Mr STIRLING - 2000-11-30
Independent power industry expert, Dr Robert Booth, gave the powerline deal a scathing report card. He described your power scam in these terms:
Deals like this were endemic around Third World countries. I thought these deals had died out. Most astute purchasers of assets refuse these deals outright.
CLP financial mismanagement has cost Territory taxpayers millions and millions of dollars at a time when business confidence has collapsed to its lowest-ever levels. When will you admit that CLP financial mismanagement equates to Third World economics? Or has Dr Booth got it wrong?
ANSWER
Mr Speaker,in the statement I presented on Tuesday, for those people in the gallery and those people listening, I gave the full history of why this line …
Mr Stirling: Not quite.
Ms Martin: You left out a few things.
Mr REED: Do you want to hear the answer, or are you just politically muckraking?
Ms Martin: No, I do not want to hear your drivel.
Mr SPEAKER: Order!
Mr REED: They do not want to hear the answer. They asked a question, but do they want to hear the answer?
In terms of the construction of the line, I explained in that statement in detail why the government did not fund it itself. It did not fund it itself because the federal government would not allow it to fund it itself. The federal government approved the Northern Territory government going ahead with the project on the basis that it was funded by the private sector. They believed that was the appropriate course to take. That federal government was a Labor government. Recognising the Territory’s desire and need to construct the transmission line, and denied the ability to take a loan ourselves to do it, we had no alternative but to go into some other arrangement, and that is what transpired.
That arrangement had certain obligations, which again I explained in detail. If Dr Booth has a different view, goody for Dr Booth. But Dr Booth was not here in 1987 when we were trying to put in place a transmission system to better ensure a reliable supply to the people of Katherine, to provide a reliable and efficient electricity generating system in the Top End without continuing to burn high-sulphur-content, dirty fuel oils …
Ms Martin: You said it was brand-new technology.
Mr Stirling: ‘Innovative technology’. It is 40 years old!
Mr SPEAKER: Order! Both the Leader of the Opposition and the member for Nhulunbuy are again going over the top. Just keep it down.
Mr REED: … wanting to get rid of the dirty fuel-powered stations both at Katherine and in Darwin and to achieve efficiencies. Also in that statement, I explained that there was a branch line to go to Jabiru. It did not happen because the federal government stopped that. It would have made the whole program that much more efficient and more successful, I dare say.
In terms of the financing and the interest paid, if you take out a loan on a home what do you pay back first? In repaying the loan you pay the interest first. The lender gets the interest, they get the benefit of how the process is structured. As I indicated earlier, interest rates for much of those early years were nudging 20%. That had an enormous impact on what happened in relation to interest costs for the project, conveniently overlooked by Dr Booth. I dare say that if I hunted around the country I could find a dozen people who would say we got a pretty good deal with this.
Members interjecting.
Mr SPEAKER: Order! Settle down.
Mr REED: I did table, in the course of the statement, a valuation of the line which supported the position that the circumstances saw in place. The opposition conveniently set that aside. They are only looking for negatives. That is why they think Dr Booth is a wonderful man. Well, he may have some expertise, but he does not seem to have much knowledge about what is happening in the Territory, as I indicated when I was last on my feet, with regard to the regulatory regime and the National Competition Council. He does not take into account important factors like interest rates and does not take into account the fact that if we had stayed with the arrangements that were in place we would have forked out $10m extra over the next 10 years.
We have saved $1m a year by buying this line. It is a good asset that has been acquired for the Power and Water Authority. It will provide benefits for Territorians for 30 to 40 years. It will ensure that the people of Katherine have a power system that is more reliable than it otherwise would have been, and it has enabled the Power and Water Authority over the last decade or more to have a more efficient system for the benefit of Territorians than they otherwise would have had. The government is proud of the arrangements that have been put in place.
Deals like this were endemic around Third World countries. I thought these deals had died out. Most astute purchasers of assets refuse these deals outright.
CLP financial mismanagement has cost Territory taxpayers millions and millions of dollars at a time when business confidence has collapsed to its lowest-ever levels. When will you admit that CLP financial mismanagement equates to Third World economics? Or has Dr Booth got it wrong?
ANSWER
Mr Speaker,in the statement I presented on Tuesday, for those people in the gallery and those people listening, I gave the full history of why this line …
Mr Stirling: Not quite.
Ms Martin: You left out a few things.
Mr REED: Do you want to hear the answer, or are you just politically muckraking?
Ms Martin: No, I do not want to hear your drivel.
Mr SPEAKER: Order!
Mr REED: They do not want to hear the answer. They asked a question, but do they want to hear the answer?
In terms of the construction of the line, I explained in that statement in detail why the government did not fund it itself. It did not fund it itself because the federal government would not allow it to fund it itself. The federal government approved the Northern Territory government going ahead with the project on the basis that it was funded by the private sector. They believed that was the appropriate course to take. That federal government was a Labor government. Recognising the Territory’s desire and need to construct the transmission line, and denied the ability to take a loan ourselves to do it, we had no alternative but to go into some other arrangement, and that is what transpired.
That arrangement had certain obligations, which again I explained in detail. If Dr Booth has a different view, goody for Dr Booth. But Dr Booth was not here in 1987 when we were trying to put in place a transmission system to better ensure a reliable supply to the people of Katherine, to provide a reliable and efficient electricity generating system in the Top End without continuing to burn high-sulphur-content, dirty fuel oils …
Ms Martin: You said it was brand-new technology.
Mr Stirling: ‘Innovative technology’. It is 40 years old!
Mr SPEAKER: Order! Both the Leader of the Opposition and the member for Nhulunbuy are again going over the top. Just keep it down.
Mr REED: … wanting to get rid of the dirty fuel-powered stations both at Katherine and in Darwin and to achieve efficiencies. Also in that statement, I explained that there was a branch line to go to Jabiru. It did not happen because the federal government stopped that. It would have made the whole program that much more efficient and more successful, I dare say.
In terms of the financing and the interest paid, if you take out a loan on a home what do you pay back first? In repaying the loan you pay the interest first. The lender gets the interest, they get the benefit of how the process is structured. As I indicated earlier, interest rates for much of those early years were nudging 20%. That had an enormous impact on what happened in relation to interest costs for the project, conveniently overlooked by Dr Booth. I dare say that if I hunted around the country I could find a dozen people who would say we got a pretty good deal with this.
Members interjecting.
Mr SPEAKER: Order! Settle down.
Mr REED: I did table, in the course of the statement, a valuation of the line which supported the position that the circumstances saw in place. The opposition conveniently set that aside. They are only looking for negatives. That is why they think Dr Booth is a wonderful man. Well, he may have some expertise, but he does not seem to have much knowledge about what is happening in the Territory, as I indicated when I was last on my feet, with regard to the regulatory regime and the National Competition Council. He does not take into account important factors like interest rates and does not take into account the fact that if we had stayed with the arrangements that were in place we would have forked out $10m extra over the next 10 years.
We have saved $1m a year by buying this line. It is a good asset that has been acquired for the Power and Water Authority. It will provide benefits for Territorians for 30 to 40 years. It will ensure that the people of Katherine have a power system that is more reliable than it otherwise would have been, and it has enabled the Power and Water Authority over the last decade or more to have a more efficient system for the benefit of Territorians than they otherwise would have had. The government is proud of the arrangements that have been put in place.
Last updated: 09 Aug 2016