owns the industry, thereby risking billions of dollars of taxpayers’ money and commercial business enterprises, rather than investing those funds in social and economic services and facilities that are the core areas of government responsibility.
That is a reasonable summary; that is what the coalition has been saying for years. However, the important issue is not privatisation, with which we agree most strongly; the important issue is the Government’s word. Before the last election the Labor Party promised something completely different: it promised the people of New South Wales that privatisation was not on its agenda. Cross our hearts and hope to die, this is not going to happen! After the State election, when the Treasurer moved to corporatise the power industry, he said, "Oh, we are just corporatising. We are getting the system operating effectively. We are not going to privatise". Again the people of New South Wales were promised no privatisation.
Now what do we have? Privatisation! On both those occasions the people have been betrayed: a double betrayal. The Labor Government has followed in the footsteps of its Federal colleagues, the former Federal Labor Government. Honourable members will remember years ago the Labor Federal Government saying, "Oh no, we will not privatise TAA", as it then was. But what happened after the election? TAA was privatised. It said, "No, we will not privatise the Commonwealth Bank". It was privatised soon after the next election. In New South Wales the TAB is also to be privatised. Was that promised before the last State election? No, not at all. But it is not the concept of privatisation that is objectionable; the lies are objectionable. Politicians are generally held in low esteem by members of the public. Can honourable members be surprised at that, given the track record of this Government?
The Carr Labor Government was elected on a list of promises which it has systematically proceeded to break; this is just one of hundreds. Other broken promises include the lifting of the road tolls. Of course, the Government delivered on that, did it not, with a system so complicated that very few people have been able to use it. Only the rich can afford to claim back their toll payments through the cashback scheme. I remind members that tolls have to be paid up front in a lump sum - a large sum of money - which cuts out the working class.
We are all familiar with the ongoing saga of hospital waiting lists and the chaos of the health system. The Labor Party said, "No new taxes." In an interesting segment on Channel 9's Sunday program Laurie Oakes interviewed the former Federal leader of the Liberal Party, Dr John Hewson. Laurie Oakes accused John Hewson of being a bad politician. Dr Hewson agreed. He said, "Yes, I was a bad politician because I did something that politicians do not do. I told people the truth." He told the people of Australia that the tax system needed to be
reformed. He told the people of Australia what he proposed to do about it. As a result he was pilloried and lost the election.
What is happening now? A whole new debate is taking place about how Dr Hewson was right and how the tax system needs to be reformed along the very lines that he proposed. Remember: one should never let the truth get in the way of political opportunism - at least not if one is a member of the Labor Party, and definitely not a member of the Labor Party when it opposed John Hewson at the 1993 Federal election. Members should not forget that it was the ALP that initially put forward the idea of a goods and services tax. The ALP opposed John Hewson federally in 1993 and opposed us in the 1995 State election. They stood up and vociferously declared that under Labor there would never be legislation to privatise our power industry. Yet what has the Government given us? A proposal to privatise the power industry. Again I refer to the paper tabled by the Treasurer, which stated:
They won’t cop governments which mortgage the future, which spend up big now, but leave the bills for their kids to pay.
The Treasurer was referring to the people of New South Wales. He is right; that is what the coalition has been saying for years. But people will not tolerate lies. Who was it who said that you can fool some of the people some of the time but you cannot fool all of the people all of the time? The Labor Party has been trying to do that for far too long in New South Wales and the people have seen through it. No wonder this is the only State in Australia in which the Opposition leads the Government in the polls and in which the Opposition is doing far better than the Government. At least the Opposition is still held in some esteem in the eyes of the electorate. This Government has destroyed any credibility it might ever have had, and this is the last straw.
What will happen to the workers in the power industry? The Treasurer knows that the guarantee of jobs is false and that when an industry is privatised jobs go. What will be done to protect the jobs of the people in the Hunter? The Labor Party has been grandstanding around the Newcastle-Hunter region wringing its hands about the closure of BHP. What does the Labor Party think this proposal will do to the Newcastle-Hunter region? It will be an absolute disaster. What will happen to power bills in country New South Wales? New South Wales is very different from Victoria in that it has far more open and empty spaces. In New South Wales it is very costly to get power to isolated communities. Who will pay for that power? Who will ensure that people who are already disadvantaged because of their rural isolation will not end up paying much more for their power as a result of the privatisation process?
The Hon. R. S. L. Jones: They will.
The Hon. Dr MARLENE GOLDSMITH: The Hon. R. S. L. Jones has confirmed my concerns.
The Hon. R. S. L. Jones: They will all be competing with each other.
The Hon. Dr MARLENE GOLDSMITH: They will end up paying more for their power. These issues have to be addressed, and I am concerned to ensure that they are addressed. I am a strong supporter of privatisation. I do not think government has any business owning power stations. As a Liberal I can stand and hold my head up high and take pride in that statement. I do not have to stand here and knowingly tell lies to the people of New South Wales by promising them something which I have no intention of delivering. In conclusion, I refer to, if you like, the bigger picture. In recent years social science research into what makes a successful democracy has been increasingly coming down in support of the concept of a civic society.
Research conducted by such people as Robert Putnam and his team into the evolution of democracy in modern Italian regional governments over the last 20 to 25 years has shown that networks of social cohesion and trust are of enormous importance in making sure that there is a functional democracy. The political systems that work have networks that enable people to work together, to have respect for one another and to be willing to work together towards compromises, rather than be suspicious and hostile towards each other. This proposal is a betrayal of the trust of the people of New South Wales and it has been going on for some time.
In arguing that he is defending the State’s economic capital, as he does in his discussion paper, the Treasurer is destroying the social capital; destroying much of the trust that existed in the community; creating far more cynicism about politics; creating a far greater resistance to politicians among the people; and, in so doing, is damaging the democratic process. Of particular concern is the fact that he is able to do all that without a shred of remorse. As much as I applaud the direction in which this proposal is going - given that it is being promoted by the Treasurer and the Labor Party in complete defiance of what they
promised to the people of New South Wales - I regard it as an act of opportunism of the very worst kind; a betrayal of civic society and a betrayal of everything that they stood for in the election.
The Hon. R. S. L. JONES [9.25 p.m.]: The Hon. Dr Marlene Goldsmith talked about the betrayal of the trust of the people. The Hon. Dr Marlene Goldsmith and her colleagues can ensure that the trust is maintained by opposing the legislation when it comes before this House. By so doing the Government can be kept honest, if that is what she wishes. It is no good talking about betrayal of trust and then voting to reassert that betrayal of trust. She simply cannot have it both ways.
The Hon. Dr Marlene Goldsmith: I made myself quite clear.
The Hon. R. S. L. JONES: If the Hon. Dr Marlene Goldsmith wants to keep the Government honest, she has the opportunity in this Chamber. It is a matter for her whether she wishes to avail herself of that opportunity.
The Hon. Dr Marlene Goldsmith: We have to be honest to our word too.
The Hon. R. S. L. JONES: The honourable member is in a position to keep the Government honest. When the coalition returns to government at some point either this century or next century it will certainly implement a privatisation program. The first body to go will be Hunter Water Corporation, then Sydney Water Corporation, then Bondi Beach and then the Opera House. As Tony Blair said recently -
The Hon. M. R. Egan: "What works is what matters."
The Hon. R. S. L. JONES: - "What works is what matters." Thank you Treasurer. I personally have no ideological view as to whether or not a government should own electricity production.
The Hon. M. R. Egan: Yes you do.
The Hon. R. S. L. JONES: Not particularly. The Government does not own the gas that we use, and the networks are very similar. Therefore, why should it own the electricity that we use? Does it matter whether the Government owns it or not? The question is how does it affect people? The Hon. Dr Marlene Goldsmith mentioned that it would affect country people - and it may well do. For many years her colleagues in the National Party have been defending country people by ensuring that a cross-subsidy was provided for country people with regard to a number of services.
Those cross-subsidies have gradually been removed, and rural people are now feeling the cold winds of the Hilmer reforms in country towns. Many jobs are going and people find themselves having to move to the city. All this is reducing the National Party vote; western country electorates are down in numbers compared with city electorates. The Hilmer reforms are definitely having an impact on the country. If this industry is privatised, in all probability its new owners - whether foreign, Australian, the AMP or whomever - will want to get a return on their money, regardless of whether that be from the country or the city.
There is little doubt in my mind that unless we legislate to prevent it, country electricity prices will go up to the point at which rural people will be very much disadvantaged. Those trying to maintain businesses, even in places like Taree, Bathurst and Orange, will have a disadvantage vis-a-vis those living in Wyong, Wollongong or western Sydney. If that happens, the drift of people from rural areas to the cities will be exacerbated. Opposition members have it within their power to ensure that any legislation of this type contains safeguards. There is no doubt that privatisation will happen regardless of whether the Labor Party or the coalition is in government.
Now that the right wing of the Australian Labor Party has changed its position, honourable members can be sure that it will happen one way or another. In the Treasurer’s discussion paper for a secure New South Wales he suggests that about $3,000 million will be left over after the entire State debt has been paid off for capital investment in social and economic infrastructure and environmental enhancements. I am anxious to see how that actually happens in practice and whether there will be three trust funds: a social trust, an economic infrastructure trust and an environmental trust. No doubt those matters are being worked on right now. If one pays off one debt with funds received from the sale of one’s assets, it does not really matter.
If we are paying off State debt that surely has to be a good thing in itself. If we reduce outgoings by $500 million a year, hopefully, additional funding will be made available for education, health and rural infrastructure. Honourable members have to decide the merits of privatising this industry. Remember that already the State Bank, the Government Insurance Office and the Grain Handling Authority have been privatised. If the
power industry is privatised, I will endeavour to ensure that there are environmental and social advantages to be gained from the privatisation. I understand that the Government will not receive $22 billion or $25 billion in one year; it would be impossible for the markets to digest such an amount. We will be doing them bit by bit over the next four or perhaps five years. No doubt when this round of privatisations is finished, there will be a further round of privatisations by this Government or by whichever party is in office at the time.
It is something that is happening throughout the world in OECD countries. It has happened in New Zealand, it has happened in Victoria and it is happening all round the world. It would be impossible to resist privatisation in this State, even if one felt very strongly about the Government owning electricity utilities. Personally, I do not believe it is important that governments own or do not own such entities, so long as the money is put to good use, so long as State debt is reduced and so long as the money is not frittered away. I will be working with the Government, if that is possible, to ensure that any money is spent in the best way possible, to protect country people and to achieve some good social and environmental outcomes. I think that is the best we can hope for.
The Hon. P. T. PRIMROSE [9.31 p.m.]: My contribution to the debate this evening will be very brief, but I indicate that I, like so many others, will have a lot to say during the course of debate over the next few months. One of the key sentences in a press release entitled "Committee of Inquiry to examine power proposal" which was issued by the Premier today, is as follows:
We must weigh the benefits of the plan against the retention of the asset and the concerns of the energy workforce.
The terms of reference specifically note that the committee is also to advise what constraints, if any, should be placed on the way in which electricity assets are disposed of, having regard to all 14 criteria referred to in the terms of reference. Let me refer to one aspect of the voluminous amounts of information that have been published on the issue of privatisation. On 16 August last year in Stockholm a paper was presented as part of the public service privatisation research unit seminar. That paper suggested that a number of matters need to be examined in relation to assessing privatisation. It recommended, for instance, that a full public sector option must be included and assessed, together with any suggestion of private enterprise taking over. It suggested further that a complete assessment should be made of the relative costs of financing; the full economic cost for consumers, workers and public finances; and environmental consequences.
It also recommended the inclusion of an assessment to guarantee that if privatisation in any form is to continue, a number of anti-corruption measures should be included - for example, companies with a record of corruption in any country in the previous five years should be automatically excluded from short lists; any evidence of corrupt practices by the company before or after contract award should invalidate the contract; the successful bidder may not operate in other sectors or services within the country; employees of the successful bidder have the right to whistleblow on corrupt or fraudulent practices by the company; and contracts and concessions should be fully open to public scrutiny. I certainly hope that those items will be included in this assessment.
Of course, a key issue is worker protection. The report from the Stockholm committee recommended, over and above all, that all workers must be protected and that jobs, pay and conditions should also be protected. The committee made it quite clear that the history shows that privatisation means job losses. There are three main reasons for this. First, privatisation is almost always associated with a drive to reduce deficits and/or increase the surplus available for investment. Second, privatisation creates the demand of the shareholders for dividends. Money must be found to pay for these dividends and it seems that cutting jobs is the quickest way to find it. For instance, in the United Kingdom salaries saved by the jobs lost in all utility companies since privatisation are almost exactly equal to the dividends paid by those companies. Contracting out of work, such as maintenance, meter reading, billing et cetera, is one technique used by companies to cut jobs.
The final concern relates to mergers, which belies the whole issue of the value of competition. When mergers take place there is a further demand for savings both to cover the cost of the merger and to deliver the higher dividends which are invariably the promised result of a merger. Once again in recent mergers in the United Kingdom, shareholders have been promised that it will be possible to cut 2,000 jobs by the year 2000 as a result of mergers of local electricity companies. I believe that consultation is absolutely critical in respect of this whole issue.
The final item in the terms of reference indicates that the committee that is to be established by the Government is to provide advice to Cabinet by 18 August 1997, with the possibility of an early
report and interim reports. I believe that, certainly within the Australian Labor Party, the appropriate place for this matter to be considered is the Labor Party’s annual State conference in October. I say that because last year during the October long weekend annual State conference the first item on the industrial development and energy policy committee agenda was proposed by the Hornsby District Young Labor Association. The item stated:
This Committee opposes the privatisation of the electricity industry. We call on Michael Egan to provide us with an assurance that such a move will not occur under this Government.
The recommendation, which was endorsed by the whole of annual conference, was as follows:
Recommendation: We note the recent statement from the Premier contained in the State Hansard of the 16 May, 1996
" . . . it is restructuring not privatisation . . . This Government is to maintain the power industry as a public asset and is driving efficiencies and delivering reductions in the price of energy to the private sector of 25% over the next five years."
I strongly believe that there should be consultation. We should examine all of the issues, including those that I have outlined as being the experience of other countries and this country, when considering other privatisations, but the decision within the Labor Party must be made at its October long weekend conference.
The Hon. J. F. RYAN [9.38 p.m.]: I want to say something that I believe will be significant when we begin to consider this legislation, when the Government eventually introduces it. In case honourable members are under some misapprehension that the Treasurer is some sort of guru of microeconomic reform, I draw their attention to this year’s budget papers and to what privatisation of electricity distributors is all about. Page 3-23 of Budget Paper No. 2 contains the following paragraph:
In particular, the Generation sector (excluding the impact of the inclusion of the cross border lease payment in 1996-97), the dividend and tax equivalent payments are expected to decline by 40 per cent and 30 per cent, respectively, in 1997-98 reflecting the significant fall in prices for electricity generation during 1996-97.
The Treasurer has recognised in the budget papers that he has finished ransacking the electricity distributors. He realises that, at some time in the future, they will no longer be available to provide the special dividends he has extracted from them during past years. They will no longer be a great revenue resource because the price of electricity must inevitably fall and no longer will the Government-owned monopoly be able to continue to grab from electricity distributors a revenue stream which it has not earned. Finally, the day of reckoning is coming. The Treasurer is going to have to make some decisions about positively managing the generation sector.
I acknowledge, as the coalition has done for some time, that it is difficult for governments to manage the electricity sector, which has been rescued from the impact of competition over the past couple of decades. Previous Premiers like Neville Wran were able to strike special deals and build special electricity generation facilities for a company that they wanted to attract to the State. It is no longer possible to do that. Reality is creeping up on the electricity generation sector. The Treasurer, who is not in the Chamber at the moment, has ignored that. He has been busy raiding the electricity generation sector for special dividends, tax equivalent payments and so on. He has realised finally that nothing more can be extracted from the golden goose, so rather than try to manage the sector himself he wants to try to escape. He wants to run away from it and move the poison chalice somewhere else. That is what this is all about.
I ask members opposite, when they are discussing this matter at their caucus meetings, not to forget to read those pages from the budget papers to the Treasurer. That is what it is all about. He could not care less what happens to the electricity generation sector or to the State’s economy. He has simply realised that the electricity generation sector is not the cash cow that he thought it would be, or if it is to be profitable he will have to make some hard management decisions about the structure of the sector and he does not want to do that. For that reason he circulated in a fairly gutless way a discussion paper for Government members to read, and he hopes that they will all vote like sheep to support him so that he can get away from the decisions he should be making.
I call on members opposite to make sure they scrutinise his actions properly and keep him honest. He is trying to get away from the hard decisions of the future, and I sincerely hope they do not let him do so. The Treasurer has changed from being the alleged bulwark against privatisation to the exponent of privatisation. He can see a freight train coming in his direction; he can see tough decisions on the way and does not want to take them. Government members should not accept that he has had a latter-day conversion to microeconomic reform and to retiring State debt. This proposal is all about trying to avoid hard political decisions and trying, in the best and finest traditions of the Labor Party, to rort
the outcome of the next election and avoid any sort of fiscal responsibility.
The Hon. JAN BURNSWOODS [9.43 p.m.]: This debate is most peculiar. I do not believe I have ever taken part in a debate like it. The Opposition has initiated a debate on a proposal to sell various sectors of the electricity industry. That proposal is being debated within the Labor Party because of a discussion paper released by the Treasurer. It is hard to know what the Opposition believes it will gain from bringing on this debate. Opposition members keep saying what an important debate it is, but they also keep saying that the Government should stay out of the electricity industry.
On the other hand, a number of Labor Party members with different views feel free, as I do, to speak out because, indeed, a debate is taking place within the party. It is a good thing that the Labor Party is able to have that sort of debate. The real reason the Opposition has brought this debate on and forced the House to spend all day on it is that although it was reported last Thursday that a number of people in the Labor Party, including me, were shocked by the Treasurer’s discussion paper, the level of shock felt by myself and others was nothing compared to the shock Peter Collins got.
It is clear that Peter Collins was planning to go to the next election supporting the privatisation of the electricity industry and believing that he would be able to pork-barrel his way into power. Members of the Liberal and National parties are probably the most unhappy people in the New South Wales Parliament today, particularly those supporters of Peter Collins in the ongoing leadership turmoil within the coalition. I was one of those who were reported last Thursday and Friday as having been deeply shocked by the proposal; indeed, when I look back at how my statement started, I can understand why the strength of it even surprised some members of the media. The statement I put my hand to began:
"Treasurer Egan’s so-called discussion paper on the sell-off of the New South Wales electricity industry is a blatant attempt to bribe caucus into walking away from Labor’s long held philosophy of public ownership," Left caucus secretary Jan Burnswoods said.
I am repeating that only because it has been quoted many times already. It gives some indication of the depth of feeling within the Labor Party. That depth of feeling was a reaction, at least in part, to the clear statements that have been made in particular by the Treasurer and by Bob Carr. Several of those statements have been quoted, and I do not want to go over that ground again. However, I should like to refer to a letter sent by the Treasurer to the Como-Jannali branch of the ALP earlier this year. That letter contains a simple statement that the Government does not intend to privatise the electricity industry.
Given those statements, it is not surprising that many Labor Party members believe that this plan has been sprung on them. But as I said, one of the strengths of members of the Labor Party is that they are able to have a passionate debate about where the party should go next. We can and will argue it out over the next weeks and months. I am conscious that in many cases those who support the Labor Party have a fundamental and deep loyalty to the party, its history of well over 100 years and what they believe it stands for. That is why words like "betrayal" have been used. For that reason this debate had a serious aspect.
I believe passionately in the difference between the Labor and Liberal parties, and although it is perhaps fashionable to talk of convergence of the parties, there are still very real differences between them. That is why this argument about public ownership is worth while. The other big difference between the parties is the role of the trade unions in our party and the level of commitment and loyalty that comes from the unions and that is in turn owed by members of the party to the workers represented in the unions. I do not believe anyone would be surprised that this debate is an emotive and passionate one in the party and, as has already been said, it will continue for a considerable time. Indeed, I hope and expect - indeed, I will insist - that it continue until the party’s supreme policy-making body, that is, the annual conference in October.
I do not want to go into the details of the plan. No-one in this House would be surprised at the level of hyperbole in which the Treasurer has indulged in his document, "A Plan for a Secure New South Wales". It is a little like one of those cradle-to-grave health plans that promises much more than it can ever deliver, but if all the things in the plan were to be delivered, everyone would be going straight to paradise. I do not think anyone in this House believes all the rhetoric in the document. I certainly join with other members who have drawn a comparison in part between John Howard’s promises in relation to the partial privatisation of Telstra and the slush fund that that has now been shown to have produced.
Instead of financing the environmental paradise that was promised, the fund has basically become a means to enable John Howard to buy various votes in various parts of the country. Honourable members
must be aware that all politicians are held in low esteem. That is not surprising when all promises made by politicians are breached. I believe that we all should ensure that there are moral standards, as well as standards of honesty and trust, in politics. We all share responsibility for the low esteem in which politicians are held. The debate within the Labor Party on this proposal will be heated.
Within the Liberal Party the debate is simply another stage in the continuing irrelevance of Peter Collins and his leadership team. Essentially, this all-day debate in the Legislative Council has been irrelevant. It has presumably been a desperate attempt by the Opposition to exploit divisions in the Labor Party. As I said at the outset, the divisions in the Labor Party and the willingness to debate them have been perfectly apparent since last Thursday, so I cannot understand why the Opposition believes that we need its help in bringing this debate to public attention. As I said, it is a smokescreen and an irrelevance to remove attention from the terrible situation in which the Opposition finds itself in the lead-up to the next election.
The Hon. J. P. HANNAFORD (Leader of the Opposition) [9.51 p.m], in reply: It is interesting to note what the Australian said on this issue. I quote:
Egan said, "As I see it, if dogma defeats our overriding purpose of achieving a more protected and secure community, then the dogma must go."
The statement could well have been made by Margaret Thatcher in 1979.
The Hon. M. R. Egan: She was the most dogmatic of all.
The Hon. J. P. HANNAFORD: She was most dogmatic. The most interesting reflection on this debate is that it only emphasises that the current Labor leadership is prepared to override and throw out everything for which the Labor Party has stood for a long time. Interestingly, that forces those who support the Labor Party and, more importantly, the unions to ask what purpose will be served by continuing to support an organisation that no longer stands for anything. The coalition has consistently maintained the position that the electricity industry should be privatised.
I am of the view that the Government should pursue the program advocated by the Treasurer - but not yet advocated by the Premier - in the interests of New South Wales. However, the community and those who directly support the Labor Party must ask what the Labor Party is all about. To use the words of the Hon. Jan Burnswoods, what trust can be given to an organisation and its leadership when it says one thing and does the direct opposite? The community cannot trust the Labor Party on this or any other issue, and the Labor Party will answer for that. The coalition hopes that the community will not suffer when the Labor Party abandons the policy direction now being advocated by the Treasurer.
Motion, by leave, withdrawn.
AJC PRINCIPAL CLUB AMENDMENT BILL
TOTALIZATOR (OFF-COURSE BETTING) AMENDMENT BILL
Bills received and, by leave, read a first time.
Suspension of standing orders agreed to.
BUSINESS OF THE HOUSE
Postponement of Business
Motion by the Hon. M. R. Egan agreed to:
That notice of motion No. 2 of Government business be postponed until the next sitting day.
JOINT ESTIMATES COMMITTEES
The Hon. M. R. EGAN (Treasurer, Minister for Energy, Minister for State and Regional Development, Minister Assisting the Premier, and Vice-President of the Executive Council) [9.55 p.m.]: I move:
(1) That notwithstanding anything to the contrary in the standing orders, the following joint estimates committees be appointed:
Estimates Committee No. 1
1. Premier, Arts and Ethnic Affairs
2. Education and Training
4. Treasury, Energy, State and Regional Development
5. The Legislature
Estimates Committee No. 2
1. Health, Aboriginal Affairs
2. Community Services, Aged Services, Disability Services
4. Mineral Resources, Fisheries
Estimates Committee No. 3
2. Corrective Services, Emergency Services
3. Attorney General, Industrial Relations
4. Fair Trading, Women
Estimates Committee No. 4
1. Transport and Tourism
2. Public Works and Services, Roads, Ports
3. Gaming and Racing, Hunter Development
4. Sport and Recreation
Estimates Committee No. 5
1. Urban Affairs and Planning, Housing
3. Land and Water Conservation
4. Local Government
(2) The Budget Estimates and related documents representing the amounts to be appropriated from the Consolidated Fund be referred to the committees for inquiry and report.
(3) 1. Each committee is to consist of nine members, comprising:
(a) five members from the Legislative Assembly, being three from the Government nominated by the Leader of the House, one from the Opposition nominated by the Opposition Whip and one Independent, nominated by the Opposition Whip;
(b) four members from the Legislative Council, being two from the Government nominated by the Government Whip, one from the Opposition nominated by the Opposition Whip and one member of the crossbench, nominated by the Opposition Whip.
2. Nominations for Legislative Assembly members of the committees shall be made to the Clerk of the Legislative Assembly and nominations for Legislative Council members of the committees shall be made to the Clerk of the Legislative Council within seven days of the passing of this resolution by both Houses.
3. (a) Government or Opposition members of the relevant House may be appointed to the committees as substitutes for a member of the committees for any matter before the committees, by notice in writing by the relevant Leader of the Government, Leader of the House, Leader of the Opposition, Government or Opposition Whips or Deputy Whips.
(b) Crossbench or Independent members may be appointed to the committees as substitutes for another crossbench or Independent member of the committees, provided they are of the same House as the member to be substituted, for any matter before the committees. Notice in writing of the substitute member, which is to be determined by agreement between the members themselves, can be made by any of the crossbench or Independent members provided that the others are in agreement.
(c) In the event that no crossbench or Independent member wishes to be appointed to a committee, the Leader of the Opposition or Opposition Whip or Deputy Whip can nominate a member to fill the position.
4. That the chair of a committee have a deliberative vote and in the event of an equality of votes a casting vote.
5. The chairs of the five estimates committees will be nominated in writing to the Clerks by the Leader of the House in the Legislative Assembly.
6. (a) A chair may from time to time appoint another Government member to act as deputy chair and the member so appointed is to act as chair when the chair is not present at a meeting of a committee.
(b) In the event of absence of both chair and the deputy chair, a Government member of the committee is to be elected by the members present to act as chair for that meeting.
7. The committees have power to send for and examine persons, papers, records and things.
8. The quorum of the committee is four members, provided that a member from each House is present.
9. The proceedings of the committees are open to the public unless otherwise ordered by a committee.
10. (a) The times, dates and places for meetings of each committee are to be set out in a schedule provided by the Clerks of both Houses to members of each committee.
(b) A committee may hold meetings supplementary to those set out in the schedule.
11. A committee may examine:
(a) each program area in the Budget Estimates and related documents by portfolio; and
(b) by portfolio, expenditure or income of any statutory body or corporation appointed, constituted or regulated under an Act of Parliament:
(i) which the Minister for the time being administers, and under which the statutory body or corporation is appointed, constituted or regulated; or
(ii) which is required to submit an annual report to the Parliament, either under the Act appointing, constituting or regulating the statutory body or corporation or under the Annual Reports (Statutory Bodies) Act 1984.
12. In an estimates committee:
(a) the chair is to call over each program area and declare the proposed expenditure open for examination;
(b) members may question Ministers, and through Ministers, officers of any department of Government, statutory body or corporation, relating to each program area, or where possible, proposed income or expenditure or other relevant matter in each program area; and
(c) a question is to be proposed for each program area, "That the amount be recommended".
13. The time allocations for questions in each committee be three hours for each Minister’s portfolio areas with total times for questions allocated in the following order:
30 minutes Opposition
30 minutes Government
30 minutes crossbench and Independent
30 minutes Opposition
30 minutes Government
30 minutes crossbench and Independent
14. Any Minister present to answer questions may have staff present to assist him or her during the hearing of evidence and may refer to those staff at any time.
15. A daily record of the proceedings of a committee is to be published by Hansard.
16. (a) Before an estimates committee hearing, members or substitute members of a committee may provide written questions to the clerk of the committee who will then distribute them to the relevant Minister and to members of the committee. Answers to these questions may be supplied in writing to the committee clerk prior to the hearing or tabled at a hearing.
(b) Nothing in this paragraph prevents a member from asking questions at an estimates committee hearing.
17. Where a Minister indicates that a reply or supplementary information will be given in response to a question asked, a written answer must be lodged with the clerk of the committee within seven days. The clerk of the committee is to publish in an estimates committee questions and answers paper the information requested and the reply.
18. The report of each committee is to state whether the amounts of each program area in the estimates are recommended.
19. (1) The committees are to report to the House prior to the consideration by the Committee of the Whole House of the relevant bills, after which the committees will expire.
(2) Where a committee fails to report in the time required under subparagraph (1), the amount for each program area is deemed to be recommended by the committee.
20. The reports from the committees will be received by the House without debate and their consideration deferred until consideration of the Appropriation Bill and cognate bills.
21. In Committee of the Whole House when considering the amounts for each program area in the estimates and the corresponding clauses and schedules in the Appropriation Bill and cognate bills:
(a) the Chair is to put the question in respect of each corresponding committee report, "That the report of (name of the committee) be adopted"; and
(b) any remaining clauses and schedules of the Appropriation Bill and cognate bills are to be considered as one question, "That the remaining clauses and schedules of the bills be agreed to".
22. At the conclusion of proceedings in Committee of the Whole, the Chair is to report to the House that the Committee has or has not adopted the reports from the estimates committees.
23. (a) If the House is not sitting when a committee wishes to report to the House, the committee is to present its report to the Clerk of each House.
(b) A report presented to the Clerk is:
(i) on presentation, and for all purposes, deemed to have been laid before the House;
(ii) to be printed by authority of the Clerk;
(iii) for all purposes, deemed to be a document published by order or under the authority of the House; and
The Opposition has circulated a number of amendments. I indicate to the House that the Government will oppose amendments Nos 1, 2, 3, 4 and 5; it will not oppose amendment 6; it will support amendment 7; it will oppose amendment 8; it will support amendment 9; it will oppose amendments 10 and 11; it will not oppose amendments 12, 13 and 14, although it will move to amend paragraph 14(d) to provide for 14 days, rather than seven days. The Government will not oppose amendments 15, 16 and 17. It will support Democrat amendments Nos 1 and 2.
The Hon. J. P. HANNAFORD (Leader of the Opposition) [9.57 p.m.], by leave: I move Opposition amendments Nos 1 to 17 in globo:
(iv) to be recorded in the votes and proceedings of the Legislative Assembly and minutes of proceedings of the Legislative Council.
No. 1 Paragraph (3)1. Omit "nine members", insert instead "11 members".
No. 2 Paragraph (3)1.(a). Omit "five members", insert instead "six members".
No. 3 Paragraph (3)1.(a). Omit "one from the Opposition", insert instead "two from the Opposition".
No. 4 Paragraph (3)1.(b). Omit "four members", insert instead "five members".
No. 5 Paragraph (3)1.(b). Omit "one from the Opposition", insert instead "two from the Opposition".
No. 6 Paragraph (3)3.(c). After "Deputy Whip", insert "in the relevant House".
No. 7 Paragraph (3)5. Omit the paragraph, insert instead:
5. Estimates committees Nos 1 to 3 are to be chaired by a member of the Legislative Assembly and Nos 4 and 5 by a member of the Legislative Council.
No. 8 Paragraph (3)6. Omit the paragraph, insert instead:
6. (a) Before proceeding to any business at its first meeting each Committee must elect a chair and a deputy chair.
(b) If the chair and deputy chair are absent from a meeting of a committee, the members present are to elect a chair for that meeting.
No. 9 Paragraph (3)8. Omit "four members", insert instead "five members".
No. 10 Paragraph (3)12.(b). Omit "through Ministers,".
No. 11 Paragraph (3)13. Omit "30 minutes crossbench and Independent" where last occurring, insert instead:
15 minutes crossbench and Independent
30 minutes Opposition, if any time remains
No. 12 Paragraph (3)13. Insert at the end of the paragraph:
(2) Each question be limited to one minute and the reply to four minutes.
(3) For each 30 minute period, a minimum of six questions must be asked and answered and for each 15 minute period a minimum of three questions must be asked and answered. If not the time period is to be extended.
(4) Time taken for discussion of a dissent from a ruling of the chair is not to be counted for the purpose of allocated question time.
(5) The debate on a motion of dissent from a decision of a chair is to be limited to 10 minutes after which the chair must put the question.
No. 13 Paragraph (3)14. Omit "Any", insert instead "A member of a committee or a substitute member of a committee, and any".
No. 14 Paragraph (3)16. Insert at the end of the paragraph:
(c) Where no written questions are directed to a statutory body or corporation, or no member of a committee has indicated to the clerk of a committee, at least 24 hours prior to the hearing, that questions will be asked in relation to a particular statutory body or corporation, a representative from that statutory body or corporation is not required to be present at an estimates committee hearing. Where a representative of a statutory body or corporation is not present at a hearing, questions to those statutory bodies or corporations will be taken on notice and a reply lodged with the clerk of the committee.
(d) A member who attended at a hearing of an estimates committee may lodge with the clerk, within 24 hours of a hearing, written questions on notice relating to any matters unanswered or any other additional information required relating to matters referred to a committee. The clerk is to publish the question and the reply in an estimates committee questions and answers paper. A reply must be lodged with the clerk within seven days.
No. 15 Paragraph (3)17. After "Minister", insert "or officer of a department, statutory body or corporation".
No. 16 Paragraph (3)17. Insert after paragraph (3)17:
18. The committees have leave to sit during the sittings or any adjournment of the House.
No. 17 Paragraph (3)18. Insert at the end of the paragraph:
(2) A member of a committee may append to a report of the committee made to the House a statement of dissent in relation to any part of the report.
I welcome the Government’s support for a number of these amendments. The Opposition has moved these amendments because they reflect effectively the motion that was originally carried by the House. It is an indictment of the Government that this House having carried a motion to establish joint estimates committees and having sent a message to the Legislative Assembly seeking its concurrence with the proposal, the Legislative Assembly has ignored completely this House’s message. Rather than the Legislative Assembly dealing with that message and at least sending it back with amendments, which would have been the appropriate courtesy between the two Houses, the Government has proposed its own motion to establish joint estimates committees.
This House should continue to insist upon a set of joint estimates committees in accordance with the proposal at least in principle that was advocated by this House. The Government in the main is opposed to proposals that would establish committees which appropriately reflect the various compositions of the Houses but in the structure of them would not give the Government control of those committees. The amendments mean that the Government will be answerable to the House in relation to the estimates committees. In the main, that is the direction in which the Government is moving on these changes.
Opposition amendment No. 10 if accepted would mean that the heads of agencies would answer directly to the estimates committees. The Government proposes that no head of a department or agency should be able to answer to the committee but that any answers be controlled by the Ministers. The Opposition does not accept that position. The Opposition takes the view, as a matter of principle, that departmental heads should be able to answer questions asked by the committee. As I indicated when I originally proposed this package of reforms for the Parliament, we should follow the approach
taken in the Senate in Canberra. The Opposition and I still adhere to that proposal as a matter of principle.
The Government has proposed that 14 days, rather than seven days, be allowed for the answering of questions. I would have no difficulty if the Government were to say that it had an administrative problem in answering within seven days but would be able to give an answer within 14 days. I should be glad to hear the Government explain its need to extend to 14 days the period allowed. The Opposition supports the amendments to be moved by the Hon. Elisabeth Kirkby. The Opposition would have recognised the need for those amendments but for an oversight in drafting, for which I apologise to the Hon. Elisabeth Kirkby. I commend to members of the crossbench the amendments pursued by the Opposition, which amendments restate the position originally taken by this House.
The Hon. ELISABETH KIRKBY [10.02 p.m.]: I support the words of the Leader of the Opposition. When this House first devised the way it believed the estimates committees should work it did not do so without due care and consideration. For the message to be sent to another place and then be sent back completely gutted - and that is not an exaggeration; it is what happened - is extremely insulting. This House thought very carefully when it drew up the terms and conditions under which it believed joint estimates committees could work to the best advantage of the Parliament, the taxpayers and all the different parties represented in both Houses of Parliament.
The Government made it very clear that it did not intend to accept estimates committees as devised by and passed by this House and sent back a message changing the estimates committees almost completely. From conversations held with the Leader of the Government I gather that the Government will accept certain of the amendments that are to be put later this evening but will not accept other amendments. One of the amendments that the Government will not accept relates to the chairperson of the estimates committees being elected by the committees rather than being appointed by the Government. As far as I am concerned, that issue is the key to what this House was trying to do to make the estimates committees truly democratic and not a rubber-stamp mechanism.
When I spoke previously in debate on this matter I pointed out that when I went away earlier this year to South India on a Commonwealth Parliamentary Association study trip I was greeted with hysterical laughter in both Madras and Bangalore in discussion about estimates committees. There, estimates committees are always chaired by members of the Opposition. It was felt that New South Wales was antediluvian in that it still had estimates committees that were chaired by a Government member. I am not attempting to cast any aspersions on Indian parliaments, but if in India - which is a fellow member of the Commonwealth - it is now commonplace for estimates committees to be chaired by members of the Opposition, New South Wales should follow that example. Indeed, we should have set that example and not now be in the situation in which we have to attempt to follow it, with the Government resolutely and absolutely determined that it will not accept the majority view of this House that the chairpersons of the committees should be elected by the respective committees.
I am perfectly certain that in the case of some committees Government members would be elected to the chair; I do not suggest for a second that every chairperson should be an Opposition member or a member of the crossbench. I do not believe that it is reasonable in 1997 to suggest that in this State an estimates committee should automatically be chaired by a Government member. The estimates committees are not devised to be a rubber-stamp process for the Government. If that is what the Government believes, we are wasting a great deal of our time and taxpayers’ money. Organising an estimates committee is not a cheap exercise. Public servants from all around Sydney at least, and in some cases from country New South Wales, have to come here to sit with their Ministers, which is a cost to the taxpayer. Those officers also have to spend many hours in this Parliament instead of carrying out their departmental duties, which delays their work and is a cost to the taxpayer.
I believe that if we are to have estimates committees at all they should work properly as estimates committees that put the government of the day on notice to explain in detail what its budget really means and to be prepared to be questioned about the fine detail of it. If the Government is not prepared for that and wishes to have a rubber-stamp process, with no opportunity for the committee to dissent, with the chair of the committee always being a Government member and with the chair of the committee having not only a deliberative but also a casting vote, then in my opinion we should not have estimates committees at all but save the taxpayers a great deal of money.
Having said that I support the views put forward by the Leader of the Opposition, I have a
minor amendment, which I am given to understand will be accepted by both the Government and the Opposition. I believe that we in this place should tell our parliamentary colleagues in another place that we simply will not accept that when we have made calculated, careful and considered decisions about the estimates committees that place should send back a message seeking to override and totally change everything this House has resolved. By leave, I move Australian Democrats amendments Nos 1 and 2 in globo:
No. 1 Paragraph (3)3.(b). After "Cross Bench or Independent members" where first occurring insert "of either House".
No. 2 Paragraph (3)3.(b). Omit "provided they are of the same House as the Member to be substituted".
I commend the amendments to the House.
The Hon. J. H. JOBLING [10.09 p.m.]: I shall speak briefly in support of the amendments proposed by the Leader of the Opposition and those proposed by the Hon. Elisabeth Kirkby. This House gave much thought to the procedure and proposed to the Legislative Assembly a fair and reasonable estimates committees process that reflected the rights and needs of the Legislative Council as a sovereign House. For some time the Legislative Assembly has had on its business paper a notice stating that it wanted joint estimates committees. The Assembly parked the message that this House forwarded and sent back a separate message. That demonstrated a degree of arrogance and was an insult to this House.
The amendments proposed by the Opposition reinstate in the message things that are important to members of this House, namely, that there be: joint estimates committees comprising a combination of members from both Houses; the opportunity for members of both Houses to chair committees; an assurance that members of each House have the opportunity to ask questions and, if there is disagreement, that those questions will not be put aside; and a requirement that debate on a motion of dissent from a chairman’s ruling will not diminish the time for discussion.
These amendments take a step forward from the estimates committees held for the past two years by this House and will ensure that the members have the right to ask questions during those estimates committees and that members have a right to understand and question the Minister, the bureaucracy and people from those agencies. In that way honourable members, as representatives of the people, may find out what is happening with departmental budget allocations. The amendments are fair and reasonable and the House should support them. By supporting also the proposed amendments by the Democrats honourable members will be in a position to gain a better understanding of the financial aspects of government for the people, and to examine the estimates as they are supposed to do.
The PRESIDENT: Order! The Minister has moved that five joint estimates committees be appointed in accordance with the terms of the resolution contained in the message received from the Legislative Assembly, to which the Leader of the Opposition has moved amendments Nos 1 to 17 as circulated. The Hon. Elisabeth Kirkby has also moved two further amendments, which are different from those moved by the Leader of the Opposition. However, I understand that the Government proposes to move an amendment to Opposition amendment 14.
The Hon. M. R. EGAN (Treasurer, Minister for Energy, Minister for State and Regional Development, Minister Assisting the Premier, and Vice-President of the Executive Council) [10.14 p.m.]: I do not proceed with it.
The PRESIDENT: Order! In order to facilitate the business of the House I propose, subject to leave, to put Opposition amendments Nos 1 to 5 inclusive in globo and Opposition amendments 10 , 11 and 13 in globo. The remaining Opposition amendments I will put seriatim. I propose to put Australian Democrat amendments Nos 1 and 2 in globo.
Question - That Opposition amendments Nos 1 to 5 be agreed to - put.
The House divided.
Mrs Chadwick Mrs Nile
Mr Corbett Rev. Nile
Mrs Forsythe Dr Pezzutti
Mr Gallacher Mr Ryan
Miss Gardiner Mr Samios
Dr Goldsmith Mr Rowland Smith
Mr Hannaford Mr Tingle
Mr Kersten Tellers,
Ms Kirkby Mr Jobling
Mr Lynn Mr Moppett
Mrs Arena Ms Saffin
Dr Burgmann Mr Shaw
Ms Burnswoods Ms Staunton
Mr Cohen Mrs Symonds
Mr Dyer Mr Vaughan
Mr Johnson Tellers,
Mr Kaldis Mrs Isaksen
Mr Obeid Mr Primrose
Mr Bull Mr Macdonald
Mrs Sham-Ho Mr Manson
Question so resolved in the affirmative.
Amendments Nos 1 to 5 of the Hon. J. P. Hannaford agreed to.
Amendments Nos 1 and 2 of the Hon. Elisabeth Kirkby agreed to.
Amendments Nos 6 and 7 of the Hon. J. P. Hannaford agreed to.
Question - That amendment No. 8 of the Hon. J. P. Hannaford be agreed to - put.
The House divided.
Mrs Chadwick Mrs Nile
Mrs Forsythe Rev. Nile
Mr Gallacher Dr Pezzutti
Miss Gardiner Mr Ryan
Dr Goldsmith Mr Samios
Mr Hannaford Mr Rowland Smith
Mr Jones Mr Tingle
Mr Kersten Tellers,
Ms Kirkby Mr Jobling
Mr Lynn Mr Moppett
Mrs Arena Mr Obeid
Dr Burgmann Ms Saffin
Ms Burnswoods Mr Shaw
Mr Cohen Ms Staunton
Mr Corbett Mrs Symonds
Mr Dyer Mr Vaughan
Mr Egan Tellers,
Mr Johnson Mrs Isaksen
Mr Kaldis Mr Primrose
Mr Bull Mr Macdonald
Mrs Sham-Ho Mr Manson
Question so resolved in the affirmative.
Amendment No. 8 of the Hon. J. P. Hannaford agreed to.
Amendment No. 9 of the Hon. J. P. Hannaford agreed to.
Amendments Nos 10, 11 and 13 of the Hon. J. P. Hannaford agreed to.
Amendment No. 12 of the Hon. J. P. Hannaford agreed to.
Amendment No. 14 of the Hon. J. P. Hannaford agreed to.
Amendments Nos 15, 16, and 17 of the Hon. J. P. Hannaford agreed to.
Motion as amended agreed to.
Message forwarded to the Legislative Assembly advising it of the resolution.
JOINT SELECT COMMITTEE ON VICTIMS COMPENSATION
The Hon. M. R. EGAN (Treasurer, Minister for Energy, Minister for State and Regional Development, Minister Assisting the Premier, and Vice-President of the Executive Council) [10.33 p.m.]: I move:
That the terms of reference of the Joint Select Committee on Victims Compensation be amended by omitting paragraph (6) and inserting instead:
"(6) That the committee report by 29 May 1998 but report upon the long-term financial viability of the Victims Compensation Fund reference by 24 December 1997."
The Hon. J. P. HANNAFORD (Leader of the Opposition) [10.34 p.m.]: This is an important committee undertaking a very important review. The committee has indicated it is not able to complete its task within the allotted time and has asked for an extension of time. The coalition agrees with the Government that the committee should be given that time.
Motion agreed to.
Message forwarded to the Legislative Assembly advising it of the resolution.
The Hon. M. R. EGAN (Treasurer, Minister for Energy, Minister for State and Regional Development, Minister Assisting the Premier, and Vice-President of the Executive Council) [10.35 p.m.]: I move:
That this House do now adjourn.
ABORIGINAL AND TORRES STRAIT ISLANDER REFERENDUM THIRTIETH ANNIVERSARY
The Hon. JAN BURNSWOODS [10.35 p.m.]: Today is the thirtieth anniversary of the 1967 referendum which gave Aboriginal people the right to vote. I pay tribute to the anniversary of that event, which made such a big leap forward for Aboriginal people. I record the tragedy that today, instead of celebrating, Aboriginal people and the wider Australian community have so much to lament. This week and this year on so many fronts Aboriginal people are under siege. They are under siege particularly by the Federal Government with John Howard’s cuts in funds to many Aboriginal programs whether it be for the Aboriginal and Torres Strait Islander Commission, Abstudy or many other respects. That has occurred despite the continued appalling conditions in Aboriginal health, life expectancy, employment, housing, education and indeed in just about every area in which the Federal Government has a responsibility to Aboriginal people.
Aboriginal people are also under siege from the continued appalling behaviour by the Howard Government in relation to the Wik decision of the High Court and the brawl going on between Howard and many of his colleagues in relation to the so-called 10-point plan. Most honourable members are fully aware that this 10-point plan, rather than being a fair statement in relation to Aboriginal land rights and pastoral leases, tilts the balance even more towards pastoral leaseholders and a massive increase in their security of tenure and, indeed, the value of their property. The so-called 10-point plan is not at all a compromise or a proper solution following on from the High Court decision but rather is another blow to Aboriginal people in addition to many other blows that they have suffered.
The third aspect of siege continues to be the appalling performance of Pauline Hanson. While many of us would perhaps dismiss her as an aberration and someone hardly to be paid attention to, she has become an important national figure because of the cowardly, lily-livered and disgusting behaviour of the Prime Minister. The Prime Minister waited too long before disowning her and admitting that she is taken seriously. He patently expected Pauline Hanson to help him get across the coded message behind that phrase "for all of us" that honourable members got so used to in the Federal election last year.
Pauline Hanson has mobilised people on the loony right with the worst sorts of racist attitudes in our community, directed not only against Aboriginal people but particularly against Asian migrants and Asian communities. One of the reasons I feel so angry about John Howard’s performance on this issue is that I live in his electorate. The electorate of Bennelong has an overseas-born population of roughly 30 per cent, of whom a substantial number are Chinese or from the Middle East - Pakistanis, Indians, Iranians, Sri Lankans and so on. We have, in the Prime Minister, a local member who, ever since his infamous statement some 10 years ago, has connived in the racist attacks of people such as Pauline Hanson.
Finally, of course, there is the report on the stolen Aboriginal children and the attempt to denigrate both the authors of the report and its content, and the performance yesterday at the conference of the Council for Aboriginal Reconciliation when the Prime Minister eventually, grudgingly, managed a personal apology. It was a-mean spirited apology as Prime Minister - not an apology on behalf of the Federal Government, but a statement of regret; an apology that was literally dragged out of him. Many Aboriginal delegates and others present at the conference showed their contempt for John Howard by turning their backs on him. Instead of Aboriginal people being able to celebrate today, they - as do we all - still have very much to lament. I shall conclude on a small but positive note: I remind honourable members that 30 years ago today more than 90 per cent of the Australian population voted for the referendum.
ELDERLY AUSTRALIAN CHINESE HOMES TENTH ANNIVERSARY
The Hon. J. M. SAMIOS [10.40 p.m.]: The Elderly Australian Chinese Homes, which was founded in May 1987, celebrated its tenth anniversary at a dinner which I attended in Chinatown over the weekend. The occasion was a most successful one and was held in the presence of the Prime Minister’s representative, Senator the Hon. Bill Heffernan, and other political and community representatives. The Elderly Australian Chinese Homes is a non-profit, charitable and benevolent organisation which provides accommodation and
care for people of Chinese origin over 60 years of age. As honourable members would be aware, Australia has an ageing population which requires special community services.
The ethnic communities have taken on the challenge of meeting these needs by establishing the necessary ethno-specific institutions to cater for the elderly in their midst. One such organisation is the Elderly Australian Chinese Homes, chaired most ably by Dr Cecilia Fong. Services to the elderly in the organisation have grown from accommodating 18 frail aged at its Croydon hostel to including community aged care packages - CACP - an aged day care centre, dementia care and a weekly activities program for the elderly. Statistical data reveals that the number of dementia sufferers in New South Wales has been growing at a rapid rate. This organisation recognised the need and provided dementia support for senior Chinese people approximately three years ago.
The Elderly Australian Chinese Homes, working with the inner-west dementia unit of Concord Hospital launched a tracking system to locate dementia wanderers in September 1995. In the future it aims to expand care services to cater for the increasing demands of the aged suffering from this most crippling disease. Honourable members will appreciate that institutions such as this provide for the specific linguistic needs of the aged in their communities, many of whom, as a natural course in their twilight years, regress to the language of their country of origin.
The Chinese community, needless to say, hold among their traditions a great respect and care for the elderly, and this is reflected in the regard that is given to the rights and needs of the aged in the care of the Elderly Australian Chinese Homes. One significant aspect of the function held on the weekend was the evident visible support shown by the more than 400 guests who generously donated towards this important cause. I commend Dr Cecilia Fong and the board of directors and carers of the Elderly Australian Chinese Homes for their dedication and commitment in caring for the aged in their community. I wish them and their members every success for the future.
The Hon. ELISABETH KIRKBY [10.45 p.m.]: I am sure that honourable members will be aware that, between 12.30 p.m. and 1.30 p.m. today a silent vigil was held outside Parliament House supporting justice for all Aboriginal Australians. The vigil was organised by the Religious Society of Friends Sydney Regional Meeting Inc., the Quakers. At that silent vigil a notice was distributed. It reads as follows:
Quakers acknowledge the Indigenous Australians on whose land we live.
We wish to make a strong, visible support to the Indigenous Australians in their struggle for justice.
We acknowledge the murder, horror, destruction of culture and community that accompanied the white invasion.
We hear the stories of the stolen children and the deaths in custody and feel the pain, grief and anger.
We believe reconciliation cannot begin without justice and acknowledgment for past wrongs. Only after this can healing begin and the building of a strong nation.
We urge all Australians to look into their hearts; to recognise our common humanity, not a separateness in our search for a way forward, embracing the differences that strengthen and enrich the whole.
Quakers want to be a part of the process of reconciliation that will enable all Australians to share in the building and enjoyment of the good life this nation could offer.
Yesterday in Melbourne, on the first day of the Aboriginal Reconciliation Convention, which was one of the most important events of this century, my Federal leader, the Hon. Cheryl Kernot, made the following statement:
. . . on behalf of many Australians, in a spirit of reconciliation and owning and learning from our real history I take this opportunity to apologise for the past policy of stealing Aboriginal children from their parents.
I apologise for the pain and trauma inflicted on an entire generation of indigenous Australians and their families.
I apologise for the way in which this injustice has been ignored in the past and I apologise for the way in which some are sliding around it in the present.
It is not about money. It’s about healing. I hope indigenous Australians can find it in their hearts to forgive us . . .
Our colonial relatives in Canada and New Zealand have addressed the responsibilities of dealing with their pasts - why can’t we? Why can’t governments see the sense in investing in our united future? It even makes economic sense.
I hope our government is listening to the unshrill voices - the voices that embrace and unite.
I hope this government will lead us in a way in which it is possible to work together and walk together with trust and respect.
In conclusion, I wish to say again as I did to the gathering outside Parliament House today that, although I only came to live in Australia in 1965 and am a very new Australian, I wish to apologise to the indigenous people of this nation for the
wrongs that have been done to them by white Australians, by my forebears. I sincerely apologise.
AMNESTY INTERNATIONAL THIRTY-SIXTH ANNIVERSARY
The Hon. FRANCA ARENA [10.49 p.m.]: Tomorrow, Wednesday 28 May, marks the thirty-sixth anniversary of Amnesty International, the world’s largest human rights organisation. Since its inception in 1961, Amnesty International has campaigned through the grassroots action of its one million members to have prisoners of conscience released, to end disappearances, torture and political killings, to end cruel, inhuman and degrading treatment and to pressure governments around the world to adhere to their international humanitarian obligations.
During 1997 Amnesty International will campaign for the rights of more than 24 million refugees worldwide. It will harness the activism and passion of its members and their commitment to justice to remind governments that all governments have a responsibility to prevent the human rights violations which give rise to refugee populations. Tomorrow at 10.00 a.m. in the Strangers Lounge all members of Parliament and staff are invited to the official launch of the refugee campaign. In Australia local groups, professional networks and school students will participate in this campaign, and all are determined to work for a positive solution to the refugee situation.
I am proud to be the president of the New South Wales parliamentary group of Amnesty International. The Hon. Bob Carr, Premier, and the Hon. Peter Collins, Leader of the Opposition, are patrons of that group. The Hon. Elisabeth Kirkby and the Hon. Jennifer Gardiner are its vice-presidents, the Hon. Kevin Rozzoli is its secretary and Mark Swinson is the treasurer. Many members of Parliament and staff are members of the group. It sends letters regularly to governments which abuse human rights, and at times it is successful in its submissions. We are grateful when we receive letters of acknowledgment and letters informing us that a prisoner has been released.
We raise funds for Amnesty International and will hold our next function on 12 June. At that function the guest speaker will be the distinguished Dr John Wong, who will speak on the subject of some possible scenarios for post-1997 Hong Kong - an interesting topic. I hope all honourable members will support this worthwhile organisation by attending the function. Above all, I extend my warm congratulations on behalf of all members and staff to Amnesty International on its thirty-sixth anniversary.
ACCOMMODATION FOR VENTILATOR-DEPENDENT QUADRIPLEGICS
The Hon. J. F. RYAN [10.52 p.m.]: It would not be an exaggeration to say that the matter I seek to raise this evening is a matter of life and death for the individual to whom I shall refer. This weekend an individual who has been in Royal North Shore Hospital for more than two years will seek to discharge himself into the community. He is a ventilator-dependent quadriplegic, who has been waiting for governments of all persuasions to make available the resources he needs to live safely in the community. I sought to highlight this matter a couple of weeks ago in question time and also in an adjournment debate. Last week in the Daily Telegraph there appeared an article about a Ms Lyn Bell, who has been in the Royal North Shore Hospital since December 1994, as a result of a turf war between the Department of Community Services, the Department of Health, and the Department of Housing.
The difficulty is that it is an expensive exercise to meet the needs of such people, and no department wants to take ownership of the expense. However, whilst the responsibility is passed around, the patients involved remain in hospital. Despite the fact that this has been brought to the attention of the Premier, who I understand discussed the matter with three different Ministers, these patients have heard nothing of a formal nature from the Government to indicate that their period of hospitalisation is in any way likely to come to an end.
The young man of whom I speak comes from the country town of Parkes. He wants his parents to remove him from the hospital because he is sick to death of being there. He wants to resume his life, which has obviously been disturbed by reason of the fact that he has suffered an accident which has left him a ventilator-dependent quadriplegic. When he returns to the community he will need someone on hand 24 hours a day to ensure that his ventilator does not stop working. It is true that there are alarms available that he may use, but unless people are assigned to him to monitor any alarm, if he is reliant on family members - as he soon will be - the result may be catastrophic.
I understand that the only preparation that has been made for him is the modification of his home to cater for his wheelchair. The Australian Quadriplegic Association has made inquiries of the local hospital, and found that home and community
care services are not available to meet his needs, extensive though they are at the moment. I appeal to the Minister for Community Services, to the Premier and to the Minister for Health to do something urgently about this individual before he discharges himself out of frustration - which I am sure all honourable members find understandable. I appeal to the Government to do something urgently also for the patient about whom I spoke last week, Ms Lyn Bell. These people are vulnerable and deserve the most urgent possible response from the Government at its highest levels.
The Hon. R. D. DYER (Minister for Community Services, Minister for Aged Services, and Minister for Disability Services) [10.55 p.m.], in reply: I wish to respond briefly to the concern raised by the Hon. J. F. Ryan regarding high-level ventilator-dependent quadriplegics. It is true that this presents a difficult problem. It is also an expensive problem to solve. One cannot have anything but sympathy and human concern for the plight of these people who, in some cases, have been in hospital in acute care for a considerable time. Following receipt of correspondence from the Australian Quadriplegic Association the Premier asked three Ministers to deal with and progress this matter. Those Ministers, apart from me, are my colleague the Minister for Health, Dr Refshauge, and the Minister for Housing, the Hon. Craig Knowles.
The involvement of the Minister for Housing relates to the provision of capital stock, namely housing, for the individuals in question. My involvement relates to the provision of continuing care in the nature of home care services or attendant care services. The Minister for Health is involved because at the moment these people are in hospital.
It is true to say that the cost of maintaining these patients or clients on an annual basis is in excess of $200,000 - which is a lot of money. I realise that it is expensive also to keep them in hospital, but if they are discharged home there would be considerable expense involved so far as the home care service is concerned. It may well be that if such a person is discharged into the community, or ends up in the community by one means or another, he or she might well consume all available home care hours or a substantial proportion of home care hours in a given locality. That would certainly create a problem for the home care service. The matter is difficult to resolve.
However, the three administrations in question - housing, health and community services - are endeavouring to resolve this matter. Sometimes matters of this sort take some time to deal with. I cannot emphasise too strongly, however, that from the point of view of government administration and expenditure, it is not an easy matter that can be resolved quickly. The honourable member can be assured that definite and positive attempts are being made to address the matter. However, it is not really appropriate to make a one-off decision for one, two or even three ventilator-dependent quadriplegics. The Government needs to deal with the matter on the basis of providing a solution for all such people who might be in hospital now or at some future time. The matter is serious and it is receiving attention. I hope it will be resolved sooner rather than later.
Motion agreed to.
House adjourned at 11.00 p.m.