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Tuesday, 4 September 1984
Page: 392

Senator COOK —My question is addressed to the Minister representing the Treasurer. Has the Minister's attention been drawn to recent comments made by the Secretary to the Treasury criticising what Mr Stone called 'grasshoppers'; that is, public works for which the earning capacity does not cover the capital invested? Does the Minister share that particular concern of the Secretary to the Treasury? Can the Minister point to any particular projects that would fall into that category?

Senator WALSH —Senator Cook asked whether I can point to any particular projects that fall into the category of 'grasshoppers', which I believe was originally defined by Mr Shann; that is, public works the revenue from which is inadequate to service the cost of the capital invested in them. I was astounded to hear the present Leader of the Opposition uncritically endorse Mr Stone's speech when, in fact, the present Leader of the Opposition is busily promoting one of the most voracious grasshoppers ever suggested in Australia. I refer to the fact that the present Leader of the Opposition has committed a Liberal government, if there ever is another one, to building the Northern Territory railway. I cannot think of a better example of a grasshopper, as defined by Mr Shann and Mr Stone, than the proposed Alice Springs-Darwin railroad. That project entails an investment of $600m on present values, the revenue from which would not cover the operating costs and, of course, therefore would provide not only no return on the capital investment but a negative return on the capital investment. I would like Mr Peacock to explain that contradiction along with all the other contradictions he has been embracing recently. He is simultaneously embracing Mr Stone's views, derived ultimately from the views of Professor Shann, and advocating the construction of a voracious grasshopper of the magnitude of the proposed Alice Springs-Darwin railway.

A couple of other examples of grasshoppers were mentioned specifically by Mr Stone. One was the Ord River irrigation scheme in Western Australia, in which in present value dollars some $150m of public capital has been sunk, and the other was the Dampier-Perth pipeline in which some $700m of public capital has been sunk. Ironically, both of those projects are attributable to the former Liberal Premier of Western Australia, Sir Charles Court, who, although not the Premier at the time, provided the political push to stampede an irresponsible Liberal- Country Party coalition Government in the late 1960s into providing Commonwealth funds for the Ord River Dam. Sir Charles Court was also responsible for the political push which ultimately resulted in the Western Australian Government signing the disastrous take or pay contract for the domestic phase of the North West Shelf gas and the associated Dampier to Wagerup pipeline. As a result of that decision by Sir Charles Court the Western Australian Government is faced with the prospect, unless it can introduce some way of mitigating the damage which it inherited, of deficits which will accumulate to the order of $700m or $ 1,000m by the early 1990s.

One might also add, although Mr Stone neglected to mention it, that Sir Charles Court was also directly responsible for the white elephant at Broome which is called a grain loading facility in which another $3m of public capital has been sunk not only for no return but also for absolutely no use. That facility was supposed to handle the sorghum which was to be grown on the Kamballan irrigation scheme which, of course, was going down the gurgler financially at the very time Sir Charles Court committed $3m of the State funds to it. Finally, I do share those concerns which Mr Stone expressed and I commend a careful and responsible study of those views and the implications of those views to all members of the Opposition.