Hansard debates

                               PORT SERVICES BILL
                                 Second reading

  Mr STOCKDALE (Treasurer) -- I move:
  That this bill be now read a second time.
The bill introduces  significant and far-reaching  reforms to the ports industry
in Victoria. While Victoria has a well developed port structure,  with  the port
of  Melbourne being Australia's  largest container port and the three commercial
ports handling significant volumes of bulk trades, the
industry has  a  legacy  of  high costs, limited competition and user choice and
poor commercial practices.

 Page 423


The objectives of port reform therefore have been:
        to increase port efficiency and improve services;
        to reduce port costs to cargo importers and exporters; and
        to achieve a reasonable return to Victorian taxpayers.
In January this  year, following extensive  consultation  with port users,  port
authorities and other interested parties, the government announced that it would
restructure Victoria's port industry as follows:

        establish a  new public body to hold port land in Melbourne, acting as a
        landlord on a  commercial  basis, and with  lessees of land  and  berths
        being the predominant providers of port infrastructure  and  services to
        port users;
        offer the  onshore port assets  of  the ports of  Geelong,  Portland and
        Hastings  for  sale,  with the  underwater  assets  retained  in  public
        ownership;
        establish a new  statutory authority to be  responsible for channels  in
        the ports of Melbourne and Geelong, and Port Phillip Bay.
Already significant steps have been taken in implementing these reforms.

Even prior to the establishment of the new  Melbourne landlord body the existing
Port  of Melbourne Authority has  called for expressions of interest for private
sector berth operators to take up opportunities to acquire  medium and long-term
leases of berths and sites and develop their own major new facilities throughout
the port.
The government implemented the  abolition of state  tonnage duty effective  from
December  1994.  The  further reforms  facilitated  by  the  bill  will  produce
additional substantial cost benefits to port users.
The bill creates  the  Melbourne Port  Corporation,  to be responsible  for  the
provision  and  development  of land  and  related  facilities  in  the  port of
Melbourne.  The Melbourne Port  Corporation  will focus on  the provision, as  a
landlord, of port facilities to port users.

The bill  also establishes the Victorian  Channels Authority, the  role of which
will be to manage channels, channel assets and the navigation of  vessels in the
port areas of  Melbourne, Geelong, Portland and  Hastings. It will, among  other
things,  have  prime  responsibility for navigation aids and dredging  channels.
Like the  Melbourne Port Corporation, it  is required to  operate  and determine
fees and charges in a commercial manner. The VCA will be  empowered to  contract
for third parties to operate facilities and services on behalf of the VCA.
The bill expands the role of the Environment Protection Authority and the Health
and  Safety  Organisation  to  cover  regulatory areas relating to environmental
protection and health and safety areas. Further, dangerous goods regulation will
also be transferred to the HSO. The relocation of these regulatory functions not
only assists the new  ports bodies  to focus  on core  activities but  will also
ensure that port users are subject to the same sorts of  regulatory requirements
as other commercial businesses within the state.

The  bill also provides for the economic regulation of port services. To  ensure
that the market power of  the  MPC and the VCA is not abused  the  bill provides
that the prices charged by them for non-contestable services are to be regulated
by the  Regulator-General. This regulation is  an important element  in ensuring
that  prices of port services are as low as  is  commercially  justifiable.  The
Office of the Regulator-General will also oversee the obligation of the channels
authority  to  facilitate  third-party  access to the prescribed  channels.  The
economic  regulatory regime  is  consistent with systems  put  in place by  this
government in reforming the electricity, water and grain handling industries.
Under the bill the Marine Board of Victoria will undertake a regulatory role for
safe maritime operations in all state waters, including port areas. It will also
be empowered to set the  standards and requirements for operations in designated
areas.

In Portland, Geelong and Hastings the government's January announcement provided
that dedicated berths  would be offered  to  users on  a  right-of-first-refusal
basis.  Subject to the outcome of those offers, the onshore assets of  each port
would be offered for sale as a single  parcel. The  bill facilitates these sales
by  providing  for  the  allocation of assets by the Treasurer and enabling  the
Treasurer, on behalf of the state, to enter sales agreements.
This bill is a critical  step  in  achieving wide-ranging and enduring reform in
Victoria's ports. The government is determined to make this state's economy  the
most efficient and competitive  in Australia. Port reform  will ensure that port
users  --  that  is, merchandise  exporters  and  importers --  benefit  from an
efficient and  competitive service, and  will thus provide a further significant
improvement to our state's economic performance.
I commend the bill to the house.

 Page 424


Debate adjourned on motion of Mr LONEY (Geelong North).
Debate adjourned until Thursday, 19 October.