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Tuesday, 28 February 2012
Page: 2191


Mr RAMSEY (Grey) (18:36): This debate on Appropriation Bill (No. 3) 2011-2012 and Appropriation Bill (No. 4) 2011-2012 gives us an opportunity to speak on a number of things which happen in our electorates and around Australia. One of the things I raise in the House today is the implications of the bills passed in 2010 on security at regional airports.

At the time the 2010 bill was debated, I raised the problems being confronted by Port Lincoln Airport. Port Lincoln is about 650 kilometres from Adelaide by road but only about an hour from Adelaide by air. In 2010, Port Lincoln was serviced by Rex Airlines. They were flying Saab 340s with a maximum take-off weight of less than 20 tonnes. The legislation passed in 2010 specified that in the initial period all passengers on aeroplanes of over 30 tonnes would have to submit to full security screening and that then, after the middle of this year, the qualifying aeroplane weight for passenger security screening was to drop to 20 tonnes.

Around the period that the legislation was passed, Qantas commenced an air service to Port Lincoln in Bombardier Q400s. They have a maximum take-off weight of 28 tonnes, so, when in the middle of this year the legislation kicks in for the 20-tonne maximum, passengers travelling on the Qantas Bombardier Q400s will be affected. Passengers travelling on Qantas will have to be screened, whereas the Rex passengers will not have to be screened because the take-off weight of Rex's aeroplanes is less than 20 tonnes. This has presented a great dilemma for the local airport.

The owners of the airport are the Lower Eyre Peninsula council, and they are undertaking a $13 million redevelopment. I am pleased to say that they received $4½ million from Regional Development Australia, for which they are very thankful; $1.3 million from the state Regional Development Infrastructure Fund; and $1 million from state tourism department. But they have made the decision that the costs associated with the redevelopment will have to be shared by all passengers. That means that the Rex passengers, who, of course, do not have to be screened at all, will be meeting at least half the costs of the screening. Interestingly enough, the costs are not calculated on a per-passenger basis but on the basis of the number of seats on the aircraft. Unfortunately, I do not have an easy answer for the Lower Eyre Peninsula council.

It is an interesting fact that the Saab aircraft which Rex Airlines are using have a limited life. They have quite some years to go, but they do have a limited life—in fact, they are irreplaceable in aviation circles around the world at the moment. That means that any airport out of which Rex operate the only airline service—whether it is in, say, Ceduna or Coober Pedy or Kingscote or Mount Gambier—will, if it has not had to face it before and unless a suitable replacement can be found for the aeroplanes, face a similar type of upgrade to the one faced by Port Lincoln Airport. At this time, Kingscote Airport is dealing with the fact that it has an occasional charter operation coming in whose planes have a take-off weight of over 20 tonnes, while the take-off weight of the planes doing the daily service is under 20 tonnes. However, the burdens associated with airport upgrades will be inflicted on virtually all the tourists who come to Kangaroo Island on a regular air service. I think this is a ramification that is not fully understood by the government and by many others because it is one of those regional issues that does not crop up everywhere. I hope that the government will give great consideration to how this might operate in these areas. You do have to wonder how far we bend to the demands of terrorism. I make the point that one of these aeroplanes holds about 50 passengers and in the case of Qantas 70 passengers. You can find that many people on a suburban bus and you do not have to take any risks at all; you can just leave a school case there. It is a big issue. I will be watching it closely as we go forward, particularly as the replacement of that fleet comes into place.

There are other things happening around the electorate. We are waiting anxiously in the electorate of Grey for the introduction of the carbon tax. The electorate of Grey is one of those economies that has quite a large exposure to the new tax. We have a number of manufacturing industries. We have the OneSteel steelworks in Whyalla, the Nyrstar lead and zinc smelting operation at Point Pirie and 40 per cent of the state's electricity is generated in Port Augusta by Alinta Energy in coal fired power stations. I recognise that the government has put in a steel assistance package, but it runs for four years and in four years time the carbon tax will be higher. One wonders where the steel industry goes then. OneSteel announced two weeks ago a loss for the first six months of the year of $78 million. This new tax will be an added barrier for them to face. I have spoken at length in this chamber before about the implications for Nyrstar as a considerable investment is needed in Port Pirie in the medium-term future. One has to ask the question about how these industries are going to survive when we are ratcheting up their costs in Australia and their overseas competitors are not facing similar costs. We wait anxiously to see what happens there. We know there are going to be 500 big emitters affected in Australia but we do not know who they are. I know those three will be affected. I assume BHP at Roxby Downs will be affected, but after that we do not actually know.

There are some good things happening. There is a lot of optimism in the mining industry in the electorate of Grey. There is enormous potential out there. It is worth while reflecting that, as the government moves to introduce a mining tax, there is only one company in the whole electorate that will be affected by the mining tax—the company I have already mentioned, OneSteel. The biggest open-cut mine operation in the world, BHP's Roxby Downs mine, which will probably get the tick to go ahead this year, will not be affected. The copper mine at Prominent Hill, a very large mine, will not be affected. Potential copper mines on Yorke Peninsula will not be affected. One has to ask what kind of equity there is in a tax that attacks just one mining operation out of a myriad that are on offer.

There is a lot of optimism because there is a lot of iron ore around. The juniors expect not to be paying the tax for some time. There is $30 billion worth of investment on offer at Roxby Downs. It is estimated there is another $30 billion in the pipeline for the Grey electorate. As I said, there is abundant iron ore in the Middleback Ranges, which is the OneSteel operation. It is estimated there may be more than 14 billion tonnes on Eyre Peninsula. The Woomera area has large potential and there are significant reserves the Braemar deposits towards Broken Hill. Aside from Roxby Downs and Prominent Hill, there is more copper on offer with Oz Minerals' prospects at Carrapateena and Rex Minerals' Hillside deposits on Yorke Peninsula. They are both substantial deposits. There are mineral sands with kaoline and graphite. The mineral sands are already being mined out west of Ceduna by Iluka.

There is abundant low-grade coal. It was interesting to hear the member for Robertson talk about coal liquefaction. Certainly that is something that could be in the pipeline for the electorate of Grey. There are massive deposits of coal in the north. There is coal to gas and coal to liquid. In South Australia the Grey electorate is in fact the centre of activity in Australia for hot rocks exploration. There are very large gas reserves still in the Cooper Basin. The latest assessments are that less than 50 per cent of the recoverable gas has been taken from the Cooper Basin. That is without considering shale gas, which is the bright new prospect there. There is a proposal in Whyalla by Arafura, who are intent on developing Nolans Bore in the Northern Territory to build a rare earths refinery worth $1 billion. It would be a much needed and very welcome shot in the arm for Whyalla. It is one of the best prospects I have seen in some time.

But for all that to happen, there are things that need to happen within the electorate. We are critically short of ports. Two of the junior iron ore miners—one which has started and the other is about to start—are using rather obscure methods to transport the ore out of South Australia. IMX mine iron ore near Coober Pedy and transport it by rail to Port Adelaide in shipping containers. It is then put through a tippler system where it is tipped into the holds of the ship in the inner port of Port Adelaide. Another company, Ironclad, is looking at barging iron ore out from a place called Lucky Bay. These are very high-cost, low-efficiency operations. The development of new ports is essential. I am reasonably confident that Centrex will build a new port at Port Spencer. We probably need another outlet on Spencer Gulf, on the other side. The Thevenard port is in desperate need of redevelopment. In fact, if the Thevenard port is not redeveloped in the next five years or so, I think farming west of Streaky Bay—and I know these may be obscure names to you, Madam Deputy Speaker, but they mean a lot to people in my electorate—will actually become unprofitable, because they will be transporting their grain anything up to 500 kilometres by road. I know the Regional Development Australia for Eyre Peninsula and Whyalla have put in a very good submission and I hope that it will receive government support to make that go forward.

There are also issues with National Highway 1. Our section of it leads from Adelaide to Port Augusta and then west. But the section from Adelaide to Port Augusta had quite a bit of money spent on it, particularly in the latter years of the Howard government with a number of passing lanes put in, which have greatly improved safety and traffic. However, it is starting to reach its maximum again. If the $30 billion advancement of Roxby Downs is to go ahead, that will become under increasing strain. As I have highlighted in this place before, the first place that will come under strain will be the crossing of Spencer Gulf at Port Augusta, where there is just one lane each way across the one bridge that goes across the gulf. The alternative route takes people on a 35-kilometre route around Port Augusta on a dirt road. It is one of the things that I have raised with the regional development minister as a priority in the electorate of Grey and as something that will have to be attended to in the shorter term.

There are a number of other things I would have liked to have raised today, but I am going to run out of time. In particular, I am alarmed at the moment by the number of contacts I am getting from small businesses really feeling the pressure of the economy. There are things they are very concerned about. One is the impact of modern awards on the food and beverage sector, in particular. I was talking to a restaurateur the other day, who opens 365 days a year. I said, 'How do you handle the high pay on holiday Mondays?' He said: 'Well, I lose money. I employ 16 people, but I go backwards.' I said, 'Why do you open?' He said, 'Just so I can say that I open 365 days a year.' I know another restaurateur. They only operate four days a week, the busy days. They do Thursday, Friday, Saturday and Sunday. But on Sunday they try to run on family only, because the costs are getting too high. I know people who run takeaway shops who do not open on Sunday anymore, because in the end they say, 'If I cannot make any money at all, why will I operate in this space?' I was talking to a multiskilled building contractor the other day who employs a number of tradesmen. Previously he had been able to employ juniors at about a starting rate of $14 an hour. Now he has been informed by Fair Work Australia that the minimum rate will be $21 an hour because he has tradesmen on his staff. If in fact he had no tradesmen, he would be able to employ a person on $14 or $15 an hour as a starting rate. He said: 'This is the way that I've always developed my tradesmen. I put them on for 12 months and I have a look at them before I take the risk of taking them on as an apprentice.' But that door has been shut in his face.

They are particularly concerned about the new OH&S standards that are being passed by state governments. I am pleased that in South Australia at least there is a lot of careful analysis going on of what the impact of any changed legislation might be. They are concerned about the ten per cent rise—at least—in electricity rates that will happen at the end of June. And there will be no assistance for small business; not a scrap of assistance. They will have to absorb those costs. They are concerned. The people who operate quarries and construction firms are worried and concerned about the rise of at least six cents in the price of diesel that will happen on 30 June and which will apply two years later to the road transport industry. And there will be absolutely no assistance for these people. They will have to wear the cost. (Time expired)