SNOWY HYDRO LIMITED TRANSFER OF OWNERSHIP
Mr PALLAS (Treasurer) (10:38:17) — I move:
That under section 6(2A) of the Snowy Hydro Corporatisation Act 1997, the transfer of the state of Victoria’s interest in Snowy Hydro Limited, held by the State Electricity Commission of Victoria, to the Commonwealth of Australia be approved.
In speaking to this motion I rise to indicate that it delivers good value for Victorians and represents effective commonwealth‑state relations and cooperation — a rare occurrence but nonetheless one that is noteworthy and worth acknowledging. Earlier this month the Victorian government reached terms for the commonwealth to purchase Victoria’s share of Snowy Hydro Limited. As part of that historic agreement Victoria will receive more than $2 billion from the commonwealth that will benefit all Victorians.
The agreement also paves the way for the Prime Minister’s proposed Snowy 2.0 initiative. We do not oppose Snowy 2.0. We are happy for the federal government to proceed with the project and take responsibility for it. Indeed we are supportive of projects which provide greater renewables into the market and which provide enhanced energy security.
We have secured a number of protections as part of this transaction. The commonwealth has provided an assurance that Snowy Hydro will continue to be in public ownership and employment levels will not materially change. The commonwealth have also provided assurances that Red Energy and Lumo Energy’s head office locations will remain in Victoria indefinitely. The transaction will not affect allocations of GST for Victoria. In an important win for farmers, Victoria has ensured the agreement with the commonwealth will not result in any changes to our current water arrangements. Victoria has a legally binding deed with New South Wales and the commonwealth which ensures water for the environment will be managed through the scheme in a way that is consistent with the objectives of the Snowy Hydro initiative regardless of who owns Snowy Hydro. The sale of the Snowy Hydro scheme does not change this.
This government has had a consistent approach to investing in infrastructure that Victoria needs in both our cities and our regions. This government has already committed to infrastructure investment of $10.2 billion per annum over the forward estimates. That compares to the decade average before this government of $4.9 billion per annum. We are investing at more than double the long‑term average. All up our infrastructure program will create more than 50 000 jobs. We are building the Melbourne Metro and the West Gate tunnel. We are removing 50 of our most dangerous and congested level crossings. We are upgrading roads across our regions and suburbs — the Drysdale bypass, Thompsons Road, Plenty Road, Yan Yean Road and the Mordialloc bypass, to name but a few.
The list of our infrastructure achievements goes on. There is a simple message behind this motion: we are building Victoria just like we always have. Those opposite are blocking and stalling vital projects just like they always do. As always, if they have nothing to contribute, they should simply get out of the way. They had their chance to do something and they squibbed it. They should have the decency to allow this government at least to get on and do the things that are necessary to secure Victoria’s economic vitality.
The sale of our share of Snowy Hydro will allow the government to continue to deliver on the projects that matter for Victorians. We will comply with the terms agreed with the commonwealth and invest the $2 billion proceeds in productive infrastructure. The proceeds will be fully accounted for in the budget. Project selection will be at the total and unfettered discretion of the Victorian government. I will say that regional Victoria will get their fair share and certainly in excess of the proportion of proceeds from the lease of the port of Melbourne. We are doing this because we believe the proceeds of this historic deal should be utilised in a fashion that benefits all Victorians. That is their right.
I note that those opposite have taken a very different approach with their proposals in the traffic light removal project policy document, which is where they have committed the proceeds of the Snowy transaction. They will use this money in dividing communities, acquiring homes, parks and businesses, and in getting Victorians to the next set of traffic lights quicker. Let us be clear about this policy: it is an absolute stinker. It is the sort of policy that is dreamt up by people who have never actually delivered a project and who would not know a business case if they tripped over one. First, there is no traffic‑modelling of the proposed solution. It does not remove the traffic lights — it simply moves them to off‑ramps and P‑turns. Rather than provide additional capacity, all it does is get people to the next set of traffic lights quicker. These proposed intersection removals would make pedestrian and cyclist access practically impossible, cutting communities in half and disrupting long‑established routes of transport.
Mr M. O’Brien interjected.
Mr PALLAS — I am glad to hear the member for Malvern wants a broad debate. I never considered him to be particularly shy or likely to constrain his commentary on this government.
Not only would they disrupt access across the suburbs but they would require the acquisition of hundreds, perhaps even thousands, of properties. The Leader of the Opposition says that no properties will be acquired, so one wonders how magically this policy will be introduced and how physically it will be arranged, but it perhaps underlines the total level of ignorance associated with major capital works delivery. That no land acquisitions are actually costed in this policy is a further illustration of how this project is destined to blow out not in a minor way but quite possibly by billions of dollars. This is all the more galling when we know that this plan will do very little to improve traffic flow and nothing to solve congestion. It is no exaggeration to say that it is one of the most ill‑conceived policy proposals put forward by an opposition at least since Fightback was advocated as a winner of a strategy.
It is no surprise then that members opposite have started coming up with better ideas about how these funds could be spent. They do not appear to be in any way disciplined, but of course a shout‑out to the member for South‑West Coast who suggested that the funds should be spent in regional Victoria. That would be a change for those opposite, because of course we know that when it comes to regional Victoria they are all hat and no cattle.
Ms Britnell interjected.
Mr PALLAS — Here we hear the screams of outrage from those opposite about how we should be spending money in regional Victoria. In three budgets we have spent more money in regional Victoria than the previous government did in four. Now we have seen a commitment to spend the vast majority of these funds in metropolitan Melbourne. But we know that the member for South‑West Coast is an outstanding advocate for regional Victoria. It is just that she has got no pull whatsoever. Advocacy in a vacuum just proves that your whole contribution is vacuous.
Indeed the people of Victoria deserve a genuine commitment from government, and that is what they are getting here — a proposition that ensures Victorians are well served by allowing a single tier of government to get on and deliver this vital piece of infrastructure. Importantly, that commitment for that infrastructure to proceed means that the commonwealth will take full responsibility for the elevated hydro scheme that is Snowy 2.0.
Additionally what it means is that Victorians get good value for the asset that they have put to the commonwealth without the commonwealth dictating terms about how those funds should be applied. But of course, consistent with the undertaking we have given to the commonwealth, we will as a government ensure that the funds are directed to productive infrastructure. I have made it clear in this speech, and I will reassert the view, that the government will in the budget account for those funds, and of course we will ensure that regional Victoria does better than what would have been allocated under the Victorian Transport Fund, which assumes only a 10 per cent allocation to them.
The other point to remember is that as a government we have been able to secure the employment of people who are employed by Snowy Hydro and the maintenance of the head offices here in Victoria of the two retail operations. We have also been able to reach agreement with the commonwealth about important principles attached to ensuring that our water rights are in no way disadvantaged as a consequence of these arrangements in what are legally binding agreements with the commonwealth.
It is important that we recognise that therefore the tier of government that is motivated and committed to delivering this vital piece of infrastructure gets the opportunity to do exactly that. The commonwealth and the Prime Minister in particular have indicated their desire to go down this path. The state of Victoria and the state of New South Wales have agreed on what we see as being reasonable value for the asset that we own, but of course this is not a privatisation in anybody’s ordinary use of the language. This is in fact a sale to another tier of government. The asset remains in public hands and in the hands of the tier of government that seeks to enhance and indeed increase the value of the asset by making the investment implicit in Snowy 2.0.
It is in our view a substantial improvement to the original positioning of the commonwealth, where it thought it might be in a position to purchase an asset from the state of Victoria and the state of New South Wales and then direct the states in how they might then spend the funds — an interesting level of misperception of what the role of a vendor and what the role of a purchaser is in fact. But as it transpires economic reality together with the right of a seller to simply say no has got us to a position where we have not only extracted assurances about the long‑term management of this asset and the fair share for Victoria through the continued operation of Snowy Hydro, but also importantly the state of Victoria has been able to assure employment levels and, might I say, our right as a state to continue to oversee and determine what are the appropriate assets. That is a right I am sure, while there might be disagreements as to which infrastructure projects are desirable, that both sides of this house would see as being something that should remain a right unfettered for the state of Victoria.
This is a historic motion. It is good for Victorian households and it is good for our economy as we continue to build the infrastructure and create the jobs that the state needs for the future. We know that the state of Victoria is the fastest growing economy in the nation, and we know that the state of Victoria is also the fastest job creating state in the nation, both in percentage terms and in absolute terms. We know that a key part of that story is the government’s willingness to continue to make the critical investment that grows our economy and increases the livability of the state.
Everybody is entitled to their fair share, and the fundamental proposition underpinning the arrangements that we have struck with the commonwealth is that the state of Victoria will make those determinations but will work consistent with that broad principle. Victoria of course as I have said will receive more than $2 billion from the commonwealth that will benefit all Victorians. This demonstrates that when we have a partner in the commonwealth we can deliver benefits that are in the interests of Victoria and the nation. I call on all members in this place to support this important motion.