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House of Assembly - Fifty-Second Parliament, First Session (52-1)
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ROXBY DOWNS (INDENTURE RATIFICATION) (AMENDMENT OF INDENTURE) AMENDMENT BILL

Referred to Select Committee

The SPEAKER (19:31): I lay on the table the report of the committee, together with the minutes of proceedings and evidence which has been received and published pursuant to the resolution of the house on 18 October.

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Manufacturing, Innovation and Trade, Minister for Mineral Resources and Energy, Minister for Small Business) (19:32): I move:

That the report be noted.

In doing so, I will give a brief overview on the select committee. On 18 October 2011, a select committee was formed to investigate the indenture agreement between the state government and BHP Billiton. Its members included me, and people I would like to thank are the Minister for Transport, the Treasurer, the member for Little Para, the Leader of the Opposition, the Deputy Leader of the Opposition and the member for Davenport. The committee called representatives from the Olympic Dam Task Force, BHP Billiton and the Conservation Council. It invited written submissions from the cities of Whyalla and Port Augusta and the Arid Lands Natural Resources Management Board; and the committee established a number of facts. Those facts are:

The open pit would extend more than four kilometres, being three kilometres wide and reaching a depth of one kilometre.

The committee noted that BHP Billiton is bound by the environmental impact statement process and the government's assessment report.

BHP Billiton gave evidence to the committee that the project will contribute $45.7 billion in net present value (that is, in today's dollars) to the South Australian gross product over the next 30 years.

This will create 6,000 new jobs during the construction phase—4,000 jobs at the mine, and 15,000 indirect jobs, greatly impacting on the Upper Spencer Gulf regions (including, Madam Speaker, your electorate of Whyalla).

The state's taxation revenue will be increased by payroll tax and, of course, royalties.

Local content was very important. Clause 12 of the variation deed provides for the use of South Australian-based professional services and labour as far as reasonable, and that local companies can bid for contracts and be pre-approved. In regard to processing, on-site processing will be doubled from 190,000 tonnes per annum of refined copper to 350,000 tonnes of refined copper.

I note that the opposition today has announced that it will support the passing of the indenture ratification bill without amendment and without delay. I note that this is a ringing endorsement of the government's negotiating skills and, for that matter, I put on the record my considerable thanks to the Olympic Dam Task Force for their very hard work, and all those who participated—including, of course, the member for Port Adelaide, Hon. Kevin Foley, who led those negotiations. Quite frankly, the state does owe those fine public servants a great deal of debt and gratitude.

The royalty rates that have been set are the same as the Mining Act. They are: 3.5 per cent for refined metals and 5 per cent for unprocessed metals. That is a very good outcome for the people of South Australia, a very good outcome for the project, and a very good outcome for the people of Whyalla, Port Augusta, the Upper Spencer Gulf and Port Pirie.

BHP Billiton will now for the first time pay for water they extract from the Great Artesian Basin and saline well fields. It is important to note that the committee took evidence that, if the expansion did not go ahead and the current indenture continued, BHP Billiton could continue to draw water from the Great Artesian Basin at no cost.

Native title and Indigenous land use agreements were discussed, and we understand that an ILUA has been registered with three planning groups in the mining lease area. We also noted that the workers village to be established between Roxby Downs and Andamooka will accommodate up to 10,000 workers.

The committee also noted that BHP Billiton agreed to reimburse the state for the $25 million cost to upgrade the Sturt Highway. We received a number of unsolicited submissions, Madam Speaker and, as I addressed in my report that you tabled today, 'The main submission addressed matters outside of the committee's area of examination.'

A lot of people were tempted to reargue the environmental impacts of the approval. The committee's role was very simple. The committee's role in looking at the indenture agreement in a hybrid bill, as deemed by you, Madam Speaker, is that we would look at conferred rights on BHP that are not available under a normal process as a private right to an organisation. The committee noted those. The government members on the committee then recommended that we noted those advantages given to BHP.

We accept them; we think they are in the best interests of the state and the people of South Australia and recommend to both houses of parliament that the indenture ramification bill pass both houses of parliament without amendment and without delay. I also note that the opposition members, out of courtesy to their party room, did not recommend that on the committee. However, I do note that on the committee they said that they noted the committee's findings and would defer until a party room meeting was held to canvass opinions from the party room.

I note today that the Leader of the Opposition has announced that her party room will be supporting the indenture ramification bill without amendment and without delay, we are told. I also note that members of the upper house have made comments. I will say this, Madam Speaker: Mr Mark Parnell is a man for whom I have a great deal of respect and admiration. I think he is a fine advocate for the environmental movement. I think he argues his case well. However, I think he is being just a little bit dishonest.

It is one thing to say that you wish to move 100 amendments to this bill. However, the honest answer is to say: 'We don't support uranium mining. We will be voting against every clause of the indenture ramification bill and not supporting it.' What Mr Parnell and the Greens are attempting to do is to delay. I think they should be honest and tell the people of Australia, 'We oppose the mining of uranium, we oppose taking water out of the Great Artesian Basin, we oppose the export of uranium for peaceful uses, we oppose the mining of uranium full stop and all the fuel cycle that is used for uranium, and therefore we cannot support this bill.' But that is not what we are hearing from Mark Parnell.

What we are hearing from Mark Parnell is 100 amendments he wants to move to this bill, which is really about frustrating the government's agenda. What it is really about, what they don't want people to know, is that they really oppose the expansion of Olympic Dam. I think it is important that as politicians we are completely honest with the public about our voting intentions in the parliament.

My view is that the Greens' view should be that they oppose it. Do not try to amend it to death; just vote against it. If he is going to attempt to use the parliament to stymie this bill, I think he is behaving with utmost disregard to the people of South Australia in an act of economic vandalism. The most important thing about this bill is that the entire world is watching us. South Australia is about to signal to the entire world that we are one of the safest places in the world to do business. There are no sovereign risk issues in South Australia. There is a jurisdiction that does—

Mr Treloar interjecting:

The Hon. A. KOUTSANTONIS: Sorry? I thought you said something.

Mr Treloar interjecting:

The Hon. A. KOUTSANTONIS: Good. There are no sovereign risk issues in this state. This state, when it negotiates an indenture, keeps its word. Every mining company is looking at what is happening in the Gawler Craton and what is happening with BHP Billiton and this indenture. This is the greatest advertising campaign for investment in this state's history, and the swift passage of this indenture will signal to the world that South Australia is the centrepiece, the epicentre of mining around the world. We are about to have the largest ever endeavour in human history—

The Hon. K.O. Foley: Any history!

The Hon. A. KOUTSANTONIS: —any history of mining, with the largest order of trucks, the largest ever logistical exercise in mining ever undertaken by any company anywhere in the world. When considering the impacts on South Australia, my personal view, and I think that of the government, is that this is a game changer. Future generations will look back at this moment in 2011 and say, 'This is the time, this is the moment when South Australia changed forever.' That change will be for the better. That change will be in the way we view ourselves, with confidence about ourselves, and it will not simply be about the expansion of Olympic Dam because I believe this is the first of many.

This signals to the entire mining industry that we are about to take our rightful place amongst the titans of mining: a safe regime to invest, the best regulatory system in the world, the fastest approval process in the world, and the highest environmental standards in the world. Just quickly on environmental standards, what we have subjected BHP Billiton to are some of the most rigorous environmental standards on any company anywhere in the world—and BHP has passed those tests. We have not bent to their will: they have bent to ours. I say that because, if you look at the standards we placed upon the desalination plant, they are some of the strictest and most rigorous in the world.

I urge members when considering this to note that we have struck the right balance between royalties—and it is very easy in hindsight to get up and say we could have done a better job. I think the truth is that, under the careful negotiation that was led by the Hon. Kevin Foley, Bruce Carter, Dr Heithersay and others in the OD task force, this government held its nerve and struck the right balance. We were negotiating with a very sophisticated company which has a very skilled and adept way of negotiating with governments, and I think the stars lined up just right for the people of South Australia in this deal. The right people were in place at the right time to strike the right negotiation.

No doubt our opponents will say that they could have got a better deal. Our opponents will wax lyrical about what they think the royalty rate should have been. The truth is that we will be the pacesetters for royalty rates with copper and uranium in this nation in striking the right balance between a massive capital investment and a return which is way out in the never-never and setting a royalty rate that will not only encourage investment but, of course, make sure that it is prudent for us at that rate for it to be sustainable for the people of South Australia. I think we have that balance absolutely right.

If you set royalties too high, you risk capital investment; if you set them too low then, of course, you have problems with HFE. We have the balance absolutely right, and for that I commend our former treasurer and the former minister for the Olympic Dam task force for his good work. I also want to thank members of the opposition, especially the Leader of the Opposition and her deputy, the member for MacKillop. It was a very productive select committee with some very difficult questions asked on both sides. Obviously, there were people who wished to play politics with this outside the committee, but the committee was a very good example of how well we can work together for the betterment of this state.

I want to place my personal thanks on the record to the Deputy Leader of the Opposition, the Leader of the Opposition and the member for Davenport for the constructive way in which they conducted themselves; and, of course, to you, Madam Speaker, for the timely way you have received the report, to your Clerk, Mr Malcolm Lehman, for the good work that he did on the committee and, of course, to all the witnesses and Hansard. I commend the committee report to the house.

Of course, I will say that, given that the second reading speeches have concluded, the government has undertaken to ensure that government time is given so that all members of the opposition may comment on the committee report. Madam Speaker, we ask for your leniency in terms of standing orders. Members may wish to discuss other aspects of the indenture that are outside the committee's scope because they did not have an opportunity during the second reading stage, so I expect the debate to be wide and far-reaching about this very historic moment, Madam Speaker. Thank you very much for your time.

The SPEAKER: The member for MacKillop.

Mr WILLIAMS (MacKillop—Deputy Leader of the Opposition) (19:45): Thank you, Madam Speaker—

The Hon. A. Koutsantonis: Are you the lead speaker, Mitch?

Mr WILLIAMS: Yes, I am.

The SPEAKER: You identifying you are the lead speaker?

Mr WILLIAMS: I will be the lead speaker for the opposition, Madam Speaker—and I hope to finish my comments sometime tonight.

An honourable member interjecting:

Mr WILLIAMS: No, I do hope to finish tonight. I listened with interest to the minister's comments there, and I agree with most of what he said, particularly when he was praising the opposition. The opposition has approached this matter in good faith, and I will talk some more about that in a little while.

I agree to some extent with the minister about a game changer for South Australia. If it gets the tick of approval from the BHP Billiton board—which, we hope, will happen sometime in the first half of next year—this will indeed be a huge project for South Australia and for this nation.

The reality is that the game changer occurred almost 30 years ago for South Australia. The game changer occurred when the then Liberal government, led by David Tonkin, took great pains against great odds to ensure that the original mine started at Roxby Downs. That government, in very difficult political times, faced up to the then opposition, the Labor Party, who were anti uranium mining, in just the way the minister has said that Mark Parnell and the Greens are today, and stared them down.

I have made the comment before in this parliament that that government of David Tonkin was aided by one of South Australia's heroes, one Norm Foster, in the upper house, who crossed the floor, against his party's wishes, to ensure that that original indenture was passed through this parliament and saw the beginning of mining activity at Olympic Dam. That was the game changer. We are now seeing the next iteration.

There have been a number of iterations on the way through. Now we are seeing the next iteration. Let us not lose sight of the hard work undertaken by David Tonkin and his government. His mineral resources or mining minister at the time, one Roger Goldsworthy—I might talk a little bit more about Roger Goldsworthy in a while, but he is the father of the now member for Kavel—led the debate at that time on the original indenture and saw that South Australia was indeed going to have a mining industry.

I have made these comments in the house before, but can I say again that when I was a boy growing up way down in the Lower South-East of the state, I was very proud of our state, very proud of South Australia, because, at that stage, we had a bigger population and greater economic activity than our cousins in the west, in Western Australia. Adelaide as a city was challenging Brisbane to be the third city in this nation, after Sydney and Melbourne. We were challenging Queensland to be the third powerhouse state, after New South Wales and Victoria, in this nation. The one mistake we have made over the last 40 to 50 years is that we have not embraced the mining industry. Our cousins in Western Australia embraced the mining sector in the early 1970s, and you would be a blind man not to see the difference that has made.

I have spent most of my life, since those early days, lamenting that South Australia has failed to maximise the potential for the citizenry of this state by embracing a mining industry. I accept that it is more difficult in South Australia than it is in Western Australia, because we recognise that there is a considerable depth of cover over the mineralisation, particularly in the north of the state, which makes it more difficult to discover minerals.

South Australia was saved in the 1800s by the copper industry in Burra, in the Copper Triangle on Yorke Peninsula. South Australia was saved even earlier than that by gold discoveries in the Adelaide Hills. South Australia had a very proud history of mining in the early days of European settlement, and we lost our way, probably in the 1970s. We had embraced manufacturing as the key economic driver in the state, and we lost our way with regard to what is now regarded as a most important industry for this nation, and that is mining.

The game changer, I believe, was indeed the original indenture, in 1982, driven by David Tonkin and his government and the minister of the day, Roger Goldsworthy. The Liberal Party payed a heavy political price at that stage, because the uranium industry was certainly out of favour right around the world. Notwithstanding that, the Liberal Party, at that stage, did what was the right thing for this state. Notwithstanding the political backlash, the Liberal Party stood up and did what was right for South Australia.

I and all my colleagues are very proud that we are able to stand up today and say to the people of South Australia, 'The genesis for what is about to occur in South Australia occurred way back in 1982, and it occurred because the Liberal Party knew what was the right thing to do for South Australia.' I repeat: I am very proud to stand here as a member of the Liberal Party, that same party that drove that.

The Liberal Party, since then, has had a very strong and proud history of supporting the mining industry. In fact, it was in 1989 that we established a minerals task force. As luck would have it, when John Olsen, the then premier, established that task force—

The Hon. K.O. Foley: No; you said 1989.

Mr WILLIAMS: 1999; sorry. In 1999, John Olsen established a minerals task force because he could see the potential for a minerals industry and a mining industry in this state. As luck would have it, he was able to appoint Roger Goldsworthy as the chairman of that task force, and that task force consulted with the mining sector and the industry in general in South Australia and came up with a series of recommendations, which were adopted by the government of the day.

In the meantime, we had already established in government an accelerated exploration initiative called Targeted Exploration Initiative, South Australia (TEISA). That was the forerunner of what this government now calls PACE. I do not even know what the acronym stands for, to be quite honest, but it is basically the same: it is a government-sponsored plan to drive exploration in South Australia.

I am somewhat disappointed that this government has tried to take all the credit for the burgeoning mining industry. We see the former premier on very regular occasions claiming that it was all from his good work that we now have 16 or 18—whatever it is—operating mines in South Australia.

The Hon. A. Koutsantonis: Eighteen.

Mr WILLIAMS: Eighteen today.

The Hon. K.O. Foley: Whose good work?

Mr WILLIAMS: I am saying the former premier kept claiming it was all due to his good work.

The Hon. A. KOUTSANTONIS: Aren't we bipartisan?

Mr WILLIAMS: We are. I am just putting it on the record. The reality is that the only one of those eighteen mines that are operating in South Australia today where the ore body was discovered since the change of government in 2002, to my understanding, is the Iluka Resources Jacinth-Ambrosia heavy sands mine north of Ceduna.

To the best of my knowledge, notwithstanding that the former premier goes out and claims that in 2002 there were only three or four mines operating in South Australia and now there are 18, the reality is that all bar one of those ore deposits that are now being worked as operating mines were discovered prior to the change of government. The reality is that South Australia achieved a change to the game 30 years ago and we have slowly been moving towards where we find ourselves today.

I am absolutely delighted that we now at last have bipartisan support for the mining sector. I am absolutely delighted that the Labor Party has seen the error of its ways from previous times and has now embraced the mining sector, and actively pursues mining companies and talks up the mining sector. It is not going to happen overnight, even with potentially the biggest mine in the world on our doorstep.

Even with that it is not going to happen overnight, but South Australia's economy could potentially turn around dramatically due to mining activity over the next 20 or 30 years. That only augurs well for the future of this state. It is just a pity we took so long to get there. I have a significant interest in the mining sector. My eldest daughter has worked in the mining industry for about 15 years since she graduated from the University of South Australia here in Adelaide.

She did her geology degree out at The Levels at the Gartrell School of Mining. It is a pity that in the meantime that school of mining has disappeared. It was allowed to wither. The other thing that has disappointed me is that, notwithstanding that my daughter was educated here in South Australia in geology, she has never worked one day of her working life in South Australia.

She has worked in three other states in this nation and now works in jurisdictions as far away as Papua New Guinea and West Africa but has never worked in South Australia. I can tell the house that her mother would wish that that changes. Her mother would wish that we have a viable mining industry in this state such that her daughter might live much closer to home. I would enjoy that myself.

The reality is that we have come a long, long way as a state, and the Labor Party has come a long, long way as a party and is now embracing mining, and I welcome that. With regard to this particular project, it has been on the horizon for many years. I made this comment to my colleagues only yesterday when we were discussing this in the party room.

The Hon. A. Koutsantonis: How did that go?

Mr WILLIAMS: It went very well. The minister just quipped, 'How did that go?' As the minister said a little while ago, our leader has announced that we will be supporting it.

The Hon. A. Koutsantonis: You're talking about it like it was some sort of victory, like there was some opposition from within.

Mr WILLIAMS: No, not at all; we will be supporting this. I can tell the minister that the party room supported the recommendation that we support the indenture and the ratification bill without amendment unanimously, and I am pretty pleased with that, too. To be quite honest, it is not very often—I am sure it is the same in your caucus—that we get unanimous support for a position, on a whole range of issues.

The Hon. A. Koutsantonis: We always have unanimous support.

Mr WILLIAMS: I am sure you do, minister. Until you said that you were almost believable. This has been on the horizon for a long time. As I said to my colleagues in the party room yesterday, the reality is that Western Mining, which has been operating at Roxby Downs from the early 1980s through to five or six years ago, had plans for this expansion. Western Mining understood that the best way to go forward would be to move to an open-cut operation, but I think it realised very early on that it did not have the capacity to bring that to reality because this is such an enormous project. Indeed, there are probably very few companies in the world that could take on this project.

I am delighted that BHP Billiton became involved in this particular project and has taken over the operation at Olympic Dam, buying out Western Mining a few years ago. It has been a fair while. There was an expectation, I think, that we would get approval for the project at least two or three years ago. It has been a long time coming, but we are on the cusp of something very special and very important.

The process which the government has gone through has been, again, a long process. I will not say drawn out. It has been a long and thorough process. It is a process which is, to a significant degree, subject to the statutes of the state. The proponents sought and needed a significant number of approvals for a whole range of parts of the whole which will form the total operation, and I will go through those in a little while.

When they started the process it was obvious, under the Development Act, that they were going to have to go through an environmental impact statement (EIS) process, which is a process that is set out in the Development Act, and all the various elements of the project went through that process. I understand that BHP has spent something in the order of $30 million in that process.

I said a few minutes ago that there are not too many companies or businesses in the world that would undertake this project. There are not too many businesses in the world that would invest that sort of money up-front just seeking the approvals. It has been at least a three-year process. I happen to have a full copy of the original environmental impact statement; it is in a large box. I confess that I have not read it all, but I have picked it up and read the parts that I thought were relevant and the parts which were particularly contentious.

I have read many pages of it, particularly those concerning the desalination plant and the barge unloading facility adjacent to Port Augusta, but I confess that I have not read the whole document. I doubt whether there is anyone but Steve Green and a few other people in BHP who have, and he may not even have read the whole of the final draft either, but that process had an incredibly thorough examination of the various environmental aspects of every element of this project.

Then, under the EIS process, it went out to public consultation, which in itself is a lengthy process. There was something in excess, I think, of 4,000 submissions and each one of those had to be responded to. We eventually had the release of the final EIS. The first one was the draft, then we had what I think is officially called the supplementary EIS, and then we have had the response to that, more recently, by the government. Parallel to this process, the same process was going on in Canberra with regard to the commonwealth government's interest in this project under the EPBC Act (the Environment Protection and Biodiversity Conservation Act), and the federal government has gone through all the elements which are pertinent to that legislation, and it has produced a final assessment report with regard to its interests as well.

The process has been long, but I believe that it has been thorough. We have got to the point where the government has come to the parliament with an indenture agreement and it is now asking the parliament to ratify that indenture agreement. I particularly want to spend some time talking about that, but, first, I want to talk about the way in which the opposition has approached this—'this' being what I believe will probably be the most important legislation that goes through the parliament in my political career and probably the political career of everyone currently a member of this parliament.

As the opposition shadow minister for mineral resources, I was to take carriage of this particular matter. I went to the Leader of the Opposition and suggested that, first, I did not particularly want the total responsibility for making the recommendations to my colleagues on this; that I would like some support and some help in going through and assessing the indenture, the EIS process and the associated reports and, along with a small committee, to take a considered recommendation back to our party room.

The leader saw that that was probably a fairly wise way to approach it, and we established a small subcommittee in the opposition consisting of the Leader of the Opposition, me, the shadow treasurer (the member for Davenport) and two of our colleagues from the upper house, the Hon. David Ridgway (the leader in the upper house) and the Hon. Michelle Lensink (our shadow environment spokesperson). It was a committee which covered off on virtually all the relevant portfolio areas, and I am delighted to be able to report to the house that that subcommittee has worked diligently on this project on behalf of the opposition for about the last month.

I also want to take the opportunity to thank the former deputy leader of the government, the former deputy premier, Kevin Foley, because, when we were discussing the passage of this, I put to the member for Port Adelaide (the Hon. Kevin Foley) that I understood the time frames that the government had set itself to get this through the parliament, and I understood the time frames and the imperatives of BHP Billiton, but we were put into a fairly tight situation with regard to getting our heads around the whole series of documentation and the whole understanding of the indenture and the possible ramifications.

To his credit (and I think that the government and the opposition have both worked in good faith on this and worked very well together), he made available documentation to that subcommittee I have just referred to. Although we did not get copies of it, we were able to read it in a government office, but we had access to that document well before it was published. We were then given very good access to the government agencies that had been working on the EIS over a number of years, and particularly the Olympic Dam task force.

A number of other government agencies and government consultants were brought in and put at our disposal so that we could ask questions and they could aid us to get a complete understanding of all the elements of the EIS that we were of a mind to question and the elements of the indenture itself. That process, I think, has worked very well, and I thank my aforementioned colleagues who were on that subcommittee who basically had to put everything else on hold for the last three or four weeks because of the sheer volume of work involved in that.

It did not escape our attention that the government has had about six years working on this, and we had to get our head around it in a matter of probably less than six weeks. So the process has worked well, although it has been fairly tiring and testing.

I think it is worth just going through what the indenture is. The indenture is a special contract between the government and, in this case, a public corporation, BHP Billiton. The indenture confers particular rights on that public company which are not enjoyed by other citizens and organisations in the state. The reality is that everybody else who wants to operate a mine in South Australia has to go through various other processes and has to work within various other pieces of state law, principally the Mining Act and the Development Act, but there is a whole range of other acts—the Aboriginal Heritage Act, etc., and various environmental law. It is quite an involved process but, on the scale of most operations, it is not beyond the average operation, the average mine proposal, to go through those processes. In fact, it is much easier than what I believe BHP Billiton has been through in this process, which has been, as I said, long and contracted.

Notwithstanding that, the indenture does give to special projects surety, I guess. That is what BHP needed for this project because it is such an enormous project and because of the uniqueness of the ore body, particularly the fact that it is some 300 metres below the surface. To create an open pit to allow access to the ore before you can even start processing it and producing refined output involves such a huge investment of both time and money. The proponent required an extraordinary amount of surety.

People say to me, 'Why are we giving all these things away to BHP?' The reality is that the indenture process does not actually give anything away. To my mind, there is very little that BHP gets under this indenture that it would not get under the normal laws of South Australia, but what it does get is the surety that, on the day it starts, on the day it bounces the ball, so speak, it knows where the goalposts are and it knows that it is going to stay there for an extended time. That is basically what the indenture does.

The other thing that I think needs to be understood is that what we are talking about here tonight is a variation to the existing indenture. A number of my colleagues and a number of other commentators have asked why we are doing it through this process and what are we giving away, etc.? I have been at pains to say to them that they have to understand that, if this indenture fails, the pre-existing indenture, the one that was started back in 1982—the one I talked about earlier—remains in force. There have been some amendments to that indenture in the intervening years, but it remains in force.

What we are doing today is ratifying a variation to that indenture. We are not talking about a brand new indenture. In fact, the vast majority of the words in the document are probably unchanged but, because of the size and scope of the project that has been envisaged by BHP Billiton, there is a whole range of brand new elements that were not in the original project; therefore, they were not contemplated by the original indenture. So, the scope of the indenture has to expand to allow for this expanded project, and I will talk through a number of those shortly.

We are talking about a variation to an existing indenture. The bill we are debating today is what is called the ratification bill, and that actually gives the legality to the indenture. If the bill is passed through the parliament, the indenture forms a schedule to the ratification bill.

One of the elements of the ratification bill is that there is a date by which the ratification should occur—that is, the bill should be enacted—and that date is 20 December this year. Within the bill there is an opportunity to extend that date, but we have been given evidence which has convinced us that there are important reasons why the parliament should endeavour to meet that time line. I might come back to that a little moment.

Once that ratification is achieved—and if that is achieved by 20 December, all well and good—BHP Billiton then has a period of 12 months in which to trigger the variation by serving on the minister (and I think that is probably the term) a project notice. I am assuming that if BHP Billiton's board signs off and gives approval for phase one of the project that the company will then serve on the minister a project notice and that in itself will then trigger the variation and the old indenture will be varied as to become the indenture which forms schedule 1 of the bill.

An interesting point here is the triggering by the project notice. There is a clause that says that has to occur within 12 months. To my mind, that is a bit of nonsense. The government and the task force argued that it was necessary to ensure that BHP kept to a fairly tight time frame. I suspect that was driven by politics more than anything else, that the government wanted to use that (and has used that) as a lever to suggest that they are very hard negotiators and are forcing BHP along. I do not think that in reality the government are forcing BHP along too much. That is the process to get from the current indenture to the varied (or new) indenture and that will then enable all the elements of the project to proceed.

I talked about the opposition forming a sub-committee to investigate the elements of the EIS, the indenture and the passage of it through the parliament and bring back recommendations to this side of the house. One of the real problems that we found was that there was nobody to take advice from who was at arms length from the negotiations that occurred. Obviously the negotiations had occurred between the government, principally represented by the Olympic Dam Taskforce and BHP. We were given open access to those two parties and they answered all of our questions.

One of the dilemmas we had was that we did not know whether we were asking the right questions. We did not know which questions maybe we should have been answering that we were unaware of. Very fortunately, and I am thankful to my leader for part of this at least, we were able to access some significant expertise—possibly as good as expertise that is available in this country who have had experience in these matters. We were able to access a number of parties as a sub-committee to give us—

There being a disturbance in the Strangers' Gallery:

The SPEAKER: Can I just ask those people in the top gallery to move back from the rail? It is not appropriate to be leaning over the rail. We do not want them to jump.

Mr WILLIAMS: We were able to avail ourselves of some very good advice. In reality, we were in a couple of instances pointed to some matters which we were not aware of; maybe we would have become aware of them through our own investigations, but certainly it short-circuited some of our investigations, and more latterly we were given significant confidence that the conclusions that we were drawing from our investigations of the matters before us were the right conclusions. We were fairly confident to take to our colleagues recommendations which we believed were the right recommendations and actually we had covered off on the issues with what I think could be described as the appropriate due diligence.

That was a difficult thing to achieve and we achieved it through some of the contacts we were able to make with people who had considerable experience in these matters. I am not going to name names but I certainly do not mind putting on the record our thanks and appreciation to those people—they know who they are—for their time freely given to us, and to advise the opposition, with regard to this matter.

I want to spend a little bit of time going through the indenture itself and putting on the record what is happening with regard to the special powers and privileges that the parliament is about to extend through the indenture to BHP Billiton. Let me reiterate that there are two processes involved in the approvals for this project. I have talked about the EIS. The development approvals have already been achieved by BHP through that EIS process, so the indenture is not about giving the development approvals.

When we looked into the indenture and this ratification bill, one of the things that we had to stop ourselves from doing was going back over the old ground of, particularly, some of the environmental issues to do with things like the desalination plant, the use of water out of the Great Artesian Basin, and some of those other individual elements. That had already been covered off in the EIS process. As I said, not only has that been finalised and this parliament can do nothing to alter that—the appropriate ticks are in the appropriate boxes—but I am quite convinced that that process has been rigorous and that the approvals that have been given have been given properly, bearing in mind that notwithstanding that those approvals have been given there are still 600 licences and permits that will have to be issued to provide for the totality of this project.

One of the interesting things is that some of those are probably some years away and not necessary for a number of years, and when they are given they will be given with regard to the regulations and the law at the time. So if BHP Billiton was building its desalination plant today, it would be built to the standards expected of it today. If it builds it in 10 years' time—I hope it is not quite that far away but it will be a few years away, I expect—if there is a significant improvement in standards they will be incorporated into the design and into the final permitting, so that is one of the elements.

The operation currently occurs at Roxby Downs on what is called a special mining lease. I said a little while ago that if somebody came along and wanted to operate a mine they would apply under the Mining Act for a mining lease. That is all established in the Mining Act—how you would go about that and what conditions might be imposed in that mining lease.

The Hon. A. Koutsantonis: They can ask for an indenture.

Mr WILLIAMS: Yes. They can ask for an indenture but under this particular operation there is a special mining lease because the operation is not subject to the Mining Act, it is subject to the indenture, so there is a special mining lease. There has been considerable discussion in the community about the fact that a freehold title has been offered over this special mining lease.

I need to inform the house that the special mining lease, as it exists today, has had freehold title over it since, I think, 1986. Freehold title was granted at that time by the state of South Australia in the realisation that at some stage there would probably be some sort of native title legislation coming out of the federal government and the realisation that one way of, I guess, extinguishing native title on the area of the special mining lease would be to grant freehold title. That is what I have been told is the background to the reason that freehold title exists on the current special mining lease.

BHP needs an enlargement of that special mining lease. It will be a very different operation there from what currently exists. I suspect that the new operation would not fit on the footprint of the existing special mining lease. There will be significant expansion of that, and I think BHP has reasonably asked that the expanded special mining lease have an expanded freehold title associated with it. That is what has been asked for, that is what has been granted in the indenture, and personally I do not have any problem with it.

Some people in the community have argued that this gives BHP Billiton some sort of right that it should not enjoy, particularly some sort of right to onsell the project. Well, anyone who runs any business in this state can sell it at any time, and I do not think it is up to this parliament—and it is certainly not Liberal Party policy—to stop people doing that sort of thing. So, we fully support the granting of freehold title over the special mining lease and (I will say it at this stage to save me coming back over this ground) over the other elements of the project where the indenture gives the right for the company to request of the minister of the day that freehold title be provided over other parcels of land for other components of the project. That is the issue of freehold title.

Regarding the desalination plant, there is argument—in fact, I have drafted a letter only this afternoon to some gentlemen in New South Wales. I am sure that the minister, and possibly every member of this house, has had correspondence from them about the continuing ability of BHP Billiton to extract water from the Great Artesian Basin. The suggestion is that BHP Billiton has agreed to build a desalination plant to provide water for its operation, and we should take the opportunity to withdraw its licence from the Great Artesian Basin and make it totally reliant on its desalination plant for water.

The minister talked about the Greens; interestingly, I think that they subscribe to that thought as well, that we should take the opportunity to stop BHP from using water from the Great Artesian Basin. But the Greens also subscribe to the position that we should not allow it to build a desalination plant in the gulf either.

An honourable member interjecting:

Mr WILLIAMS: That's right; they want the uranium left in the ground. Again, BHP Billiton was granted a water licence way back in the original indenture in 1982 to take water from the Great Artesian Basin. As I said earlier, if we do not ratify this indenture that original indenture stays in vogue and that original licence carries on. The licence is not being increased, but at the same time it is not being decreased. It carries on for a number of reasons, not the least of which being that its extraction is sustainable. There is no evidence to suggest that the extraction from the Great Artesian Basin is damaging the Great Artesian Basin or adversely impacting on neighbouring users.

In addition, BHP, their forerunners, have invested a significant amount of money in establishing the bore field, which is quite remote from the operation—I think there are some hundreds of kilometres of pipeline transferring the water from the bore field back to the Olympic Dam site. There is a significant investment there and it would be a nonsense to say to BHP that it had to write-off that investment, particularly given that the extraction is shown to be sustainable into the medium to longer term.

I say the medium to longer term—I talked about the special mining lease—one of the clauses gives that special mining lease a 70-year life, with the opportunity to extend it and, at the end of that 70 years, from memory, if it is shown that the mine has another 30 or 40 years life in it, it will get another 50 years extension and will go on. It is certainly my expectation that this mine will be here operating in over 100 years' time and possibly 200 years' time.

It is very interesting—and I was totally unaware of this—but one of the facts given to the subcommittee I have referred to a number of times was that some mines have a very, very long life, and they talked about the company Rio Tinto, which is based on a silver mine in Spain from which, I was told, silver was being mined at the time Julius Caesar invaded Britain, and silver is still being extracted from that mine. That is the mine that Rio Tinto started out from: that is a little bit of trivia, but I found it quite fascinating.

With the desalination plant, we have had the EIS process and the approvals for that have all been signed off under that process, but again the company has asked for the opportunity to have freehold title to the land on which the desalination plant will be built, and the appropriate easements and in some cases freehold title, to allow for the inlet and outlet into the sea and also for a connecting pipe back to Olympic Dam.

One of the things I found particularly interesting in the EIS is that the government has put into the clause on the water and desalination plant that, if there is an excess of product water, in excess of BHP Billiton's requirements, the government will have first opportunity to purchase that water and nobody else can buy it unless the government has indicated that it does not wish to buy it. I found that quite curious, particularly in the context that the parliament is also currently debating the Water Industry Bill, which is about opening up our water industry to third party access.

I was having this debate with the minister today, expressing my cynicism at this government's actual desire or want to achieve third party access to SA Water's operations, and this is one of the reasons. If that is the government's current policy, I do not know why it put into the indenture that it should have first right of refusal to any excess product water.

Notwithstanding that, when I put that curiosity to the Olympic Dam Task Force, they said that they were unaware of the Water Industry Bill and the government's policy position there. Notwithstanding that, it is in the indenture and I do not necessarily have a problem with it, but am just curious about two parts of the government having different policies, apparently.

As the shadow minister for energy I am very pleased that, if this project is approved and developed in the way we expect it will be, it will provide a significant additional electricity load to the South Australian grid—some 600 megawatts I believe will be the load required for the fully developed operation. One of the real problems we have with electricity in South Australia is that we have this very peaky demand curve. By having a new and significant load like this, it will to some degree smooth out our demand curve and to some extent make the supply of electricity into South Australia an easier thing to achieve.

The indenture provides for a number of options for electricity for the expanded mine, including new power stations at either Port Augusta or Olympic Dam and a new powerline between those two sites, but there is also provision for a—

The SPEAKER: Order! Can we have a little bit of quiet? It is very difficult for the member for MacKillop to be heard, and I am sure you are all as enthralled as I am in what he has to say.

Mr WILLIAMS: Thank you, Madam Speaker—combined cycle generator at Olympic Dam, which will utilise waste heat from other parts of the processes to produce electricity. It is expected that not only will the township of Roxby Downs virtually double in size from its current population of about 4,000, heading towards 10,000—I think 9,000 is the figure that it is expected to reach—but, in addition, a workers' village to house up to another 10,000 workers, which will be required during the construction phase, has been planned. This again has been allowed for in the indenture agreement.

A new airport will be required. We were told both in the committee and in the briefings that we had, particularly from BHP Billiton, that an airport will be required to bring in quite sizeable aeroplanes, particularly for the construction phase when there will be a significant number of workers flying in and out of the operation.

They will be coming from (we hope) principally South Australia, but they will also obviously be coming from other areas. I doubt whether we have the capacity to provide up to 10,000 workers—more often probably of the order of 6,000 workers, we were told. I do not know that South Australia has the capacity to provide that amount of workers for the duration of the project. So there will be fly-in fly-out, but hopefully that will be maximised from within South Australia.

It is also proposed that a new rail spur line will be built between Pimba and the Olympic Dam site to allow for the export, particularly of copper concentrate, and there will be a barge unloading facility and associated infrastructure built adjacent to Port Augusta to allow for the importation of large components which will be used to build particularly the processing facilities at the expanded operation.

The indenture allows for all that infrastructure to be built. The indenture also provides for a one-stop shop for the company for any of the approvals that it will need. That will go through the minister responsible for the indenture (the Minister for Mineral Resources and Energy), where the company can make applications under any of the state legislation through that one minister.

The ratification act does ensure that the minister—notwithstanding the applications that are made through the indenture minister—does have to consult with the relevant minister in the particular policy area, and must get the approval of that relevant minister before giving any of the authorisations. This excludes environmental authorisations, which will be made through the EPA.

There has been—and the Greens have been mentioned a couple of times—much comment about the environmental implications. Obviously, you cannot construct what will probably be the biggest hole in the world without having some impact on the environment, but the reality is that I am quite convinced the EPA will have the tools necessary to make sure that the highest standards are met.

The indenture also provides that the company produce biennially an industry and workforce participation plan and that it reports on that plan annually. This is one of the areas I asked about at each of the briefings we had and also in the select committee, where the company is obliged to report regularly to the minister and the minister, according to the indenture, 'may' publish those reports. I question why the government has put the word 'may' in.

In fact, when we asked the Olympic Dam task force, they said, 'Well, "may" allows the minister to do it and of course the minister will do it.' In reality, when you sit in opposition for a few years, you realise that quite often, notwithstanding that ministers have the power to release information, it seems that they do not like releasing information.

The minister looks at me as though I have said something that has surprised him, but I can tell the house that I and my colleagues spend an inordinate amount of time putting in requests for information under the Freedom of Information Act. An inordinate amount of government time is taken up responding to those requests, and an open government would obviate the need for that time, on behalf of both the opposition and the government agencies, in addressing those requests.

I, for the life of me, cannot understand why in those particular clauses the word 'shall' was not used instead of 'may' when it comes to publication of those reports. BHP gave evidence to the select committee that it was BHP Billiton's intention to publish all that information on their website in any case. Can I say, it will be the Liberal Party's intention at any time that we are in government during the life of this indenture to automatically publish that information. We will not be party to saying, 'We may do it but we do not have to.' I urge the current minister and the current government to come out and give a similar undertaking that they will in every case publish that information.

The same goes for reports under the environmental clauses of the indenture. The same language is used: that the minister 'may' publish environmental reports, mitigation reports, etc. Again, I state that the Liberal Party in government will always publish those reports where we are able to, where it says 'may'. Again, I think it was BHP's intention that they would also publish those reports. Again, I do not know why the word 'may' is used and not the word 'shall'.

The two areas that are of the greatest importance to the public of South Australia with regard to this indenture are industry and workforce participation, and the matter of royalties. I will just spend a little time on the industry and workforce participation plan. The publication of the company's plan and of the annual reports, I think, is the way to maximise the benefits to South Australia. That is why I say that the Liberal Party in government will always publish those documents and those reports. That is the way to ensure, by a process of accountability, that we maximise participation by a South Australian based workforce and participation by South Australian industry.

Only last week—I think it was in Friday's Advertiser—we learned that BHP Billiton has placed a significant order for units for their workers' village that I talked about a few minutes ago offshore. That has occurred simply because South Australia does not have the capacity to provide. When some of my colleagues and I met with the CEO of BHP, Marius Kloppers, a week ago, he expressed to us that one of his fears was that South Australia would fail in a number of areas to have the capacity to provide for the needs of this particular project and that the company would be forced to go outside South Australia. That would be a pity.

Might I say that the opposition has been raising for some time the fact that this government has been quite willing to issue major contracts, particularly for some of the major infrastructure works such as roadworks and the Northern Expressway, to interstate companies. That very act by the government of South Australia mitigates against South Australian contractors being ready and up to capacity to tender for some of the works that will be open for tender through this project. I think that is a failure of the government. Notwithstanding there has been a huge amount of rhetoric for a long time, I am not convinced that the current South Australian government has made South Australia ready for this particular project.

The indenture talks about the normalisation of the township of Roxby Downs with regard to local government. The township currently is run by an administrator who has all the powers under the Local Government Act. I was talking to the federal member, Rowan Ramsay, about this last week. He is somewhat dismayed that there is an expectation that normalisation will not occur for probably 15 years. There are three triggers in the indenture that would then allow the minister to give notice that normalisation is about to occur and after that notice there is a two-year process. The three triggers are 15 years, or 10,000 tonnes of production of refined copper, or the population of the town exceeding, I think, 9,000 people. Certainly, the local federal member was somewhat concerned.

Each of those triggers probably will not occur for 15 years and then the two-year time frame between the minister giving notification to the company and the normalisation occurring means we are probably talking about 17 years, which puts us somewhere heading towards 2030 before we will have democratic local government in Roxby Downs. I must admit, I was somewhat convinced by Rowan Ramsay's argument that that seems to be a long time, and there are plenty of communities of well under 9,000—in fact, with only a couple of thousand people—that have normal democratic local government. I am not too sure that the best interests of the people of Roxby Downs are served by that, but that is the position we are given.

The other issue that I need to spend a couple of minutes on is that of royalties. I was somewhat surprised when I read the indenture to learn that the royalty regime has been locked away for 45 years. Before I got access to the documents, I was expecting a royalty regime of 25 to 30 years and I think that would have been quite reasonable. I am not saying the 45 years is unreasonable, but I remind the house that in the original indenture in 1982 there was a clause—I think it was 32 or 32A—which established a surplus-related royalty regime, a regime which is not unlike the super profits tax, or the mineral resource rent tax, as espoused by the federal government.

I am a little bit surprised that the government did not argue the case—I do not know that it did not argue the case, but it did not insist on the case—that such a regime be built into the varied indenture. I think it was a reasonable thing to do. I strongly suspect that the government has had the attitude that it does not really matter, first, because of horizontal fiscal equalisation, and we only get a small percentage of any increase in royalties, combined with its belief that the royalty area of taxation will be taken over by the federal government through some sort of mineral resource rent tax which will be applied much more widely than the current proposition.

As an old-style federalist, I do not see why the government of South Australia is playing into the hands of those centralists in Canberra and setting us up to have to have them walk in and take over this area of taxation which has been the province of the states hereto. I think that probably is the real downside of the fact that we do not have something equivalent to the old clause and the surplus-related royalty clause in the original indenture.

I think I have covered most of the key elements of the indenture bill, but one I just remembered have not covered is rehabilitation bonds. The Mining Act in South Australia is a 1971 act, so it is a fairly old act, but it has been modernised a number of times. Within the last, I think, 12 months, or a bit more, we modernised it substantially again.

It is common practice that rehabilitation bonds are established for mining operations. There is a bond established under this which protects the government and protects the state of South Australia in case something untoward happens and the company, for one reason or another, walks away from the project and leaves a mess there. The bond is established by way of an audited assessment of the cost at any time to rehabilitate the mine as it is at that time.

The bond can be made up of a guarantee from a recognised financial institution—and there are certain qualifications for that—and up to 50 per cent of the value of the bond provided by a parent company guarantee. I fully endorse the idea of having a rehabilitation bond, and I think that protects the state's interest into the long term.

I said that the opposition took some advice from people who had a lot better understanding and knowledge of these matters than we had as parliamentarians. One of the things which gave me and my colleagues great comfort was that we were told that the indenture, as it is written, is what you would normally expect in any Australian jurisdiction. All the elements that I have talked about, including the rehabilitation bond, are the sorts of things that would always appear in a modern Australian indenture of this nature; so, there are no surprises.

We took this advice from people who know the business of making indentures with significant mining houses. We are comforted that what you would expect to see in an indenture is here. There is nothing here that you would not expect to see in an indenture. So, I reiterate my earlier comments in closing, that I am delighted that particularly the Labor Party has come so far in the last 30 years to now embrace the mining industry the way it has.

I am particularly delighted and proud to stand here as a member of the Liberal Party knowing that if it was not for the hard work done by my predecessors in the Liberal Party some 30 years ago we probably would not even be debating this matter today—and I have mentioned Roger Goldsworthy, David Tonkin and Norm Foster several times. I look forward to BHP Billiton giving the tick of approval to this project.

I know there is a significant degree of enthusiasm for this project within BHP from all the people we spoke to, including right to the top. I am sure it will be presented in the best possible light to the board. I look forward to the board's approval, I look forward to this project getting underway, and I look forward to a much improved future for this state as a result of the mining industry being embraced by both sides of politics.

The DEPUTY SPEAKER: The member for Port Adelaide.

The Hon. K.O. FOLEY (Port Adelaide) (20:55): Thank you, Mr Deputy Speaker. I congratulate you on your elevation to the position, well deserved, and you will make an outstanding deputy speaker, as you are already as an outstanding member of parliament. I want to talk briefly—certainly no more than 20 minutes—

Members interjecting:

The Hon. K.O. FOLEY: I hope that members will give a respected former deputy premier and treasurer the respect he deserves and listen to me in silence.

Mr Hamilton-Smith: We will, Kevin, we will.

The Hon. K.O. FOLEY: I know you have a soft spot for me, Marty.

Members interjecting:

Mr Hamilton-Smith: We do.

The Hon. K.O. FOLEY: You always have. I commend the deputy leader's speech; it was a good contribution. This is one of the very rare moments where I want to acknowledge the role of the leader, Isobel Redmond, the deputy leader and the shadow treasurer for what I consider to be a very constructive approach to this entire process. We started this process six years ago as a government. While we are talking about that I must refer back to a little bit of history.

I noted that, understandably, the deputy leader reached back to the history of Roger Goldsworthy. Roger was an outstanding mining minister. He was also an incredibly abusive and disrespectful member when it came to Speakers of the parliament. As Ivan would know, I was in this place watching when he got kicked out three times in one session. It went from one day to three days to nine days, and even I have never used the words that he used. But there is no question that Roger had a passion. There were people such as Richard Yeeles at the time. I think his role should also be put on the public record through all of this, as adviser to former Liberal premiers and deputy premiers and opposition leaders and, of course, with Western Mining and finally with BHP.

The whole issue—and this is not really part of the actual debate but I just want to put a microsecond of history onto the record about the decision to fund geospatial data (or whatever stuff it is that they actually do)—was the result of a piece of work done back in 1989, and I am old enough and long enough in the tooth to remember the Arthur D. Little report that dates back to then.

An honourable member interjecting:

The Hon. K.O. FOLEY: Exactly! They recommended that we should model our economy, incidentally, on the Irish experiment, which was pretty favourable there for about 15 years until it imploded. However, one of their recommendations was based on the fact that most of our real minerals were so far underground that it was unlikely that you would generate a significant amount of exploration unless the government offered some upfront financial assistance. So the very beginning of that scheme actually occurred under Frank Blevins back in 1990—and Gay (who previously worked for Frank) would remember that.

I guess the reality is that there were some very good things done by Labor in those years but so much of it was forgotten and overshadowed (and understandably so) by the collapse of the State Bank. But Frank and the cabinet—Lyn Arnold at the time, and John Bannon—were prepared to back what was a very clever piece of advice: that we start to spend upfront money.

When the Liberals came in they sustained that program and put more money into it, and I commend them for doing that. Of course, when we came into office, we accelerated the expenditure. We cleverly then called it the accelerated program, which basically meant putting a lot more money in. That has been a good piece of public policy, supported on both sides of the house. In respect of Olympic Dam, this has been at least six years. Again, as a former chief of staff to a premier and adviser, I can remember a number of false starts with various expansions with Olympic Dam.

When Western Mining clearly realised that they were not able to fully exploit this resource, the swirling birds of prey, the big mining houses of the globe, started to have a look at Western Mining. I remember that the leading mining house that was favoured to buy Western Mining was indeed Xstrata. That copped a lot of criticism locally. Not a lot was known of Xstrata. They had had some pretty mixed involvement, I think, in the west with some mining ventures. I publicly supported then, as the government treasurer, a potential bid from Xstrata, but then, of course, very late in the piece, BHP made the offer and bought the company.

That single decision of BHP Billiton to buy Olympic Dam, I think, was arguably the most important corporate play in this state, at least since General Motors bought Holdens. This was not so much a game changer in those emotive terms, but it was the arrival of a corporate entity that had the balance sheet and the risk appetite to fully exploit this asset. Truth be known—and I am only guessing here, I don't know—I doubt that even BHP then fully appreciated or understood what it was they were buying in terms of the full scope. Of course, Western Mining, which had not had the resources to fully scope the entire project, were not fully aware of what they had.

When BHP bought the project, I remember having a dinner with the premier—I am not sure whether Paul Heithersay was there but I will talk about Paul a bit later—and we met the then number two or number three executive from BHP Billiton, Mr Solomon. I asked him at that dinner a probably very naive question. The question was: with the acquisition of Western Mining, what else would BHP Billiton be doing in South Australia? What other opportunities could there be for BHP to explore and see other mineral potential? I was thinking from the point of view that we now have BHP at Western Mining. Perhaps they could look up in the APY lands, perhaps they could look up in Moomba for whatever—gas, petroleum.

Mr Solomon just looked at me and, in a South African accent, he said to me (and I will not try to do the accent), 'Mr Foley, in my business you always hunt where the elephants roam.' It took me a while to work that one out, I might add, but what he was saying was, 'We have just bought an elephant. This is where the elephants are and we will look incrementally out from the resource that we have bought. There is no need for us to go looking in other parts of your state. We have bought a patch of dirt where the elephants are and we will look where the elephants roam.'

At one point, I think BHP had engaged something in the order of probably 70 or 80 per cent of the drilling rigs available in Australia to try to scope the full extremity of this asset—this potential scoping exercise to see just how large this thing was. I have never properly nailed it down with Dean Dalla Valle and others, but what I do know is that, at one point, they had not found the outer extremities and they may yet have not. They probably even struggled to find the depth of this extraordinary asset, but they had the capacity, both financially and in a risk-taking appetite, to scope a project way beyond what was the initial Western Mining deposit and known deposits of that area.

Now what have they found? Who knows whether BHP has discovered 35 per cent of the world's known deposit, 40 per cent, 50 per cent or 60 per cent?

What we do know is that we have the largest deposit by a factor of whatever in terms of uranium. Importantly—and this is the really important part of all of this—had it just been uranium, it is probably unlikely that BHP would have been in the position to mine it. It is low grade uranium—it is not high grade—so the more volume, the greater yield.

But what is mixed with it is one of the great global deposits of copper. So, with copper, together with the uranium and the other products of nickel, some silver, I think, certainly gold—a multi-mineral mine—the economics sort of get towards working, and who knows how far these elephants roam? I am sure that BHP already has the next 100 to 200 years worked out, and I will leave it to other people to worry beyond that.

Six years ago, we had a crack at this project, and we formed the Olympic Dam task force. Bruce Carter was asked to chair it. Paul Case, who had been the head of the Department for Administrative and Information Services, was asked to lead it, and the work began, and we put in a lot of effort and a lot of money, as did BHP. At one point early in the process, BHP Billiton had 250 people in Adelaide working on the EIS, about five or six years ago.

The truth is that BHP Billiton was designing a project that I think it could be argued was even beyond its capability to fund and to finance. So, it had a bit of a hiccup and some change of key personnel, and it is not for me to comment on those changes, and there was a delay there that was disappointing to the government. Then, of course, the GFC hit.

What I have learnt very quickly about the mining industry is that it can turn off a tap as quickly as it can turn on a tap, and when the GFC hit, capital was scarce, economic certainty was volatile, and it was not proceeding and they put it on the backburner. We had to keep the project ticking along, and we asked Paul Heithersay, the head of the resources division of government, to come over and split his time between running the mining agency of government, as well as overseeing the Olympic Dam committee work.

To Paul's credit—and he should know this—it was well received by BHP, not that that was the reason for asking Paul to do it. BHP respected Paul Heithersay as a serious operator in the mining industry, and Paul was asked to manage that process. I have only a few minutes to go, and I have not even started to talk about the indenture. We had a very good team; Peter Bradshaw and a whole series of people had been working on this project for a long time and had done an outstanding job, from the government's perspective.

Then, as the GFC washed through, BHP basically picked up the phone and said, 'We want to do this project now.' I said, 'Yeah, rightio,' and we had to crank it all up again and seriously get to work. Dean Dalla Valle and I met with Bruce Carter in the very early part of this year—in January or February, from memory. We met for coffee on a couple of days. I think we had a bit of butcher's paper where we did a bit of a spreadsheet.

Kym Winter-Dewhirst, who has this incredible flow chart that only he could understand that has dates and critical time paths—

The Hon. S.W. Key: Was it Noodle Nation?

The Hon. K.O. FOLEY: Well, it was close to Noodle Nation, but Kym understood it, and that was important, and that is why you have staff who are smarter than you. Kym gave us the time frames, and it was a very aggressive time line. It was not about Mike Rann or Kevin Foley, as I said to this house before, and our political fortunes and careers. It was about a window opening up within which a multinational company could spend and allocate tens and tens of billions. Let's be honest with the parliament: this is not about $20 billion or $30 billion, in my view. This is about a much larger sum of money.

The result of this decision in further stages and further expansions means that we are talking tens upon tens upon tens of billions of dollars over the next 100 years, in my view. I have not been told that, but to me it is a pretty obvious conclusion given the nature and the size of this resource and the demand the globe will have for it. We had about eight months to try to pull this off. We had to negotiate hard, and full credit to Paul Heithersay. I have worked with a lot of senior public servants in my time in politics. I have never met and dealt with anyone better than Paul, quite seriously. I am not saying it because he is here.

Mr Venning: That's a big call.

The Hon. K.O. FOLEY: It is. There are few people of Paul Heithersay's calibre—there are some, and I do not want to mention names, but no-one better than Paul, in the sense that Paul diligently went about his work. It was never political. He was never afraid to tell you what he felt, whether or not he thought you agreed with it.

Dean Dalla Valle from BHP Billiton and I developed a very strong, quality working relationship. We headed up negotiations. We only dealt with things when they were elevated to us. We had very large teams of people doing the initial face-to-face stuff. We had lawyers, and if I had another 20 minutes I could crack a few gags about the lawyers, but best I do not. Although I should try to use as much privilege as I can over the next few weeks. The lawyers were very diligent and very good in what they did, but they were a unique profession. We did work for tens and tens and tens of hours in my office and in BHP's office, working through a long list of issues, and we got landings.

As I have said to this place before, you have to look at this deal in its totality. If you itemise decisions that we have taken, I am sure there are things that you could be critical of and you might think we could have got a better deal on that issue. However, these were protracted negotiations over seven or eight months, many days a week, tens and tens if not hundreds of hours of face-to-face negotiations, and a negotiation is give and take. You cannot get everything you want. You just have to make sure that you get the best deal that you can.

I do not want to go through all of the various environmental issues that I think we have covered exceptionally well. What I do want to address is the issue of royalties. Some members might ask why we have given 45 years and why we have struck the rate that we have. South Australia is the price setter on uranium and copper. We will produce 90 per cent of Australia's uranium, once the thing is fully operational, and 70 or 80 per cent, if not more, of the copper of this nation. So, no other state is going to raise royalties above us.

You have to understand horizontal fiscal equalisation. That means that, of what we get in royalties, we only get to keep our population share of 6.8 per cent. Of the $350 million per annum projected, under the way our nation is structured in the distribution of finances, we only get to keep about $20 million of that. No state is going to increase royalties above us and we only get to keep 7 per cent of the royalties that are pinged. It did not make sense from the government's negotiating point of view to be uncomfortable with a long rein of holding those royalties at the rates they are. They are very well structured so that they pay a lower rate if they process the material here and they pay a higher rate if they do not. I think that was a very good deal.

The previous indenture had 30 years. We went a bit longer. I know some members—particularly the shadow minister for industry—said we should look at a profits-based tax. Well, that is a resource rent, and I think Tony Abbott has made the Liberal Party's position clear on a resource rent.

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: Exactly, and I am aware of that, but it is a resource rent and your federal leader is opposed to it. I thank the Liberal Party for its support. I want to conclude by thanking—and I know that I am stretching my friendship here—the team at BHP, Dean Dalla Valle, Bruce Carter, Paul Heithersay, my ministerial colleagues in the parliament, and particularly the Liberal opposition who have shown a very sensible and mature leadership through this process. This is beyond politics. It is a good deal for our state and it is a good opportunity for the parliament to do what is in the best interests of South Australia.

The DEPUTY SPEAKER: Member for Davenport.

The Hon. I.F. EVANS (Davenport) (21:15): Thank you, Mr Deputy Speaker. I congratulate you on your election to that position today. As the shadow treasurer of the opposition, I am pleased to stand up and offer bipartisan support, as my colleagues the shadow minister for mining and the Leader of the Opposition have, as a member of the select committee. I agree with the former minister and former treasurer that this project is beyond politics. I am pleased that the opposition took the unanimous view that the state's interests should be put before political interests.

I want to recap on a few things. I am extraordinarily proud, as a Liberal, to be speaking to another bill to expand what has been a magnificent Liberal project. The cold, hard reality of it is that if the Labor Party of years past had got its way then we would not be here debating it because the line that was a mirage in the desert, the line that no credible economic commentator would agree with the economic estimations at the time, the whole campaign run against this particular project from its very commencement by the Labor Party, I think, was a very sad chapter in this state's history.

There are some projects in this state's history, some issues that come along that are so much in the state's interests. You sometimes have to put party interests aside, put politics aside for one minute, and put the state first. It is regrettable, in my view, that the Labor Party of the 1970s and 1980s did not take that decision in relation to Roxby Downs and the question of uranium mining because of all of the economic benefits that we talk about today, all of the economic benefits that are talked about in this particular project.

The reality is that the negative opposition taken by the Labor Party in years past only denied the state access to this resource, and only denied the state access to the economic development years earlier. You would have to question why, other than for political motive, would a party do that? So, I am pleased that this side of the house, the Liberal Party, took, in my view, a mature decision not to play politics with the issue in relation to the agreement.

This is a magnificent Liberal project: Roxby Downs. It will underpin the state's economy for many years to come and provide a sound base for the economy for many decades to come. I am pleased to be part of the party that has delivered this project and has agreed unanimously to this particular expansion indenture that we are debating now. I remember the position put down by former premier Rann in his document, Uranium: Play it Safe, South Australia's non-boom, the big prediction by Mr Rann at the time that South Australia would have a non-boom. This would not happen. He actually says in here:

No serious commentators are now likely to join the Premier in trumpeting the economic impact of Roxby Downs. Even Western Mining, a partner with BP and Roxby exploration, will not publicly commit itself to actually mining the ore body despite its insistence that the government pass an indenture bill for the project.

He finished up the page by saying, 'It smacked of a political stunt.' Well, I say to South Australia: it's not a bad stunt! It is going to be the world's biggest mine brought to you by the Liberal Party of South Australia. I am very pleased. It is great that Roger Goldsworthy is still with us to hear this debate and see this project developed. We are having dinner tomorrow night with one of the Tonkin family. It is just great to see that this project is going ahead because those people had political courage. They did not wimp off to the corner and take the political angle like some others did: they had the political courage to put the state first, and I am so pleased they did so.

I am disappointed that the Labor Party at the time never took that option of putting, in my view, the state first before the party. It has always been the Liberal Party that has taken the big issue questions, the big policy steps, in regard to the state's economy. If you look at the more recent history of the state, the three key decisions that rebuilt the state economy were these: the Roxby Downs decision, which the Labor Party opposed; the lease of the electricity assets to pay off the state debt which enabled the state to regain its AAA credit rating and which the Labor Party opposed.

The Hon. A. Koutsantonis: That's right.

The Hon. I.F. EVANS: The minister says, 'That's right,' and I thank him for putting it on the record and agreeing with me. I thank you for that, minister. The reality is that my grandmother could have delivered the AAA credit rating after the 2002 election, and she has been dead nearly five years—that is how certain it was that it was going to be reinstated.

The other issue was the GST, which has provided a growth revenue stream for the states. Imagine South Australia—

The Hon. A. Koutsantonis: What about the carbon tax?

The Hon. I.F. EVANS: Well, the minister says, 'What about the carbon tax?' The people will have their say on the carbon tax. Speak to me after the next federal election.

The Hon. A. Koutsantonis interjecting:

The Hon. I.F. EVANS: Speak to me after the next federal election about the carbon tax. The reality is that, without the GST, without the reduction of debt through the ETSA leases and without the Roxby Downs decision, I ask the parliament this: where would the state budget be and where would the state economy be? The Liberal Party has a history of putting the state before politics.

The government has been saying that there is a message about the state, as if the state has a chip on its shoulder. The state does not have a chip on its shoulder. It is a proud state with a good economic record, and what all this decision does is send a message to the mining industry that we have a state opposition that will support projects on their merits, and we will put the projects first if there is some merit to the project. They actually have a parliament that is prepared to put the state first rather than necessarily play politics with it. I accept the role from the view of a shadow treasurer, I accept the issue that it is essentially the role of government to negotiate these contracts.

I accept the position put by the former treasurer that this has been about a six-year process. To try to renegotiate these sorts of indenture agreements on the floor of the house by a committee of 69 politicians from various viewpoints would be nigh on impossible, and I do not think the business community or the mining industry would even seek to invest on that basis. There is, I think, an acceptance—from my point of view at least, as an individual—that it is indeed the role of government to negotiate these contracts for the good of the state. I accept the former treasurer's view or position that he put to the parliament, that it has taken nearly six years to negotiate this particular contract.

I justify my view because, if you look at all the planets that have to align for these decisions to be made, not only do you need a BHP board that is supportive, in this particular case, you need a chief executive like Marius Kloppers who is committed to the project—and he is, and we thank him for the very courteous and frank meeting the other day. You need to have a government that is committed to the project and prepared to negotiate on the key issues. You need to have the capital available within the company. You need to have the financial markets in such a state that the company is actually prepared to invest if it needs to borrow. You need to have an opposition that is prepared to negotiate the issues through both houses. There is a whole range of things, where planets need to align.

I think it is ultimately the role of government to negotiate these indenture agreements. It is the role of the opposition, of course, to scrutinise and question. I think Paul Heithersay, Bruce Carter and others who have been dealing with the opposition over the last few weeks would agree that we have questioned them a fair amount about the project and other options that were available to the government to consider.

The other issue that we have to consider in all this is the state of the world market as we speak. Here we are, a small state with a limited economy that seeks to expand through the BHP expansion. We have one of the world's biggest miners, probably one of only two or three miners with the capital and the capacity to develop this project. When we look over to Europe, Italy is in trouble and Greece is in trouble. What will the financial markets be doing in three, six or nine months? Who knows?

I think if we can get BHP to invest in what will be the world's biggest mine in South Australia, it will be, in my view, well over a 100 to 120-year commitment. I think it will be a significant player in the state economy, and my view is that we should not unreasonably stand in the way of this project. My message to BHP is that it should have full confidence that the state opposition—if and when we become government—will honour the agreement 100 per cent.

The DEPUTY SPEAKER: If and when, did you say?

The Hon. I.F. EVANS: If and when. If we win government or when we become government. On behalf of the opposition, I say to BHP that it has a 100 per cent ironclad guarantee that, on forming government at some point in the future, the state opposition will honour the agreement. BHP can be confident of that particular issue.

I suspect that the real test for the parliament and the state is: how do we then capitalise on what will be one of the world's great projects? That will be the real test. It will not be the royalty rate; it will not even necessarily be the level of employment; it will be: how can South Australia best capitalise on this project? The real message out of this project to the rest of the world is that we have world-class resources that can be developed. We have a government and an opposition that are prepared to work in the best interests of the state on these world-class deposits, and we are an economy open for business. That is the real message, I think, by the opposition taking this particular view.

Imagine the message to the world if we took the view that we were going defeat the indenture bill. What would the message be to investors into South Australia? It is for that reason that I congratulate Isobel Redmond and Mitch Williams, as the leader and deputy leader, for getting a unanimous vote out of the party room because it sends a very strong message about the alternative government that we are very serious indeed about the economic development and the employment development of this state.

We will have more to say on future dates about ways to capitalise on this particular investment. Importantly, from the Liberal Party's point of view, this project will invest significant sums in the regions. It is this side of the house that most represents the regions, and it is this project that is going to deliver significant sums, significant jobs and significant confidence into the regions which have taken a battering through drought, flood, fire—and indeed through budget measures over the last few years.

So, we welcome this big investment into the regions. The world's biggest mine, in my view, 120 years slap bang in regional South Australia, can only be a good thing for the regions of the state. I am someone who takes the long view on these sorts of issues and, while it is going to be very difficult to implement this overnight—in fact, impossible because of the former treasurer's point about horizontal fiscal equalisation—it is time for the state to at least consider how in maybe a decade's time we can construct a sovereign wealth fund, whether that is possible, and what changes to federal regimes need to be made to allow it. It may not be possible but, if ever the state is going to consider it, with this investment and other mining investments that are in the wind, over the next decade there needs to be some discussion about it.

There is a review of the horizontal fiscal equalisation process happening at the federal level. There are rumours that they are talking about adopting the Canadian system which essentially cuts off part of the mining royalties out of the horizontal fiscal equalisation process and, if that occurs, the question comes: can South Australia actually develop a sovereign wealth fund without penalising its budget regime too much. Other sovereign wealth funds are not set up on the basis of royalties but on the basis of budget surpluses.

Let me make this quite clear. I am not suggesting we set one up tomorrow, but I am saying that in the context of this debate over the next decade now is the time to at least start to talk about it, to have a look at it, to get the Public Service thinking about it, and the newer members of parliament who may be here longer than me will ultimately one day have to make a judgement about whether we can actually do that because we will only ever dig it out once. We will only ever dig it out once and we shouldn't blow the revenue simply without considering whether we can implement a sovereign wealth fund. I have a motion on Thursday in the Economic and Finance Committee to look at that very issue.

The other issue is in relation to attracting other business on the back of this investment. Part of the issue will be the high tax regime and the WorkCover regime in this state as to whether businesses come here. So, there will have to be a debate about the level of taxation in this state and the implementation of this particular project.

I have not spoken in detail at all about the select committee report or the indenture agreement because my colleague the deputy leader more than adequately covered that. I wanted to speak a slightly different message. I want to put on the record my thanks to the minister and his staff and the other members of the select committee for the very mature way the select committee was handled. I want to thank most sincerely BHP and their negotiating team for their openness and frankness with us in relation to the negotiations, and particularly to Paul Heithersay and all the departmental officers from his agency and the crown law and others who gave us access, through the minister's courtesy, to the documents two weeks early on a confidential basis so that we could get our head around the detail and have all the questions answered. I think the process it went through helped deliver a unanimous vote from the Liberal opposition. I really look forward to this project starting, and my message to BHP is to get on with it.

The DEPUTY SPEAKER: Member for Unley.

Mr PISONI (Unley) (21:35): Thank you, Mr Deputy Speaker, and congratulations on your elevation. I would have actually voted for the other guy—the member for Croydon—because I would have looked forward to having my speeches interrupted with corrections of grammar on a regular basis. That would have been an enlightening experience!

I would like to take a slightly different tack on my support of the indenture bill. I want to take us back to 1979. I remember 1979: it was after the so-called Dunstan decade. We had very high unemployment here in South Australia. It was very difficult, in particular, for school leavers to get a job. I was one of those school leavers at that time, and at age 16 I decided that in April of that year I would look for an apprenticeship. I had had enough of Salisbury High School and I felt I needed to get out into the workforce.

It took me over 100 job applications and until December that year before I was finally accepted as an apprentice at a small family firm in the city called Norman, Turner & Nottage. There would be many older South Australians (particularly in Canberra and also in the eastern suburbs of Adelaide) who would be familiar with Mr Nottage and the fine work that he did.

During that time, on 15 September 1979, we had an election. In January of that year Don Dunstan resigned for health reasons, and I remember the news conference well. At that time I was collecting glasses at the Parafield Gardens Community Centre—I think the rate then was $1.50 an hour—and I remember watching it on the television screen after school. Mr Dunstan was in his pyjamas, and they were very fashionable, too, I recall, at the time, which was typical of the premier who was a very sharp dresser. We all recall his pink shorts a couple of years earlier.

Des Corcoran was then the deputy premier, and he replaced Don Dunstan as the premier but insisted that he needed his own mandate so he went early to an election, and I remember two key issues. I must have been much more politically aware than I thought I was at that time, as a young 16 year old. I remember seeing one of the ads on TV with Des Corcoran putting a petrol pump into a car and complaining about the price of petrol (I think it was about 12¢ a litre back then), and blaming Canberra. He said, 'We've got to stop Canberra putting up petrol prices!'

Then we had the big bus strike of 1979. The ever-so-helpful unions for the ALP decided that they were going to go—I think in about September—

Ms Chapman: And the meat scandal at the Royal Adelaide.

Mr PISONI: The meat scandal at the Royal Adelaide Hospital, the member for Bragg reminds me, as well. I am not quite sure that my politics were quite that sophisticated that I remembered something like that at the time, but the bus strike which happened almost as Des Corcoran called the election—and David Tonkin was elected—

Mrs Geraghty interjecting:

The DEPUTY SPEAKER: A point of order has been called for.

Mrs GERAGHTY: Sorry, I was just going to raise the point that I have no idea what this has to do with anything, but—

Mr PISONI: —in 1979 as the new premier.

The DEPUTY SPEAKER: Member for Unley, the procedure is, when there's a point of order, you take a seat and I hear the point of order.

Mrs GERAGHTY: No, no; it's all right.

The DEPUTY SPEAKER: You wish to withdraw; okay.

Mr PISONI: I distinctly recall the minister very graciously allowing members to speak beyond the report that has been tabled. We have to look at the contrast that David Tonkin brought to South Australia compared to how the Labor Party was thinking at the time. I refer members to a very famous publication, that has become more and more famous as it has got older. It was the work by Mike Rann, then working as a staffer in the Labor Party: 'Uranium Play It Safe'. The introduction to the paper tells us that Mike Rann was the chairperson of the nuclear hazards committee of the ALP in the South Australian branch, that he was the adviser to the South Australian Labor leader John Bannon, and was previously press secretary to premiers Don Dunstan and Des Corcoran.

It is interesting that the campaign run at the time, in 1977, 'Uranium Play it Safe', was a big federal issue. I think even Don Dunstan appeared on television ads across the nation telling people 'I once thought uranium was a good thing but then I realised it wasn't a good thing.' Advertisements were on television showing how long it would take for nuclear waste to become safe. It was a very strong campaign that the Labor Party ran in 1977, and it was called 'Uranium Play it Safe'. That was the campaign.

As a matter of fact, if you go to the Fred Daly Collection in the Australian National Museum in Canberra they even have the badges on display, because ALP members could wear these badges. They are described as green, yellow and white plastic and metal badges with a safety pin clasp on the reverse side. The front has yellow inscribed 'Uranium Play it Safe' in capitals, and in white text 'Vote ALP' on a green background. It is a very detailed description. It tells you that the material was metal, non-specific and plastic, which of course was also non-specific. It was six millimetres in depth and 55 millimetres in diameter. This was a campaign badge, or button, which were very popular in the 1970s for members—

The Hon. S.W. Key interjecting:

Mr PISONI: I would love to have one for my political collection. I do not discriminate in my political collection, and I thank the member for Ashford for that kind offer of a souvenir from that time. If we go further and compare some of the debate of today with the debate that Mike Rann was arguing as to why we should not have this Roxby Downs indenture bill in 1979, you can only think how things change but how they stay the same. Mike Rann wrote:

In South Australia, the Liberal government has got itself into a tangle over the proposed Roxby Downs copper and uranium mine.

The DEPUTY SPEAKER: Mike Rann is actually the member for Ramsay; I suggest you refer to him in your speech as the member for Ramsay.

Mr PISONI: The member for Ramsay, of course; Mike Rann, the member for Ramsay. He continued:

Since the September 1979 election, Premier Tonkin has pinned his government's political hopes on a development he has described as eventually being as big as Mt Isa.

It is even bigger than that now, of course. Actually, he was Mike Rann back then, not the member for Ramsay; he was Mike Rann when he wrote this. Mike Rann said:

Faced with record unemployment, the South Australian Liberal government—

this is after 10 years of the Dunstan decade, of course—

has painted itself into a corner over Roxby Downs.

As I said, I think it was two elections that Mike Rann won based on the promise of the expansion of Roxby Downs. He continued:

No serious commentators are now likely to join the Premier in trumpeting the economic impact of Roxby. Even Western Mining, a partner with BP in Roxby exploration, will not publicly commit itself to actually mining the ore body despite its insistence that the government pass an indenture bill for the project.

Of course, then premier David Tonkin knew that this was a fantastic project for South Australia and, despite the opposition, the opportunistic nature of the Labor Party, he was going to make this happen. Mike Rann then went on to say:

Negotiations over the Indenture have not gone well for the South Australian Government. The Indenture Bill was supposed to be presented in November 1981. It didn't appear. Then it was due to be presented to Parliament in December of that year. But negotiators failed to agree over electricity prices and royalties.

Here we are told, after six years, that we have to rush this through, yet Mike Rann was criticising the Tonkin government, which was only in power for three years. We should look at the achievements of the Tonkin government in those three years. He was described as a combined fiscal conservative, with impending social progressive reforms—something I am very comfortable with.

Premier Tonkin made significant cuts to the Public Service. I remember that he completely decimated the public buildings department and freed up work for small businesses right around the state. He did it to such an extent that, even after 11 or 12 years of the Bannon government, they could not reinstate the public buildings department. Of course the unions did not like that, but we saw much more opportunity and better value for money in government purchasing for furniture, buildings and so forth throughout the state.

Then there was the passage of the lands rights bill and the return to the Pitjantjatjara people of 10 per cent of South Australia's area, another very significant achievement by David Tonkin. Other significant actions included the development of Olympic Dam that we are discussing here tonight, extending earlier anti-discrimination provisions to include physical disability, establishing the ethnic affairs commission and introducing random breath testing. The late Hon. Murray Hill was the first minister for ethnic affairs, father of the former senator, the Hon. Robert Hill.

So in a very short time we had many legacies for South Australia from David Tonkin. That is why I want to use this opportunity to remind the house about a motion that was supported by the Labor Party, the government, that I moved in this place in 2006, successfully amended by the member for Mawson, that the South Australian government name a significant piece of infrastructure in South Australia after David Tonkin and of course Norm Foster.

Both men paid a high political price for their commitment and courage, their commitment to South Australia and their foresight, despite the attack by their political enemies both within their own parties—Norm Foster in the Labor Party of course—and David Tonkin had to fight the unions and the Labor Party to get the indenture bill through the parliament. That was a period of over three months that that took to get through the parliament.

I take this opportunity to remind members that this house unanimously supported a motion to recognise those two men by naming a significant piece of infrastructure in South Australia, and there are plenty of opportunities for us to do that. I would not like that infrastructure out in the middle of nowhere; I would like that infrastructure to be somewhere that South Australians will see it and will know that these two men played a significant part in the establishment of what we are celebrating here today, the Roxby Downs indenture bill.

To get back to some comments the member for Port Adelaide made, where he congratulated the Liberal opposition on being bipartisan by supporting this—a stark contrast to when the hard yards were made by David Tonkin in 1982, despite obstacles and furphies. Radon gas, if you read the report by Mike Rann, was going to kill all the workers in the mine. The report said that it hangs around for 3½ hours when it comes out of the ground, and that was another reason we should not have radon gas.

The member for Port Adelaide also spoke about royalties and that 3.5 per cent we should be very happy with. But what did Mike Rann write in 1982? He wrote:

The bill was finally introduced in March 1982. It was a disappointment, even to the strongest supporters of Roxby. Instead of the 10 per cent royalties predicted by the Advertiser, the real figure was 2.5 per cent, eventually rising to 3.5 per cent.

What are we signing today? Yet Mike Rann was critical of the Tonkin government for signing a deal that had royalties at only 3.5 per cent. Of course, he went on to say that there was no guarantee in the indenture that mining would proceed beyond the feasibility stage. No guarantee. Well, there are no guarantees in any business, but I think it was a pretty good call by David Tonkin and Roger Goldsworthy back in 1979, because here we are today supporting legislation, passing legislation, putting legislation through this parliament that will see this mine become the largest open-cut mine in the world.

Things do change in politics—I admit that—but I do not think I have ever heard Mike Rann as Mike Rann, the Premier or as the member for Ramsay say he was wrong when he was so critical of the Roxby Downs indenture bill in 1972.

Ms Chapman: 1982.

Mr PISONI: 1982, the member for Bragg reminds me; thank you very much. I am certainly very pleased with the opportunities that this bill will give South Australians. As a father of teenagers, we all hope that our kids have opportunities here in South Australia, and they feel they do not have to move interstate or overseas in order to pursue their professional interests. But we also have to ask ourselves just how well this government has prepared young South Australians for cashing in, if you like, on this mining boom.

We do know that there is always an option for mining companies to fly staff in and fly them out again. We would like them to employ South Australians first, but we also need to understand that South Australians need to be ready for that. Let us look at the appalling condition in which Premier Jay Weatherill has left the education system here in South Australia. Since the NAPLAN tests were introduced in South Australia in 2008—which are crucial items of numeracy and literacy—we have gone backwards at every test since 2008, and our worst results happened under the watch of the then education minister, now Premier of South Australia.

This year, South Australian school students fell behind in 14 out of 20 categories in our NAPLAN scores. We did not reach the national average in any NAPLAN scores in South Australia—

The Hon. A. KOUTSANTONIS: Point of order.

The DEPUTY SPEAKER: Point of order. Minister?

The Hon. A. KOUTSANTONIS: Mr Deputy Speaker, given that the opposition agreed that the second reading of the bill be passed very quickly in order to allow members to comment on the noting of the report in length as a second reading speech on the indenture, I am not quite sure what the NAPLAN testing has to do with the indenture bill. I think, while we are being very patient—

Mr PISONI: Point of order. This is not a point of order; this is a speech.

The DEPUTY SPEAKER: Member for—

Mr PISONI: Stop the clock!

The DEPUTY SPEAKER: Excuse me, member for Unley. There is a point of order and you will take your seat until I have dealt with it, okay?

The Hon. A. KOUTSANTONIS: Relevance.

The DEPUTY SPEAKER: Relevance, okay. I have allowed you quite a bit of scope, member for Unley, and I would suggest you get back to the substance of the report.

Mr PISONI: That is not what the minister said when he introduced his opening remarks about this report. He said that speeches could be beyond the report, and skills are a very important factor here in South Australia, because we have failed to prepare South Australians to participate in the mining boom. Only one school in South Australia is teaching geology—

An honourable member: Shame!

The DEPUTY SPEAKER: Member for Unley, take a seat. I have made a ruling. Unless you wish to contradict that ruling, I suggest you just get back to the report. I do not have to defend what I just said; just get up and debate the report please.

Mr PISONI: The member for Croydon wouldn't do this.

The DEPUTY SPEAKER: The member for Croydon is not here and, member for Unley, you are warned.

Mr Pengilly: He didn't get enough votes.

Mr PISONI: He didn't get enough votes; that's right. So that is my whole point, Mr Deputy Speaker: for six years, this government has been telling us about the opportunities that Roxby Downs has been giving us, and for six years our education standards here in South Australia have failed. In 2000, 44 per cent of students were getting pass marks in maths, science and chemistry here in South Australia at year 12—44 per cent. That figure is now 37 per cent—37 per cent under this government. This government has failed to prepare South Australians to be able to participate fully and receive all the benefits that this indenture bill will provide. They have been more focused on spin than they have been on delivering outcomes and preparing South Australians to exploit the benefits.


[Sitting extended beyond 22:00 on motion of Hon. A. Koutsantonis]


Mr VAN HOLST PELLEKAAN (Stuart) (21:55): Thank you very much, Mr Deputy Speaker. As you know, I support this development. In the vein of the minister's comments earlier, we are here talking about the select committee report, but I will certainly comment on the indenture and a little on the EIS. I have some very serious concerns about what may lie ahead of us, but nonetheless when I do my own cost-benefit analysis we will be way out in front, and consequently I do support this development. I consider that some fairly certain positives will outweigh some uncertain negatives and some very genuine potential risks.

I have a very short period of time in which to speak. I certainly will not be able to get out all the issues I would like to on behalf of the people of Stuart, but I will certainly do my best. I would like to start by congratulating everybody who has been involved in this project because, whether it could have been a bit better or a bit worse, it has been a long slog. Government agencies, government, BHP, opposition, everybody has done their very best to get this project to where it is now and that should be recognised.

The other thing I would like to say is that from the electorate of Stuart's perspective this is not a political issue. This is a very serious issue; this is not about politics. This is about what is important for Stuart, what is important for the region, what is important for our state. I have great interest in this issue. My association with Olympic Dam goes back a long way. I used to work for BP when BP was a 49 per cent shareholder with Western Mining in the Olympic Dam mine. I lived at Pimba and Woomera for seven years, just 90 kilometres down the road.

I have lived at Wilmington for the last seven-odd years. Port Augusta has been my regional centre for a very long time, and I have actually lived through the previous expansions in my working life, so I do have a great interest in this and I do not underestimate the scope and the size of this project. I also put on the record that I still have personal investments at Pimba and in Port Augusta.

Some people do not know this, but Roxby Downs is actually in the electorate of Giles, and I think it is important to put that on the record. It is very important for Stuart: it has a huge impact on Stuart, and Stuart will reap many of the benefits and also bear many of the costs. Roxby Downs is actually in the electorate of Giles. With regard to the government's negotiations, as I said, this has been a very big job, but I have to say I think BHP has done better than the government.

I think the government has a done an okay deal. I do not think it is a great deal; I do not think it is a good deal. I think BHP has done a better job than the government in negotiating this, and that is probably not surprising; they are a gigantic worldwide organisation with professional negotiators. In our briefings with BHP, they said very clearly that they had three key priorities: No. 1 was no third-party access to their infrastructure, No. 2 was that they got access to freehold land, and No. 3 was that they had fiscal and regulatory stability.

Of course, they were after much more than that, but they said that these were their top three. When I think that those were their top three, and they do not talk about finances and they do not talk about a lot of the other things, I think a better deal certainly could have been done. I hark back to 18 October this year, when the member for Port Adelaide said in this place, when he was encouraging the house to support the work that he and the government had done, 'It is our responsibility as a parliament to back the board of BHP.'

I would say to him and to everybody else here: it is our job in this parliament to look after South Australia, first and foremost. The government has essentially said to the opposition, 'Here is the deal, take it or leave it. There is no room for improvement.' I suspect that is exactly what BHP did to the government as well and that is why we find ourselves in this situation.

Here we all are trying to weigh it up, and I would like to start by focusing on some of the positives because there are, of course, an enormous number of positives that will come out of this. I also say that, of course, we do need the BHP board to make a commitment to progress this development, but let us assume, optimistically, that that will happen. BHP can do the job. I suppose the very first positive is: we have a partner which can do this job. It is a very professional, very well organised, very cashed-up organisation. The reality is that nobody else, no other company in the world, could do this job. So it is a positive that the deal has been done with them.

I point out, too, that, while these negotiations have been going on, whether or not they are fruitful, BHP actually already owns the right to mine these minerals, so there really was not anybody else that we could have dealt with. People sometimes say, 'They do not go off and they don't perish. Leave the minerals there and do a better deal later,' but we would always have been dealing with BHP, and I think that is an important issue to comment on.

Another very important positive, and speaking the obvious here, is the jobs and the economic benefits to the region and our state. Approximately 6,000 jobs will be created during the construction phase, approximately 4,000 direct jobs once the mine is fully operational and approximately another 15,000 indirect jobs once the mine is fully operational. No-one can deny that that is extremely beneficial for our state.

BHP is self funding this project. They will spend $20 billion to $30 billion between now and 2020 when the project becomes cash positive. There are no taxpayer funds going into the expansion of this mine, and I think that is a very positive outcome.

Regarding royalties for the state and again speaking the obvious, BHP will not strike ore until approximately 2018 and we will have to wait for these royalties but the royalties certainly will be significant. People before me have spoken about horizontal fiscal equalisation and have also spoken about the 45-year fixed period of the royalties, and I do agree with the member for Port Adelaide on that point. We could always argue about whether it should have been a shorter time and the royalties higher or lower, but I think that is quite a fair position to have come to.

Another positive is that the state will get the first opportunity to access any surplus water that might be available from the Point Lowly desalination plant, and I think that is a positive for our state given the very important issues we have with water all over South Australia, and particularly on the Eyre Peninsula and Far West Coast. BHP will pay for the water that they get from underground in the north of the state, and I think that is a positive thing. I congratulate the government on that. I think that is a real win that has come out of this negotiation.

I would also like to comment on the fact that it is important to recognise that when we talk about the indenture agreement the government has also agreed to the EIS, supplementary EIS and also to the third report, the assessment report, and they do need to be looked at differently. It is important to point out that BHP still has significant hurdles to jump over with regard to developmental and licensing requirements so that they can still actually develop and implement many of the aspects that they want to. There are numerous positives in this deal and I do not want to be churlish and pretend that there are not.

There are also negatives and, as I said very clearly to begin with, I see the negatives primarily as very genuine risks, risks that need to be addressed and dealt with. There are certainly many environmental risks. I do not doubt BHP's credible intentions when it comes to doing the best the company can with regard to the environment, but these risks cannot be overlooked. If they progress the project, they will be digging the biggest hole on the planet. How you go about rehabilitating that is an enormous issue. That is just sort of glossed over in the reading that I have done. It is a very, very difficult thing to know how on earth in 100 or maybe 200 years you would properly environmentally rehabilitate the site. That is a key issue.

Potential drain on the Great Artesian Basin is a real risk. They are already drawing an enormous amount of water from the Great Artesian Basin. I think BHP are really leaving their options open. They may draw less, they may draw a bit more, but they certainly have the opportunity to continue to draw from the GAB. Even today I received a letter from the Marree Arabunna People's Committee expressing their concern to me about that: it is a very important issue. Dust and air pollution, tailing dams and many other environmental risks exist.

I would like to focus in a bit more depth on a couple of them. It will come as no surprise to people here that at the top of my list, on behalf of the people of Stuart, is the Point Lowly desalination plant. The Upper Spencer Gulf is an exceptionally sensitive environmental area. It is an area that is in exceptionally good condition. I would not say pristine, because there are already some invasive pests in this area. The issue is that we have to make sure that this gulf is looked after—

The Hon. M.J. Atkinson interjecting:

The DEPUTY SPEAKER: The member for Croydon, you will have your time to speak.

Mr VAN HOLST PELLEKAAN: —as well as it possibly can be. It is important to also get on the record that nobody actually disagrees with desalination. It is the choice of the location that is the risk. Nothing really sums up better my views on this issue, and also the people of the Upper Spencer Gulf in general, than comments made by our Speaker, the member for Giles, back on 7 August 2009 on Adelaide talkback radio. This is with regard to her chairing the select committee in parliament that looked into this issue specifically. She said:

We initially released a report on the Port Stanvac site and we had no major problems with that, but the Port Bonython we initially certainly were concerned, we waited til the BHP Billiton EIS to come out, we called in more people afterwards and had another look at it and decided no it's in the wrong place. We certainly don't oppose desalination but not in that spot...Out in the open ocean the water turnover takes...maybe 20 days to turn over. In our part it takes 400 days...it just seems to be in the wrong spot.

The people I represent hold that point of view very, very strongly. It is also important to say that in the briefings that we got from the EPA, SARDI and PIRSA we got some mixed messages, in their opinion, as to whether or not it was the right spot. However, I am very, very pleased to know that the EPA will have the full authority and responsibility to monitor the brine output and all other aspects of that. I thank the government for that because I wrote specifically to the Premier and called through the media for that to be done, and I trust the EPA will do that work to the very best of its ability so that these risks can be minimised and ideally removed.

I would also like to point out that the information that we have all received said that 99 per cent of marine species will be protected in the Upper Spencer Gulf. When I asked the question: 'Can you identify the 1 per cent of species that are at risk out of the hundreds of thousands, if not more, of species in our marine environment,' I was told that no work has actually been done on the 1 per cent that might be at risk.

The other the key issue that I would really like to focus on is the barge unloading facility just near Port Augusta on the western side of the gulf, just on the north side of where the shacks are. It is important to point out that for the first two years of the development stage there will be a barge a week unloading at this facility, and for the next five years there will be a barge every nine days, on average.

There are very serious concerns about dust, lighting, noise, damage from winnowing, dredging, potential 24-hour operation, ballast discharge. Ballast discharge is an issue that is certainly covered in all the reports, but I have to say that that is an issue that, while there are rules and regulations all over the world, people do still get around them. There is another very genuine fear about the fact that this facility will be here for at least 16 years, and the people I represent are very concerned about the potential permanency of it.

The assessment report also states that it considers that the dust from the construction of the proposed access corridor from the landing facility to the pre-assembly yard on the north-west outskirts of Port Augusta poses the greatest potential risk to air quality of all the roadworks that would be undertaken in the proposed expansion. I think it is very important that people are aware of that. That is not to say that BHP cannot deal with that issue, but that is a very real risk.

I would also like to point out that I think BHP has been very fair with regard to the offers it has made to purchase and/or compensate people who own shacks in the immediate vicinity of the barge unloading precinct. However, I have to point out that people with shacks further away—and there are in excess of 300 of them south of that point of the coastline—will be impacted by this.

Another thing I would like to point out is workforce commitment. There is, of course, mandatory reporting expected from BHP to the government, but there is no obligation for the government to share that reporting with the public. I understand that we have undertakings from the government that that will happen and I thank them for that. Certainly, that will be one of the things that all sides of politics should be pursuing over the next decades, to make sure that the public is fully apprised of all of the benefits.

I would also like to point out that there is no definition of what 'local employment and use of local businesses' means in any of the reporting or paperwork of the indenture agreement. I hope that it means regional, then South Australian, then national, and international after that. I am sure it is no accident that there is no definition of what 'local' means.

Another very important issue that needs to be dealt with is road traffic access due to heavy vehicles. There will be an estimated 90 additional heavy vehicle movements per day north of Port Augusta during the seven-year construction phase. That is a very big issue that needs to be dealt with. That will be in addition to the forecast increase in heavy vehicle movements. It was only a few years ago that the projected increase of doubling across Australia over the next 10 years of heavy vehicle movements was predicted.

That means that the upgrading of Yorkeys Crossing becomes a higher priority than it has ever been before. That has been a very important issue that I have spoken about here and elsewhere, and everybody is aware of my views. The 90 additional heavy vehicle movements per day north of Port Augusta for the next seven years is an enormous issue that needs to be dealt with.

I would also like to quickly comment on the impact of those thousands of jobs. Again, in the tone of everything I have said, the positives outweigh the negatives, but it is really important that people understand the impact of all those jobs on other industries, other businesses and other households. Those thousands of people who will be working on this project, either directly or indirectly, will often be excluded from other jobs.

It will be extremely difficult for other businesses to hire people, and that is a cost on our economy that needs to be dealt with. It will be very difficult for households to get a plumber or an electrician, as a very basic down-to-earth example. That is again a very real risk. I would also like to point to some of the more down-to-earth community aspects of these jobs. Working away from home is a very difficult issue. It is a double-edged sword.

Many people I represent have managed to save their family farms because they have had the opportunity to work away doing mining but it also means that parents are not home on weekends and they miss school events, they miss sporting events, they miss time with their family and they miss churches. It is a double-edged sword that needs to be considered very seriously.

Just summing up, there are positives and there are negatives, and I have no hesitation in saying that the positives outweigh the negatives. Also, I see the positives as having far more certainty about them than the negatives. The negatives are risks that must be dealt with. They must be addressed; they cannot be hidden from; and they are risks that every single person in government, every member of parliament, and every person in a government agency has to address for the next decades.

The Olympic Dam mine, through Western Mining and through BHP, has contributed enormously but we have to be vigilant so that we can reap many of the rewards and deal with the risks, and keep them as risks, and not let them turn into actual negatives. With those few words, I again congratulate everybody concerned with getting this project to this stage.

The DEPUTY SPEAKER: Member for Waite, I think you are trying to get my attention.

Mr HAMILTON-SMITH (Waite) (22:15): Thank you, Mr Deputy Speaker, and congratulations on your appointment.

The DEPUTY SPEAKER: Thank you.

Mr HAMILTON-SMITH: The parliament has no choice but to support this bill, not because it is a good bill or the best outcome that might have been achieved but because the Olympic Dam project is simply too important to the people of South Australia not to proceed forthwith. We have been put in a position where we must take what we have been served up, whether it gets the best of outcomes for the people who elected us or not.

There are no political points whatsoever in opposing this bill. Quite to the contrary, there is only political criticism in opposing it. Why anyone would suggest that the Liberal opposition would oppose the bill baffles me—amend it perhaps, seek to improve it perhaps, but oppose it, I think, was never ever an option for anyone. So, why anyone would suggest that the Liberal opposition might play politics with this is intriguing.

BHP has sought to get itself the best deal possible for its shareholders by extracting as many concessions from the Labor government as possible. You cannot blame it for that—what a success it has made of it. On the other hand, the Labor government's priority has been to rush this project through parliament before the departure of former premier Mike Rann and before the 2014 election. Labor has over-promised and under-delivered. Its negotiations with BHP, reflected in this bill and this indenture, expedite its political interests.

The parliament is simply left with no choice but to support the bill without amendment. The alternative, which is to try to sort out the weaknesses in Labor's agreement with BHP through worthy amendments, would deliver delay and uncertainty. Thus we must accept the barely adequate outcome rather than celebrate a real success.

Industry should be warned. On 1 July this year, Nick Bianco was asked by David Bevan on 891 Mornings whether the company's collapse was brought on by a misplaced belief that South Australia was heading for a mining boom and that it was time to expand and build a $50 million fabrication facility at Gepps Cross, only to find the work did not materialise. Bianco replied, 'That's right.'

There is a message in the Bianco collapse for other manufacturers across the state. As shadow minister for industry and trade, I would say this: be very careful about spending significant amounts of money on infrastructure in the expectation of work coming your way from BHP's Roxby Downs expansion. It may materialise and I hope it does, but there is nothing in this indenture bill that requires it to be so. Do not be surprised if the majority of work goes off overseas at worst or interstate at best. My advice to every manufacturer and contractor—and I have visited several and discussed this with them recently—hoping to do business with BHP is: wait until you have signed the deal before you extend or put your business on the line. Learn the Bianco lesson.

There are some weaknesses in the bill and some strengths. Particular weaknesses in the bill, the indenture and the agreement between Labor and BHP, include a failure to optimise royalty and other incomes for the state, a lack of commitment and transparency on BHP's performance in regard to engaging local suppliers and local contractors, the absence of accountable arrangements in regard to local employment, and other factors.

The state has missed a grand opportunity—the opportunity to lock in with BHP a commercially negotiated master plan which ensured government and the miner work together for the benefit of future generations of South Australians for the development of its 70 to 100-year life. Instead, what we have been delivered is a de facto marriage, and this bill and the indenture are, in a form, a prenuptial agreement.

The original indenture has been watered down, with some of its key elements removed, so it is now one-sided in BHP's favour and largely unenforceable. Just like a marriage, what is left is a great leap of faith. There are no guarantees or requirements on BHP to deliver the jobs in the industry and the business opportunities which we all expect and which BHP has pointed out it hopes to deliver. It all depends on goodwill. If the relationship sours, our children, grandchildren and their children may well be asking what it was the Weatherill government signed up to during and prior to this debate.

We needed real headkickers, such as Alan Joyce and Peter Reith, negotiating on our behalf during this process; we did not have them. Now BHP has both the government and this parliament cornered. It is a case of agreeing with this amendment or risking it all. That is not to diminish the excellent work done by the Olympic Dam task force—I am sure that this has been a gruelling process—but they have been dealing with very skilled negotiators.

How did it come to this point? The house will remember the news when BHP took over Western Mining Company in 2005 for around $9 billion, thereby acquiring the Olympic Dam asset, an asset which the Olympic Dam task force has advised the parliament and members now contains up to $1 trillion worth of mineral wealth. Not a bad buy!

International giant BHP and the state Labor government have been involved in a protracted negotiation, which has, in effect, been a game of poker, with 2011 revenues of $72.2 billion and a profit of $24.3 billion, of which $16.6 billion was retained in Australia and Asia. BHP, in my view, has held the cards during the negotiation. The state Labor government has over-promised the benefits of the Roxby extension and has been wedged by BHP on most key aspects during the negotiation.

BHP's international standing as a masterful negotiator has been on show. This is a multinational that for decades has engaged in skilled negotiations with Chinese and Japanese companies over iron and coal prices. BHP is the best of the best when it comes to well-planned, well-executed negotiations. All the signs of its dominance during negotiations are present. Let's consider a few.

There was the six-year delay from BHP's acquisition to consideration of the bill, during which Labor has been over-promising the project and has under-delivered, diminishing its bargaining power with BHP at every step. Then there has been the sudden rush and the deliberately created time pressures. For example, this must be approved by 20 December or the project fails, or we must submit orders for vehicles and equipment in a time frame beyond the company's control—all highly questionable—creating the perception that it is a marginal project which is barely profitable, another very good technique.

MPs have been briefed that the cost of removing the top soil is around $5 billion to $6 billion over three years, or 0.5 per cent of the $1 trillion ore value, with around $25 billion to $30 billion to be spent on infrastructure (around 2 to 3 per cent of ore value). Certain MPs have seen financial reports on this but have been sworn to confidentiality. There has been no openness, no accountability and no testing of the claim in the parliament or publicly, as far as I have seen.

The assertion that BHP is doing us a favour by developing the resource and that we are not doing BHP or its shareholders a favour by allowing it access to $1 trillion worth of minerals owned in the first instance by South Australians, which once removed will be gone forever, is another characteristic of this negotiation.

The positioning of the bill and the indenture on the basis that they can be only agreed to or rejected but not amended is another aspect of this negotiation. The clever negotiating foil that not a word may be changed without an extensive and lengthy renegotiation of the entire agreement, all designed to put pressure on the parliament, is clever indeed. Of course, there could be amendments quickly agreed to if the government and BHP were of a mind to do so swiftly. Nothing is impossible between parties negotiating a commercial agreement, but we have been told differently.

Then, of course, there has been the threat of delay. This is the big bargaining chip. If the parliament does not agree to this by 20 December, whoever has held it up will be blamed and demonised as an enemy of the project, regardless of the merit of any amendment or minor change to the agreement. Labor must be glad indeed that we have not handled this indenture as they handled the indenture when it came before the parliament in the 1980s, when they opposed it and forced amendment after amendment. How relieved they must be that we have been a more responsible opposition.

One must even admire the internal structures used by BHP, where by implication Mr Dean Dalla Valle, who has done an outstanding job for his company, and his team seem to have their own job futures at risk should this project not succeed when considered against other BHP propositions put to the board. Create internal structures that make the negotiating team fight for survival—what a clever device!

Then one must marvel at BHP's superb lobbying campaign. Everyone, it seems—every industry association, every leading industry voice, every major media outlet—appears to have been persuaded by BHP that this bill and indenture should proceed almost regardless of what is in it. It is as if whatever is in the contract (whatever is in the prenuptial), let's just sign it and get on with it. Some who have been urging this have admitted they have not even read it. Let us hope that the expectations of the marriage are fulfilled and that it does not end up with a loss of affection, a drifting apart and then a bitter divorce and property settlement, because every word of the agreement favours BHP, not South Australians.

There are specific weaknesses in the bill as indeed there are strengths in the indenture. I am interested that they have not attracted greater media and public scrutiny during the debate. Let me talk about royalty arrangements, taxes and charges for a moment. Labor has signed up for 5 per cent for uranium and 3.5 per cent for other minerals for 45 years. This equates to a 40-year period of fixed taxation following a five-year period of non-revenue-earning site preparation. Many businesses in South Australia would like their tax rates fixed at today's levels for 45 years.

Although at present royalty payments to the states are offset by horizontal fiscal equalisation as part of agreed federal-state fiscal arrangements, these arrangements could easily be changed in the course of the mine's life, and indeed are presently under review. Should we lock in today's arrangements in light of tomorrow's fiscal uncertainties? On 21 October I note Paul Cleary of The Australian described the royalty arrangements in this indenture as 'a case of Olympian incompetence' which has 'robbed the state's citizens of their wealth' and should have comprised a profits-based measure. This is particularly important since the mineral resources rent tax only applies to coal and iron ore.

On 1 November I note Christopher Russell of The Advertiser expressed similar views in that newspaper. The point is that the existing indenture had a super profits mechanism in it, established back in the 1980s as part of the original indenture, and what we seem to have done in this agreement is remove that device.

Then there is the issue of employment outcomes. There is nothing in the indenture that requires BHP to employ a single South Australian as part of the expansion. We all know they will, but there is nothing that requires it. We all know that a commercial negotiation could have seen a better commitment from the company on a commercial basis. Arguments about free trade across borders are irrelevant in my view. If it wanted to, BHP could have chosen to set itself performance standards and KPIs in regard to employing locals. Instead, the road ahead, while paved with good intentions, contains nothing which is enforceable in the indenture.

Schedule 1, clause 12 of the bill provides no guarantee that over the 70-year life of the mine priority will be given to South Australian based workers. Assurances, while comforting, are not enough to guarantee. All that matters is what is stated in the bill and the indenture. Should we have ensured that fly-in, fly-out workers from outside South Australia do not dominate the workforce in future? If they do, they will spend their incomes in Sydney, Melbourne, Brisbane or even overseas, and the GST revenues will be spent there.

The bill has no position on overseas and interstate workers. In future years, a fly-in, fly-out workforce from emerging or regional countries could predominate at the mine as workers fly in and fly out. A master plan to grow townships in regional SA and Adelaide based around fly-in, fly-out to and from Roxby could have been made clearer. Plans could have included the role of skilled migration and an employment scheme.

Let me now move to flowthrough benefits to South Australian manufacturers, businesses and head office functions. The indenture bill does not adequately ensure that South Australian manufacturers and businesses are offered first access to contracts on a level playing field, including contracts for services, construction and supply. BHP should be free to run its business as it sees fit, by all means, and SA businesses bidding for work must be competitive, but there needs to be a process to ensure that SA businesses have been offered an opportunity to tender and compete on a level playing field. There needs to be openness and accountability.

The issue is one of transparency. Debate regarding a miner's business contracts is topical in Western Australia where, according to the Australian Financial Review of 27 October 2011, the federal government and state government are seeking to establish more transparent arrangements with miners in that state. Could we have done better? Freeholding of land and third party access is another issue of concern. Selling the land is a threshold decision, as it denies access to others in perpetuity. Detail is needed on the price being paid. The indenture could have spelt out what is to occur if the site is, in the future, sold to a foreign subsidiary, particularly if an enterprise is owned by a foreign government.

I am remembering here that the Chinese government-owned corporation CHINALCO, strongly considered a takeover of BHP in 2008. Perhaps we can rely on the Foreign Investment Review Board to protect us, perhaps not. A threshold concern is that should another mineral deposit on a scale of Olympic Dam be discovered in the future, the state has bargained away its rights to BHP, subject to commercial consideration to provide access to third parties. This situation might be good for BHP but would limit future opportunities for South Australia. BHP could block a further mine development from access to under-utilised capacity at its airport or railway line.

I am advised that retention of a third party access right in the original indenture has been given up. The issue was fought in the courts by Fortescue in WA, which would not have had a viable business had it not been given access to another company's rail infrastructure. These are important issues. Is BHP a good corporate citizen? Why did we require Santos, when we lifted the share cap, to spend $60 million over 10 years on an array of benefits and investments from organisations like RiAus, UniSA and Athletics SA, to Common Ground and other charities, and yet we have not required anything like this from BHP?

What could have been here is a grand vision for jobs and industry involvement in the project as part of a master plan for regional South Australia and an agreement which can be measured and which requires BHP to perform and deliver. Future generations would have benefitted from a profits-based royalty and taxation regime leveraged forward, together with measures to optimise GST and other tax revenue opportunities available in the forward years.

What is missing is a visionary plan to connect mining to manufacturing in SA through investments in research development and innovation science using our universities and CRCs as a catalyst for transformation, an investment by BHP, as a good corporate citizen of SA, in both charities, arts and community-based institutions. It is a startling omission and one that I certainly hope BHP remedies.

In summary, achieving these outcomes would have required a different approach; in particular, a stronger government bargaining position. We have the asset, $1 trillion, but we allowed the initiative to switch to BHP. We should have achieved a better commercial outcome on jobs in regard to the fly-in/fly-out workforce and other considerations; a better commercial outcome. Despite all of the issues that I have raised, as I said at the beginning of my address, the parliament has no choice but to support the bill unanimously, not because it is the ideal bill but because the Olympic Dam project is too important to the people of South Australia not to proceed forthwith.

We have been put in a position where we must take what has been served up by this state Labor government, whether it gets the best outcomes for the people who elected us or not. I sincerely trust and hope that BHP will do the right thing through this agreement, although the agreement does not require it to do so. I hope that we will see the jobs hired locally. I hope that we do see skilled migrants relocate to SA and fill up not only Roxby Downs but also Upper Spencer Gulf cities and Adelaide. I hope that a substantial slice of business on offer goes to South Australian companies, not off to China, India and other emerging economies. I hope that assurances of goodwill are fulfilled because this indenture is no protection should that goodwill fail at any time in the next 100 years.

I sincerely hope that future generations do not reflect back on this debate and ask how we could have got it so wrong, but rather that we look back in confidence that we got it right. Only time will tell.

Dr McFETRIDGE (Morphett) (22:35): Madam Speaker, I recognise that this project is in your electorate and, as a strong supporter of this project, I look forward to accompanying you at some stage to visit the project as it develops. Much has been said about this project by the minister, our shadow minister and other members in this place, and I will not go over what they said about the benefits to the state and some of the concerns. The member for Stuart voiced a number of concerns. What I will say is that there is no doubt whatsoever that this project is a significant milestone in the development of South Australia.

When you come into parliament you have to recognise your own abilities and your own areas of weakness. I am not a good negotiator. I recognised that, so I did an intensive commercial negotiation course for a week in Sydney, and, as part of that course, you learn some of the tricks of the trade of negotiation. Basically, it came down to giving the person you are negotiating with what they want on your terms. It sounds easy, but particularly with this sort of project (as we have seen) the negotiation has been protracted and it has sometimes been heated, I understand, but, in most cases, there has been very, very involved negotiation.

Every part of the progress of this project has been looked at and examined. Can I congratulate not the former premier, Mike Rann, on this at all, because he is the political chameleon here, but I would like to congratulate the member for Port Adelaide, the former treasurer, Kevin Foley, on his role. People outside this place have said to me, 'It's not Mike Rann, it's Kevin Foley who has been driving this for the government.'

Can I also congratulate the Leader of the Opposition, the deputy leader and the shadow treasurer for their input on this project, for their part on the select committee and for their part in the confidential negotiations to get the information ready for the opposition to be able to consider. I acknowledge the fact that we have had a number of briefings in the party room that have been able to give us not the absolute minutia of the negotiations, but, certainly, a thorough overview and a degree of confidence with which we are happy to progress, and that resulted in the unanimous support of the indenture by the party room last night.

That is not to say that there was not discussion or that there was not some debate. Those who had concerns were won over by the strength of that debate, so there was unanimous agreement. Whilst he is in the chamber, I acknowledge Mr Paul Heithersay who has been a leading public servant in this area, and I know that the member for Port Adelaide has valued his input in a very significant way.

I first visited the Roxby Downs site up in the Far North of South Australia a number of years ago in my parliamentary career. In 2007 my wife and I visited to have a look at the town, to have a look at the site. We were given a conducted tour. We did not go underground at the time, but I was absolutely blown away by the then projections of the size of the hole that is going to be dug—3½ kilometres long, 1½ kilometres wide and about 1½ kilometres deep.

The size of that hole is just mind-boggling, and I look forward to going up there. Some members of the opposition did look at Prominent Hill a while ago, and to see the size of that excavation, even as it was in its early stages, was enormous, but to imagine the size of this project is going to be something to behold. I would like to take my grandchildren up there to see what is happening when the site is being developed because this is going to be part of the future of South Australia. My grandchildren will be benefiting from this as will their grandchildren. We understand that there may be up to 200 years of excavation at this mine because the limits of Roxby have not yet been discovered.

I also understand that there are significant deposits not far away very similar to Roxby that have been looked at by other miners. It is very important and very pleasing for South Australia to have such an El Dorado, I suppose, of minerals sitting right on our doorstep ready to develop. Just today I heard of other prospects in South Australia involving petroleum products. Having been the shadow minister for aboriginal affairs for a number of years, I spoke to people involved on the APY lands who were negotiating with mining and petroleum companies for exploration on those lands which would then flow through benefits to the people on the APY lands.

This is an enormous project by anybody's judgement. We are not just talking telephone numbers. One of the things that astounds me is that, once we start talking about government figures, we start talking telephone numbers. We are talking not only about international subscriber numbers, but about intergalactic telephone numbers. We are talking about massive numbers, not only in terms of the amount of overburden that is going to have to be removed, the amount of ore that is eventually going to be removed from this site, but also the money that is going to be made not only for BHP but for South Australians and Australia as a nation, because this is a project of that size.

The need to make sure that we get it right is so important. While there are some areas of concern—and we have those from members here—we believe that this is a project that should be supported and given an expeditious passage through this place so that BHP can start getting rid of the overburden. Three hundred metres deep over that area is a massive amount. In fact, when I was in Roxby a number of years ago, I said to the chap who was showing us around, 'You're going to create Mount Roxby.' He said, 'No, we'll be creating just a low range of hills.' That is quite true. It is a massive amount.

I understand that there will be some changes to the microclimate, but that has been explored in the EIS. That is how detailed the EIS has been, and it has to be, because we need to make sure that we do not create irrevocable damage to the environment because of such a project. The long-term gains must also be balanced by the long-term effects of such a project.

The discussion that has gone on tonight and the discussion I have heard over a number of years is a bit like Groundhog Day. On 4 March 1982, my good friend the member for Kavel's father, the Hon. Roger Goldsworthy, introduced the Roxby Downs Indenture Bill. I had the pleasure of seeing Roger and Mrs Goldsworthy (Lyn) at St Leonards Primary School not long ago, and they are both fit and well. It was good to see them. They live in my electorate, were married in my electorate and went to St Leonards Primary School. It is lovely to have that connection with them and also to have the member for Kavel in this place now, following in his father's steps of being a very valuable member of this place.

In March 1982 Roger Goldsworthy introduced the Roxby Downs Indenture Bill. He obtained leave to introduce a bill for an act to ratify and approve a certain indenture between the state of South Australia and others; to make special provision for local government in relation to a part of the state subject to the indenture; and for other purposes. Mr Goldsworthy said:

...the government undertook to 'encourage the full-scale development of the copper/uranium deposits at Roxby Downs'. This was in the context of a well recognised need for major new projects to be encouraged in order to provide the necessary diversity for South Australia's economy to grow and develop, thus ensuring that South Australia shared in the benefits of economic growth taking place elsewhere in Australia.

As I said, this is a bit like Groundhog Day, déjà vu. There is a looming global financial crisis out there, but what we need to recognise is that this sort of project—Roxby Downs—is going to be looked at in exactly the same way as it was in 1982: as something that is going to give South Australia an absolute leg-up in economic terms by anybody's measure.

Mr Goldsworthy went on to say that the joint venture was announced that they would spend 'an additional $10 million to $15 million constructing an exploration shaft'. As I was saying before, you are talking telephone numbers when you are talking about this sort of construction, but $10 million back in 1982 was probably the equivalent to $100 million now, and we are talking billions of dollars today just to get this project going. Mr Goldsworthy also noted back then:

Results of the first hole, sited on geophysical anomalies and drilled to provide subsurface geological data, are now legendary. It was not until the tenth hole was drilled, however, that the immense potential of the region was realised...This is a remarkable deposit in terms of size of contained metal and mineralogy, and appears to be unique, genetically—it is quite unlike any known orebody.

Back in 1982 they recognised that and we understand now that the limits of Roxby have not yet been defined, and it is something that I find really exciting for the future of South Australia, particularly if we have other sites similar to this that are being explored and possibly developed in the future.

I note there is some concern about third-party access to roads and rail but, when you are talking about a trillion-dollar mine, as the member for Waite pointed out, some of the infrastructure is a fraction of a per cent of the cost of the mine, so I wouldn't see that that is going to be a huge impediment to anybody who is looking at developing a project of similar size. The bottom line is that the profits for the company will be significant over many years.

I do not hold any BHP shares. We did actually buy some during the stock market collapse and resold them and made ourselves quite a nice profit in that time. I do not hold any BHP shares at the moment. The company is looking forward to a rosy future with this sort of development. In 1982 Mr Goldsworthy also said:

The ratifying Bill and the accompanying indenture are, because of the nature and size of the project that they contemplate complex documents. This is because of the need of the joint venturers for commercial as well as legal security in a situation where large amounts of money have been spent, and will continue to be spent...

We have heard that again. We see this indenture. The bill itself is a very short piece of legislation. The actual schedule itself is 156 pages—20 pages of the bill and a further 156 pages of the schedule which covers the amended form of the indenture.

As Mr Goldsworthy said back in 1982, it is a complex document because the company needs to have commercial as well as legal security when you are going to be spending the money that is going to be spent. So, what was said in 1982 is just as valid now, and this is what the government have before us and this is what this party is supporting.

There was concern back then about the provision it made for state preference in relation to labour supplies and materials, but we have seen that there has been significant benefit to South Australia from that development back in the early stages of the Roxby development. Mr Goldsworthy continued, and this was on 4 March 1982:

The arrangements before the House today do, I believe, represent a major opportunity for a most significant development within the State. There is considerable interest throughout Australia and in overseas countries in the development of this unique orebody. Opportunities such as this do not present themselves frequently. The indenture and its ratifying Bill have been exhaustively negotiated, having regard to the need to ensure proper protection of community interests and the maximum financial benefit to the people of the State, having regard to their ownership of the minerals that will be developed as a result of the ratification of this indenture.

Exactly what was said then is exactly what is happening now. I look forward to seeing this piece of legislation progress through the other place without delay, although the Greens in their usual way will try to scare the horses. They will try to delay, they will do everything they can. I think that to question is quite legitimate but to delay is not a thing that we can afford in South Australia.

The history of the support for the original indenture, I have to mention. While we are trying to be as bipartisan as possible by trying to support the passage of this legislation, we should remember it was one vote in the other place that got this legislation through. It was Norm Foster who crossed the floor and who voted with the Liberal Party to get the legislation passed in the upper house.

It is worth going back and reading the Hansard, which I have done, from 1982. Read the contributions, not only of the Hon. Roger Goldsworthy, but read the Hon. John Bannon's contribution; read David Tonkin's contribution—and compare and contrast.

You should also read the contribution of the grandfather of the house, retired now, the Hon. Graham Gunn (the member for Eyre). Even then, he laid it out as he saw it, in black and white; there were no shades of grey. You understood exactly where he was coming from. I would encourage members, particularly the newer members of this place, to go back and read what the Hon. Graham Gunn said back in 1982.

You should also look at the select committee report from 2 June 1982 and read what Mr Don Hopgood and Mr Rod Payne said in their dissenting report. It is really something—you shake your head now and think what could have been missed. What could have been missed had we not been able to get this legislation through?

My predecessor, John Oswald, made a significant contribution in support of the legislation, and it is worth reading his contribution, which contrasts significantly with that of Peter Duncan, the then member for Elizabeth. If he had had his way, none of this would have happened. There is something about those northern suburbs representatives. The member for Ramsay, now: if he had had his way, 'the mirage in the desert', as he then called it, would have been still a mirage and not the absolutely fantastic project that we are seeing.

My veterinary colleague, the Hon. John Cornwall, the then minister for health, in the other place—I don't know what John had been on, but his contribution was quite rabid, about the dangers of uranium and radon gas. It was really quite inflammatory and, for a scientist, I was disappointed to read his contribution. But then I was very, very pleased to read the contribution of Norm Foster and the courage that was shown by that man way back then. He said:

There should be deep and serious consideration of this matter. I say, not boastfully but with sincerity, that the representations made to me concerning what I should do have been, to say the least, very considerable, and they have come from those who have not disguised themselves as being political opponents of the Liberal Party...It has reached the stage where this question has to be settled by the people of this state...The debate has become clouded with all sorts of phraseology, innuendo and half truths.

Norm Foster, in his way, expressed his own feelings of frustration, of concern and of anger at how the Labor Party and the members at that stage had treated him and were dealing with this whole issue. It seemed to focus around uranium—it was a side play; it was a sidetrack from the main game—that was the potential at Roxby.

I put on the Hansard record here that on 18 June 1982, in the other place, the council divided on the motion. There were 11 ayes and 10 noes. One of the ayes was, obviously, Mr Norm Foster. Amongst the noes were Labor luminaries such as Frank Blevins, John Cornwall, Chris Sumner and Anne Levy. The bill was passed and the sitting of the house was suspended at lunchtime. I am sure that Norm Foster would have had indigestion during his lunch, but not because of the fact that he did the wrong thing: it was because of the stress he would have been under.

A brave man did a good thing, and thanks to him we got the indenture through then; and thanks to all those concerned now that this indenture will go through this place and Roxby Downs will go ahead to be mined and to be developed to the extent that it is going to be for the benefit, not only of the current generation, but of generations to come.

Ms CHAPMAN (Bragg) (22:55): I rise to speak on the Roxby Downs (Indenture Ratification) (Amendment of Indenture) Amendment Bill 2011. I will be supporting the bill, and I indicate that, whilst I have some concerns about some aspects of the terms that have been negotiated between BHP and representatives of the government, culminating in the indenture that we are being asked to approve, I would say it is a fair assessment that it would be better at the moment to be a shareholder of BHP under this indenture rather than a stakeholder, as a citizen of South Australia.

That means that it is clearly a contract that is excellent for BHP. That does not mean it is a bad contract for South Australians; there are very good aspects of it which, if certain conditions are met, will give a very good outcome for South Australians. I would say that it is in the category of being potentially very good for South Australians, but there are some serious aspects to consider.

That is not to say that the situation is a poor reflection on the negotiation of the government representatives. What I say is this: what we have is the difference between an elephant and three blind mice. The sheer imbalance between the negotiating parties would inevitably result in an indenture being presented for consideration where there will be a more favourable outcome for the player. I do not say that as a poor reflection on those negotiating on behalf of the government, but it does concern me when representatives of the government come in to spruik a proposal and present it as though it were the greatest thing that has ever happened to South Australia, and as something that will be in our best interests that must be accommodated without any consideration of amendment.

The reason I say that is because, in the short time I have been here in the parliament, we have been asked to ratify an agreement reached with Santos. In that instance we were asked to lift a cap on the level of ownership of shareholding in that entity. Santos is a major gas provider for South Australia that now has international commitments and wishes to develop those, and it put a good case to us to change the rules and to enter into an agreement, enter into an indenture, between the government and Santos.

I say this: as good as that was presented to us, with all the hype that was presented to us and the parliament by the then premier, which we as an opposition supported, I remind members that as we speak that indenture is a live issue in the Supreme Court of South Australia. Its interpretation and what outcomes are reached either by judgement or by compulsory arbitration—either way you look at it—have identified areas where there is going to be some justiciable cause. That will be expensive, and it highlights to us that these contracts are not without fault and are not immune, as they are really presented to us, the idea that we have this wonderful opportunity, that we are protected by this indenture and that it is going to good for all of us.

Tonight I wish to outline some of the vulnerabilities. By that I do not mean seeing the then premier having to rush off to Melbourne to sign the contract for this, although it must have been very humiliating for him to have to do that after he had spruiked this as being such a fabulous thing for South Australia, as though BHP had eyes only for us. If one appreciates that the Australian base is in Melbourne, and if one went to Perth to see the brand-new BHP building they are building in Perth, one would have to understand that we are actually a small player in the scheme of things. In Queensland, there is 1968 legislation that covers an indenture for coal mining in Queensland. In Western Australia there are indentures with BHP, having taken over Western Mining, which was the original architect of the development of this mine.

It is not surprising, but let's understand here that BHP does not only have eyes for us. It is an international company, it has multiple interests in Australia and we are but one small part and, if the rather humiliating running off by the Premier to Melbourne to sign the agreement were not evidence enough, we ought to be very clear about the pending litigation of the Santos indenture in the Supreme Court as we speak. These things are not perfect, and we have to identify where the weaknesses are. The vulnerabilities that I wish to expose are several, and I will refer to them shortly.

I point out that we are being asked to approve an indenture which is an amendment to vary a 1982 indenture, which was then approved by this parliament. In the 1982 debates, which went over some nearly three months, of course a bill was introduced under the Tonkin government by the then minister for mines and energy, the Hon. Roger Goldsworthy, and supported by the then Liberal government. This came in the wake of a discovery in the mid-1970s of this major resource on the Olympic Dam station, which had identified this massive opportunity.

The technology of the time, I am advised, was such that underground mining was the only option to be able to undertake the attack on that resource and the exploitation of it. Nevertheless, it was discovered then, and the Labor Party's decision at its subsequent convention to oppose uranium mining meant that the Dunstan government was not prepared to advance that. However, the Tonkin government took up the challenge. It went through the proper process. It was clearly a hybrid bill; that is, it provided specifically for individuals, as distinct from the whole of the community, and therefore had to go to committee.

I also point out that during the course of those debates I think some eight or nine amendments were presented by the then opposition—I think by Mr Bannon in the first instance—but presented notwithstanding that they raised the question of the difficulty of varying the terms of the indenture. They were still debated and considered in the debates, and various undertakings were given later in the debates as to the referral of some of the issues to the Law Reform Commission, undertakings as to federal guidelines in respect of responsible management of uranium and the like. Those undertakings were given and ultimately the bill passed without amendment and without those amendments being put up and rejected.

However, contrast that with the current position, where we have had the minister for mineral resources come into this parliament and say publicly, 'Look, there can be no alteration to this, not a word to be changed, no indenture corrections, no addendums to be done,' while jumping around in here like a grasshopper on heat, telling us that we cannot do that. That is just not correct: we can do it if we want to. We are not asking to do it, but do not come into this parliament and try to insist that the opposition—

The Hon. A. KOUTSANTONIS: On a point of order, Madam Speaker, I never said to the opposition that they could not move amendments, and I ask the member to withdraw that accusation.

Ms CHAPMAN: The minister of course in those circumstances, if he thinks he has been misrepresented, can make a personal explanation, which I am sure you will explain to him, so I will not be apologising for the statement I have made.

The Hon. A. Koutsantonis interjecting:

The SPEAKER: Order!

Ms CHAPMAN: What I say is this: it is not acceptable that as members of parliament we have issued to us the edict that there shall and cannot be any change to this, that the document cannot be changed—that is just nonsense. That issue was raised back in 1982. It was acknowledged that it raises some difficulty between the signatories to the contract—no question about that—but it is not acceptable to suggest that there can be no amendment to this legislation.

The other aspect I raise is this (and I just want to place this on the record): much is often said about Mr Foster's crossing of the floor. Can I just place on the record what happened back at that stage. Dr John Cornwall, who was the leader in the upper house, had introduced on behalf of the opposition the principal arguments and amendments that he presented to the indenture before they would even consider any positive advancement of the bill. Dr Cornwall said:

During the past three years there has been a great deal of extravagant rhetoric and bullish posturing from the Tonkin government on the Roxby Downs project.

He went on to say:

The extravagant and cruel distortions which produce 15,000 permanent jobs for propaganda purposes are a disgrace to their perpetrators. The possibility of providing 3,500 permanent jobs is welcomed by the opposition. We would embrace any responsible and safe industry which would provide desperately needed employment in this state.

When that debate progressed, it was clear at that stage, when we got to Mr Foster, that he was going to vote with his own party, and he did. During the course of his contribution, he actually made a number of invitations to the Tonkin government to go to an election. He called on them to do that—that they should issue the writs and take this matter to the election—and at the end of the debates he voted with the opposition to defeat, on the third reading, that bill.

What happened two days later was that the bill was revisited. There was power at the time in the Legislative Council for that bill to be resubmitted before the parliament, and it seems that, on the basis that Mr Foster had changed his mind and was going to vote with the government if they resubmitted the bill, that is what actually happened.

But, the debates between Mr Foster and Dr Cornwall are very illustrative as to what happened. There was a total deterioration in the debate about Mr Foster's sympathy towards aspects of the bill, and the exchange between Dr Cornwall and Mr Foster became quite obscene—ultimately culminating, on the final day of the first vote on 16 June, in Mr Foster turning to Dr Cornwall and saying, 'You are an insulting bastard, John,' etc.

The reason that Mr Foster ultimately voted in support of the government of the day to come in with that vote became quite clear on 18 June, when he said:

I supported you the other night—

referring to his own party—

and you all rubbished me. It would have been all right, but you—

That is what he said. So the reason we have this is the bullying behaviour of Dr Cornwall and his colleagues at that time, and the reaction of Mr Foster to support a resubmission of the bill and, upon that representation, the vote was taken, and the rest is history. So, how the wheel turns.

What we have now is a new indenture. I just want to remind the house that we have had a couple before; in the 1990s, again under a Liberal government, we have had some amendments to the terms of the indenture, and it has come back before this parliament for ratification. I just want to remind the house that this is not a new mine, this is not a new resource, this not a new reserve. This has been a known reserve for 45 years.

What is new is that we are going from an underground mine to an open-cut mine; therefore, I want to make it clear that this extension—as the very expensive investment it is for both BHP and South Australians—is a current resource. It is not something that Mike Rann can say is something that we need to be able to capture BHP to come here—they are already here. They, or their predecessor, have been here for 35 years, digging up this copper, uranium, gold and the like. So let us not get ahead of ourselves. They are already here. They are already spending a lot of money. They want our permission, with the security of tenure on royalty capping and the like, and access to infrastructure and so on, and they want our approval for those things before they will invest further and change over the mining operation so that they can pull up their resource more quickly, make money more quickly, and make a lot of it. Let us be under no illusion here about what we are being asked to do.

The existing mine operation is one which took a heavy toll originally on infrastructure requirements and the like and there was a royalty rate/infrastructure deal done, which, as I say, has been amended a little over the time. In seeking to convert this to an open-cut mine, the real consequences are as follows. This operation will need a lot more water, and we already have a situation where the capping on the Great Artesian Basin reserve is there for good reason. It will need a lot more power, and BHP have said they will link up with the gas line to Santos, establish some more power reserves, and build the desal plant, etc. It needs a lot more people, and I will come back to that in a moment. It needs a lot more in port, rail and road facilities. It needs a new airport and some other temporary facilities, etc.—a major amount of infrastructure.

The royalty rate is something that has been discussed at length. I do not personally have a big issue with the royalty rate itself. The cap for 45 years, on the face of it, at first blush, seems a bit excessive; I can live with that. It does concern me, though, that we are in an environment where there is such a huge fluctuation in other things affecting that at the federal level, particularly the mining tax which is about to descend on us. It may not be covered yet, as in the carbon tax may not be covered yet, but this is a very significant emissions industry and therefore who knows what is going to happen. I think that is fairly long.

The freeholding of land is consistent with what happened before. It is a much bigger area; I can live with that. Regarding third-party access, I personally think that there needs to be some provision for third-party access for some of this infrastructure, especially the airport. I can live with it otherwise, but I think that it is something that should have been a bit tighter. I do want to speak about the people and the fly-in fly-out jobs, and the commitment of BHP in the indenture. On page 44 of the indenture they have committed to the use of local professional services, labour and materials 'as far as is reasonable and economically practical', and with a further qualification that is not to require the company to 'act other than upon commercial considerations'.

It is very generalised. Some would say that if you were looking at this strictly from a legal perspective it is a very sloppy drafting, but obviously in favour of BHP. I have read material recently from Mr Dalla Valle in which he has announced again his commitment to South Australian workforce and the like. I hope all of that comes into effect, but I will say this: I came into Melbourne airport on Monday and up there was a big sign which said, 'Mining career, Melbourne living'. It promoted undertaking mining and of course flying around Australia for another major player in the mining field.

We must understand that we are in a competitive market on the labour force and this sort of clause does not give me much comfort, especially when I come to the commitment by Mr Dalla Valle to the question of local product. Just in the last few days I read his announcement that he is buying 3,000 houses for the Hiltaba complex from China, ostensibly on the basis that he cannot source these from South Australia.

To quote that wonderful Australian television tourism advertisement, 'Where the bloody hell are you?' Where has the government been in the last six years that he has been negotiating this, that when it comes to the actual preparation for this major contract it has not coordinated with all those who build houses here in this state and who are currently facing a major problem with their industry because of lower numbers of houses? Where the bloody hell are you? It absolutely stuns me that this appears to be ostensibly overlooked. I will raise other matters during committee.

Mr GRIFFITHS (Goyder) (23:15): It is interesting that this parliament has existed for 154 years in its various places, locations, sizes and makeup of individuals. I have no doubt that there have been some very short and passionate speeches, there have been some long and boring speeches—

Mrs Geraghty: Many.

Mr GRIFFITHS: —probably, and a lot of things in between. There have been some debates about some absolutely critical issues that were important to the state at the time and for the state moving forward. Indeed, I hold no doubt at all that the debate being held this evening and tomorrow and within the Legislative Council in future days will be recorded in history as one of those important debates, also.

While the Liberal Party has confirmed its support for the bill with no amendments to be moved, there is no doubt that there was healthy debate about this in our party room. Concerns were put and answers provided. That is why we sought briefings on it. We wanted to be informed as much as we could to ensure that the scrutiny that the South Australian public expects from the parliament in regard to a bill of this importance because of its economic importance to the state has occurred.

I still stand here in deep amazement at the fact that I, as an individual and a humble person, have been provided with an opportunity to be part of this debate, and I hope that all members in this chamber, no matter what side they come from, stand up and put their point of view about this, because it is a bill that demands that.

I recognise from the very start the efforts that have been made by hundreds of people to get it to this stage, be they BHP employees, Western Mining employees (their predecessor), or public servants (who have some representation here tonight) or those in the political process who have ensured that the work has been done over the last decade to give us an opportunity to debate this bill and an opportunity for our state to move forward with a mine of titanic proportions.

There is really no other way to describe it. I know it is four kilometres by three kilometres by one kilometre deep, but I cannot even begin to imagine in my mind what that is going to be like. No doubt minister Koutsantonis has been to Escondida in Chile and looked at that operation. I know the previous premier, Mike Rann, certainly has reflected upon his visits there, and Kevin Foley has reflected upon that, too. This will be an opportunity for South Australia to build an economic future that is a good one, and we need to make sure that happens.

I formally put on the record also the appreciation that I have as a member of the opposition for the hospitality provided by BHP in allowing me and quite a few of my colleagues—indeed, most of our team—the opportunity to visit Roxby Downs and Olympic Dam to see the scope of their underground operations, the processing that occurs on site, the accommodation provided to their staff, the facilities provided in the community as part of the social fabric that forms Roxby Downs and to be briefed about the scope of this development.

I believe it is Mr Steve Green from BHP who has made an enormous effort in regard to the EIS and the response to that. I know any time the opposition has requested information he and Mr Dalla Valle and the BHP team have been available to talk to us and make sure that we are as well informed as possible—and that is what it demands: that we are informed as best as possible.

I also recognise the fact that it is important that the democratic principles of South Australia are preserved and that rights exist for people to put a variety of views on this—to raise their concerns and put in submissions on the EIS, to lobby members of parliament, to write letters to the editor of the local papers, to go on the radio or try to get a television grab about whether they support it or whether they do not and ensure that that scrutiny does occur. It really is important.

I also put on the record that my basic principle is to be a person who is pro-development, because I want to make sure that we have an opportunity to grow our economy and diversify our economy from the more traditional aspects that have grown us to this current stage and ensure that we move forward as a state and a nation. We need to make sure that the parliament is behind opportunities that create our economy and ensure our communities grow and that we can create jobs for our children and our grandchildren, and to ensure that we as a state have a great future. I have no doubt in my mind that Olympic Dam represents that.

It defines our state to some degree. The scope of this development, the wealth that it will bring not just in royalties but within transactions that occur in this state, the people it will bring here, the skill set that it is going to demand, the work ethic that will be in place, the principles behind the development by the company (BHP), and the support that exists across all the major parties within the parliament will ensure that it actually comes to fruition. It has to.

It is my position that there is a strong expectation from within the community that we should support this bill. When it comes to business activities within South Australia, I would say it is more a demand that we support this bill. I know from the debates that occurred in our party room that many members spoke about the fact that within either their portfolio areas or the communities they represent there has been contact made with members of parliament to say, 'We need this to happen. We recognise the importance that it plays for our local area, and we want you to make sure that you do all that you can to get it through.'

I live in the hope that the eventual fruition of this development will result in a tremendous boon for South Australian business. Construction has faced challenging times and retail has faced challenging times. There has been a difficult economy within the state, the nation and around the world that has concerned many people. Discretionary spend has been down. The fact that we now suddenly have a company—one of the largest in the world, one of the very few businesses within a worldwide sphere that has the capacity to fund this level of investment—that will come forward and believe in South Australia, admittedly, yes, because it can make a profit, but because the environment is created in which they can actually do good work, does auger well for our future; it really does.

The environment has been a concern for many members of the chamber, too. While we look at economic opportunity, we are also respectful of the environment. It is not just the mine site. The remote location of that might, to some degree in some people's eyes, make it 'out of sight out of mind'. It is also very much focused on the desalination plant. I know that other members have spoken about that, but as a member who resides in and represents a coastal fringe community that is concerned about desal technology, I can say to you that even when a small-scale desal plant was proposed, that might have affected the northern Yorke Peninsula area, there were concerns, and I had a very vibrant public meeting with people who did not want that to occur.

I respect that the EIS has gone to enormous effort. I understand that BHP have put significant additional resources into the pipe, which will now be underground and go for the distribution of the brine solution to ensure that, as much as humanly possible, it will not pose a risk to the marine environment around Point Lowly.

I reflect, though, upon the fact that, as part of the EPA briefing that the opposition was provided with, a question was posed about its assessment of potential sites. From memory, there are 20 or so potential sites where it could have gone. The EPA does not actually look to the detailed responses on that one site. I asked if this was the best possible location. It is an important issue and it is one that we need to discuss.

It is impossible not to be attracted by the economic scope of this development. In his opening contribution about the committee report, the minister talked about the fact that it is 6,000 people during the construction phase; 4,000 people full-time working in part of the expanded pit; 15,000 jobs created indirectly around South Australia as part of this development; and $45.7 billion in net present value to the gross state product over the next 30 years.

The fact that it has been funded by BHP, as I understand it, from within retained profits and that over the last full year BHP made something like $24.3 billion in profit ($16 billion-odd of that emanating from its Australian operations) shows that this is a company that is serious about what they do. It is driven to excellence, it wants to make sure this happens, and I have no doubt it has probably taken no prisoners on the way, too.

The member for Waite reflected upon the capacity of various people involved in this process over the last six years. He declared his belief that BHP was there to do a job, to get the best possible outcome for the company. I know that it has put the representatives of the South Australian government in a very difficult situation.

The member for Port Adelaide no doubt has been involved in some very tense negotiations. He has been respectful of what business wants to do, but there has been a realisation that he is there to represent South Australia to get the best possible deal. I have no doubt that minister Koutsantonis, when he has been involved in it, has done exactly the same thing. You are South Australians, you live here and you want to make sure that your own children have a future here. You want to make sure that you can get the best possible investment. Politics, as we have all come to realise, is the art of compromise to some degree. Business negotiations involve compromise too, where there has to be a win outcome from both sides.

There will be a lot of media scrutiny of this. People have had varied opinions on what should occur, but no-one seems to doubt the fact that this development has to make sure—and I hope that the industry participation plan that is developed as part of this does ensure this—that as much as humanly possible the positive outcomes flow through to our state because that is where it needs to be.

The member for Bragg has commented on a recent media report that 3,000 of the accommodation units required for the Hilt Harbour workers' site will be sourced from China. It is my understanding that a lesser figure—I think 1,200 or 1,300—will come from South Australia or Australia as part of that. I want to see my local industries benefit, too; for example, little old Yorke Peninsula has a business called modpod that is designing a fibreglass-based accommodation unit that is expandable and can be put on the back of a truck and trucked up there.

I have no doubt that innovative industries within South Australia have been gearing up for this. They have looked at the opportunities and recognised the importance of the place. They have focused on this as a major part of their business development, and that is where the responsibility of government is to make sure, by working very closely with BHP, that the outcomes are positive ones.

Page 6 of the report from the select committee talks about the fact that clause 12 of the variation deed provides for the use of South Australian-based professional services and labour as far as reasonable and that, in calling for tenders and the letting of contracts, South Australian contractors will be given a reasonable opportunity to tender or quote, and then it goes on to talk about the industry and workforce participation plan.

They are the key issues for me. They are the key issues that will drive the economy for South Australia moving forward. They are the tangible job outcomes that people need in the short term. It is not the long-term benefit that will flow through from increased royalty payments and, obviously, payroll tax components and the stamp duties that will emanate from it; it is these industry workforce participation plans and the opportunity for South Australian businesses to benefit from it immediately. I really hope that it happens because it needs to.

This project is going to have an enormous impact upon regions no matter where you come from. You might be 1,000 kilometres away but you still represent an accommodation opportunity. I know the Riverland community—and I have been up there—has seen the opportunity to become a dormitory suburb. In my own area of Yorke Peninsula, because of the coastal attraction we feel as though we can become a dormitory suburb, too. The Barossa and the Mallee, all those sorts of places—

Mr Venning: Crystal Brook.

Mr GRIFFITHS: —Crystal Brook—will see themselves as an opportunity because of the social opportunities they provide, the existing infrastructure that is in place and the welcoming attitude of the residents there.

The Hon. A. Koutsantonis: Yorke Peninsula is going to be a hot spot.

Mr GRIFFITHS: I hope so.

The Hon. A. Koutsantonis: I think so.

Mr GRIFFITHS: I hope so, too.

The Hon. A. Koutsantonis: It's all thanks to Rex Minerals.

Mr GRIFFITHS: Yes, I might talk about them, too. The regions want to benefit from it. They respect the fact that Olympic Dam is a long way away, and they know that in many cases it will not probably be the family relationship that may choose to live there, but they want to make sure that there is an opportunity for families to live within that area and be part of what is special about the places that we all live in.

This will represent a big challenge to regional areas. Those of you who live in the regions will understand that we have some wonderfully skilled people who do really important jobs but who do not necessarily get paid a lot of money for doing them, but they have a skill set that is going to be necessary as part of this development. I am fearful about the loss of our skilled workers—mechanics, electricians, welders and all those sorts of people—who will see the Olympic Dam expansion and the mining opportunities that are going to be created across South Australia over the next 10 years as their future. They might still choose to live as a family unit within the town, but the skill they currently provide on a full-time basis will be lost.

How do we get it right? How do we backfill? The member for Unley talked about the need for skill development training and that only one school or one university is teaching geology or whatever. However, it is important that we get it right. The big wages will be on offer, there is no doubt about that. There will be an attraction to a lot of people who have traditionally been lower earners who will think, 'This is my chance.' They will take that opportunity and who can blame them? As a state, we need to ensure that we have got that resource available, not just for the mining development, but to ensure that that physical resource is available for our communities, to ensure that the loss does not exist.

I am a big believer in the fact that history actually teaches us much. It actually better informs us when it comes to making decisions for the future. Many members of this chamber have referred back to the 1982 debate that took place for the original indenture and it has been interesting, from my perspective, to actually hear that.

I am not, or had not been to this stage, a big reader of previous Hansards. I respect the contributions of others though who have recorded the wise words of those members who came before us. In 1982, when this debate took place, I was 19. Young blokes do not take that much of an interest in this sort of thing when they are 19.

Mr Pederick: You weren't thinking about politics.

Mr GRIFFITHS: No, you have other things on your mind, but you recognise that yes, it was happening. I do have a recollection of it but I am reflecting now on the courage that it must have taken to put it forward and to make it happen. The parliament was a different place. The state was a different place. It was seen as a transformation opportunity. It was a leap forward in technology, a leap forward in industry and it put a lot of challenges before them, but they made it happen.

We live in a society that has a better option now to be informed about things, but I do not think the community actually understands things as much as it might have 28 years ago, mainly because people do not actually want to be better informed which is, I find, very frustrating. But now South Australians are aware of this. I do pose the question, though, of how many actually have much of a possession of the detailed knowledge of it? Very few would have.

They actually expect us, the people in this chamber and the people in the other place, to be the people who are elected to represent them, to make sure that the right decisions are made in every possible way and to move forward into a better place. That puts a great responsibility upon members of parliament because we are expected to make the right decisions. We do not always make the right decisions but, in this case, there is no doubt in my mind that the only choice for the South Australian parliament is to support this bill.

As part of the debate that we had quite seriously about this in the Liberal joint party, there was a convergence of opinions put. At one stage I rose and I might just put this little analogy into the Hansard. The member for Waite, for example, used, as part of his contribution this evening and as part of his contributions to discussions the Liberal Party held, a prenuptial agreement in a marriage situation and the level of risk that takes where you hope for the best possible outcome.

I use the example that, in my eyes, there was no choice for us. We had to approve this. We had to support it, we had to make it the best possible thing that it could be. It was a bit like the option posed in the prenuptial agreement situation of either being a very frustrated husband, which sometimes does occur, or being a virginal bachelor—and that was it. The frustrated husband might not necessarily get the exact result he wants all the time, but the virgin bachelor has no opportunity to even experience it.

Mr Venning: Deep stuff here, Steven.

Mr GRIFFITHS: It had a bit more of a buzz the first time I said it, I think. It is an analogy that holds for me because it shows that South Australia has to be prepared to take some level of risk. It has to show its best hand. It has to perform as best as it can. It has to hope that it keeps its partner—and, in this case, it is BHP—happy and it has to try to get the absolute best possible result from it. If it does not have the courage to do that, indeed, it is a person that sits on their hands and lives with the frustration for the rest of their life that they never took or seized that chance that was before them and often wonders about what might have been.

In this case, we have had a process—that has worked initially since 1982—in the last six years, in a sincere effort, to try to actually give the state the opportunity to make that choice. So, I respect the work that has gone into it from hundreds and hundreds of people from around the place, to put us in this place where we have that opportunity to make a choice.

In my eyes, there is only one choice and that is to support it. That is why I am proud that, after a lot of debate, the Liberal Party has chosen to support the bill without amendment and to do so in its best endeavours because timing is important. As we move forward and as our state gets the benefit from this and history reflects upon the discussion and effort that has gone in over the last six years and over the last week, it will put all of us in a good place—and that is what it demands. Let us hope that BHP puts forward its best endeavours and that its outcomes are profitable not only for the company but also for the state. That is what we all want to see happen.

The ACTING SPEAKER (Mr Sibbons): Thank you, member for Goyder, for sharing the dynamics of a relationship! Member for Schubert.

Mr VENNING (Schubert) (23:35): Thank you, Mr Acting Speaker. I do not think I will go into that territory; I have been married for a bit too long for that—to the same woman, incidentally, for 42 years, actually.

I rise, along with all of my Liberal Party colleagues, to proudly support the Roxby Downs (Indenture Ratification) (Amendment of Indenture) Amendment Bill. I have been here for over 20 years. I was the parliamentary secretary of mines and energy, with the then minister, the Hon. Stephen Baker, who was a good minister, too, incidentally; he worked very hard. I was here, but not as a member, with my father, when Labor refused to pass the original Roxby indenture, to see the Hon. Norm Foster support it. He walked straight out the front door of the Legislative Council to political oblivion. Worse than that, he lost his membership to the ALP, something that really hurt him. I was very pleased, though, that he actually got it back not long before he left this world; it was something that meant a lot to him. Anyway, the courage of the guy was not lost on me.

In my role as parliamentary secretary, I worked with the department, especially Andrew Andrewjiskis, who some people around this place would remember. Andy was a bit of character. He had lots of rows with Stephen Baker, and I was sitting in the middle of them. I soon learnt how important this whole thing was and how important leadership was, particularly from the department side, in relation to this.

I also therefore note the input of Mr Paul Heithersay, who is with us at the moment. He has been around for a while. He has had a go at most jobs with the industry and now in semi-government and government. His input into this whole process has been huge, especially working at this level. I note the comments tonight by ex-minister Foley, when he paid that tribute. We, too, respect his input and add to that tribute. Good on you, Paul Heithersay; you certainly are part of history here.

I want to pay the highest tribute to the Hon. Roger Goldsworthy who knew it was much more than a mirage in the desert. I also pay tribute to previous premier David Tonkin, who, with his government, pushed it to the line. I also pay tribute to an early director of mining, who is still with us. He has been mentioned in the newspaper, and I refer to Mr Keith Johns. The gentleman is an absolute marvel when it comes to mining. He is into mining history in a big way. He was fantastic. He and Goldsworthy were a formidable pair. You could not take them on; they always won. Keith is still with us. What a passionate mining professional he is, and he is still a very powerful devotee of the mining industry. So, I pay tribute to him, too.

I also pay tribute to an old mate of mine, Richard Yeeles, who I think the former deputy premier mentioned him earlier tonight. Richard Yeeles, who used to be the adviser to the then leader of the opposition, John Olsen, left this place to work for Western Mining Olympic Dam operations. His input has been huge because he was in charge of all the public relations work that was done. When you are trying to sell a uranium mine of all things, it is very difficult. He did a superb job; he was an expert in everything he did. Richard Yeeles would have to be the person above all others whose area of expertise has gone unnoticed and unheralded. He is a man of great capacity. I say, 'Well done.' He, too, can sit back and say, 'This has been good.'

Also, I want to recognise those who in recent days have worked with and briefed us in opposition over a great deal of time. Especially, I want to mention Kym Winter-Dewhirst, who has been in to help us. I understand that he is also from this place, from the other side. I understand that he used to work with the government side. He too was very valuable, as were Ms Leah Grantham and Mr Steve Green.

The decision of BHP Billiton to buy Olympic Dam was probably the greatest corporate decision in this state's history. I note the speech by previous minister Foley earlier tonight. He talked about one of my biggest concerns, which is the royalty. A lot of people wonder how you can make a decision over a 45-year period of what the state is going to achieve from this mine. I did appreciate how the ex-minister put it tonight. He said that the reason we set the royalty the way we did is that no other state will be able to raise it above it.

I also believe that the royalties will keep increasing with the value of the product. I can see that the price of the product in 45 years' time could be anywhere. It could be far in excess of anything we could even consider today, particularly when you consider the energy needs of the world in 45 years' time. No-one is saying we would not be able to raise the royalty, and we only get to keep 7 per cent of the total royalty take anyway.

I did not know that, but it is an interesting fact. We are South Australians first, but we are also Australians, so we all share in this. I had not realised that. We are going to miss Mr Kevin Foley in this place. I never thought I would say that, but we will miss him, because he certainly knew his stuff and he worked hard, and he certainly has a way of expressing himself.

I will not keep us here the whole time, but I want to go briefly through a bit of history, particularly in relation to infrastructure. BHP Billiton is proposing a significant expansion of its existing mine and processing operations at Olympic Dam. The ore body at Olympic Dam is the world's fourth largest copper resource, the largest known deposit of uranium, and it also has rich deposits of silver and gold.

The proposed Olympic Dam expansion is centred on the creation of a new open pit mine that would operate simultaneously with the existing underground mine. The proposed expansion will be built progressively over several stages and lift ore production significantly. The existing smelter at Olympic Dam will be expanded, and new concentrator and hydrometallurgical plants will be built to process the additional ore and generate additional concentrate.

The major items of infrastructure required over time to support the expansion—and that will benefit a lot of us, particularly from where we live and what we do—will include:

a 200 megalitre per day coastal desalination plant at Port Lowly. This is an issue close to your heart, Madam Speaker, and you have made many comments about that.

320 kilometres of pipeline with associated pumping stations to deliver the water to Olympic Dam.

an additional 270-kilometre electricity transmission line from Port Augusta to Olympic Dam, or a gas pipeline from Moomba and a new gas-fired power station at Olympic Dam, or a hybrid solution that is a combination of these two supply methods.

105-kilometre rail line from Olympic Dam to the national rail network near Pimba. That would be a great asset to the state.

additional port facilities at Outer Harbor in South Australia, as well as the port of Darwin. I hope there is not too much at Darwin, because I think Port Adelaide is closer and probably better—I hope it is.

a new airport at Olympic Dam to cater for large commercial jets and the increase in passengers and air traffic. Again, we are reminded that we do not want to see too many people flying in and flying out. We hope that most of these jobs could stay within South Australia, but we do understand that there is a certain level of expertise required in an operation like this that will facilitate them needing to fly them in and out. I see that as a positive.

a landing facility and access corridor at Port Augusta to unload and move equipment from barges to Olympic Dam. Absolutely. We know that some of the equipment that has to come in is huge. This also highlights another problem. Driving up the road even now, you are seeing an increase in heavy traffic going up the road with equipment, and the roads are not adequate. One of the first projects the government ought to do is to dual the highway from Port Wakefield to Port Augusta.

It is the very least it can do, because it is dangerous trying to pass these huge trucks. A lot of them are over width, and now we are even talking about putting triples on these roads. I think the government ought to come out in the next few days and say, 'One if the first things we will do in recognition of this project is to dual the highway from Port Wakefield to Port Augusta.'

a new accommodation village for workers at Olympic Dam.

expanding the Roxby Downs townships to provide additional services and accommodation.

The proposed expansion will be a progressive development. The project schedule will ultimately depend on the timing and nature of government approvals and the final investment decision of the BHP Billiton board. That is the reason why it is critical tonight that we move on this with all haste and no political games.

I am happy that the Liberal Party has said that it will support the bill without any amendments and without any political hoo-ha. We have had a bit of hoo-ha here, which you would expect us to have, but nothing untoward. We just have to remind people of the history because we have been told in recent days that some people have forgotten what has gone on in the past.

In relation to the economy, the Olympic Dam project will be the key economic driver for South Australia over the next 40 years. Of that there is no doubt. I know that minister Koutsantonis has been saying that, and nobody could disagree, and good luck to him for sitting in that seat right now at this historic moment to pass bills like this. Whatever your future holds, minister, you will never forget tonight and tomorrow, so good on you for being in that position.

The Hon. A. Koutsantonis: Safe hands.

Mr VENNING: Absolutely. It will generate a significant investment of growth and jobs in key regional communities, such as Whyalla, Port Augusta, Port Pirie, Roxby Downs and even, as I said earlier, Crystal Brook, because there are people buying houses in Crystal Brook to stay in when they are not at work. The South Australian gross state product is estimated to increase by $47.7 billion between 2012 and 2051.

In relation to jobs, developing Olympic Dam would underpin the South Australian economy in many ways, particularly through employment. Construction: various elements of the project would require a construction workforce averaging around 4,000, with a peak of about 6,000 people until full production is reached, over the long term a doubling of the existing operations workforce to 8,000 people is expected. Now, that is a big workforce.

The new mine would need the skills and services of businesses across South Australia and it is estimated that this would create an additional 15,000 jobs in the state. It is estimated that there would be 5,000 new jobs created in the Upper Spencer Gulf region as a result of the project. I think we all get spin-offs here. I can only say that before I came into this place I used to buy and sell a lot of machinery, and a lot of it came from Roxby Downs, and I still operate some of that machinery that I bought then.

When I do leave this place, one day in the future, I will probably end up going back there, because there is a great opportunity to do the work that I love doing, and that is mucking around with earthmoving machinery. I think we will all have an opportunity in the future with this. It is all about the future. It is all about the state. It is all about us leaving something for our kids.

Local business opportunities: the existing operation currently spends over $500 million annually with South Australian businesses. In the last financial year, 28 per cent of companies supplying to Olympic Dam were South Australian and accounted for 34 per cent of the operational expenditure. Under the proposed expansion project, the amount of money spent locally is expected to increase significantly. BHP Billiton is planning to commit more than $500 million as part of the $1.64 billion precommitment funding to local companies in the next six months, if the bill is ratified this year. Well, it is certainly going to be.

BHP Billiton has already undertaken a series of supplier information forms in Adelaide, the Upper Spencer Gulf, Roxby Downs and Port Lincoln, with more planned. It has also spoken to potential suppliers of the RDA Barossa-convened forum at Greenock in October. I have also seen the Escondida mine in Chile, and it is huge. This is going to dwarf that; it is massive.

Can I say to the minister and everybody else, this is a fantastic opportunity for South Australia. We have heard the story about value-adding. We are all being very positive tonight about the uranium industry and everything else, and we know that the world needs it. If we are talking about value-adding then why do we not talk about enriching uranium? Why? I cannot understand the bogey. We are not even allowed to discuss it in this place. I do not have my party approval either to discuss it in this place.

Mr Pederick: What's that?

Mr VENNING: Enriching uranium. But it was the plan, right back under Don Dunstan's day, to enrich uranium. In fact, Ted Connelly is still alive today. Ted Connelly was the speaker who put Labor into power. He was the member for Port Pirie. He knocked off Mr Phelan who was an endorsed Labor candidate. Ted Connelly became the speaker—straight from the street into the speaker's chair. What did they do for him? They put a bridge to the island out from Port Pirie—the bridge to nowhere, they call it. What do you think that was for? That was going to be the site of the uranium enrichment plant. There is no doubt about that—ask him, he will tell you, but, of course, he has not made any publicity about that. Ted is still with us and he has still got his faculties.

Why don't we? The minister might like to comment. Is there any movement at all in the future? If a consortium came to you, minister, and said, 'We're interested in setting up uranium enrichment in South Australia,' what is your response going to be?

The Hon. A. Koutsantonis: No.

Mr VENNING: The answer is no. If the answer is no, as the minister said very quietly under his breath—

The Hon. A. Koutsantonis: We will not enrich uranium in South Australia.

Mr VENNING: We won't? I cannot understand the logic of that, minister, because here we are, very keen. This is obviously a product of the future. We are keen. We export it as a base product. If we enriched it here, in South Australia, the opportunities are almost doubled. I cannot understand why we will not go there.

My final comment tonight is that I am horrified—in fact, disgusted—that not all political parties are with us. It has not been very often in my time here, I have to say, that Liberal and Labor have agreed. We have, so we should and well done. I am horrified that the Greens are making comments that cause division and concern in the community that I think are unfounded, and deliberately designed to cause angst, particularly when they talk about it being the biggest hole in the world, the largest mine in the world, 45 years—all the negatives from the Greens.

On the other hand, they come out and they say, 'We don't want wind farms, either.' Hang on, you have to be a bit more consistent about this. You have to be constructive. You just cannot knock big projects. I am pretty upset about that.

Finally, I wish the project all the best. I think that it is quite historic at six minutes to midnight that we are doing this. Hopefully, it can go through this house by Thursday and finish in the parliament before Christmas. I support the bill.

Debate adjourned on motion of Hon. A. Koutsantonis.

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