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Wednesday, 1 April 1987
Page: 1917


Mr BEALE(7.17) —Tucked away on page 12 of Appropriation Bill (No. 4) is a line that reads:

Payment of equity capital for the Snowy Mountains Engineering Corporation, $6m.

For many of the last months of calendar year 1986 it was well known in engineering circles that the Snowy Mountains Engineering Corporation was experiencing a severe liquidity crisis. Despite that the Government chose to wait until after the Parliament had risen for the Christmas recess to provide the Corporation with the funds it needed desperately to continue its operations. It also chose to wait until after the Parliament had risen to release the Corporation's 1985-86 annual report.

In February 1983 the Corporation's staff totalled 623, but it has now fallen to about 320 and is expected to fall further. This has badly affected the town of Cooma in the Federal seat of Eden-Monaro. The Minister for Housing and Construction (Mr West) has no idea what is going on in the Snowy Mountains Engineering Corporation. For example, he stated that he expected that the Corporation would break even during the 1985-86 financial year, instead of which its net loss was nearly $2 1/2m. The only way the Corporation makes any money is to sell houses to its employees.

For several years now my colleague the honourable member for Denison (Mr Hodgman) and I have been warning that the Snowy Mountains Engineering Corporation is in need of restructuring. In a speech to this House on 1 May 1986, I said:

This heralds a further loss for the current year, that is, the 1985-86 year, despite the assertion by the Minister for Housing and Construction that the Corporation would break even in that period.

The Liberal and National parties' policy on housing and construction gives our blueprint for the future of the Snowy Mountains Engineering Corporation. We believe that the future of the Corporation and its employees can be enhanced only by its conversion to an efficient private consulting firm, and it is one of our objectives to ensure that the Corporation's people are involved in its ownership so its employment can be increased as it becomes a thriving commercial company.

The next Liberal-National Party government will enter into detailed discussions with the Corporation's management and staff, giving them first option to purchase the Corporation. The objective is to have the Snowy Mountains Engineering Corporation employees own and run the Corporation as a private consulting company. In a sale of the Corporation the tenure, superannuation and other benefits of the staff would be protected. Any transfer would be made with as small a cash payment as appropriate and buildings might be leased to the new owners and sold at a later time. The completion of contracts in force at the time of transfer would be guaranteed. The taxpayer would not need to foot the bill, as he has done this year, to the tune of $6m, to prop up another bureaucratic edifice. This is our blueprint for the future of the Snowy Mountains Engineering Corporation and our vision for its employees as owners of a thriving, prosperous, competitive, commercial company.

Bill agreed to.

Bill reported without amendment; report adopted.