LABOR have accused NSW Treasurer Gladys Berejiklian of “putting a brake on economic development in Newcastle for a century” by putting a cap on container ships at the city’s port.
But Ms Berejiklian says Labor’s argument that the cap was instituted “intentionally to the detriment of Newcastle” is an “affront and it is wrong”.
In July the Newcastle Herald revealed that a “strictly confidential” agreement existed between the NSW government and the private operator of Port Botany and Port Kembla to compensate it against any competing container terminal in Newcastle.
During a Budget Estimates hearing on Thursday Ms Berejiklian – who has consistently said there is “no legislated cap” on the Port - was asked by Labor’s Adam Searle to explain why the cap had been put in place.
The government says that because the majority of container deposits in Botany are delivered to within 40 kilometres, it makes sense for it to be the state’s main container port.
While Labor argues that is only the case because firms that rely on container receipts base themselves near the Port, Ms Berejiklian said that “major freight operators do not want multiple ports of stops when they are bringing their goods to New South Wales”.
“As a government we have to make some really sound decisions on what the primary use of each port should be to make sure we maximise the opportunities of increasing capacity at all of our ports in relation to our strategy,” she said.
“We have said very publicly that we see the particular role of the port at Newcastle to be primarily for coal and other bulk commodities.
“We now have record investment in infrastructure and record investment in revitalising Newcastle and the greater Hunter region, which has been made possible in part by this transaction.”
The cap had long been denied by the government, and on Thursday Mr Searle said Ms Berejiklian had “lied” about its existence during last year’s estimates hearings.
In 2015 Mr Searle asked Ms Berejiklian whether there was “any other restriction in the sale of the lease documents” on the Port, to which she replied she was “not aware” and would take the question on notice. On Thursday she said she did not answer because she wasn’t sure if it was commercial in confidence.
“I am telling you now the reason why I did not elaborate beyond what I knew was a fact was because I wanted to seek some advice as to what was commercial in confidence and what was publicly available,” she said.
However the subsequent answer in 2015 repeated the government’s line that there is “no legislated cap”.
After the Herald revealed the existence of the cap, the Minister for Roads, Maritime and Freight, Duncan Gay, outlined the details in parliament, revealing that once a“cross-payment” threshold of 30,000 containers – plus 6 per cent yearly growth – was reached at Newcastle, the operator would have to pay the owners of the Port of Botany $1 million for every ship.
The chairman of competition regulator the Australian Competition and Consumer Commission, Rod Sims, has said he can't take action against the deal because governments enjoy immunity from competition laws.
Mr Sims previously told the Australian Financial Review that state government’s are only subject to competition laws when they are carrying on a business, not when selling assets.
However the government has not said when it claimed immunity from the act.
On Thursday Mr Searle asked Ms Berejiklian when the government had claimed immunity from the commercial regulations.
The Treasurer said there was “ongoing consultation with the ACCC during that process and ongoing consultation with all the relevant agencies”.
“I do know for a fact because after I was asked those questions I did go back and check with the team that there was ongoing consultation,” she said.