Senator MASON (6:48 PM) —Sadly, once again the Townsville City Council is being officially investigated by the authorities. Tonight I intend to expose unlawful behaviour at the highest level of the Townsville City Council. This is a matter that must be placed in the public domain, as the ratepayers of Townsville have a right to know how their mayor is running their city. Tonight I am making public the fact that the Australian Competition and Consumer Commission, the ACCC, are conducting an investigation into unlawful dealings between the Townsville City Council and NQ Water.

The ratepayers of Townsville have a right to know that the Mayor of Townsville, Councillor Tony Mooney, is currently the subject of an investigation by the ACCC into price fixing. Councillor Mooney asked NQ Water to artificially increase their bulk water price so as to make NQ Water’s price higher than the council’s price. Councillor Mooney wanted to sell water to Enertrade, a state government owned corporation who had, until recently, proposed to establish a new gas-fired power station in Townsville. The new gas-fired power station, if it were to go ahead, would require a large bulk water supply. In order for the Townsville City Council’s public-private partnership to be able to supply bulk water to the proposed new power station at a competitive price, NQ Water’s prices would need to go up.

Councillor Mooney apparently had no qualms about using a heavy-handed approach to some members of NQ Water. He sought to manipulate NQ Water’s pricing so that Enertrade would be forced to buy water from the Townsville City Council’s proposed public-private partnership plant at Cleveland Bay. The real rub for the Townsville community is that, if NQ Water lifted its prices, it would mean that all North Queensland industry and the ratepayers of Townsville would have to pay more for their water. Higher water prices would mean that Townsville would be a less attractive place for new industry to establish. What Tony Mooney was secretly doing was putting up the water charges in Townsville in order to make his own public-private project more viable. The mayor has gone so far down the track with this public-private partnership and invested so much political capital that he is prepared to sacrifice what is right for his community to serve his own base political ambitions.

This is price fixing and is illegal under the Trade Practices Act. Indeed, to aid, abet, counsel or procure a person to price fix or to conspire with others to price fix is an offence under the Trade Practices Act. Unfortunately, there are still people like Councillor Mooney who are prepared to break the rules—to collude with competitors and divide up markets so that they can stifle competition and inflate profits.

There are significant penalties for corrupt behaviour. Of course, such penalties only apply if you are caught. But anyone who has paid even the slightest attention to the media in recent months will now know that that is a very real risk. If the ACCC mounts a successful prosecution, the Townsville City Council faces fines of up to $10 million and Councillor Mooney faces personal penalties of $500,000. This is therefore a very serious matter.

Take George Weston Foods, for example, where a former divisional chief executive telephoned a competitor seeking to fix the wholesale price of flour. Even though the competitor did not agree to the scheme, the intent alone was enough to earn George Weston Foods a $1.5 million fine. The ACCC were alerted to this failed scheme by an anonymous tip-off, as they were in the case of the Townsville City Council. The Australian Competition and Consumer Commission administers the Trade Practices Act, legislation that embodies competition law and continues to evolve to deal with evolving processes and practices of businesses, both good and bad. Local authorities and public utilities are not immune to the requirements of the act.

The ACCC has been undertaking an investigation into this matter for some months now. I understand that both the Townsville City Council and the Thuringowa City Council have been required to supply the ACCC with information concerning their involvement in NQ Water’s water pricing decisions. I can reveal here tonight that the Thuringowa City Council sought legal advice as to the legality of being involved in a decision to lift water prices and declined to have anything to do with it on the advice that they received from their lawyers, who said that the Thuringowa City Council’s two directors on NQ Water should not attend the meeting where this decision was proposed to take place. Lawyers correctly advised that what Tony Mooney and the Townsville City Council were suggesting was illegal. The mayor’s conduct threatens to cost the Townsville community millions of dollars in long-term benefits for very short-term political gain.

NQ Water is currently considering a request from Enertrade to sell bulk, raw water for Enertrade’s new power station. At the same time, NQ Water is conducting a review of its pricing structure. Not only is this price fixing but it is to the detriment of the city. Without cheap water, Townsville will never attract the industry needed to see it continue to grow. Councillor Mooney is so keen on ensuring that his water plant at Cleveland Bay stacks up so he is vindicated in his decision to commit so much money to it that he is prepared to sacrifice the long-term economic viability of the region. I am told that TCC’s price could be as much as double that of NQ Water’s price if this collusion is not highlighted and a spanner thrown in the works at this early stage.

NQ Water has the potential to produce water for industry that is competitive with Gladstone water board’s price. That means loss of jobs in the twin cities—jobs that Councillor Mooney is apparently prepared to sacrifice for his own political gain. NQ Water’s agenda and minutes also show that it was recommended to sell water to Enertrade last year, but this was not accepted at the board meeting. Instead, they are getting the AEC group, which is also doing the pricing report, to develop a report on the costs and relative advantages and disadvantages of the project. Tonight, I call on the mayor to justify to the ratepayers of Townsville why he has secretly attempted to lift their water charges and jeopardise jobs growth for the sake of a project that does not stack up.