A cleanskin rises as the Nats change tack: There’s hope for NSW planning
Columnist, author, architecture critic and essayistJuly 6, 2019 — 12.10am
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Jodi McKay may not prove to be our Jacinda, much as we could use one in poor, dog-torn NSW. But having had the dubious honour of being dudded as minister not only by the then-Opposition but by her own colleagues, she’s the ALP’s closest thing to a cleanskin. More importantly, she may reverse the wealth-concentrating effects of neoliberal cronyism and send some much-needed vitality to the regions.
Last Saturday, the day after McKay was elected opposition leader, the National Party annual general meeting in Inverell declared its support for a “high-intensity container terminal” at Newcastle. Together, these two far-flung and causally unrelated events could constitute NSW’s most significant planning shift for decades.
Planning? I see your eyebrows raise. Planning in NSW is never about plans. Plans-as-made don’t leave the paper they’re printed on. Planning here is always about where politicians send the dough. It’s about at what instant and in what semi-random direction, as they’re punched and pummelled in the political brawl, the huge dollops of dosh leave their fat little hands. Wham! Ooouf! Catch this!
There’s back-story here. In 2011, the dying days of the Keneally government, McKay was minister for Newcastle and the Hunter. Suddenly, weeks before the election, a huge anti-McKay smear campaign loomed from nowhere. Ten thousand leaflets flooded local streets, exhorting local residents to “Stop Jodi’s Trucks”.
Everyone knew what it meant: oppose government policy (dating from the Carr government in 2003) for Newcastle to be the home of our second container terminal on the site of the former steelworks. Back instead Nathan Tinkler’s bid (also supported by then treasurer Eric Roozendaal) to expand Newcastle’s coal capacity with a billion-dollar coal terminal on the Mayfield site. Vote Jodi out.
Trucks? You might think no one would believe a boofhead developer like Tinkler gave a damn about trucks clogging roads. But the electorate bought it. McKay lost office to Tim Owen – one of nine Liberal MPs subsequently found by the Independent Commission Against Corruption’s Operation Spicer to have accepted improper donations from developers.
Operation Spicer also revealed that Tinkler’s little helper in printing and distributing the leaflets was former ports minister Joe Tripodi, who also warranted Spicer’s only explicit corruption finding. Naturally Tripodi, like some schoolboy, blamed the printer.
That was bizarre, but in Newcastle’s container-port struggle it was just the start. When the O’Farrell-Baird government took office, it predicated its budget numbers on selling everything not nailed down – first poles-and-wires, then ports; Kembla, Botany and Newcastle.
In 2011, then treasurer Mike Baird told Parliament he expected $2.5 billion for Port Botany, the only port in NSW with dedicated container terminal facilities. In 2012, with Port Kembla added, the expected figure was mid-threes. But by April 2013, when the deal was executed, the two ports fetched an astounding $5.1billion.
What we didn’t know then, but know now, is why. Newcastle is the world’s largest coal export port, but even then coal was widely seen as a stranded asset. The bidders had not only baulked at buying the Port of Newcastle for that reason but had also extracted a government promise to hobble Newcastle as potential competitor for the next 50 years.
It worked via two secret contracts, or Port Commitment Deeds. The first, signed in April 2013 between the government and the new owners of ports Botany and Kembla, NSW Ports, commits the government to compensating NSW Ports $100 for every container (or equivalent) above a 30,000 limit handled by any future Newcastle container terminal. The second, signed roughly a year later between government and the Port of Newcastle’s new owners, commits those new owners to the same payment upon the same trigger.
A word of explanation. Thirty thousand is nothing. Standard containers are 20 feet long (although many are now much bigger) so ship or port capacity is measured in TEUs, or Twenty-foot Equivalent Units. A single new ultra-large container vessel, or ULCV, can carry up to 20,000 TEUs and a container-port at Newcastle could expect an annual throughput over a million TEUs. So limiting Newy to 30,000 before a punitive tariff kicks in essentially kills the port.
Further, the twin deed – obliging the Port of Newcastle to reimburse government for its Ports NSW payout – makes the whole thing cost-neutral to government, excepting, of course, the huge windfall gain for putting an effective monopoly in private hands.
This was deliberate and covert; conveyed neither to the Parliament (although it was government signing up for the payout) nor to the public, whose assets these supposedly were. We know only because of “confidential” documents leaked in 2016 to The Newcastle Herald.
Some say this is reasonable. Sydney is the biggest market for goods, so sending the 96 per cent of our enormous goods-trade that is ship-borne in that direction makes sense. But there are many counter-arguments, including the fact that produce from the Hunter, traditionally shipped in bulk but increasingly containerised, must now travel by congested rail and road to Port Botany.
This is expensive, illogical, short-sighted, hypocritical and, says the ACCC, illegal.
Expensive for freighters since (says a 2018 Deloittes report) road tolls alone, especially on WestConnex, will add $60 to $80 a truck, plus costs from delays and missed ships.
Illogical because, if a Newcastle container port were really so unviable, why even bother imposing an anti-competition clause? Unintelligent because Newcastle has the land and channel depth to accommodate the new, immense ULCVs (currently 45 per cent of new-build ships) whereas Botany, unless we move the airport, is strictly limited.
Hypocritical because, well, either you’re promoting competition or you’re not. To pretend competition while secretly imposing a monopoly strictly to maximise your own profits is at best ugly and at worst, treacherous, especially if it hobbles an entire region for half-a-century and exacerbates climate change.
As to illegal, this depends on the outcome of a case currently in the Federal Court where the ACCC seeks to ban Baird’s extra tariff as anti-competitive.
So thanks, neoliberalism, for signing us up to a 50-year commitment that is expensive, illogical, unintelligent, hypocritical and potentially illegal. Then again, Tinkler was bankrupted for 26 months until 2018 and McKay’s in line to be premier. With 63 per cent rank-and-file support, she may yet return the ALP to its roots and the Hunter to its rightful vibrancy.
Elizabeth Farrelly is a Sydney-based columnist and author who holds a PhD in architecture and several international writing awards. She is a former editor and Sydney City Councilor. Her books include ‘Glenn Murcutt: Three Houses’, ‘Blubberland; the dangers of happiness’ and ‘Caro Was Here’, crime fiction for children (2014).