The Nationals and Liberals are working hard to achieve a good deal for farmers, exporters and all Victorians on the Port of Melbourne lease sale.
While we don’t have a deal yet, it appears close. Last week the Labor Government provided 23 pages of amendments to their port sale legislation which appear to bring us closer to achieving a better deal.
The Nationals and Liberals are currently reviewing those amendments and they will be dealt with next time Parliament sits.
There have been two major sticking points. One is timeframe during which taxpayers would have to pay compensation when a new port has to be built. The second is the amount of proceeds from the lease sale that would be provided to rural and regional Victoria.
The Liberal-Nationals Coalition did not want any compensation regime for when a second port was built and Labor wanted compensation paid if a new port was to be built at any time within the 50 year lease.
Labor’s reason for wanting this compensation clause was that it would drive up the immediate sale price prospective buyers would be prepared to pay - a quick cash-grab if you like.
However, this would have been a financial millstone around the neck of taxpayers and what many in the business sector were saying would be a massive debt our children would have inherited and had to pay for.
Quite simply, the Nationals and Liberals were not prepared to have another Myki or desalination plant situation and this was a position supported by industry.
Months ago, as part of the efforts to find a resolution, we moved to 15 years on the compensation clause. It is highly unlikely a new port would be required in this timeframe (they take around 15 years to plan and build).
The government held off, wanting the 50 year clause to boost the sale price. They threatened to by-pass the parliament and just do this without legislation on several occasions, and even threatened an early election.
However, on Thursday last week Labor handed over 23 pages of amendments which appears to address the concerns over the compensation matters, but that are currently being considered before next sitting week.
On the port lease proceeds for regional Victoria, The Nationals have demanded our fair share.
In August last year the Labor Government promised a $200 million fund for the regions if the port sale legislation went through.
If the port lease sale is to reach $7 billion as predicted, that would have been around 2.8 per cent of the sale proceeds coming to the country.
Given regional Victoria provides more than 40 per cent of the exports from the port, The Nationals did not see that as fair at all – in fact, completely unacceptable.
Strangely at the time, Victorian Farmers Federation (VFF) president, Peter Tuohey, was lavish in his praise, saying the $200 million was “a great win for farmers”.
I have no idea how Peter came to this conclusion and I had a number of VFF members questioning these comments and asking how this was a “great win” for rural communities. Nationals Leader Peter Walsh was quick to point out we would not be accepting the scraps off the table on such a big deal.
The Nationals demanded a 10 per cent from the sale of the port lease be allocated to regional Victoria, which based on the sale figure, would equate to around $700 million.
This is vastly better than the deal that was being offered.
February 26, 2016