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12 March 1991 - Current

Delivering Victorian Infrastructure (Port of Melbourne Lease Transaction) Bill 2015
Page 1571
27 May 2015

Mr PALLAS (Treasurer) — I move:

That this bill be now read a second time.


In opposition, Labor made clear our commitment to a plan to transform our public transport system, reduce road congestion and create thousands of jobs.

Central to this plan is removing our 50 worst level crossings, building Melbourne Metro and relieving pressure on the West Gate Bridge.

These projects will create thousands of jobs and get Victorians home safer and sooner.

We said we would support removing the 50 worst level crossings by leasing the Port of Melbourne's operations.

Now we're getting on with it.

The bill

The Delivering Victorian Infrastructure (Port of Melbourne Lease Transaction) Bill 2015 delivers on Labor's election commitments.

The bill authorises and facilitates leasing land and disposing of other assets of the Port of Melbourne Corporation and transferring operation and regulation of services as a result.

The 50-year lease is for the port's commercial operations only.

The Victorian and commonwealth governments will retain responsibility for regulating the port's safety, security and environment functions.

The leaseholder is expected to deliver efficiencies, boost competitiveness and ensure future development of the port is not compromised — reinforcing Victoria's position as the freight and logistics capital of Australia.

It's about making the port even better.

Speaker, the bill clearly articulates the most important objectives of this transaction:

regulating PoM to ensure it continues to operate competitively and efficiently to support Victoria's freight and logistics network;

requiring that the transaction delivers the optimal overall long-term economic benefit to Victorians and Victorian businesses;

treating employees fairly and equitably;

maximising the financial return to the state from the transaction within overall policy settings, while minimising the ongoing financial risks and liabilities to the state;

ensuring that appropriate activities, including marine, environmental and safety functions, remain with the state and are managed in an efficient manner;

completing the transaction efficiently with appropriate probity, transparency and accountability standards;

securing Victoria's role as the freight and logistics capital of Australia.

The Victorian Transport Fund (VTF)

Speaker, this bill guarantees a direct benefit for Victoria's transport system through the 50-year lease transaction.

Lease proceeds will go to the Victorian Transport Fund.

This fund will be established to support projects like removing our 50 worst level crossings, building Melbourne Metro, the West Gate distributor and other important transport initiatives.

It will also support projects that help relieve traffic congestion and improve access to the port.

The Victorian government will work with the leaseholder to manage traffic around the port.

We are already working to take 5000 trucks off the West Gate Bridge every day, with $40 million provided in the 2015–16 budget to widen Whitehall Street and strengthen Shepherd Bridge.

Most importantly, the lease proceeds being paid up-front means we can remove our 50 worst level crossings and protect our AAA credit rating.

Removing level crossings will relieve traffic congestion and create thousands of construction jobs.

It's a boost for jobs, industry, our transport system, and it protects our AAA credit rating.

At the same time, it's a great example of asset recycling — allowing us to unlock billions of dollars from the port lease to plan and build vital transport infrastructure.

Victoria will be eligible for the commonwealth government's asset recycling initiative, which provides financial incentives for jurisdictions to divest assets so the proceeds can bring forward the funding of new, productive infrastructure.

I am pleased to say this is one thing the federal Treasurer and I agree on.

The lease

The port of Melbourne is the biggest container and cargo port in the country, visited by more than 3000 ships each year. Victorians are rightly proud of it.

Under the lease terms, only the port's commercial operations are to be leased.

The Victorian and commonwealth governments retain responsibility for regulating the port's safety, security and environmental functions. Existing statutory planning standards will continue to apply.

The state will continue to be responsible for the harbour master, safe navigation in Port Phillip Bay, dangerous goods oversight, waterside emergency management, marine pollution response and towage regulation.

The lease is structured to make our port even better, increasing efficiencies, competitiveness and innovations.

The leaseholder will be obliged to maintain the port during the lease term so it is returned to public hands in good working order.

Public access to walkways and bike paths for locals', visitors' and neighbours' use will be maintained.

The iconic Station Pier will remain in public hands.

Victoria's independent economic regulator, the Essential Services Commission, will oversee a strengthened pricing structure for port users. Annual tariff increases will be capped at CPI for at least 15 years to protect Victorian producers, manufacturers, other exporters and importers, and consumers.

The lease will help maintain Victoria's position as the freight and logistics capital of Australia — good news for producers and manufacturers who export all over the world, and consumers who want affordable products.

I also welcome the Port of Melbourne Corporation's decision to enhance its export price competitiveness by freezing loaded international container export charges in 2015–16 and recommending a progressive 2.5 per cent price reduction for these export charges for the four years thereafter.

Government will give effect to the regulatory pricing framework, including the CPI price cap and the Port of Melbourne Corporation's recommended four-year loaded international container export charge reduction via the pricing order.

The people

The people who work at the Port of Melbourne Corporation are an integral part of its success.

As part of the lease process, Port of Melbourne employees will be treated fairly and equitably.

PoMC employees covered by the enterprise agreement who transfer to the leaseholder will do so on a voluntary basis.

This bill protects continuity of service and entitlements and provides an employment guarantee period of two years from the date of transfer for permanent staff transferring to the leaseholder.

Transferring staff will be offered no less favourable terms of employment.

The future

The lease for the port's operations will be welcomed by the market and give Victorians the best financial outcome to support removing our 50 worst level crossings and other transport projects.

A 50-year lease will allow the leaseholder to plan for the investment needed to maintain and improve the port. Importantly, these costs will be met by the leaseholder, not Victorian taxpayers.

It also gives the Victorian government the ability to plan for the future and consider options for a second major port.


When this house concludes its deliberations on the bill, it will pass to our colleagues in the Legislative Council. There, it too will be enthusiastically debated.

It should be debated — and it should be passed as soon as possible. This will allow the government to secure real value and assure the investment community of the preservation of the pre-election consensus on this matter. The Andrews Labor government was elected on a platform to lease the Port of Melbourne's operations, remove our 50 worst level crossings, fix our transport system and create thousands of jobs in the process.

We made this commitment a full year before the last election, a policy which the former government quickly copied.

This was a position supported by the previous government because it was a great policy then, and it's a great policy now.

We look forward to continued bipartisan support, and to persuading others that we simply can't afford to wait another minute to start transforming Victoria's transport system.

I commend the bill to the house.

Debate adjourned on motion of Mr HODGETT (Croydon).

Debate adjourned until Wednesday, 24 June.