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Wednesday, 22 October 1997
Page: 9637

Mr STEPHEN SMITH(6.52 p.m.) —I open the debate on the Snowy Hydro Corporatisation Bill 1997 and the Snowy Hydro Corporatisation (Consequential Amendments) Bill 1997 for the opposition and indicate at the outset that I propose at the conclusion of my remarks, which may well be tomorrow rather than tonight, to move formally a second reading amendment which I am happy to have circulated now. I have taken the opportunity of alerting the responsible minister, the Minister for Resources and Energy, Senator Parer, of the amendments, so I hope he has had some notice of them as well. I have also indicated that when this bill is returned to the House I am proposing to move an amendment in the committee stage to effect the thrust of the second reading amendment.

The Snowy Hydro Corporatisation Bill 1997 and the Snowy Hydro Corporatisation (Consequential Amendments) Bill 1997 facilitate the corporatisation of the Snowy Mountains Hydro-electric Authority, as agreed in 1995 between the Commonwealth, New South Wales and Victorian governments. The corporatisation thrust of this legislation had been agreed by those on this side when we were in government and, as will become clear in the course of members hearing my remarks and reading the proposed amendments, it is not the corporatisation thrust of the legislation with which the opposition has difficulty.

The rationale for the corporatisation of the Snowy Mountains Authority was outlined by the Minister for Veterans' Affairs (Mr Bruce Scott) in the second reading speech; in effect it will enable the authority, under its new corporate entity, Snowy Hydro Ltd, to participate fully in the emerging competitive national electricity market. This, of course, is an important thrust to ensure a national electricity market, to ensure competition amongst energy sources. This has been part of a general thrust which on this side of the chamber we have been engaged in since as early as 1990-91 to bring more effective national focus and competition to our energy sources.

The nature of the Snowy Mountains Hydro-electric Authority is that complementary legislation is required in the Victorian and New South Wales parliaments and that has occurred. The Victorian legislation is expected to be passed by the Victorian house in due course. The New South Wales legislation has unfortunately fallen foul of those things known as upper houses which, with the greatest of respect to our colleagues, no self-respecting member of the House of Representatives has much time for.

Having said that, from time to time, some minority members can come up with a reasonable report, and I will refer to that subsequently. An amended version of the New South Wales legislation is expected to be introduced into the New South Wales parliament later this year or early next year. The structure of the legislation is that the Commonwealth legislation cannot be proclaimed until the complementary bills are passed in those jurisdictions and an independent water inquiry on the water flow of the Snowy has been conducted. It is that aspect which goes to the heart the amendment, which I will move in due course.

The bills terminate the existing legislative arrangements in relation to the Snowy scheme and form a new company, the Snowy Hydro Ltd. The Snowy Hydro will manage and operate the Snowy Mountains scheme and the Commonwealth and two state governments will have shares respectively in the new company—New South Wales 58 per cent, Victoria 29 per cent and the Commonwealth 13 per cent. The charter given to the Snowy Hydro Ltd is to generate electrical energy and market that energy and related service on a strictly commercial basis in the national electricity market.

To digress from the objects and purpose of the legislation, this is consistent with the thrust to bring competition to our energy sources. It is not just gas on gas. It is gas on electricity and it is electricity on electricity irrespective of the way in which electricity is generated whether that be hydro, coal, gas or co-generation.

To continue with the Snowy Hydro's principal purposes, it is also to operate on a financially viable basis in accordance with the corporate plan approved by its members and to undertake any future developments and operations that are commercially viable and that are agreed by the board.

So far as transitional arrangements are concerned, one thing which is always important on this side of the chamber is that all current Snowy Mountain Authority staff will be offered transfer to Snowy Hydro Ltd with no net loss of their benefits or their entitlements. In addition to that, the corporatisation process will enable the facilitation of repayment of substantial debt owed by the Snowy Mountains Authority to the Commonwealth.

Because of the nature of the geography of the Snowy, Snowy Hydro Ltd will be governed by New South Wales law and the obvious and relevant laws are those in respect of planning, water and the environment. The heart of the thrust of the amendment which I foreshadowed goes to the conducting of a water inquiry into the Snowy water flow. While the Commonwealth legislation does not expressly provide for it, corporatisation principles which have been agreed between the Commonwealth and the states, and which are appended to the explanatory memorandum, provide for the establishment of a public water inquiry under the auspices of the New South Wales and Victorian governments into issues arising out of the current pattern of the Snowy River water flows.

On this side of the chamber, the question of water distribution between electricity, environment, irrigation, aspects or needs had not been resolved by the time we left office. The corporatisation principles which are, as I say, incorporated in the explanatory memorandum, go to the heart of the water inquiry at paragraphs 8.1 and 8.2 of the corporatisation principles. Paragraph 8.2 says:

The inquiry will submit to the States comprehensive, costed options to address the issues considered by the inquiry within six months of its commencement. Thereafter, the States will consider the final report of the inquiry and agree upon a final outcome within two months or such other time as may be agreed by them.

It is the establishment of the inquiry, its outcome and the implementation of its recommendations which are the focus of the amendment. I have kept a watchful eye on the clock, Mr Deputy Speaker. This may well be the most appropriate time to indicate that I seek leave to continue my remarks when debate resumes and, at the conclusion of my remarks, I will formally move the amendment that I foreshadowed.

Leave granted; debate adjourned.

Main Committee adjourned at 7.00 p.m.