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Wednesday, 30 May 1973
Page: 2851


Mr FAIRBAIRN (Farrer) - We are discussing the Snowy Mountains Engineering Corporation Bill. I start by saying that the Opposition does not propose to oppose this Bill; it will agree with it. When we first set up the Snowy Mountains Engineering Corporation - and I was very closely associated with this for a considerable number of years, although it was shortly after I retired as Minister for National Development that my successor introduced the Bill into the House of Representatives - we had quite a lot of problems to face. The Snowy Hydro-Electric Authority under Sir William Hudson, and later under Mr Howard Dann, had achieved a very high reputation and considerable fame and 1 believe that world wide it was regarded extremely highly. There was no doubt that the Authority did a magnificent job in designing and completing the work which has now been almost completed. But we did have problems then as to what would happen to the Authority. As my successor, Mr Swartz, said when he introduced the Bill into the House in March 1970:

Some sections of the community would have liked us to retain the whole of the Snowy organisation intact to undertake major water development measures throughout Australia in much the same way as it has tackled the Snowy scheme.

He went on to say:

The truth is however that there is no other scheme in Australia of the same size and homogeneity as the Snowy. The Snowy had been geared to spend annually sums equivalent to the total expended by all States on rural water development measures. While the States' total might with good reason be increased, there is no case for the Snowy to move into this field so as to push the States out.

So we had to look and see what expertise the Snowy Mountains Hydro-Electric Authority had which might be used. First of all, of course, it was not in the field of construction because, as we know, all the dams that have been built in the Snowy Mountains area have been built by contract and these contractors are of course available to build dams elsewhere in Australia. But the Authority itself was not a constructing authority. The expertise and the efficiency which this Authority had was in investigating not only projects in the Snowy itself but also many other projects and in designing - in particular, in designing dams, tunnels, mountain roads and a number of other things in this area - in scientific services which it provides in Cooma, and in contract writing and supervision.

So what we set out to do when we set up this Corporation was to maintain these skills. But we did not want the Corporation to go so far as to undermine the business of local private engineering consulting organisations or to compete directly with them in all fields, and we did not want to have the Authority able to push unwanted into the States. Therefore, the then Minister in his second reading speech outlined a number of measures which he felt would see that the Authority was fully used, but in Australia anyway would abide by the rules which Cabinet had laid down for it. It was not to be permitted to act as a constructing authority, and the principal engineering fields in which it was to operate were broadly described as those related to the development of water and power resources and for underground works. In work for private organisations, it was able to act only when commissioned by a private consultant and the State governments were invited to introduce legislation matching that of the Commonwealth. I understand now that all the States have done this and I am very glad that they have done so because at the time some of the States seemed to be rather half-hearted as to whether they would use the Authority or not. They have ali used the Authority and I am glad that they have all now passed the necessary legislation, lt was expected that the Snowy would continue to use and collaborate with Australian consultants in appropriate circumstances and this it certainly has done. It was to be necessary for the Snowy to obtain approval of the Minister before undertaking any job and the Minister, before he gave that approval, was to have the advice of a consultative committee which was formed and on which some private consultants were members. Finally, it was to operate as a commercial organisation, would pay Commonwealth income tax and would be expected to make a reasonable return on its capital.

I am sure we can say that everything that was set out in the second reading speech for the Authority to do it has achieved and I am sure that everyone is extremely pleased with the way it has been operating. I see from its last annual report that last year, the charges to clients were over $8m, up about $1.5m on the previous year. Its operating profit was just on $500,000, it made provision for income tax of $305,000 and this left it a net profit of $172,351. It has been able to undertake a large number of assignments. In the last year, there were some 25 assignments inside Australia and about 11 assignments outside Australia, in Papua New Guinea, Thailand, Cambodia, Malaysia or North Borneo. So, I think we can be justly proud of what the Corporation has achieved during the relatively short period it has been in operation.

The Bill now before the House proposes to widen the capacity of this Corporation to undertake work in Australia. As I said, at present inside Australia it has been limited in a number of ways, lt has been limited to the development of water resources, to the generation and transmission of electricity and to underground works. It was limited in that it had to work through a private consulting engineer and that it was not to engage in construction. Some of these restraints are to be removed by the present Government. The first is the proposal that will allow the Corporation to act independently or in association with others. The second is that at present all works undertaken by the Corporation, however minor, must receive the prior approval of the Minister, and the Government says that it believes this provision is unnecessarily restrictive and it will amend it so that the Minister can allow certain works as prescribed by him without specific submission being made for approval. This, I am sure, is only sensible. A change is to be made in the Principal Act so as to alter the composition of the consultative committee and add representatives of the Departments of Foreign Affairs and Overseas Trade to this committee. I think in the past there was close liaison on all overseas matters with the Departments of Foreign Affairs and Overseas Trade, but this will put them even closer together.

There, is to be a change in the borrowing powers of the Corporation to bring it into line with standard provisions in other similar Acts such as, we are told, the Overseas Telecommunications Act. The final amendment clarifies the fact that the Corporation must not only seek the approval of the Minister before it can acquire or dispose of property with a value in excess of $100,000, but also seek the approval of the Minister to enter into an agreement for the provision of services if their value is in excess of $100,000. The Opposition does not oppose the legislation. We believe that it is a sensible measure. I understand that a request has been made for the services of the Corporation in additional areas, in fields outside those in which it is at present allowed to participate. 1 refer particularly to the mining field. In the early days of the development of the Bougainville field Conzinc Rio Tinto of Australia sought the services of the Snowy Mountains Engineering Corporation, but because of the then charter of the Corporation it was not enabled to assist. Now it will be able to engage in such activities in mining and other areas when its services are required and desired.

The Opposition believes that the Corporation has been extremely successful. I have no doubt that a number of projects with which the Corporation has assisted would have gone to overseas consultants had the Corporation not existed. It has also assisted Australian consultants. Sometimes an Australian organisation employs Austraiian consultants in conjunction with the Corporation knowing that if the Australian consultant does not have all the required expertise, probably the Corporation will be able to assist. Such joint undertakings have enabled Australian consultants to obtain jobs which otherwise would have gone to big overseas consultants, private and governmental.

Consultant engineering is a very big activity nowadays. The amount expended annually on such work in Australia is enormous and in addition quite a lot is spent overseas. Anything that can be done to build up local expertise is worthwhile. The Corporation is not a large organisation in the field of consultant engineering operating in Australia today. I understand that in the Association of Consulting Engineers there are between 4,000 and 5,000 engineers, and all told there are between 10,000 and 12,000 men in that organisation. The Snowy Mountains Engineering Corporation employs 107 engineers and a total staff of about 308 people, so that relatively speaking it is quite small. For the reasons I have given I believe that we should congratulate and support the Corporation. We support the Bill.







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