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Re: possible policy responses to resource development in the '80's



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WORKING PAPER

RE POSSIBLE POLICY RESPONSES TO RESOURCE DEVELOPMENT

IN THE '80's.

STEWART WEST, M.H.R.

Shadow Minister Environment an d Conservation.

ECONOMIC 1.

Dimensions of the new Boom 4.

Future Economic Problems 6.

Employment 9.

ENERGY AND ALUMINIUM 12.

ENVIRONMENTAL 18.

Aluminium Industry - Environmental Problems 27.

South West Tasm an ia 31.

CONCLUSION 35.

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ECONOMIC

The size of the proposed resources development boom has

important implications for Federal Labor Policy.

The Department of Industry and Commerce survey divides

proposed projects into four stages :-* Committed

* Final feasibility

* Preliminary studies

* Possible studies.

Lynch's statements alleging $29. billion of capital

expenditure for private resource development relates to

the committed and final feasibility sections of the survey.

This creates a need for urgent Policy clarification.

Federal responsibilities include the level of future capital

inflow, Loan Council approvals for State borrowings to provide

public infrastructure, probable inflationary effects, rising

interest rates and wages, shortage of skilled labour, future

export earnings - currency revaluation, tariff policy and

effect on total employment, company and resources rent

taxation, foreign investment levels, export licences, the

effects on the environment and Aboriginal Land Rights.

These are Federal matters, yet the States increasingly demand

the right to issue exploration licences, approve development

projects and determine environmental protection standards in

isolation from the total effect on Federal economic

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management. -

In .the process the States are certainly competing

against each other to attract capital by offering concessions,

particularly in their prices for provision of energy.

They do not exhibit that they have the necessary economic

expertise to justify their demand for such wide powers.

For example in one week one State Government has complained

at refusals of Loan Council approvals, attacked rises in

interest rates, and blasted cuts in public housing finance

without any apparent understanding of the economic connections

between the three areas.

Our concern is shared by such diverse bodies as the

Australian Industries Development Association, sections of

the media, such as the Financial Review, Age, and Sydney Morning

Herald, and even Treasury itself.

01

As the Financial Review of December 9th last says :

"State Governments are notoriously incompetent at making the kind of judgments required ...... . . the paradox of Australian economic policy in the energy area is how to prevent the State

Governments, regardless of thei.r Party colours, squandering our resources in an excess of competitive sponsorship. This will only be achieved by the exercise of Federal powers".

Our problem is how to ensure the balanced development

of mining and minerals processing, the manufacturing sector,

and provide adequate financial allocation for social

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infrastructure, without being condemned as a "centralist"

or "Anti-Development Party".

The answer will be to conduct the debate on our own

terms rather than Frasers - to raise questions such as

how much development, how many aluminium smelters and where,

how much finance should be allocated to State infrastructure,

who shall own and control the developments, the need for

public participation and Australian equity in them, how much

tax they should pay and how to tax, what environmental

standards are required, what are the total employment

effects, and so on.

It is useful to examine the overall effects of resource

development to date.

Figures provided by the Australian Mining Industry Council

following a survey of companies responsible for 100% of

Australian bauxite, alumina, copper, lead and zinc production,

80% of iron ore and nickel, and 50% of black coal production,

show after tax profits of $421 million in 1976/77 and

$874 million in 1979/80. .(Seemingly considerably understated,

based on known profits for Utah and the coal industry).

In this period sales revenue for these areas increased from

$4.1 billion to $6.7 billion, with $3.8 billion from export

earnings. Total funds employed. were $7.75 billion of which

borrowings amounted to $3.2 billion.

In 1977 borrowings from Australian sources were 32%

and by June 1980 the Australian percentage had risen to 43%.

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This rise has contributed to upward pressure on

local interest rates.

Total employment was 64,000 in 1977 and 66,750 in 1980,

a rise of only 4.3% over the three year period in which

total sales revenue, as mentioned above, rose by 63% .

This has grim employment connotations for the resources

-boom,

Nothing more amply demonstrates the exponentially

capital intensive nature of resources development for

export purposes.

DIMENSIONS OF THE NEW BOOM

Projects in the Department of Industry and Commerce's

$29. billion committed and final feasibility bracket

(this does not include any of the Black or Brown Coal-to-Oil

or Rundle Shale Oil Developments) include :-

* $4B.for the North-West Shelf offshore natural gas project.

* $700 million for uranium mining projects.

* A massive $6.3 billion for coking and steaming coal projects in NSW and Queensland - ($3.1 billion NSW and $3.2 billion Queensland).

* $6,700 million for the aluminium industry involving bauxite mines, alumina refineries and aluminium smelters to 1990 (see Appendix A).

(1979-80 values)

The manufacturing industry does not fare nearly as well in

proposed capital expenditure, with, for instance, just

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$350 million proposed for projects committed or underway

in NSW.

The $29B. projects will require huge financial commitments

from the States for infrastructure such as power stations,

coal loaders, and new railway lines.

The special infrastructure borrowing programme approvals

through the Loan Council now stand at approximately $5 billion

(see Appendix B) - but much more public finance will

be required to service the already committed development

projects.

The Commonwealth_ has estimated that $10 billion will be

required for coal based power generation during the next

decade, including $2,6 billion for Eraring, Bayswater and

Mt. Piper in NSW, $2.9 billion for Queensland and $3.2 billion

for the Loy Yang complex in Victoria.

Also the Victoria S.E.C. is already planning yet another

"Loy Yang" of 4,000 megawatts costing a further $3.5 billion.

A survey by the NSW Department of Development and

Decentralisation lists $4.3 billion worth of planned State

expenditure in coal mining, electricity generation, rail

electrification and coal loader facilities during the next

seven years (see Appendix C ). Of this only $210

million has been allocated for rail electrification on

provincial commuter lines (Gosford to Newcastle and Waterfall

to Port Kembla).

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FUTURE ECONOMIC PROBLEMS

It is obvious that such a huge bill for capital expenditure

by both private industry and the States, to be raised both

within Australia and overseas, will create National economic

problems necessitating the use of Federal powers if any

"resources boom" is to be controlled by a Federal Labor

Government to achieve the best results for the Australian

people.

From earlier quoted figures there could be $45billion to

$50 billion combined capital investment by both private

industry and State Authorities in the next decade for resources

development.

If 50% of this comes from overseas borrowings there could be

increased capital inflow of $25 billion with $25 billion being

raised within Australia,

Already the pressure on local interest rates has commenced

and with the State instrumentalities offering approximately

13,5% as against Bank rates of 9-11.5%, interest rates must

rise further.

The Loan Programmes of Local Municipal Councils are now being

squeezed to allow room for S.E.C. borrowing. For instance,

Wollongong City Council's Loan Programme has been cut by

$1.5 million this financial year, meaning that at least 5% of

an already excessive 1981 rate increase resulted from this

reduction of borrowing capacity.

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This is the story for Local Government throughout NSW in 1981 .

The most objectionable social feature of the Transnat i ona.l -States-Commonwealth pre-occupation with resource development has

been the total lack of commitment to social infrastructure f

such as housing, public tr ansport and local government facilities

in the affected localities.

Net payments to the States for public housing have fallen in

real terms, after consideration of repayments, from $515 million

in 1974 to $76 million this financial year.

Already rents have soared to $130 per week for a three bedroomed

house in Gladstone in Queensland from $50 six months ago, and

to $120 a week in the La Trobe Valley in Victoria.

A similar problem will soon exist in the Hunter Valley in NSW

because there is no large Housing Commission Programme nor

any special Federal attempt to subsidise private housing

construction.

The Hunter Development Board has warned that "a housing

shortage of unprecedented scale is now emerging".

The NSW State Planning and Environment Commission and Hunter

Development Board estimate a 'niddle level projection" of

6,800 required new units by 1986, and an "upper level

projection" of 17,000 required new units.

The Queensland Government request for $120 million by

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way of Federal Loans for local road works, water supply,

sewerage and drainage, and other works in the Gladstone

area has been refused in direct contrast to the endorsement

of Loan Council funds for power stations and coal loaders.

Also, there will be a huge surge in export

earnings by highly capital intensive industries. By 1985

coal exports, liquefied gas, and aluminium will each earn

an extra $2 billion (total $6 billion), and uranium an extra

$500 million if exports proceed.

There willundoubtedly be a revaluation of the Australian

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dollar, or increased inflation, unless there is Federal action to

either, encourage capital outflow in the form of repatriation

of profits and repayments of foreign borrowings, and/or

significant reductions in tariffs to encourage an increased

flow of imports of manufactured goods concurrent with the

increase in export earnings. None of these "choices" are

desirable options.

There is now belated recognition that the Country Party's

veto on currency revaluation in the face of the excessive

capital inflow and export earnings of the mining boom prior

to 1972, provided the base for the inflationary take-off of

1973-74.

In Government our subsequent attempts at corrective action

via revaluation and 25% tariff cuts simply exacerbated

unemployment through jobs lost in manufacturing.

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The outlook for primary exportindustries, any

emerging export-based manufacturing industries, and import-competing manufacturing industries will be very poor, in the

absence of Federal economic measures to control both the

transnational companies and the States.

EMPLOYMENT

The question is how many jobs are created from the total

effect of the resources boom, and how many may be lost as

a result of it in other industries.

NSW Premier Neville Wran has argued there are 10,000 jobs

in the proposed expansion of the aluminium industry in the

Hunter Valley, approximately 2,200 permanent jobs in the

smelters and the rest in mines, power stations and service

employment..

Nationally, if we assimie there are 6,000 permanent jobs in

aluminium smelting as a result of the proposed current

developments on a 4:1 job creation ratio, we can expect 30,000

jobs to be created altogether for a total capital expenditure

(private and State) of over $8 billion, i.e., $270,000 per

job - or if you consider the 6,0(X) permanent jobs only, this

amounts to over $1.2 million per job to create annual export

earnings of $2. billion.

The prime question is how many jobs in labour-intensive

manufacturing industry can be potentially destroyed by

transforming a percentage of $2. billion of extra export

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earning capacity into imports through a revalued dollar

and or lower tariffs.

If a hypothetical $1 billion, that is 500 of the earnings,

came back in increased exports we could directly lose

60,000 jobs in other more labour intensive industries - a

nett loss of 30,000 jobs.

Or if one uses the 4:1 ratio used in assessing job

creation benefits to calculate the total of jobs

lost - we could add another possible 120,000 in jobs lost to this

scenario.

No serious work has been undertaken in Australia to predict

these outcomes, such as the extent of revaluation in a

situation of stable tariffs - or the extent to which

revaluation and or reduced tariffs will increase unemployment,

or the increased inflation that would occur if no action

was taken to either revalue the dollar or reduce tariffs.

Unless Federal actions are undertaken an unbalanced unm anaged

resources boom will turn sour o n a future Labor Federal

Government.

The end result could well be shortages of skilled labour,

pressure for greatly increased real wages and deplorable social

amenities for workers in the resources boom areas, whilst

other industries, particularly secondary and manufacturing,

would experience theseeffects without the gains made from

export earnings, with these latter industries obviously less

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able to afford wage increases as a result of increased pressure

from imports. There may be increased industrial disputation

in manufacturing as Unions struggle for wage parity.

The result would either be a wide disparity in wages

and conditions available to Australi an workers in the capital

intensive resource based industries as against those in

the manufacturing and service sectors, or the closure o f

many industrial firms through dual import and wage pressure.

As the Financial Review argues :

"There is a need to resurrect the old theme of 'balanced development' with its implicit imperatives about establishing priorities.

If we simply climb on to the back of the international energy crisis and decide that Australia's coal and aluminium is the door to Eldorado, we may well make somebody rich .. maybe some Australians will become very rich.

But we could well end up as a poor little England where we have a booming resource sector and an economic blight through the industrial community. ,"

12.

1.: Nf:RGY AND ALUMINIUM

Australia currently produces 275,000 tonnes of alumin.ilnn

annually from three smelters owned by

Comalco, Tasmania

Alcoa, Port Henry, Victoria,

Alcan, Kurri Kurri, NSW.

By 1985-86 it is proposed to raise production by 1.2 million

tonnes through these proposed aluminium smelting plants :-

UEENSLAND TONNES

Comalco Gladstone 200,000

Alcan Gladstone or Bundanberg 300,000

NEW SOUTH WALES

(Hunter Valley)

Alcan Kurri Kurri 135,000

Pechiney Tomago 220,000

Alumax Lochinvar 236,000

VICTORIA

Alcoa Portland 120,000

1,211,000

By 1989 it is proposed to establish further smelting

capacity of 640,000 tonnes by a 400,000 tonne expansion

to the Alcoa Portland facility and a new smelter in W.A.,

possibly at Bunbury, currently under investigation by 2 groups,

Alcoa and a consortium comprising Shell, C.S.R,, and Reynolds.

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The reasons why the transnational aluminium companies wish

to establish in Australia are three-fold :-1. The States are competing amongst themselves to offer

cheap power.

2. Pollution controls are less stringent than those in the

U.S., Japan or Europe.

3. They hope to avoid the imposition of export taxes.

We should avoid creating the impression that we are totally

against aluminium smelting per se.

After all, as the price of aluminium, alumina and bauxite

is $1,550 per tonne, $217, and $12 respectively, export of

aluminium is 3.5 times more valuable than the equivalent amount

of export alumina and 30 times more valuable than the

equivalent amount of bauxite.

However, the increase of aluminium production solely for

export of 650% in eight years involving $8.5 billion of

private and public expenditure and an estimated $2.8 billion

of export earnings per year (1980 values) is too much.

Balanced development is the key.

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As stated, the States' power stations construction programmes

even just to 1985 are enormous

STATE COST ($billion) MEGAWATTS

Queensland $2.9 5,150

Victoria

(Loy Yong A Ei B) $3.2 4,000

NSW $2.6 6,600

TOTAL $8.7 15,750

From this extra capacity NSW will allocate 1,000 megawatts

or 15%,

• Victoria 900 megawatts or 22.5% and

Queensland 1,320 megawatts or 26%

• for aluminium smelting by 1987-88.

The total eastern States extra capacity for aluminium smelting

will thus be 3,220 megawatts or 20.50 of 15,750 megawatts.

Competition amongst the States has-created a

pricing bonanza for the smelting companies.

Smelters will be subsidised by possibly the lowest power

prices per kilowatt hour in the world.

Subsidies are worked in two ways, the difference in cost of

coal input and export prices and the difference between the

rate of return in investment of power stations and that

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available in otherrareas of investment.

Cost of production of electricity ranges through:-Europe 4-5 cents per kilowatt hour

Japan 8 cents '° it

Australia 1.7 cents "

The new Alumax plant in South Carolina is designed to

produce 197,000 tonnes of aluminium a year and purchases its

power at the local standard industrial rate of 2.1 cents

(Australian) per kilowatt hour.

There is certainly no more power available at these rates

in the US.

In Australia State prices to aluminium companies will range from :-* 1.3 cents per kilowatt hour in NSW

* 1.8 cents per kilowatt hour in Victoria, and

* .9 cents per kilowatt hour in Queensland.

In 1980 a major County Council in NSW purchased electricity

at 2.5 cents per kilowatt hour and reticulated at :-* 3.7 cents for domestic users

* 3 cents for light industrial

* 2.6 cents for public lighting and

* 2 .2 cents for the lowest cont inuous industrial consumer.

Some major industrial consumers buy direct from the State

Electricity Commission, e.g., A.:[ E S. Port Kembla, purchases

direct and pays 2.1 cents per kilowatt hour.

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In Wollongong- Port Kembla 1981 power costs to consumers will

rise by 12.5% and then quarterly to 17%.

In Victoria domestic consumers currently pay 4 cents per

kilowatt hour.

It takes approximately 14,000 kilowatt hours of electricity to

produce one tonne of aluminium. That is, at 1.3 cents per

kilowatt hour there is $182 worth of electricity in a tonne of

aluminium, or approximately $109 million in power costs for

the 600,000 tonnes per annum of aluminium production proposed

in the Hunter Valley.

If the lowest general industrial rate were charged in

Australia, i.e., 2.1 cents per kilowatt hour, then 600,000

tonnes would require $176.4 million worth of electricity,

that is the State Electricity Commission would reap an extra

$67.2 million a year in 1980 values for some 30 years ($2 billion).

Further, NSW power involves coal consumption by the State

Electricity Commission at $14. per tonne. Steaming coal export

prices range from $30-$35 per tonne, and could shortly rocket to $50.

Total coal consumption to provide power for the aluminium smelters

in NSW will be approximately 4 million tonnes per annum.

Taking the lower figure of $30 per tonne steaming coal, that is

a subsidy of $16. per tonne for the SEC, there is a further $64.

million per annum subsidy involved.

We should not under any circumstances however advocate that

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coal consumed by the State Electricity Commissions should be paid

for at export parity prices.

However, it could be fairly questioned whether coal at this

price should be consumed in providing power for aluminium

smelters to the extent envisaged.

The SEC provides for its capital expenditure on the basis of

50% from internal revenues and 50% from approved borrowing

programmes.

But in the final analysis, total capital expenditure, plus the

interest repayments, are all paid by the total of consumers ,

There is little doubt that State rivalries motivated by

an understandable but mistaken belief that employment

problems will be solved by excessive minerals processing

will involve subsidies by the States and the Commonwealth

and a transfer of financial resources from other consumers

to smelting companies.,

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ENVIRONMENTAL

All major projects have a significant effect on the environment,

whether directly, on site, or indirectly via increased use of

resources, e.g., electricity or timber.

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The new development boom will put increased pressures on

the environment. Yet the companies involved are calling for less

stringent environmental standards both in terms of the assessment

and planning of projects and the levels of pollutants allowed

to be released into the environment.

The States, in their enthusiasm for projects to go ahead, are

sometimes inadequate in their scrutiny., Queensland and Western

Australia are examples of this. NSW and Victoria are the

only Governments besides the Commonwealth with comprehensive

Environmental Legislation. They can be played off by developers

into lowering their standards. Queensland with its atrocious standards

could develop into a Pollution Haven.

In 1978 Queensland amended the State Planning and Development Act

to place assessment of projects under the control of the

proponent Department, e.g., Mines, instead of the Co-ordinator

Services Department and removed all reference to environment from

the Act. Under the present system, an E.I.S. if called for

need not be made public and the proponent department judges the

reports. Without Commonwealth pressure and legislation

environmental assessment of major projects in Queensland would be

little more than a rubber stamp.

19.

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When the States give the 'go ahead' to a project, 'subject

to environmental consideration', such action can result in

major environmental problems discovered after the Government

is committed to a project. Costly settlements, alternatives

or compromises of environmental standards are then needed,

all because environmental assessment was ad hoc, and not part

of the planning process..

Another problem is that Environmental Impact Statements

produced by the companies are on an individual project basis,

and there has been no State controlled regional inquiry into

the economic and environmental consequences to the overall

development of the region as a whole. (Re coal mines, power

stations, aluminium smelters, housing requirements and transport).

Such difficulties have surfaced, for instance, in the Hunter

Valley of NSW where the State Pollution Control Commission, and

the National Parks and Wildlife Service have both written to

their Minister, pointing out these problems.

In the words of the National Parks and Wildlife Service

in a response to Cabinet Minute 1256 on Infrastructure

Planning for the Hunter Valley :--"The magnitude and time-scale of the projected expansion is such that the potential for adverse environmental onmental impact within the Hunter Valley will transcend anything previously experienced in New South Wales and perhaps even in Australia. Unless the development is planned and controlled with this aspect constantly in mind the potential for adverse effects and adverse public

reaction to the expansion could also transcend anything previously experienced".

The NSW State Pollution Control Commission has suggested the

setting up of a Hunter Valley Environmental Research

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Committee "to facilitate development by the SPCC of

pollution control and environmental protection strategies

related to industrial development within the Hunter River

Valley".

It suggests membership comprise participants from all

relevant departments and services including the

Planning and Environment Commission, Departments of

Agriculture, Mineral Resources, and Industrial Development,

the NSW Electricity Commission, the NSW Energy Authority and

various environmental statutory bodies.

The State Minister's response to these suggestions was

to request the Premier to undertake a thorough

investigation of the Environmental constraints throughout

the Hunter Valley region by way of :-* "a public inquiry or

* by a thorough investigation carried out by the Department

of Planning and Environment",

Unfortunately calls for just such a public inquiry have been

resisted in NSW. At the December 1980 State Council meeting the

State Branch's Environmental Committee Report advocating such.

an inquiry was withdrawn and replaced with a motion supporting

the total proposed power and smelting developments, providing

"That there was no charge upon the public and that vigorous

environmental conditions were adopted".

There is a pressing need for regional environmental

impact assessments to be produced via either public

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or at least Government sponsored inquiries in regions

such as Gladstone, Queensland; Hunter Valley, NSW;

Portland Victoria; and the Darling Ranges, W.A.

It seems such inquiries will only be instigated through

Commonwealth action.

Under the Federal Environment Protection (Impact of Proposals)

Act 1974 the action Minister, a person on behalf of same, or

the authority responsible for a proposed action as defined by

Section 5 is supposed to send the Minister for Environment

information on the action for the purpose of determining

whether an E.I.S. will be needed. Both the social and natural

environment are considered.

If an E.I.S. is considered necessary by the Minister for

Environment, the proponent is informed as soon as possible.

The E,I.S. may be prepared in the form of a draft if required

by the Minister for the Environment. The Minister also

determines whether the draft E.I.S. shall be made public, if

so, a period of not less than 28 days is set aside for

public comments. Need for a public inquiry is then decided

on by the Minister.

The only two such public inquiries were set up by the

Whitlam Labor Government, that is the Ranger Inquiry into

Uranium Mining, and the Inquiry into Sand Mining on Fraser

Island. No Environmental Inquiries have been initiated

under the Act since 1975.

22.

Constitutionally, the power of the Commonwealth in Environmental

Protection is restricted to :-

* Areas under direct control of the Commonwealth,

* Federal works and activities,

* Development which the States have referred to the Commonwealth,

and

* Matters considered by the Commonwealth to be of national

significance, such as the Great Barrier Reef and South

West Tasmania, I

* Where the product is destined for export,

* Where the Commonwealth is involved in a project through the

granting of finance, either by Specific Purpose Grants

or the Loan Council.

So the Commonwealth has considerable powers to set up

Federal Inquiries, but to implement any recommendations arising

from such Federal Inquiries it must rely on its

constitutional powers in other areas such as Loan Council

approval for borrowed funds, the granting or withholding of

export licences (as in the case of Sand Mining on Fraser Island),

and perhaps taxation and Foreign Investment regulatory powers.

The present Government has entered into discussions with all

States in an effort to reduce the possibility of so called

duplication or conflict. Arrangements have been reached with

Victoria, South Australia, Western Australia and Tasmania and

will soon be reached with New South Wales.

23.

The alleged objectives of these arrangements are to:-* co-ordinate the environmental assessment of proposals which

require both Commonwealth and State approval;

* avoid duplication of effort both by proponents and

Government agencies;

* ensure that a single environmental impact assessment procedure

is required;

* make environmental assessments at the earliest feasible stage;

* gain the benefit of expert advice and local knowledge in the

States;

* leave purely local issues to be dealt with by State Governments;

and

* retain Commonwealth Government involvement in assessment of

those proposals that raise significant environmental concerns

and in this respect clarify those instances when an

Environmental Impact Study would be obtained by the State

Government and when it would be obtained by the Commonwealth

Government.

However, in practice, the present Government strategy is to

simply defer to the wishes of the States,

SOME ENVIRONMENTAL PROBLEMS RELATED TO RESOURCES DEVELOPMENT.

BAUXITE MINING

* Clearing of land and revegetation : In W.A. Darling Ranges.

Jarrah_Forests are being cleared or contaminated with dieback

disease and reafforestation is not proceeding well.

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* Salinity problems in W.A. Darling Ranges could be aggravated

by bauxite mining expanding into Western Range.

ALUMINA REFINERIES

* Caustic Red, Mud wastes from refineries can pollute ground

water and streams.

* Alumina dust problem, is especially noticeable in Gladstone,

* Use of water in .W.A. Darling Range may compete with other use.

Air pollution from stacks SO 2 and NO2.

* W.A. refinery (Alcoa) uses 60% of W.A. natural gas while

others suffer shortages..

ALUMINIUM SMELTERS

* Fluoride pollution affects plants in area, essential that

siting is properly considered.

* Air pollution - SO2 . - Sulphur Dioxide.

* Waste water contains fluoride and cyanides.

* Needs high electricity input, environmental effects .of power

generation, e.g., flooding Franklin in Tasmania; air pollution

and water shortages.

COAL MINING

* Land subsidence especially under highways, parks and dams.

* Restoration problems relating to removal and replacement of

over burden in open cut mines.

* Drilling and blasting of overburden and coal.

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* ' Stockpiling and transport - particularly road.

• i

* Pollution of streams and lakes from mine drainage.

COAL LIQUEFACTION

* Problems of coal mining.

Huge quantities of water needed,

* Huge open cut mines with great problems of revegetation etc.

* Air pollution ($02 and NO2 in particular) from liquefaction

process.

* Water pollution - from liquefaction process - settling ponds etc.

POWER STATIONS -^ THERMAL COAL FIRED.

* Air pollution - SO2 and NO2.

* Thermal pollution off coastal lakes.

* General coal mining problems.

SHALE OIL

* Problems of coal liquefaction and coal mining.

* End up with more rock volume than you started with..

* Rundle will affect wetlands and fisheries of area.

* Shale oil refinery pollution.

* Air pollution of refining shale.

URANIUM

* Water pollution

* Radon gas.

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* Heavy metal pollution e.g. Rum Jungle.

* Rear end of fuel cycle.

* Proliferation and nuclear waste disposal.

• The Opposition should not be in a position of continually

calling for Federal Inquiries into this or that development.

Nevertheless, the State Governments and developers, on the

evidence, will not and cannot, instigate national public

inquiries into matters of great national economic and

environmental importance.

In effect, Queensland, Victoria, NSW "and W,A, are really saying that they must be allowed to make all the important decisions,

leaving any deleterious effects on an economic, environmental

or energy supply level for the Commonwealth to solve later.

Given these two tenets our approach should be :-

* To demand the Commonwealth use its above stated powers to

instigate and act upon inquiries into the most

important matters.

Obviously two such matters are the aluminium industry on a

national level and the importance of South West Tasmanian

Wilderness as a national asset and the future energy

requirements of Tasmania.

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ALUMINIUM INDUSTRY - ENVIRONN1ENTAL PROBLEMS

Pollution caused by the aluminium industry includes emissions

of fluoride and sulphur dioxide and contaminated water as well

as associated pollution problems from power stations and

' coal mining, in particular dust, carbon monoxide, nitrogen

oxide and sulphur dioxide emissions.

There is the inevitable noise and landscape pollution

accompanying any large scale establishment of industry,

Besides these general problems there are the specific problems

I- relating to each area as a unique habitat for native flora

and fauna.

Fluoride has traditionally been the biggest pollutant problem

associated with aluminium smelting.. It causes premature

ageing and eventual death in plants by poisoning their systems,

stunting and slowing growth. Similar problems occur in grazing

animals.

Commercial crops and cattle are threatened by smelters but

reports vary as to what degree. Sensitivity to fluoride

varies and research has not been concluded as to how this will

affect regions such as vine growing in the Hunter Valley.

Without emission controls smelters release up to 40 kg of

fluoride per tonne of aluminium, The State Pollution Control

Commission of NSW has accepted a US emission limit of 1 kg per

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•

28.

tonne which can be reached using hooding and dry scrubbing

technology.

The separate E.I.S. for Tomago and Lochinvar developments

advocate this limit and technology. However, the question

remains, "Is this figure low enough?".

The Australian Conservation Foundation points to emission

standards of 0.5 kg per tonne in Oregon, US, and argues for

the further use of secondary roof scrubbers with an efficiency

of 80% which would reduce emissions to 0.2 kg per tonne.

I YSulphur dioxide may also be a problem, particularly in

areas where power generation occurs adjacent to the smelters.

It will be produced by both the smelters and power stations.

With Eraring and Bayswater power stations in the Hunter Valley

an extra 12 million tonnes of coal will be consumed.

Excessive sulphur dioxide concentrations in the atmosphere

are probably far worse for human beings than fluoride and it

is highly toxic to plant life.

It is, responsible for extremely pungent odours and can increase

human mortality, particularly in babies and old people suffering

respiratory complaints.

Bony fluorisis had been the traditional workers health problem

suffered in aluminium smelting, but this is no longer considered

much of a problem.

29.

However, research now indicates that fluoride emissions are the

cause of respiratory problems in pot room workers.

Worse, cancer has shown to be particularly prevalent in those

who have worked in the pot room for more than 10 years, peaking fi at between 15 and 19 years exposure. Fluoride and sulphur dioxide emissions are suspected to be

the major cause, combined with carcinogenic tars.

Recent studies also indicate health problems associated with

the effect of electro-magnetic fields. Serious long term

exposure as a result of the intense electrical activity in a

pot room, can result, according to Newcastle Trade Union

research, in "shattering the dynamic state of the central

nervous system, the heart and blood vessel system and in

changing blood structure".

Finally, there is a need to establish long term parameters

for the development of our steaming coal reserves.

The NSW Minister, Mr. Hills, has said the NSW Electricity

Commission will double the State's power capacity within

seven years, that is to a total of 14,000 megawatts by

1987 involving an extra 7,000 megawatts.

In comparison, California, U.S. with 23 million people, through

its State Energy Commission intends to limit power capacity

from all sources to a 45% increase to the year 2000 with coal

fired power stations limited to an increase of 5,000 megawatts,

that is 2,000 megawatts less than NSW proposes in the next

z

30.

seven years.

In Victoria, even with the 4,000 megawatt extra capacity from

the Loy Yang complex, because of the 900 megawatts eventually

needed for Alcoa in Portland, more capacity will be required

by the late 1980's and '90's.

This means that the most viable . option for Tasmania's

future energy requirements - an undersea cable transmitting

brown coal generated electricity from Victoria to Tasmania-has been excluded by the Victorian Government and Tasmanian H,E,C.

So the State of Victoria has power for Alcoa but none for a

neighbouring State.

I -

1 31.

SOUTH WEST TASMANIA

There are compelling reasons for a Federal Inquiry into the

future of South West Tasmania; its value to the nation and

the world as a wilderness area, and the correct future power

+ sources strategy for the State.

The State Government having endorsed in July the Gordon above

Olga Rivers hydro scheme has been challenged by an H.E.C.

determined to implement its own Gordon below Franklin integrated

scheme which, if implemented would certainly destroy forever

Australia's last wild river, the Franklin.

It is incredible that the Hydro Electric Commission of Tasmania,

as a statutory authority, should be so publicly challenging

the elected Labor Government, via the conservative controlled

Upper House and its Select Committee.

The Tasmanian Government has declared the lower South West

area a National Park but still has not yet nominated the

entire South West Wilderness for inclusion on the World

Heritage List, although it is now on the National Heritage List.

The Tasmanian H.E.C. forecasts a. required power capacity by the

year 2000 of 1,650 megawatts:, an increase of 570 megawatts over

expected capacity upon completion of the Pieman River scheme.

Surprisingly, the two mentioned hydro power schemes will only

32.

produce 180 megawatts for the Gordon above Olga plus King

Rivers Scheme (Favoured by the Government) or 340 megawatts

Lot the integrated scheme proposed by the II.E.C.

Obviously, whatever the outcome of the current brawl, other

forms of power generation will be required to provide for

Tasmania's future energy requirements.

Even if every Tasmanian creek and river were dammed, new

hydro power would still not fill Tasmania's future energy needs.

/ Alternatives include thermal coal-fired power stations, possibly

. fuelled by imported steaming coal from the Hunter Valley, or

importing pure power via undersea cable from Victoria.

The initial capital costs of hydro power generation compared

with coal are enormous, although. recurrent expenditure is,

of course, almost negligible compared with the cost of coal.

For instance, capital expenditure for Eraring in the Hunter

Valley is $1 billion to provide 2,660 megawatts whilst the

integrated hydro scheme for the Gordon Franklin Rivers will

cost $1.3 billion for 340 megawatts.

Although the H.E.C. quotes a figure of 1.1 cents per kilowatt

hour as the total all up cost, including interest on capital

expenditure, for its integrated scheme, as compared with 2.1

33.

cents for power from a thermal power station using -imported.

coal, the fact is that the discrepancy in initial capital

expenditure is absolutely enormous, especially at a time

when State Loan Council borrowing programmes are blowing

out.

It appears future energy requirements may be well supplemented

by coal-fired power using NSW steaming coal carried by

hitherto empty iron ore carriers returning to W.A.

Since the much publicised deadlock between the Upper and Lower

Houses of Tasmania's Parliament we can stress the need for

a Federal Inquiry. Although this has been opposed in the

past by the Lowe Government they may now be more amenable

to the idea.

That was my impression during recent discussions with

various Tasmanian State Ministers.

Such a Federal Inquiry, under the Environment Protection

(Impact of Proposals) Act, has been recommended by the House

of Representatives Standing Committee, is part of our policy as

espoused by my predecessor, Barry Cohen, and can be justified

since

* The area is of national and world significance, is already

on the National Heritage List and should be nominated for the

World Heritage List - the Fraser Government has suggested

this already to the Tasmanian Government.

34.

* Huge Loan Council borrowings will be required for either

hydro power development.

* Long term national financial assistance may be required if the

South West area is to be saved and it is determined that

future costs in a move to thermal power should not be borne

solely by Tasmania`s. economy..

35,

CONCLUSION

SUGGESTED POLICY APPROACHES TO RESOURCE DEVELOPMEN T

AND RESOURCE ALLOCATION

Our strategy should be clear : we stand for the balanced

development of Australia's minerals and energy resources,

manufacturing and secondary industry, and the service and

public sectors., We also stand for the provision of adequate

finance for social infrastructure and must ensure that this

vital area is not crowded out by excessive capital inflow and

loan borrowing programmes for an over-inflated resources

development boom.

l,We respect State rights but should oppose irresponsible State

power in resources development, that is, the granting of

exploration licences, the approval of development applications

on the basis of inter-State competition, without responsibility

for emerging problems relating to excessive capital inflow,

export earnings, interest rates, inflationary pressures,

environmental problems, and an inadequate financial return to

both State and Commonwealth for use of non-renewable energy

resources.

2. We should use existing Federal constitutional powers

to, impose national cohesion on the resources development boom.

These powers include Loan Council approvals for State borrowings,

export control powers, taxation powers and controls over

foreign investment through the Foreign Investment Review Board.

36.

3 . In conjunction with these existing constitutional powers we should be stressing the crucial sections of Labor's Economic

Energy and Environmental Policies as outlined in Conference Policy

and as determined prior to the last Election. For instance :-(a) Tougher scrutiny of foreign investment involving F.I.R.B.

consideration of State infrastructure and energy availability

terms; the use of the A.I.D.C. to undertake equity

investments and the establishment of a Resources Development

Fund to mobilise funds from small investors.

(b) Implementation of a Resource Rent Tax, or an Aluminium Export Tax based on tonnage, if as Ken Davidson in the Age points

out - "This proves to be the only way in which the

economic benefits from Australia's cheap energy sources

can be kept for Australians rather than handed out as a

gift to foreign multinationals".

(c) Proposals for a National Fuel and Energy Commission,

Australian Hydrocarbons Corporation and a National Coal

Authority to cover all coal producing States and the

Commonwealth (an extended version of the Commonwealth-NSW

Joint Coal Board) to regulate development in the coal

mining industry.

(d) The proposal to establish a separate Department of the

Environment, the appointment of an environmental advocate

and the pledge to review and strengthen the Environment

Protection (Impact of Proposals) Act 1974 and use it,

particularly to ensure State responsibility, and cohesion

of State Legislation.

(e) Continue support for current opposition to uranium exports

and nuclear energy in Australia.

38.

8 , In both Opposition and Goverment we should urge and use

Federal influence and powers such as the Loan Council approvals to :-(i) ensure that Regional Environmental Impact Studies are

undertaken by State Governments in areas of rapid integrated

development, rather than separate studies for each

development,

(ii) ensure that State Energy Authorities provide full public

information of their pricing arrangements with the

aluminium industry.

9.. Just as we advocate on a Federal level increased public

equity through the AIDC in future resource developments,

we, should press the States using the above Federal powers

if necessary, to involve existing State instrumentalities such

as the NSW State Electricity Commission and Victorian Gas and

Fuel Corporation to take equity in future projects. There is

no justification for democratic socialist Governments to

allow their great statutory authorities to be merely the

generators of capital and providers of cheap energy for

foreign transnationals. The example already set by overseas

national oil companies in Norway, Britain and the Middle East

can be successfully pursued by State Energy Authorities, that is,

cheap power subsidies from State Instrumentalities should mean a

percentage of equity in the actual projects, such as aluminium

smelters..

10. We should continue to support Aboriginal Land Rights Policies

as determined at Federal Conference and for the recent Federal

Election (see Appendix E).

39.

11. We need to develop a just wages policy involving

maintenance of indexation and the implementation of our

Federal Conference wage policy as determined at Adelaide in

1979 (see Appendix F).

.A.

.A.

.A.

.A. LD. LO.

I.A.

1,854 1,833

400 400

1,000 1,000

1,400 1,400

40 15

100 100

641 641

800 800

600 560

100 50

360 360

2,641 2,526

N.A. 530 530

mid 1980s 750 750

1984-90 700 700

1983-89 700 700

APPENDIX A

F8 80/6113

Prepared by the Legislative Research Service to the specific request of a Member of Parliament (NOT FOR ATTRI3UTION)

TABLE 2

ESTIMATED CAPITAL COSTS OF ALUMINIUM PROJECTS ($m)

STATE PROJECT TIMING TOTAL REMAINI^

COST COST

ALUMINA REFINERIES AND BAUXITE

i) Committed or Final Feasibility Mitchell Plateau Bauxite Mine 1982-83 60 60

Wagerup Bauxite Mine and Refinery Stage 1) 1979-82 300 280

Worsley Refinery and Bauxite Mines Stage 1) 1980-83 1,000 1,000

Expansion of Pinjarra Refinery 1980-82 19 18

Gladstone Alumina Refinery Expansion N.A. 300 300

Weipa Bauxite Mine 1982-86 175 175

ii) Preliminary Studies

Worsley Refinery (Stage 2) 1984-

Mitchell Plateau Refinery and Bauxite Mine 1983-87

ALUMINIUM SMELTERS

i) Committed or Final Feasibility .S.W. Kurri Kurri Smelter Expansion Potline 2) 1979-80 .S.W. Kurri Kurri Smelter Expansion (Potline 3) 1982-83 .S.W. Farley Aluminium Smelter 1981-84

.S.W. Tomago Aluminium Smelter 1980-86

LD. Gladstone Aluminium Smelter (Stage 1) 1979-84 IC. Point Henry Smelter Expansion 1979-30

IC. Portland Aluminium Smelter (Stage 1) 1980-83

SUB-TOTAL

ii) Preliminary Studies .S.W. Unsited Aluminium Smelter .A. Urlsited Aluminium Smelter LD., Gladstone Aluminium Smelter (Stage 2)

IC. Portland Smelter (Stages 2-4)

SUB-TOTAL 2,680 2,680

F9

30/6113

• Prepared by the Legislative Research Service to the specific request of a Member of Parliament (NOT FOR ATTRIBUTION)

STATE PROJECT TIMING TOTAL REMAININ

COST COST

ALL Total Published Aluminium (Committed and Final Feasibility) 4,495 4,359 ALL Undisclosed Aluminium (Committed and Final Feasibility) 401.

TOTAL ALUMINIUM (Committed and Final Feasibility) 4,760

ALL Total Published Aluminium (Preliminary Studies 4,080 4,080 ALL Undisclosed Aluminium (PreliminaryStudies) 2,320 2,320Ir TOTAL ALUMINIUM (Preliminary Studies) 6,400 6,400

NOTE: The above disclosed figures are taken from the Department of Industry and Commerce survey. They do not include a new Alcan smelter costing $300m. which will probably be established near Bundaberg. It is possible that this project might account for part of the

undisclosed investment.

The production of aluminium also requires the generation of large amounts of electricity, in most instances from new, coal-fired power stations. It is difficult to be precise in estimating the associated investment required for the production of aluminium. The following figures have been gleaned from

numerous sources and should be regarded with some caution.

N.S.W.

As stated earlier, N.S.W. is undertaking a $2.5 billion

programme to increase electricity production. The State is accelerating its electricity generation programme by constructing

APPENDIX B

F5 80/6113

Prepared by the Legislative Research Service to the specific request of a Member of Parliament (NOT FOR ATTRIBUTION)

TABLE 1

INFRASTRUCTURE BORROWING APPROVALS AS AT NOVEMBER 1980 l-I URES SHOW TOTAL APPROVALS TO 1939-90

STATE PROJECT SUM APPROVED ACTUAL BORROWING

($m) TO JUNE 1980

Railway Electrification Projects

N.S.W. Gosford/Newcastle Rail Electrification 131 18

N.S.W. Waterfall/Port Kembla Rail Electrification 181.5

QLD. Brisbane Rail Electrification 68 8

SU3-TOTAL 380.5 26

Electricity Generation Projects

N.S.W. Eraring Power Station 264 136

N.S.W. Bayswater Power Station 135 12

N.S.W. Bayswater Extension 375

VIC. Loy Yang A Power Station 583.3 131.5

VIC. Loy Yang B Power Station 492.6 ..

QLD. Power Stations 460 76

S.A. Northern Power Station 145 10

W.A. Pilbarra Region Power Supply Integration 138.7 10

W.A. Kwinana Power Station Conversion 39.1 2.4

W.A. Additional Power Station Facilities 236.3 TAS. Hydro-electric Power 112.8 36

SUB-TOTAL 2,981.8 413.9

Coal Loaders

N.S.W. Coal Export Facilities: Port Kembla/ Balmain 122 59

QLD. Coal Export Facilities: Hay Point 106 .,

SUB-TOTAL 228 59

Other Projects

VIC. World Trade Centre 70.3 27

VIC. Wurdee Boluc Pipeline 13.1 2.6

vii. train terminal Facilities 55.9

F6

80/6113

` Prepared by the Legislative Research Service to the specific request of a Member of Parliament (NOT FOR ATTRIBUTION)

STATE PROJECT

SUM APPROVED ACTUAL 30RROWING! ($ m ) TO JUNE 1980

VIC. Portland Transmission Line 122.8 S.A. Redcliff Petrochemical Project 228 W.A. Dampier/Perth Pipeline 553.3 W.A. Worsley Rail and Water 42.6 W.A. North West Shelf Gas Infrastructure 38.6 W.A. North West Shelf-Jervoise Bay 7.1 TAS. Water Supply 40 C'WEALTH Rural Te lecommunications 70 C''4EALTH Adelaide/Crystal Brook Railway 62SUB-TOTAL 1,303.7 2.9

17^ 30

79.5

TOTAL PROJECTS 4,894 578.4

Spokesmen from State and Commonwealth Treasuries have

confirmed that for several projects, only a portion of the total

cost is represented by the borrowing approval. Although the States have made estimates of the total cost of infrastructure

projects and have provided this information, to the Loan Council, this information is treated as confidential.

Electricity generation is one area where some estimates

of total cost have been referred to publicly. The Commonwealth has reportedly estimated that almost $10 billion will be required in coal-based power generation during the next decade. The current programme in N.S.W., for example, is estimated to cost about $2.5 bil lion. Projects currently being undertaken or approved in Queensland are to cost approximately $2.87 billion.

In Victoria, the Loy Yang complex alone is estimate d to cost $2.8 billion dollars. 2 --------

2. This estimate has been revised upward by an additional $340m recently as a result of industrial problems.

' Ii

1 PP I'Th4 L GMAJOR DEVELOPMENT PROJECTS - PUBLIC SECTOR - NSW GOVERNMENTAUTHOP I T Y LO:ATICN PROJECT CAPITAL EXP. (SM) CONSTRUCTION EIF LOYMENT Pr',JEECT DES ,- i=TOTAL REMAINIto PERIOD CCNSTRUCTIU1 PRCOUCTIONCOST COSTCOA T T a)Cool MiningElectricity Myuno and 79.0 64.0 1979-1983 200 800 Two-stage de^eloonent of ..goerCommission Cooronbong ground stea..ninc cool min, of NSW Mines for suppl y c' coca to tne-(Eroring) Commission's Erarina powerstation. Stone 1 to aecompleted in March 198,with productive capacit y c=500 000 tonnes ae'r onr;L,- c:each mine; capacit y wil:rise to 1.25 milior tonne:per annur-...! oer mine` orcompletion of Sta g e 2The Electricity Waiierawong 80.0 80.0 1981-1987 150 400 Two underground lone wc.Commission of steamino coal mines toNSW Mt. Piper Dower station:;plannea capacity at eac-- mineis 2 million tonnes Der Jear.The Electricity Mt. Arthur 400.0 400.0 1982-1988 150 600 Involves open catComrission of North and coking coal -,_ _ ce uNSW (Muswellbrook ment; oLtput l,r,e:^• .:.export, with stea-'i r c co0.to fuel Saysw .oter c :Pr station. lonnec ;:roc^::ivecapacity of 1( rl! lio^ LG^nesper yearNew South Wales Upper Hunter, 50.0 50.0 1980-1990 90 N/A NSW Cver'fl1er ex_orc' ="Government Gunnedah and prograrrne _nvolvmn_ cr=ice=n;(Department of other areas - proorar e. se is-ic sj rv e v arc,P'.ineral Resources) { ' I assessment . s ;- c :cimprove knowleooe `•S-,' coal ` ^^ _ 300 resources 5^ drilli zmetres Der annu^-.

AUTF-JRITY

LOCATION PROJECT CAPITAL EXP. (SM) CONSTRUCTION EMPLOYMENT PROJECT DESCRIPTIC+ TOTAL REMAINING PERIOD CONSTRUCTION PRODUCTION COST COSTElectricity GenerationElectricityCorry fissionofEraring Power 900.0 645.0 1976-1984 2 000 585 The station will have four N SAStation (Lake Macquarie) (peak) 660 megawatt-turbo generators planned to be put into oper-ation in 2 stages - stage 1(1983) and stage 2 (1984).Construction of the majorpower transmission line toSydney is about to begin.Bayswater PowerStation (Hunter900.0 900.0. 1980-1987 2 200 585 The first stage will consistValley) of two 660 megawatt units and be operational by 1985.Stage 2 (a further two 660 MWunits) is expected to beoperational by 1986. So forcontracts for the supply andinstallation of boilers hovebeen let and awarded toMitsui & Co. (Aust.) Ltd. andIHI Engineering (Ault.) Pty.Ltd.NallerawongPower Station275.0 40.0 1976-1981 650 550 One additional 500 megawattLithaowl unit to be installed in '981.kAt. Piper-'awerStation500.0 500.0 1980-1988 1 760 435 Construction of two 660 •Tego-ort1°nd watt units; planned ooerations by 1987. Contract or supplyand installation of boilershas been awarded (refer toBayswater Power Station entry)LiddellSingleton)50.0 50.0 -1980-1982 150 520 Modification to existinc power station.

C

7

AUTHORITY LOCATION PROJECT CAPITAL EXP. ($ M) CONSTRUCTION

EMPLOYMENT PROJECT DESCRIPTIt.

TOTAL REMAINING PERIOD, CONSTRUCTION PROOl1CTICN

COST COST

Roilwoy Construction/Electrification and Locomotives

State Raii Gosford- 130.0 130.0 1980-1982 250 N/A 1 Railway ElectrFicotic -

Authority Newcastle upgrading of rail networks

to suit increasec oeorc

Waterfall- for export cool iincluoes

Port Kembla 18u.0 1981-1984 200 N/A rolling stocK

^alG

Granville- 45.0 45.0 1980-1985 150 N/A Additional roilwa, lir ^•s-

St. Marys upgrading for i^c:ecse: c^=-

line shior+er,ts .

Port Kembla 15.0 15.c 1980-1982 N/A N/A Construction. c rc:- -

loading facili pies Kemblo cod i =occer.

- 120.0 120.0 1980-1985 200 N/A Canstricticr of 8C new

diesel locomotives cna 50:. new coal hopper woggons haul increased ex p orts c-

coal.

Port Facilities

Maritime Services Port Botany 200.0 50.0 1977-1981 200 N/A Wharf construction anc

Board/ANL/CTAL associated dredging one

reclamation work for iic!uic and container bert_r.s. Project is 75 per cer-completed.

Newcastle 90.0 40.0 1978-1982 N/A N/A Deepening of Newcestie

n

cr our

to enable vessels f u, 120 000 t7hT to be ccomrcaated.

Newcastle 12.0 12.0 •1981-1982 N/A N/A Constructio-: of bulk berth to

service needs of the aluminium

f 7 S Zl, industry.

e .

AUTHORITY LOCATION PROJECT CAPITAL EXP. ($Ir1)CCNSTRUCTION EMPLOYMENT PROJECT DESCRIFrION

TOTAL REMAINING PERIOD CONSTRUCTION PRODUCTION

COST COST

Port Facilities (Continued)

Ycritime Services Port Kembla 12.0 12.0 1980-1981 N/A N/A Construction of multi-purpose Board/ANL;'CTAL berth is being planned withcapacity of accommodatingvessels up to 110 000 DWT.Port Kembla 6.4 6.4 1980 N/A N/A Repair berth.Coal Loader FacilitiesMaritime Services Port Kembla 130.0 100.0 1979-1982 250 N/A Construction has commenced on Board and Public (Stage 1) coal loading facilities having 4orks annual capacity of 14 milliontonnes. Stage 2 is expectedto commence mid 1981.9almain 12.0 12.0 1980-1981 100 N/A Extensions to existing loader _enabling annual capacity torise to 4.5 million tonnes(presently 2.5 million tonnes).^lcter Resourceslater Resources Glennies 30.0 30.0 1980-1983 150 N/A Construction of concrete-faced Corvnission Creek (Hunter rock-filled dam on Glennies Valley) Creek to meet increasing water® o

needs of industry in the

Hunter Valley.

45.0

19E2-1983 N/A

50.0 1982-1985 N/A

NK47 N/A N/A

Cotmission of Mine

NSW „T„ iruiis v wGiiy

Railway Constructior.

State Rail Gulgong-Ulan 45.0

Authority

PRELIMINARY STUDIES

Coal Loading Facilities

Maritime Services Newcastle 50.0

Board/Public Works ^o S

POSSIBLE

Commercial/Recreation Services

Undetermined Darling Harbour 750

(Sydney)

expansion to suaal •: eitner Wallerowanc or '!i. F_oer o ow:

stations.

N/A Constructi o? ro:iw

when cor-, etec .-i.i Hollow with ico ;.

N/A Third coal loader is under consideration.

N/A Proposal to re-develo2 area for stagin7 c` Exp , :; 88

C.

I AUTHORITY LOCATION PROJECT CAPITAL EXP. (S_4; CONSTRUCTION . EMPLOYMENT uROJECT :E;c=.i=T:.1.

TOTAL REMAINIt PERIOD CONSTRUCTION PRODUCTION

COST COST.

FINAL FEASIBILITY -

Coal Mining

Electricity Angus Place 10 0 '0.0 1982-1984 35 75 Undercrounc stec^i-:, ccci

t

APPENDIX D

U

. .

REPORT

CAUCUS EiNERGY TAS ORCE

ALUMINIUM INDUSTRY I EFF.fti IvCL

Introduction

The taskforce was asked to examine .the need for a public enquiry into the Aluminium Industry in the terms of the Following resolution agreed to at a joint meeting of the Resources, Urban and Regional Development, and Economics and Trade Committees held on March 18th:

"That tha Energy Task Force of the Caucus together with Mr. Howe, be asked to discuss with colleagues in the States all aspects

of the aluminium industry and to bring forward a report together with a drat statement incorporating all the concerns

raised at this joint meeting iii just:i.f_Lcat ion

of an election policy promoting the develc:ru-ment of the al uniinium indnn str. y in harmony

with the broad needs of the Australia.-, community by way of the vehicle of a public enquiry.

The Task Force to report to a further

joint meeting to be held on 13 May,i930."

Activities:

Requests were made to meet State Parliamentary CC] leagues in Victoria, NSW, '.A. and T.asmani.a and the folic wing meetings \ ci :e• hold:

11th April, ] 9830 Meeting with W.A. S. P _ L. P. in Perth s report attached)

24th April, 1930 Meetinq with Victorian S. P. L. P.

in Melbou re (report att ic-n, ] )

19th May, l96') Meetinr1 with ad.v.i:urs to t.hc NSW Prr.,miic;: in S i. i, ,:

2.

It was not possible to meet with the Tasmanian Government before the end of the Autumn Session.

The purpose of the meetings was to discuss with our State colleagues some areas of concern in relation to the development of the industry and obtain their views on the suggestion of a national public enquiry.

Conclusion

The meetings revealed general support for a national public enquiry. Reports of the meetings are attached.

The Task Force notes that the Senate Standing Committee on National Resources is enquiring into a reference titled .

"The development of the bauxite alumina, and aluminium industries with particular reference to their requirements for energy, labour, capital and infrastructure."

• The Task Force believes in the light of this enquiry the Party should consider the way in which this matter should be pursued.

Recommendations

1. That the Party announce its intention when elected to office to hold a Ib ryJ to ensure the orderly development of the aluminium industry on a national basis in a way which maximises benefits for Australia having special regard for the following aspects :

le - capital requirements and sources of capital

- the need to maximise local ownership

- the need for royalty and taxation arrangements to ensure the benefits of the industry are fairly shared.

- the pricing of energy inputs to ensure the efficient use of energy resources

- the rate of expansion of the industry

- employment prospects

the location of the industry.

- financing of the public infrastructure

- transfer pricing practices

2.

0

- public and industrial health considerations

- the effects of bauxite mining on other natural resources

- mining OIL Aboriginal land

This enquiry to complement and extend the enquiry being undertaken by the Senate Standing Committee on National Resources.

2. That in view of the enquiry instituted by the Senate Stan ling Committee on National Resources that the Ta3k Force be asked to consider ways of pursuing th 2 issues raised..

These recommendations were approved by a joint meeting of the Caucus Econonics and Trade Committee, the Caucus Resources Committee and the Caucus U.R.D. Committee held in Canberra on 3 July 1980.

.

S!h7

_}. ''1' Ui 'i'I:I; r'_i,u:' i ICI U I '.) J 1'I

1 September 19BO

Development of the aluminium industry on a national scale

will be encouraged so that the benefits will be maximised for

all the States and the Australian community!, both for the

short- and the long-term.

Consultation with the States, and a joint national inquiry

with them if necessary, rill seek to ensure:

- compliance with thE: requirements of our foreign investment

guidelines;

- the efficient use of energy resources;

- adequate financing of public infrastructure needs;

- protection of Abor:.ginal land and sacred sites;

- co-ordination of all velopment;

- proper concern for public health needs; and

- protection of the environment.

77

M

APPENDIX E

') LAM) RIGHTS (continued)

10.7 Policy Initiatives

Labor supports the principle of a Treaty of Commitment to be negotiated between the Federal Government and the Aboriginal people and their organisations.

Negotiations should proceed parallel with the implementation of Labor's socio-economic and Land Rights Pclicies.

Labor will re-draft the present Aboriginal Land Rights (Torthern Territory) legislation to restore the concepts of the Woodward Recommendations and our

own Act introduced in 1975.

Traditional owners will thus have power of veto over mining exploration and development unless over-ruled by both Houses of Parliament in the, national interest.

This mear.s the qualifications on Aboriginal veto regarding mining leases applied for before proclam-ation of the present Fraser legislation and the Ranger area would be removed.

The role of the Aboriginal Development Commission to purchase land and acquire leases in the open market, will be an integral part of Labor's Aboriginal. Land

Access Policy.

Unwarranted attempts by State Governments to refuse transfer of pastoral leases will be countered by judicious use of Section 51 (xxxi) and 51 (xxvi) of the Australian constitution.

Labor would introduce model Aboriginal Heritages legislation expressly to enable the definition, declarat:.on and protection of significant Aboriginall. sacred s:.tes. Such an approach is vital to provide a just solution to disputation between mining companies, State Governments and traditional Aboriginal communities.

Labor wi:.l closely examine the rights of Aborigines to alienates land in States such as NSW and Victoria and any proposed State legislation. Such legislation should povide an organisat.ioral financial and

judicial framework for determii,ing any emergency claim to alienated land.

If necessary, model legislation will be prepared to present to the relevant States.

9

78

.10 LMll) RiGiffS (continued)

10.7 Policy In itiati.^ es (continued)

Labor will regard the careful an d selective use of ` Section 51 Df the constitution as necessary and justified daring the implementation of Labor's Land Rights, Development Commission, Aboriginal

Heritages Aft policy package, in any deadlock with a State Govi3rnment asserting alleged State. legislative powers for the repression of Aboriginal communities,

• Aboriginal band Councils — Labor will provide funds for approve([ operating expenses to Aboriginal Land Councils such as Kimberley L an d Council in Western Australia ar.d the North Queensl an d Land Council, which are nct receiving fin an ce from Federal or State Governments or from mining royalties.

f

APPENDIX F

• 6 Be innovative in economic management, using policy instru-ments which conservative parties, for doctrinaire reasons, refuse.to u!.e. These will include a intervening, where necessary, on both the demand and

supply sides of the economy to achieve Labor's objectives; b using overall instruments such as consultation, regulation, public-private sector competition, joint public-private sec-

tor ownership, government procurement programmes and nationalisation, as well as the other policies mentioned in the Industry Development and Short Term Policy sections of this Platform; and c establishing or extending public enterprise where necessary

to, combat anti-social monopoly, maintain or extend essen-tial economic activity, facilitate restructuring of . industry, maintair.. essential employment opportunities, or reduce foreign ownership and control of Australian industry and and rescurces. 7 Accept the importance of small business and recognise their

particular problems, and encourage and assist their growth by providi zg programmes to overcome their disadvantages.

C Short Tcrm Policy

To complement the medium and long-term planning mecha-nisms outlined above, and to facilitate economic expansion without accelerating inflation or worsening the balance of payments, a Labor Government will-1 Provide a ;;table framework for economic activity, recognising

that major changes in . policy bring disruptive economic con-sequences if introduced abruptly. 2 Use all the tools of economic policy, including variations in taxation, ,government spending, the exchange rate, money

supply anc. interest rates, to maintain as stable a growth path as possible:. 3 Keep an appropriate relationship between growth in the money supply and the prospective increase in prices and out-

put, since too rapid an increase in the money supply may bring unacceptable inflation, and too slight an increase may result in reduced output in general, and severely damage the

prospects of particular industries. 4 With the understanding and co-operation of the trade union movement, develop and implement a policy which will en-compass F rices, wage incomes, non-wage incomes, the social

wage, taxz tion reform, and elimination of tax avoidance, and which will achieve a more equitable distribution of our national wealth and income, with the commitment to sup-porting the maintenance of real wages by quarterly adjust-ments and the passing on of the benefits of increases in productivity.

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