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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-04-29 Daily Xml
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MARITIME SERVICES (ACCESS) (MISCELLANEOUS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 8 April 2009. Page 2339.)

Mr WILLIAMS (MacKillop) (12:15): The Maritime Services (Access) (Miscellaneous) Amendment Bill comes to the house after a review carried out by the Essential Services Commission into ports, pricing and access.

By way of a very brief history, when the previous government divested the state of a significant number of the ports around the state, we also introduced a regulatory regime which oversaw both access and the prices charged by the new owners of the ports. Obviously, ports are an incredibly important infrastructure for the state, and a significant amount of the export and import of goods in and out of the state goes through our ports. To provide for free and open access at a realistic price is incredibly important.

I understand, also, that part of the review was at the behest of the Competition Council. The review came up with a number of conclusions, and a number of recommendations were made. I have been informed in a briefing with the minister's department that three parts of the amendments go to the reforms required by the review under the Competition Rules and that those changes are being made not only here in South Australia but also in other jurisdictions. I understand that it is probably only in Victoria (which is the only other jurisdiction which has a similar regime to what we have in South Australia) where ports have been, at least in some instances, privatised.

There are three sets of changes proposed: the first changes the objects of the act and puts a new provision into the objects of the principal acts; there is a change which obliges the arbitrator to take certain pricing principles into account when making a pricing determination; and the third change is putting a six-month time limit upon an arbitrator to a dispute. Within that amendment, there is a stop-the-clock mechanism so that, during the arbitration process, if the arbitrator needs to gather more information, the clock on that six-month period can be stopped.

Whilst carrying out the review, ESCOSA also proposed to the government a series of other recommendations. Three recommendations are encapsulated within this bill: one is to extend the review period from a three-year review cycle to a five-year review cycle; another amendment would make it such that ESCOSA itself cannot be appointed as the arbitrator to a dispute (ESCOSA has recommended that, being the regulator, it is inappropriate for it to also be an arbitrator to a dispute); and the third amendment ensures that an existing award remains current whilst an appeal is pending.

The opposition supports the bill in its entirety, but there are a couple of comments I would like to make. The ESCOSA report suggests that it is recommending that regulations should also be applied to the new grain facilities at Outer Harbor. I am not sure that the government has picked up on that particular recommendation at this point, and suspect that that is why the member for Schubert wants to contribute to the debate on this matter.

Access to ports for the exporting of grain is of paramount importance for members representing regional electorates, and with the deregulation of the grains industry (both the wheat and the barley single desks) we have seen unfettered competition in the marketplace for purchasing grain. There is probably not such unfettered competition with access to storage and handling—or, indeed, loading—facilities in our ports.

Mr Pederick interjecting:

Mr WILLIAMS: The member for Hammond might enter the debate as well. I think it is of paramount importance to our farming communities that free and open access to both storage and handling and port facilities is available. I note that Free Air, a corporation that has been operating on Eyre Peninsula for at least a few years now, entered the grain business this year and exported its first shipment out of Port Lincoln within the last couple of weeks. I have received no reports of it experiencing any difficulties in using the loading facilities there, but in my opinion that is no reason why the storage and handling and loading facilities should not be subject to the same regime as are our other ports facilities.

One of my colleagues in the other place also asked a question about access to the container berth at Outer Harbor, and I am sure the Hon. David Ridgway will ask the appropriate minister some questions on that matter when the bill gets to the Legislative Council. I reiterate that the opposition supports the bill and I do not see any necessity to take it into committee.

Mr VENNING (Schubert) (12:22): This is a pretty important bill, particularly in relation to my time in this parliament, and I am pleased the minister is sitting here, because ports have been a very important part of my advocacy in this place—even though this port is not in my electorate, nor, as the minister said a few minutes ago, does it have any ports in it.

The Competition and Infrastructure Reform Agreement (CIRA) was signed by COAG on 10 February 2006. This agreement aims to provide a simpler and more consistent system of economic regulation for nationally significant infrastructure such as ports and railways. By signing the agreement South Australia committed to a review of the regulation of Port Adelaide's ports and to make certain amendments to the state's access regime. The bill ensures that South Australia's regulatory principles with regard to third party access regimes are consistent with those that will be applied across the nation.

Competition has to be encouraged, and it is most important to remove impediments and keep our monopolies or duopolies efficient. The bill makes amendments which include increasing the regulatory period for the access regime and price regulation from three to five years. This aims to reduce regulatory costs and uncertainty for port operators. The bill also seeks to improve the negotiation and arbitration processes in relation to third party access, which will, hopefully, increase efficiency and reduce regulatory impacts on business. Any bill which reduces the amount of red tape that business and port operators need to go through, along with the associated costs, can only be a good thing, and I will always support that.

In recent days we have seen third parties operating our ports. We have a consortium of Eyre Peninsula grain growers who, right at this moment, are attempting to load a ship—which, incidentally, was condemned and sent across to Port Adelaide for cleaning. I believe it has now gone back to Port Lincoln, and is hopefully now being loaded with grain through the process of private operators and having third party access. Also, we now see independent importers of fertiliser operating, and they are able to use the facilities here through third party access. So it is happening, and it is great to see that the legislation we pass in this place actually works and that we do have some relevance.

I also note the near completion of the new grain terminal at Outer Harbor. I note that the minister is sitting in the chamber and, although I do not normally give accolades to ministers, he will get one on this occasion. I am very pleased that, after 30 years of campaigning and prevarication, which started before I got to this place—campaigning for a decent, modern deep sea port—we finally have it, and this minister was sitting in the seat when it happened. So, I give accolades where they are due.

We have had several reports, and I was involved with some of them—going back 30 years. We have had recommendations on how to make our grain paths more efficient. I have always said there should be a deep sea port at the end of a rail head, but we never seemed to get it right. There was always some political reason—and often on this side of the parliament—that we did not get there.

I commissioned my own report, which I am happy to show members and which came out glowingly with the recommendation that Outer Harbor was the best option, not the inner harbor port option that our previous minister was pushing. I believe that, when the minister came to power, the option was for a site sitting out on the northern arm of Outer Harbor.

The Hon. P.F. Conlon: Terrible idea.

Mr VENNING: It was an absolutely crazy idea. As I said to the minister at the time—particularly when Ports Corp was sold—we had these negotiations. It was all recommended; I have kept a diary, and it is all in there. I will write a book about this. In fact, I am doing some words today for some people—I am doing a history on this matter. I am happy to go on the record and tell the truth about how it was. When we were in government, why did we go for that option on the northern arm alongside the power station? Why were we talking about that option—it was crazy—when right alongside the container berth was the obvious place for this? This minister, with minimal knowledge, comes in and says, 'It sounds like common sense to me, so we'll put it there, and we'll put in a conveyor belt.'

The Hon. P.F. Conlon interjecting:

Mr VENNING: Irrespective of that, the result is there. All politics aside, at long last, I think we have now got it right. When you see some of the reports that were written, you think, 'What a lot of rubbish.' How could these people write these reports with any credibility or any professionalism and now stand up on this issue? Some of those people had a go at me at the time. I have kept the letters: how dare I go against the terms they had used! I was told I had not considered the geometry, the shipping and everything else. Well, all I can say is that the results speak for themselves. I am pleased that the facility is there. I do not know when it will start operating, but it must be very close. I hope that the minister will come across the divide and at least invite me to the opening, because it has been a lifelong project.

Also, I should declare that my brother is the Deputy Chairman of the Australian Barley Board, which operates that facility. As I say to him, they have to guarantee third party access, and I am pleased that they have done so. It is all built into this undertaking, and that is what this bill is all about. It is now very competitive. It worried me greatly to think that ABB could be the subject of a takeover by a Canadian company that could have control of the facility. So, it makes bills like this even more important.

The Hon. P.F. Conlon: How much did your shares go up?

Mr VENNING: I believe that they have gone from $8 to $9, but that is not the business of the house. Anyway, I have already told this house that my personal shares have already been sold because of the conflict.

The Hon. P.F. Conlon interjecting:

Mr VENNING: I think my wife sold them for about $7.50, for the record, not that it is a matter for the house. If you do not have a very good memory, you have to be honest, so I have to be honest.

I am very, very pleased that this has happened. I can recall, as would the member for Stuart and a couple of my colleagues, some heated discussions on this matter with previous ministers, and we would always come out with a different outcome. There was always an excuse; particularly during the Ports Corp sale process, it always got messed up. All I can say is that, with Flinders Ports, with Mr Tremaine and through the ABB operating there, I look forward to a robust time ahead, when we become very efficient exporters of product—and not just of grains but also from the container terminal, because this facility being there now enables larger container ships to pull up there and load across both those berths. All I can say to the minister is that it is common sense. Why could people not see this outside of this political game?

With the third party access regime, which is guaranteed by this legislation, I am very, very encouraged and quite excited about what the future holds. I just hope, though, that it will always remain open. I am very pleased that included in this facility is the loop railway line. That is something that was going to be built for years, but there has always been a reason why it did not happen. Well, we now have the loop railway line, too—I am amazed the minister does not trumpet it more—and that was in the original plan. So, we can now bring in and fast fill the trains. In areas such as Bowmans, up near Balaklava, and Roseworthy, they can be filled up there with fast train loaders and brought in and quickly unloaded.

While we are discussing ports, I am very concerned that just the other day we heard of the closure of the railway line between Snowtown and Wallaroo, and I think it is a state disgrace. The port of Wallaroo should always be a major grain port. It is a disgrace that many years ago the Bulk Handling Authority did not upgrade the rail unloader, and the company at that time ought to be rebuked for that.

I can recall standing there when the decision was made. There was not enough traffic going through, so they did not upgrade it because they could not justify the money. However, if they had looked to the future, they should have said, 'We'll upgrade this on the condition that the government lowers the grades on that railway line.' It was not a big deal, and still it is not. It is a shame to see that railway line now. The Bute-Kadina rail group, as volunteers, have been keeping that railway line open. However, because of the heat last year, they are now unable to find the money to upgrade, for safety reasons, so it is going to close totally, and I think that is very sad.

I would have liked to see that railway line kept open, because I still believe that, for the future of freight in this state, with Port Adelaide being city bound, in my lifetime we will see another deep sea port constructed, and it has to be in that Wallaroo, Tickera and Myponie Point area, because that is where the deep water is, and it is accessed there, and this is not the first time that issue has been discussed. It is probably 30 or 40 years since the facilities were built down there—

Mr Williams interjecting:

Mr VENNING: My brother did own the land, but he does not now; it has been sold. Again, it was sold for conflict of interest reasons. It was an idea we cooked up, and it was going well. My brother did buy the land, and the Wheat Board bought it from him because it was going to build this port. Of course, with the deregulation and the Iraq scandal, it all went over the side. I think the land is now owned by one of the local farmers. So, that was a good little scheme that did not happen, either. All that is for history; it will be interesting reading later on.

Again, I note that the new grain terminal is now being built, and I also note that it was announced today that they will be upgrading some of the facilities on the inner harbour, particularly for the mining people. I think that is a great idea. I have no problem with that, as long as they are able to access the shipping. I do not believe they are going to use panamax ships; they are using only smaller ones. That facilitates another industry, so this is all positive stuff. I think it is very, very good.

I only wish that we could have some outcomes in relation to the port at Port Bonython, up near Whyalla. All of this hoo-hah concerns me greatly. I just wonder why we are not building that port on the other side of the gulf, because that would provide similar advantages. They could still take the minerals out through there, and certainly the grain terminal on the other side would be very helpful.

It is a damn shame to see the port of Port Pirie now almost totally overlooked because it does not have the water there. There is deep water near Port Pirie, but you have to go out to sea to get it. I have asked the question before: would we consider building a jetty or a causeway of, say, a couple of kilometres long to get to the water? The rest of the facilities are all there, it is in the middle of the grain belt and just across the water from Whyalla, and there are no cuttlefish—none at all.

This is a debate for another day. It is a very passionate subject of mine, and I have got it off my chest here and on the record. I again welcome this bill and whatever we can do to guarantee that third-party access. Give ESCOSA some work to do. They are there to do these things. I just wish ESCOSA would come on board and help us to negotiate with the operator of the railway line between Adelaide and the Barossa; that is, Genesee and Wyoming.

The same things happen there with third party access, and this is now used to stop any private operator from operating. ESCOSA should come on board to negotiate access, including for Mr John Geber, who owns the wine train outright. Why can't he get access to that line? ESCOSA is there and should be used. It is all good news, and I support the bill.

Mr PEDERICK (Hammond) (12:36): I rise, too, to support the bill. In regard to the comments made by the members for Schubert and MacKillop, third party access is something that we should consider as only good for the state in regard to exports and imports. In consultation with this bill, the Competition and Infrastructure Reform Agreement was signed by COAG in early February 2006.

The aim of the agreement is to provide a simpler and more consistent system of economic regulation for nationally significant infrastructure. The reforms within the agreement provide for the reduction of regulatory uncertainty and compliance costs for owners, users and investors in significant infrastructure and to support the efficient use of national infrastructure.

That is the crux of the debate, to make the infrastructure that we have, both for the people who own and access the infrastructure, equitable to all so that it can be used profitably for all who are in the business of importing or exporting product. There have been problems at times with access.

One of my constituents, who contacted me, was involved in a fertiliser company. He had an issue with unloading a boatload of fertiliser. I must admit that there was excellent cooperation between the minister for environment's office and the minister for agriculture, Paul Caica, who I contacted on his mobile phone. And this is a bouquet for the government: I said, 'We need to fix this today,' and it was. There was a risk of that ship not being able to unload, being pushed off the port, and paying up to three weeks demurrage by the time some of the bureaucracy got sorted out.

It was good to see that it did get sorted out. I note that some of the bureaucrats involved sent a message back to all the MPs who got involved to say that next time they should try to do it without all the political intervention. But, that is the beauty of being in this place: if you need to act you can act. Perhaps it is a message that sometimes—and I am not having a go at bureaucrats individually—you have to put reality in front of bureaucracy to realise that pushing offshore 30,000 tonnes of fertiliser, or whatever was in the hold of the boat, could have cost South Australian farmers up to $3 million in demurrage costs. It was certainly a win, and I appreciate the efforts of chiefs of staff and Labor ministers.

The bill ensures that South Australia's regulatory principles, with regard to third party access regimes, are consistent with those which will be applied across the nation. These principles include: an objects clause to promote economic efficiency and effective competition; a six-month time limit for conciliation by the commission, arbitration decisions made by the arbitrator to provide greater certainty to business, and to reduce the time and costs associated with settling access disputes; and pricing principles to be taken into account by an arbitrator.

I note that clause 10(2) provides that the pricing principles relating to the price of access to a service are as follows:

(b) that access prices should not allow a vertically integrated operator to set terms and conditions that would discriminate in favour of its downstream operations, except to the extent that the cost of providing access to others would be higher;

(c) that access prices should provide incentives to reduce costs or otherwise improve productivity.

So it is absolutely necessary for the people who hold the ports to manage them efficiently and to give fair and equitable access to anyone who wishes to use those facilities.

Looking at the grain trade, I believe that it is uneconomic in this state for private operators to get together and build their own port facility. I note that ABB Grain essentially manages the ports as far as grain is concerned. I have heard that some operators have said that there have been some difficulties negotiating their way forward with third party access. However, I believe that, with wins that we have had recently with free air and moving into the future, and with the assistance of this bill, the operation should be streamlined so that third-party access is far more efficient and more equitable for all concerned. Certainly, it is a great move forward.

There are concerns about what products go over a certain wharf or jetty. I know there is discussion currently in Port Lincoln (essentially the nation's fishing capital) in regard to Centrex and its potential export of iron ore, and I think there needs to be much more examination of the issues involving access to the port or whether another port should be set up. The problem is that it is a bit like politics: perception wins. Whether or not there is an issue with iron ore sharing the same facility and the same bay as tuna farms, where prawn fishermen and other associated fisheries operate from, there is a perception—

The Hon. P.F. Conlon interjecting:

Mr PEDERICK: I am just saying that it is a bigger issue in the scheme of things. The right access arrangements should be made, the right thing for the town of Port Lincoln should be implemented and proper investigation and social, environmental and economic impact statements should be undertaken in that case.

I certainly support the bill. I believe it will provide far more equity. Obviously, the three year regulatory period for the access regime and price regulation has been extended to five years, and this aims to reduce costs and uncertainty for port operators. I just mentioned some of the clauses in the bill in regard to arbitration, but the bill does improve negotiation and arbitration processes by clarifying the efficiency of these processes and reducing regulatory impacts on businesses.

As I mentioned, with the issue of getting a shipload of fertiliser unloaded and not suffering the costs incurred with demurrage, anything that can make life simple with people accessing the ports, whether they are importers or exporters, is not just a good thing for this state but for this country. With those few words, I commend the bill.

The Hon. P.F. CONLON (Elder—Minister for Transport, Minister for Infrastructure, Minister for Energy) (12:45): I thank the opposition for their comments on the bill. I want to indicate one or two things. It is obvious, from the limited extent of amendments as a result of our national review, that the system has been working well in South Australia. It is light-handed regulation, and it is the government's intention to use light-handed regulation where we can because that is the cheapest for people.

I indicate to the member for Schubert that an agreement is in place officially between ABB and me, as I understand it, on third party access, which continues for the grain terminal. This is the sort of light-handed regulation we have seen in the past, which we believe is for the best. Of course, that can be made into regulation if that is necessary but, as I said, when something is not broke, you do not fix it—that is our view. The Bedouins' approach to life is that you should trust everyone, but tie up your camel. What the regulatory system allows us to do is trust everyone, but we have tied up our camels.

Bill read a second time and taken through its remaining stages.

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