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Wednesday, 29 October 1997
Page: 8391


Senator COONEY(5.27 p.m.) —Sitting here doing my duty, listening to Senator Lundy and, prior to that, to Senator Margetts, I was reading the explanatory memorandum and the second reading speech. This legislation does seem to have confused purposes. I am sure the Minister for Resources and Energy (Senator Parer), with his intellectual ability, will be able to resolve the confusion in his usual lucid way. The attachment to the explanatory memorandum, as an introduction, says:

Corporatisation of the Snowy Mountains Hydro-electric Authority . . . and related aspects of the Snowy Mountain Hydro-electric Scheme (collectively the Scheme) by the Commonwealth, New South Wales and Victoria is a significant national micro-economic reform initiative and is being undertaken in accordance with Council of Australian Governments commitments.The message that comes through there is clear—that this is a micro-economic reform, that this particular bill is aimed at ensuring that Australia's economic wellbeing is forwarded. That would be consistent with attachment 1 to the explanatory memorandum, which says:

The principal purposes of Snowy Hydro are to include:

(1) participation on a commercial basis in the emerging NEM—

that is the national electricity market—

as an independent electricity generator;

(2) participation on a commercial basis in any future developments and operations approved by its Board; and

(3) meeting appropriate water arrangements.

A reading of that particular document would indicate that this is an agreement between Victoria, New South Wales and the Commonwealth to ensure that there is a commercial basis to the scheme and that the gross national product is going to be increased by the way that particular scheme is put into operation.

Having read that, it would be reasonable to assume that the sooner this act is passed the better, because that is the basis upon which it would go forward. So why should there be any delay? That is if you look at the attachment to the explanatory memorandum. But when you go to the second reading speech, that does not seem to be the thrust. It says:

The idea is not to bring this legislation into operation as soon as possible but to delay the coming into operation of this legislation for a considerable period.

Indeed—a period beyond six months. Mr Acting Deputy President, as you know, six months is the usual period that is allowed, the longest period that is allowed, before legislation comes into operation. Drafting instructions, for example, say that any legislation that gets the royal assent should come into operation within six months of that happen ing. That is not the case with this legislation. So you say to yourself: why the delay in the time at which this legislation comes into operation? The answer probably lies on page 8 of the second reading speech:

At the broader level, the Council of Australian Governments agreed to a process for water industry reform in Australia at its meeting on 11 April 1995. Of particular relevance to the corporatisation of the Snowy scheme is the agreement by government that the environment is a legitimate user of water.

On page 21 of the explanatory memorandum the word `environment' is not mentioned. So a different concept is now introduced into the equation in the second reading speech. It goes on:

Governments have taken these concepts seriously. A water inquiry is to be held before the scheme is corporatised. The inquiry will examine issues arising from the current pattern of water flows in the rivers and streams within and flowing from the Snowy mountains area, resulting from the operation of the scheme. The Commonwealth has agreed that New South Wales and Victoria are the two states which have principal responsibility for the Snowy scheme. Water management will jointly sponsor the public inquiry.

So if we set aside the concepts of commercialisation, of competition and competition policy and take on the issue of the environment, then it makes sense that you have to have an inquiry. That is the thrust, as I understand it, of page 8 of the second reading speech.

So the question arises—and it has been referred to already by previous speakers: why does this bill come in now when the second reading speech says: `No, the effect of corporatisation should not become apparent until after an inquiry'? This legislation, if it is passed today, will come into operation more than six months down the track—which is not good, according to drafting instructions and according to such outstanding committees as the Scrutiny of Bills Committee. This legislation will come into operation at a time that is not in accordance with the general rules about legislation. It will come into operation after an inquiry, which inquiry will have, I would have thought, some significant impact on the very question of whether this scheme should be corporatised.

No doubt one of the problems that faces the government is that this is an agreement between three governments: New South Wales, Victoria and the Commonwealth. They have sat down and had a look at this and they have come to an agreement. Part of the agreement is that each of those jurisdictions will bring into operation legislation. It is always difficult, no doubt, to arrange things so the actions of all the governments synchronise in the way that is wanted. Nevertheless, taking into account that issue, the problem remains: why take an action now that depends upon another action further down the line which may well impact upon the action of these three governments? So there seems to be a confusion of concepts in this legislation. The second reading speech goes on:

The inquiry will be conducted by a single commissioner appointed by New South Wales and Victoria and will report within six months, followed by a two month period to agree a final outcome corporatisation to agree a final outcome. Corporatisation legislation will be finalised in all three parliaments following the states' agreements on the outcome.

So you have this paragraph in the second reading speech which guarantees that the legislation is going to come into operation more than six months down the line. Indeed, it might be a considerable time down the line because there has to be a report within six months followed by a two-month period to agree a final outcome. How that is going to happen within two months, I do not know. Say the states do not agree. Say, in the light of the report by the single commissioner, Victoria does not agree or New South Wales does not agree or the Commonwealth does not agree. Then what will happen?

How can anybody prior to an inquiry agree that there will be a final outcome? It seems to me to be a strange logic that you have an inquiry now; that the results of that inquiry are to be sent to three entities, the Commonwealth and two states; and then they have to finalise an outcome within two months. But suppose that they cannot; suppose that the discussion does not allow for that—unless there is already an agreement as to what will be the final outcome. If there is already an agreement as to what will be the final outcome, why do you need two months after the inquiry to get to it? This piece of legislation is a matter of concern. The speech continues:

Corporatisation legislation will be finalised in all three parliaments following the states' agreement on the outcome.

Does that mean that the Commonwealth does not have to agree? Does it mean the only agreement that is relevant is the agreement between New South Wales and Victoria? If the Commonwealth also has to be a party to the agreement, then why does the second reading speech say—and I read it again—`Corporatisation legislation will be finalised in all three parliaments following the states' agreement on the outcome.' What about the Commonwealth's agreement? Is the Commonwealth to have no say in this? The speech goes on:

Any outcome on environmental flows can only be determined in light of the finding of the water inquiry.

That sounds a very sensible and logical statement.

The Minister's second reading speech is really saying that you can only determine a very central issue to this whole issue in the light of the finding of the water inquiry. Has there been an agreement? What is the extent of the agreement? What effect is the water inquiry to have on the outcome? Is it allowed to have any effect on the outcome? If so, that would seem to be inconsistent with some of the assurances given in the second reading speech as to when a finalisation of this matter is to be reached. The speech continues:

The inquiry will allow the views of all interested parties to be considered—irrigators, environmental interests and other downstream users of water. Until then, there is no valid basis on which governments can take any action to alter water allocations from the scheme.

Why bring in legislation prior to all these issues being determined? Is it being brought in now because the three governments cannot agree without there being some sort of legislation such as this put in place? If that is so, how does this legislation assure that that agreement will take place? Further in the second reading speech, the following statement is made:

Governments have been unfairly accused of taking no notice of calls for increased environmental flows for the Snowy River. To respond only to the views of one interested group in advance of a public water inquiry—particularly by legislating for environmental flows in the Snowy River—would clearly disenfranchise other legitimate interests in the inquiry from the decision making process. Governments have not been prepared to do this.

It is good that they should not do that. It is good that, as this second reading speech says, everybody's interests should be taken into account—not only the environmentalists' interests but also the interests of farmers, of people who use the water generally. That seems to be a most sensible sort of a suggestion.

But why have legislation introduced and why go ahead with this now when in the second reading speech the minister himself says, `Look, it would be a silly sort of a thing and a bit unfair to do anything before you have an inquiry.' That seems absolutely correct. But then, having said that in the second reading speech, the government goes ahead and does do something: it introduces this legislation and wants to pass it through. So it is a very confused message that comes out of this legislation, that comes out of the explanatory memorandum and that comes out of the second reading speech. The second reading speech continues:

It is also important that the potential financial impacts of any changed water arrangements impacting on Snowy Hydro Limited be identified before the corporatisation legislation is proclaimed. This will ensure that the company is established on a sound commercial basis and can operate in the competitive national electricity market.

That again makes a lot of sense. But then why take the steps that are taken in this legislation, without having all this worked out? If it had all been worked out, the minister could have come in here, in his lucid and intellectual way, and said, `Look, this is what we've done. We've had an inquiry. This is what we've found out. We've looked at the commercial projections. These are the sound commercial projections we are going to have with this corporatisation. We'll go ahead now and do it.' Then there would not be any need to put the proclamation of the legislation off to some unspecified time in the future.

Probably the best way of making the point is to ask: if this legislation is passed, when will it come into operation? I do not think anybody can tell us that. If they can tell us that, then much of the material in the second reading speech does not have the force that one would have thought it should.

Instead of passing legislation now and putting off its proclamation until some time down the line, why not go ahead and conduct the inquiries? Why not look at the economic ramifications, the environmental ramifications and the ramifications that it will have on the farmers? Then, with all that knowledge that will be before us, we can look at this legislation in a calm and measured fashion, as we always should in this chamber, and, as the minister would know, the measured debate which we always have in this chamber can be repeated in respect of this legislation. They are my thoughts from sitting here and listening to the debate. It seems that what has been said by previous speakers has a lot of force.

(Quorum formed)