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Delivering Victorian Infrastructure (Port of Melbourne Lease Transaction) Bill 2015

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Ellen Sandell
State MP for Melbourne
3 July 2015

Ms SANDELL (Melbourne) — I rise to confirm that the Greens oppose the privatisation, through sale or through long-term lease, of the port of Melbourne. We do so for four primary reasons, which I will outline. Firstly, public assets that are likely to be monopolies are best kept in public hands. We should not be selling off one of the state's last remaining public assets. Secondly, privatisation will make it almost impossible to steer a good transport policy in this state. Thirdly, the local impacts have not been adequately addressed. Fourthly, this will hurt our economy, especially our export competitiveness, and especially in regional Victoria.

On the privatisation of assets in general, most of Victoria's significant transport assets have already been privatised. We already have several privately operated toll roads, with more slated by this government and the likely extension of contracts for several existing toll roads. Our trams, trains and buses have already been franchised. Country rail and freight businesses were privatised with disastrous results. We remember what happened to our freight rail; it had to be bought back by the Bracks government. It seems that both sides of the house have forgotten the disaster that was the privatisation of our freight rail. V/Line train and coach services also had to be returned to public ownership.

Privatisation of Victorian transport assets has been a colossal disaster. The assets have not been maintained and in many cases they have had to be bought back by the state. It was Einstein who said that the definition of insanity is doing the same thing over and over again and expecting a different result. It is unclear why this government thinks privatisation of this transport asset will achieve a different and better result for our state when history shows privatisation of our transport system simply does not work.

The Productivity Commission says our publicly owned port has a comparable cost structure to other ports around Australia and indeed the world. It says our port does pretty well for us compared to other ports around the world. It achieves a pretty good rate of return, a pretty good dividend for our state, but not an excessive dividend in that we are not using this public monopoly to fleece port users. We are achieving a decent but also responsible dividend for our state. We do that because we recognise that it is important to keep our export industry competitive and strong, which is necessary to keep our economy, regional and rural Victoria, manufacturers and growers strong.

If we privatise our port, we will give responsibility for the port to a private operator, which will no doubt want to squeeze more juice out of the orange. By the very nature of being a private company, it will value profit over these social and broader economic aims that the government is currently delivering through the port. There are two ways a private operator could squeeze more juice from the orange: through higher fees and charges or through lower levels of investment. Both of these would lead to broader social and economic problems. We already know this will happen. The government has already proposed rent increases of up to 800 per cent to fatten this asset for sale, so we have seen a little bit of what might happen if the port is privatised.

Where do these profits come from? They do not just come out of the ether, out of the air; they come directly from growers, from manufacturers, from exporters, from farmers and from the broader economy. These profits come from the Victorian people and go straight into the coffers of a private company. The problem is that the damage will be spread across the entire economy, so we may not be able to point to one particular instance but the damage will be done. This is exactly why public assets, and in particular assets which are likely to be monopolies, must remain in public hands.

It makes me very confused to try and understand why on earth we would sell a profitable asset that makes money for the state and contributes broader benefits to our economy, farmers and manufacturers and why we would allow those profits to go to a private company. It does not make any sense. Actually, it makes sense if the government is only thinking about short-term gain rather than long-term gain. I think I know why the Labor government wants to privatise the port of Melbourne. I think it was Paul Keating who said, 'Never stand between a state Premier and a bucket of money'. Members of the government are doing it for short-term gain, but in doing so the Labor government in Victoria is playing straight into the hands of Tony Abbott.

Members of the government are lured by the glitter of this extra commonwealth money for so-called asset recycling without actually thinking about the long term. Or maybe they have thought about the long term, but they have decided they simply do not care and just want a good bottom line going to the next election. Maybe they think that any future damage to the economy and damage to exporters, manufacturers and growers will be somebody else's problem. I am here to say that damage cannot be somebody else's problem; it is this government's problem, and that is exactly why the Greens are in this chamber and why the people have voted the Greens into this Parliament. They have done so because the Greens think about the long term, about the future. We do not just think about the bottom line at the next election; we think about the next generation.

If we in this state were truly thinking about the future and the next generation, then we would not be selling off our public assets, particularly our port; we would be keeping them in public hands, returning a dividend to the state and keeping our economy strong not just for the short term but for the long term.

It beggars belief that we would be talking about more privatisation when we have had a history of complete disasters when it comes to privatisation. I have heard many members in this house talk about the privatisation of the energy market. Let us have a look at how that went. I have been to the Latrobe Valley three times since I was elected, and the privatisation of the energy system in this state has absolutely gutted the Latrobe Valley. We had situations where in many cases almost a third of the workforce was lost. That community has still not recovered and is still economically depressed, and the social impacts have been far reaching.

The problem is that the privatisation and the economic and social impacts have meant the Latrobe Valley community is even less prepared to adapt to the changes the future will bring. Because those coal plants are now in private hands, the government is one step further away from being able to control, say, when the plants close, when we need to change the energy mix, how a site is dealt with, including rehabilitation, and what support the workers and the communities will need. Because of privatisation our government is one more step removed, which makes the job of transferring our energy mix and doing so in a way that helps the community and the workers transition to something meaningful just that much harder.

If our energy system had not been privatised, we could have avoided these private quasi monopolies that have emerged in the energy system. We could have avoided the export of profits out of Victoria to multinationals, the ones that have ended up buying our energy assets, and the government would be able to sort out the transition for energy supply and for the local community with much less fuss and much less expense to the Victorian people and also deal with the issue of climate change, which would be a good thing.

In particular this bill is damaging in that it has clauses written into it that disincentivise future ports — that is, deliberately reduce competition and create a monopoly. I would have thought the only real argument in favour of privatisation was that it would increase efficiency due to competition, yet this bill shuts down competition, which does not make much sense to me.

While we are on the issue of future ports, due to a production of documents motion, the government released a KPMG report. That report sheds very little light on the planning of our future ports, including whether we need them and when and where they will be. Transparency in the whole matter of privatising our port has been sorely lacking. To me, all of this says that the only reason Labor is selling our port is that this government wants a short splash of cash and its members are essentially willing to steal this money from the future economy of our state.

Moving on from talking about privatisation to talking about our transport system, the privatisation of this asset will mean it will be that much more difficult to steer a sustainable transport policy for our future. Ports are extraordinarily important, being the interface between our local economy and the rest of the world. The Liberal and Labor policies we have seen are all based on projections of growing the amount of truck-based freight, which is absolutely the wrong way to go. We all know that we need to be moving freight to rail and that if we privatise the port, this opportunity to move freight to rail will be lost as the private operator, by virtue of being a private operator, will be more interested in profit and not in the social and environmental benefits of sustainable transport.

Developing rail links to the port and all the way to the dock interface will be even more complicated with a privatised port. Unfortunately past governments have achieved very little in this area, and privatising the port is one more step away from achieving this important measure of building rail lines and moving freight to rail. This will have great impacts not only on climate change and sustainability but also on local communities, whose members have to deal with noisy, dirty and dangerous trucks on their roads on a daily basis.

Moving on to the issue of level crossings, government members say they want to fix the 50 worst level crossings, but it is not clear their list of 50 is the 50 that are the real priorities for this state. Some of them appear to be chosen because they are in marginal seats. Granted, removing a selection of level crossings may have benefits for local traffic congestion, but these benefits are likely to be short lived as the roads fill up again. As we know, and as all transport experts know, building more roads does not cure congestion. It is like loosening your belt to cure obesity; it is not a long-term solution for congestion. The only way to cut congestion in a city on a large scale and permanently is to invest in better public transport, to run more trains and to have a systematic approach to public transport, including things like investing in better train signalling, which this government simply does not seem to have, although it has made some important inroads. In public transport we need a systematic approach, and no government has had that for a very long time.

Thinking about the impacts of this privatisation on my electorate, and the inner west of Melbourne in particular, we have seen very little on what the local impacts will be for residents, local businesses and local infrastructure. The City of Melbourne sought advice at a local council meeting on what the local impacts for residents will be, but the council has not received anything from the government. There has been pretty much no consultation on the local impacts of the port, which shows that this measure is being rushed through without proper consultation.

I note there have been many contributions on this side of the chamber, from the Liberal Party and from The Nationals. It is great that they have finally joined the party and are pointing out some of the dangers of privatisation of the port; however, the stark fact is that privatising our port still remains coalition policy. Coalition members want to privatise the port just as much as the Labor Party does.

I am especially disappointed in The Nationals, who have been in the media calling for some of the profits to be invested in regional Victoria. It is a decent aim, but The Nationals still have a policy of selling off the port. Are they really willing to sell off the long-term future of rural and regional Victoria for a little money pot in the short term? That might help them at the next election, but it sells out the future of people in rural and regional Victoria who rely on a functioning and decently managed public port in order to be competitive. I urge The Nationals to stand up and oppose the privatisation of our port for the long-term future of rural and regional Victoria.

In conclusion, I reiterate that privatisation of public assets, particularly of monopolies like the port, is a complete disaster. We have concrete examples of where such privatisations have already been disasters, so I do not see how this one is going to be any different. It is absolutely the wrong way to go. We need to stop thinking about a short-term injection of cash, as shiny as that may be, and start thinking about the long-term future of our state. We need to talk about sustainability not just in terms of environment and transport but in terms of the economic sustainability of our state, which would be much better served by keeping the port in public hands.

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Ellen Sandell
State MP for Melbourne
3 July 2015




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