Newcastle Herald Opinion: By Richard Anicich

Remove Port Commitment Deed handbrake, we’ll do the heavy lifting

Much has been written in the Newcastle Herald on the handbrake the Port Commitment Deed (PCD) has imposed on plans to develop the container terminal in the Port of Newcastle which is a key plank in the future diversification of the regional economy.

The argument has been well articulated by others. It has the broad support of many, not just in the Hunter, but far beyond, including some on both sides of the state and national political divide.

The tabling in the NSW parliament last week of the Port of Newcastle (Extinguishment of Liability) Bill by the Member for Lake Macquarie brings the issue squarely into focus. It is a welcome development.

In introducing the Bill, Greg Piper said, “It is a simple bill with a simple intent, but simplicity belies the fact that its passage will provide a profound benefit to NSW into the future”.

Therein lies the crux of the issue and the reason why we need to find a solution to the current impasse.

The economic case has been made by others as reported in the Newcastle Herald. Just one example referred to by Mr Piper in parliament last week is the fact that farmers in the north west of the state would save an additional $16 to $22 per tonne by shipping out of Newcastle, a staggering $3billion in savings over the next 30 years.

The world has moved on since the PCD was put in place in 2014. Global shipping needs and trends will continue to evolve rapidly and change the landscape well before 2064 when the PCD will expire. It is extraordinary to think that development in the Port of Newcastle is to be shackled so far into the future.

In responding to a question from Mr Piper in parliament the Premier said he appreciated the concerns raised by the question but made “the point that this is part of the ports strategy”. No doubt the Premier was referring to the NSW ports strategy which identifies Port Kembla as the location for further container terminal capacity after Port Botany and relegates the idea of a container terminal at the Port of Newcastle to the distant future.

The Premier’s view of the “ports strategy” seems to be taken up in the recent discussion paper, “The Six Cities Region”, released by the Greater Cities Commission (GCC). The discussion paper notes “Port Botany will be the main container port for the near future. Port Kembla is planned to be the future second container terminal to support long-term demand and the resilience of the Six Cities Region’s freight network. Port of Newcastle will continue its global role in energy exports as it transitions from coal to hydrogen, as well as grows and diversifies its trade base over the next 20 years”.

It is hoped that when the GCC develops its more detailed strategic plans it will not simply toe the Macquarie Street line but seek to meet the aspirations of the Hunter region. The benefits from a container terminal in Newcastle are not just about the “long-term demand and the resilience of the Six Cities Region’s freight network” but is about providing tangible benefits to the manufacturers and consumers in the Hunter, the farmers in regional NSW and many more. It is about providing a boost to the regional, state and national economies.

A “state ports strategy” is just that, a strategy adopted by the government of the day. It is not enshrined in legislation. Some of us will recall an earlier ports strategy which nominated the Port of Newcastle for a future container terminal ahead of Port Kembla. The government is not, and should not, feel it is constrained by “the ports strategy”.

The national Productivity Commission noted in its recent draft report inquiring into productivity at Australia’s container ports that “port privatisation processes have entrenched market power in Sydney by combining the ownership of Port Botany and Port Kembla and penalising any development of container capacity at the Port of Newcastle”.

The Premier said last week that the government had developed “our ports strategy to reduce the cost of moving containers for industry, consumers and taxpayers”. The analysis and evidence supporting the container terminal in Newcastle suggests that objective is not being realised.

The Premier also noted that the issue of the validity of the PCD is before the courts and so he could not say anything which might prejudice that case.

That does not, and should not, prevent the government from seeking a resolution to this vexed issue pending a decision by the Federal Court in the case brought by the ACCC.

The Premier referred to the significant investment made in the Hunter as a result of asset recycling. That must be acknowledged. The significant investment made by the state government in the Newcastle CBD has resulted in substantial private sector investment and the results speak for themselves.

The role of government is to invest in critical enabling infrastructure and then let the private sector do the heavy lifting. Similarly, it is the role of government to get the policy settings right to remove restrictions which are a handbrake on the private sector. The PCD is one such handbrake which needs to be removed.

Richard anicich is Chair of the Committee for the Hunter