Ms PATTEN (Northern Metropolitan) — I am very happy to rise to speak, probably albeit quite briefly, even though I have probably got the most time to speak if I choose to, on the Delivering Victorian Infrastructure (Port of Melbourne Lease Transaction) Bill 2015. With it being the last day of our first year of this Parliament it is interesting to reflect on the fact that we have done so much, but this is an enormous piece of legislation. It is probably the biggest piece of legislation I have had to understand. I reflect now that 12 months ago my capacity to understand legislation like this was a lot less than it is now, and I am pleased this bill was not the first legislation we debated at the beginning of the year but that we have had a little bit of time.
This issue was discussed at the election. Certainly when I was elected it was an issue that was raised with me by the media, which asked whether I would support it. My position then, as it is now, is that as a small party we are not here to stymie the economic and financial decisions of a government; we are here to represent our members and represent our platform. I believe the government has a mandate. In fact, had the coalition been elected, it too would have had a mandate on this issue, in my eyes. The coalition’s details on this were different, and even today the details seem different to what we were discussing 12 months ago. In fact the details today seem different to the ones we were discussing yesterday. It seems to be quite a moving feast at the moment, and I am trying to keep up with what is going on.
On the broader picture that brought this about, what my constituents heard was that the sale or lease of the port of Melbourne for 99 years, 40 years, 70 years, 50 years or whatever it is going to be, was to get rid of the rail crossings, to help build the Melbourne Metro rail link and to do other much-needed transport infrastructure projects. In all honesty, and maybe it is because we are in the north and my constituents do not get down to the port much, most of them felt that the rail crossings were very important. We saw passionate support for and opposition against the east–west link, but I did not find that the port of Melbourne was something people were asking me about on election day. The east–west link certainly was. While I think the former government also had a mandate on the east–west link, this government said it would tear up the contract and pay no compensation, and I guess today’s $1.1 billion worth of compensation gives me pause for thought. Nonetheless, I feel the government went to the election with a mandate.
I will just take the opportunity to maybe question the link between the lease of the port and the level crossings. I actually think that is somewhat of a furphy. I think there were many good ways for government to raise capital at the time to build that sort of infrastructure into our systems, and I am not convinced this was the only option open to government. I think that linking the two and saying that without this we cannot have the other puts small parties such as mine into a difficult position. I do not, however, believe it. I think there were other options for this. As I say, however, I think that my role as a small party representative here is to push forward my platform, not try to stymie government on its platform in economics and otherwise.
I have had the opportunity to read a lot of the report. I cannot say I have finished it. I have had the opportunity to have briefings from the Treasurer’s office and from the department, and I have appreciated that, and I have to say I have learnt a lot. I had the opportunity to take a tour of the port on the MV Melburnian, a beautiful 1945 boat, and I thoroughly appreciated the time that the Port of Melbourne Corporation CEO, Mr Nick Easy, took to show me around the port and to give me a better understanding of its running and what we were actually talking about: what was owned by the stevedores, what was owned by the port and how they fit together. I am very grateful for that. I also thank the members of the committee that did the work on this report. I have found it to be very instructional, and I have learnt a lot. It laid out the issues very well. The inquiry received 87 submissions and it seems held numerous hearings, and from what I understand it was a fairly feisty committee as well. I have read both minority reports as well as the majority report with interest. Despite the difference of opinions, everyone has come out of this still smiling, which says a lot for the collaborative efforts of that committee and probably of this house in general.
One of the issues that has come up has been the term of the lease. As I have said, at the beginning of this year the lease was to be a 99-year lease. Then it went down; as we saw in the initial bill, it was a 50-year lease with a 20-year option. Now I understand that the government supports the recommendation that it become a 50-year lease with no 20-year option. As I have mentioned, it has been a moving feast. I noted that the KPMG report and scoping study on this recommended that the lease be a minimum of 30 years, and in fact KPMG’s preference was for a longer lease term, so one suspects 50 years is probably around the right length.
We talk then, however, about when we are going to build the second port. This has again been much debated today in this house, and it has been much discussed in the report and in the media. This is a very interesting situation. If we believe, as Mr Purcell says, that we are going to reach the capacity of this first port in 2025 — in less than 10 years — then obviously we are going to need to be starting to build a second port as of now, and that obviously is going to affect any price we are going to be able to get for this port lease; it certainly will affect the bottom line. We talk about 7.5 million 20-foot equivalent units, which is a threefold increase from the current figure. I think that would relate to a whole bunch of glass ball estimates that really we cannot — —
Ms Pennicuik — Crystal ball.
Ms PATTEN— Crystal ball estimates; I thank Ms Pennicuik. It would be very difficult to really be able to estimate with much certainty. Going back to the notion of fixing the lease at 50 years, I note that one of the things that concerned me about an extension of the lease for another 20 years without that requiring a legislative instrument was that the government, though I am sure it would not, could do the deal on the 50-year lease and then the next day — wink-wink, nudge-nudge — give the operator an extra 20 years without going back to Parliament. I think this makes it much more transparent, meaning that if there is any need to extend the lease, more legislative reform will be required to do that, and the matter will have to come back to the Parliament to be considered.
Given the current growth, it seems Infrastructure Australia is looking forward to the second port as a priority. We also, however, have recommendation 4, which I understand the government is also supporting, which is about instilling far more infrastructure around our first port. I have some related questions. If we are considering building a second port in 10 to 15 years time, what sort of time frame do we have to build the infrastructure around the port of Melbourne in light of the fact that we may be building a second port?
Recommendation 9 of the report on my understanding talked about further monitoring the costs and charges that the lessees could bring in, which includes rents. As Mr Purcell said, a private operator has two options for fixing their bottom line: reduce the costs or increase the prices. I think providing greater transparency and greater monitoring of that — adding in more transparency in this area and enabling the Essential Services Commission to have more input on complaints and on rents — is a very positive thing. I hope that might be what we see in the bill. The Australian Competition and Consumer Commission also supported this; certainly the commission in its evidence to the committee supported greater regulation, particularly around the prices that the successful port leaseholder can bring in.
One of the things that struck me — and I had not considered it when I had our initial conversations with the departmental officers — was the idea of vertical integration. I had not thought of it as going both ways. They were saying that a stevedore could not buy a port, but there was no mention that the port owner could not become a stevedore, and I think that was a very good recommendation by the committee and one that was well captured in recommendation 10.
Finally, I do have a concern with recommendation 11 about cutting out the compensation. Again, given the uncertainty and the figures that we are pulling out of our crystal ball about the future of this port and of a second port, I have a concern that, for example, if the government were to turn around in 2017 and decide to build a second international container port, the owner of the port of Melbourne lease should be compensated. We do need to provide some options for compensation. I agree they can be fixed and capped and far more regulated and captured than they are in the current bill, and I am quite supportive of the minority report’s proposed option for compensation, which was to provide greater certainty in relation to the operation of the compensation clause and to fix a cap that captured the maximum amount of compensation.
This has been something of a surreal exercise for me. I do not think I had ever considered that we would be deciding on something that personally I will not be alive to see in the future.
Mr Barber — We’re doing global warming next year.
Ms PATTEN — I thank Mr Barber. I look forward to that. This has given me a good running practice for global warming next year. Global warming is an issue that I consider but it is not something that I have collaborated on, and certainly watching what is going on in Paris at the moment it has been front of mind, obviously. But for me this has been quite a surreal exercise in thinking about a time, 70 years along, that I will not be here for, and I think this is the first time in my life that I have had to try to make a decision for something in the long distant future. But I will be interested to hear the rest of the debate about this and to see where we fall on this and whether we will fall anywhere today or whether we will still be debating this in February next year. I found it a fascinating exercise and debate. I do believe the government does have a mandate here; however, I will hold my judgement until I see what the final look of the legislation is.