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Legislative Council - Fifty-First Parliament, Second Session (51-2)
2007-10-16 Daily Xml
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Ministerial Statement

SANTOS

The Hon. P. HOLLOWAY (Minister for Police, Minister for Mineral Resources Development, Minister for Urban Development and Planning) (14:24): I seek leave to make a ministerial statement.

Leave granted.

The Hon. P. HOLLOWAY: I wish to make a ministerial statement, as made by the Premier in another place, which relates to an agreement with Santos. Today, the South Australian government has taken the historic step of agreeing to proceed with the removal of the 15 per cent shareholding cap that applies currently to Santos. The government will move to introduce legislation as soon as practicable into the parliament and the shareholding cap will be lifted 12 months after the repealing legislation comes into effect. This follows a review of the 28 year old Santos shareholding restriction that was introduced by the former Corcoran government to prevent a takeover by Alan Bond. This legislation protected Santos and the state's security of gas supplies. However, the company now believes the cap inhibits its growth potential.

The government has consistently stated that it would consider the removal of the share cap only if the state can be assured that this is in the interests of South Australia. In particular the state has sought guarantees to ensure an ongoing and strong corporate presence in South Australia and an enduring contribution to the development of the state, even if Santos were eventually to be taken over. For the benefit of the Leader of the Opposition, this is precisely what his fellow Liberal commonwealth ministers urged the South Australian government to do.

We want to see Santos grow and make sure that South Australia benefits from Santos' growth. In consideration of this matter, Santos has provided a deed of undertaking to the state, signed by Santos Chairman Stephen Gerlach, regarding the continuation of the corporate presence and contribution of Santos to the state. The deed of undertaking provided by Santos provides three fundamental commitments, which guarantee a strong and ongoing commitment by Santos to South Australia. These include: a continuing Santos presence in South Australia of effectively 90 per cent of the current South Australian based roles, which includes 100 per cent of the roles at its major South Australian operational sites. This equates currently to approximately 1,700 jobs in South Australia. It also includes a social responsibility and communication benefits fund of some $60 million over 10 years to be applied to a range of community development purposes, and these commitments will be supported by a $100 million legally enforceable compensation mechanism should there be a significant reduction in corporate presence.

The Santos deed of undertaking provides a platform for the future growth and development of the company, while also providing assured ongoing benefits to South Australia. In order for this to happen this parliament must agree to legislative changes. I call upon the opposition members in the upper house to put aside any temptation they may have to play games with the repealing of the cap and to put South Australia first.

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