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Wednesday, 4 March 1970

Mr SWARTZ (Darling Downs) (Minister for National Development) - I move:

That the Bill be now read a second time.

Last year, the Government took a number of detailed decisions on the powers and functions of the proposed Snowy Mountains Engineering Corporation. This Corporation was to be sst up to carry out on a continuing basis the engineering consulting services which the Snowy Mountains Hydro-electric Authority had been providing for some years. I now have pleasure in submitting to the House a Bill to give effect to these decisions. Construction of the Snowy Mountains scheme will be completed in 4 years time. As

I feel there is a danger of our taking the scheme for granted, 1 propose to spend a little time in drawing the attention of the House to the great effort which has been entailed in reaching this situation and the benefits flowing therefrom.

Less than a year ago the Jindabyne pumping station was officially opened and this completed the work of diverting the Upper Snowy waters to the west of the Great Dividing Range. The huge Murray power stations were completed several months ago and are now producing electricity from these diverted waters. We have now spent over $700m on the scheme and some $100m will be required to complete it and the last and largest .of all the projects, namely the Talbingo Dam, its power station and all its appurtenant works, lt has taken 20 years to reach this stage in the project. In the initial years, expenditure on the scheme was small but this Parliament gave its full financial support and as a result expenditure reached major proportions. Since 19S6 annual expenditure has never been less than $30m. In fact it has generally exceeded $40m, and in 1960 reached $56.5m. By any yardstick this is sustained massive support on an unprecedented scale.

The result in physical terms has been tha construction of a scheme which both in concept and execution has received world acclaim. The power stations have supplied valuable peak load power to the New Sorb Wales and Victorian systems to the benefit of the industries and domestic consumers of those States. The electricity has been provided at costs which are low for a peak load scheme. In the last financial year the charge for power was $14 per kilowatt and for energy lc per kilowatt hour. The facility with which the hydro stations can be brought on or off line together with the interconnection provided between the New South Wales and Victorian systems has enabled those States to make considerable savings in the quantity of reserve plant they would otherwise have had to maintain.

Apart from electricity the scheme has by the diversion and regulation of the headwaters of the streams in the Snowy Mountains area provided valuable additional water for irrigation in the arid western plains. No charge is made by the Snowy scheme for this water. In the Mumimbidgee Valley the additional supplies will enable the virtual doubling of the area under irrigation. In the Murray Valley thousands of acres of additional land are being irrigated and existing irrigation schemes now have more water and are worked more intensively. The scheme has provided greater security of supplies of water to the Mumimbidgee and Murray irrigation areas. This was demonstrated dramatically during the recent record drought when the scheme was called upon to make special additional irrigation releases. The releases made towards the end of 1968 irrigation season when the Hume and Burrinjuck reservoirs were empty were of critical importance in saving irrigated crops and sustaining production.

None of these physical results (which I have necessarily indicated so briefly) have come about by accident or by the adoption of ad hoc measures. They have arisen first from the massive financial support I mentioned earlier and secondly the scientific manner in which the project has been tackled. The scheme is unique in Australia's history both in its size and in its 25-year construction time. This required the setting up of highly expert groups in the form of investigation, design, scientific services and contract supervision staffs. No other project in Australia has been, or is likely to be, big enough to support the cost of the specialist staffs which the Snowy scheme needed.

These staffs have more than paid their way in effecting major savings in the cost of the works. In recent years they have been in a position to provide similar valuable services towards the problems of major engineering projects in Australia and overseas. .Fees from such services already amount to $3m a year. It is this most important component of the Snowy which we propose to retain. The specialist staffs will form the basis of the engineering consulting Corporation.

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. The truth is however that there is no other scheme in Australia of the same size and homogeneity as the Snowy. The Snowy has 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. The Snowy can however provide valuable services in investigation and design work to the States which they have not geared themselves to undertake. Additional technical assistance will also be available to supervise major contracts on nonrepetitive jobs which form difficult peaks in State works programmes.

On the other hand we are conscious of the growing importance of the services of local private engineering consulting . organisations, lt is not the Government's intention to set up an organisation which will compete directly in all fields with Australian engineering consultants. We consider that most of the jobs the Snowy will undertake will be those which up to now have been done by foreign consultants or will be in fields not adequately served at present by Australian consultants.

There is a further and very important field, namely overseas work. Already the Snowy has established a favourable reputation in South East Asia in the planning and construction of works and the training of local personnel in the operation and maintenance of works equipment. For the most part these activities have been financed by aid funds provided by Australia. In addition, the Snowy is registered with the relevant United Nations agencies and the Asian Development Bank for consultancy work.

As a result of the status it has already attained, I have no doubt that it will continue to attract a considerable volume of work overseas. We can look forward therefore to the Snowy acting not only as an implementer of some aspects of our foreign policy but also as a saver and an earner of foreign exchange. Foreign exchange earnings flow not only from consultancy fees but often from consultants specifying goods and equipment available from their own countries. These activities will not only benefit the Snowy and Australian industry generally; they will also benefit Australian private consultants. For example, the Snowy recently undertook the investigation, design and construction of the Sandakan-Ranau Road in Sabah. It has sublet the work on the design and construction of seven bridges on the road to an Australian engineering consultant. This policy will continue and will enable Australian consultants who are to some extent unknown overseas to increase in status and become established in new areas.

To give effect to the policy considerations I have outlined, the Bill provides that the Snowy may carry out a broad range of consultative activities in Australia and its Territories in a number of engineering fields. Within these fields it will not be permitted to act as a constructing authority in its own right, as it has in the Snowy area. It will investigate and design engineering works and supervise or give advice on contracts entered into . by its clients. The principal engineering fields in which it will operate may be broadly described as those relating to the development of water and power resources and for underground works.

Apart from work for the Commonwealth it is expected that the Snowy will continue to do a lot of work for State governments and their instrumentalities. It is expected also that it will continue to work for private organisations, such as the large mining companies. In work for private organisations, however, it will only be able to act when commissioned by private consultants. There is some doubt that the Commonwealth can effectively empower the Snowy to do work in the States and accordingly the State governments have been invited to introduce legislation matching that of the Commonwealth. It would be contrary to the public interest to stop the Snowy's current activities in the States until the State parliaments have passed enabling legislation. Such work will accordingly be allowed to continue to completion. I will also authorise the Snowy undertaking new work in the States conditional upon the relevant Premiers giving an undertaking to introduce matching legislation as soon as possible.

So far as overseas work is concerned, the Snowy will be authorised to work in a somewhat wider field. It will be able to act as a constructing authority and supervise construction of projects in the fullest sense of this term. The categories of projects it may undertake will be those in which it will engage in Australia, plus works of a type previously undertaken by the Snowy and such additional types as I consider to be appropriate to its specific skills. We would also expect the Snowy to continue to use and collaborate with Australian consultants in appropriate circumstances.

It will be necessary for the Snowy to obtain my approval before undertaking any job. In this connection, I shall have available the advice of a consultative committee which is to be formed. The Committee will advise me on whether it would be appropriate for the Snowy to accept particular commissions. For works within Australia, the committee will comprise four persons, two of whom will be appointed from private engineering sources: for work outside Australia a further two persons will be added.

The Corporation will be similar in form to the Snowy Mountains Hydro-electric Authority in that it will be headed by a corporation sole with two statutorily appointed assistants. It will operate as a commercial organisation, will pay Commonwealth income tax and be expected to make a reasonable return on its capital.

Detailed provisions of the Bill deal with the appointment of staff, the preservation of rights of staff taken over from the Authority and machinery for the transitional problems of the new organisation. The terms and conditions of employment of Corporation officers will be determined by the Corporation subject to the approval of the Public Service Board. I shall have power to determine the total number of staff.

So much for the framework of the present measure. I should, however, explain that with the setting up of the Corporation there will be three organisations acting in the Snowy area. First, there will be the Authority, which still has some 4 years of major work ahead to complete the scheme. After its completion, certain continuing functions need to be carried out in accordance with the terms of the Snowy Mountains Agreement, but they will be handled by a small number of officers. Secondly, there will be the body which is the subject of this Bill, namely the Snowy Mountains Engineering Corporation. As far ahead as we can see it will be centred in Cooma to enable full use to be made of existing specialist facilities. Finally, there will be the Snowy Mountains Council, which is responsible for the operation and maintenance of the completed works of the Snowy Mountains Scheme. This organisation was set up under the Snowy Mountains Agreement and has been functioning for some 10 years. The Government plans to provide it with funds and staff on a more self-contained and formal basis than exists at present, and in due course this will be the subject of a separate Bill. I commend the Bill to the House.

Debate (on motion by Mr Stewart) adjourned.

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