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Wednesday, 24 November 1999
Page: 12470

Mr ENTSCH (10:01 AM) —I move:

That the bill be now read a second time.

This bill repeals the Gladstone Power Station Agreement Act 1970. The act established the basis for the repayment of an $183 million 1970 Commonwealth loan to the Queensland government to help finance the construction of Gladstone power station. The act provided for biannual repayments until the loan was repaid in 2009.

In March 1994 a one-off payment to extinguish the loan was made under conditions which were agreed by the Prime Minister, the Commonwealth Treasurer and Queensland Premier of the time. The payment in the sum of $59,102,831.85 represented the difference between the outstanding balance and the net present value of the loan.

Technically, however, the payment by the Queensland government did not formally extinguish its obligations. The Commonwealth therefore treated this payment as an advance payment made on account of instalments of principal and interest due until 15 July 1998. After this date, it was agreed the Minister for Finance and Administration would be requested to waive, under the Audit Act 1901, Queensland's formal obligations under the loan agreement as they fell due.

Subsequently, the Audit Act has been replaced by the Financial Management and Accountability Act 1997. Section 34 allows for the prospective waiver of debts. On 13 July 1998, the Minister for Finance and Administration approved the waiver of the $75 million outstanding as at 15 July 1998.

Accordingly, all legal obligations under the act have now been extinguished and this act is being repealed in line with the government's commitment to remove inactive legislation.

I commend this bill and present the explanatory memorandum.

Debate (on motion by Mr Horne) adjourned.