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Wednesday, 11 September 1985
Page: 434


Senator SIDDONS(11.47) —On behalf of the Australian Democrats, I support the Snowy Mountains Engineering Corporation Amendment Bill 1985. I do so with a great deal of pride. The Opposition has made it clear that it will oppose this piece of legislation. Therefore, without the Democrats' support, this legislation will not pass through the Parliament. I am proud to be able to support the legislation because over a large number of years I have had fairly close association with the Snowy Mountains Authority, or SMEC as it is now affectionately known around the world. During the 1960s I had occasion to visit the construction site in the Snowy Mountains when a virtual United Nations of top engineers gathered together in the construction of that mighty project, as the time the largest engineering feat in the world.


Senator Parer —That is in the past, Senator.


Senator SIDDONS —I am coming to the future. At that time, as an Australian, I was proud of the way an Australian authority had been able to gather together the engineering talents of such a diverse group of people and produce an engineering feat of world standing, indeed one that led the world. It produced the scheme on time and on budget, thus taming and preserving our precious water resources. Many an evening I would sit with the engineers on the Snowy Mountains project and discuss with them what would happen when the project was finished. Those engineers comprised some of the leading people in their profession from various countries around the world. They were wondering about their future when the project was completed. They wondered whether the government would see the benefits of what had been achieved during the 1960s and turn that great band of expertise to engineering projects around Australia-water projects aimed at taming our rivers and turning them inland. There were so many things that needed to be done in Australia. There was a hope at that time that the Snowy Mountains Authority would move into this area and get something done in our large continent. Of course, that did not happen. The future of the Snowy Mountains Authority became a political football. It was tossed around by politicians from the various parties. In fact, very little was done. But the Authority did manage to retain at least a nucleus of expertise.

In 1970 the Bill which set up the present Corporation was passed. Its record from 1970 to the present is amazing. There is no other word for it. It has undertaken 1,100 projects in 35 countries. Those of us who travel around Asia know that right now SMEC is supervising the construction in Malaysia of a very large dam which it designed. It is involved in engineering works in Burma and in other countries in South East Asia. Its reputation as an Australian engineering firm is second to none.

We have heard a lot from the Opposition about the fact that the Corporation has suffered losses over the last two years. There is no enterprise that does not come up against hard times. There is no doubt that civil engineering has been going through a very serious recession, not only in Australia but around the world. When losses started to occur two years ago, SMEC management took immediate steps. It reduced the number of employees in the organisation from about 600 to 387. There is no doubt, from information that has been given to me, that the organisation can look forward to and budget for a period of quite spectacular growth. I think that this organisation has amazing potential.

We have heard a lot about the fact that it has an unfair organisational advantage over its opposition. The fact is that since 1970 SMEC has paid $40.7m, in current values into government revenue in the form of dividends. It has been an extremely profitable enterprise with a very good record. That has been achieved essentially by a small band of engineers with virtually no resources behind them. Admittedly, it has had the advantage of government funding. But it is essentially an organisation which is as good as the people involved in it. This small band of engineers has been able successfully to conclude projects around the world and at the same time pay $40.7m into government revenue in the form of dividends. It is a great achievement.


Senator Parer —How much of that is foreign aid?


Senator SIDDONS —It seems to me that it is very important for Australia to have an engineering firm that can seek out projects in the highly competitive international field, quote for them and undertake their construction. SMEC is doing that. It is doing so essentially without any direct government assistance. Our foreign aid projects, for instance, are not tied to Australian enterprises. SMEC quotes for jobs in other countries on an equal basis against international competition, wins the contract and successfully conducts the work. I take the opportunity to pay tribute to SMEC's very proud record and to the engineers who have managed the enterprise over the years and who have made a very valuable contribution to civil engineering work in this country.

The Opposition has stated that such a company should be privatised, that the capital should be sold off to the employees and that there should be a profit motive. At present there are 300-odd employees. I believe it is nonsense to suggest that those few people would have the resources to acquire the capital that is necessary to undertake major civil engineering projects. The thing that is needed is access to large amounts of capital for short periods. It is very unlikely that the 300-odd civil engineers, who are currently employed by SMEC and whose whole career has been directed towards achievement, not towards making money, would have anything like the resources required to take over the company.


Senator Button —Some people do not think that those things are different; they think that making money is the only achievement.


Senator MacGibbon —I think the argument is running at your level, Senator Button. You will be able to follow it if it keeps on this way.


Senator SIDDONS —When I move about amongst bands of dedicated engineers-there are such people in this country, both civil and production engineers-whose concern is to do a job well, and then I see the multi millions of dollars made tax free by speculators on the stock exchange, the difference is quite amazing. There are still people in this country-the people involved in SMEC are a good example-who are prepared to devote their lives to achieving a worthwhile end, to using their technical expertise as best they can and to being paid a reasonable wage for doing so. I think that, when a Bill comes before the Senate which seeks to reorganise such a company's structure so that it can compete more fairly with other construction and consulting firms in Australia, it is not unreasonable for us to pay tribute to the job that has already been done.

SMEC has taken on projects overseas in association with engineering firms which are privately owned in Australia. I refer to the Leighton and John Holland companies, and so forth. It is laid down in the company's guidelines that it should seek to co-operate with other engineering firms in the undertaking of large projects. It has done so. It is not seeking to compete with existing privately owned firms in Australia. It is seeking to co-operate with them. This Bill seeks to structure the authority in such a way that it can do so more readily.

The Democrats will support the legislation in its current form. We will not seek to move any amendments to it. We hope that this legislation, which undoubtedly has been drafted in consultation with the management of SMEC, will give it the opportunity to reach the great potential that the organisation undoubtedly has.