THE Australian Competition and Consumer Commission is right to be concerned about the NSW government’s ports and stevedoring policy.
When governments privatise assets, they naturally want the highest price they can get. That’s understandable, given that – in the case of the state’s ports – the new owners control the assets for 98 years. The leases can only be sold once, so it’s important to get a good price.
A problem arises, however, when the anxiety to maximise the sale price leads to poor decisions that force adverse consequences onto third parties with no say in the matter.
The ACCC warned the NSW government about this concern with the sale of Macquarie Generation, pointing out that the sale to AGL would concentrate ownership of power assets in very few hands, a situation very likely to result in higher electricity prices for consumers.
Similar concerns have also been expressed in relation to the power industry over the clampdown on support for renewable energy and the alleged encouragement of ‘‘gold-plating’’ in the distribution network. It has been argued that the government has a conflict of interest and may be tempted to make these policy decisions as a way of making their assets more valuable to potential buyers.
Now the ACCC is saying that a similar conflict of interest may have motivated the government to impose a cap on container movements at the Port of Newcastle. By suppressing Newcastle’s ability to compete with Sydney, the government improved the value of Port Botany to buyers.
The loser in the story is Newcastle, which – without market interference of the sort now being criticised – should have been a natural location for a major container terminal.
When the BHP steelworks closed, solicitous governments piously promised help to create a ‘‘multi-purpose terminal’’, a concept that was welcomed in Newcastle since it would have helped the city diversify away from its dangerously narrow dependence on the cyclical coal trade.
The reality has been shockingly different, with Labor governments actively diverting a car import terminal that the industry wanted to put in Newcastle and more recently allegedly torpedoing a strong bid by Anglo Ports to build a container terminal here.
The Coalition, far from undoing the wrong perpetrated on Newcastle by its political opponents, has simply set the inequity in stone by inserting terms into its port sale agreements that effectively shut Newcastle out of competing for a serious slice of the container trade.
The ACCC suggests this anticompetitive action by the government might be illegal and unenforceable. If that’s true it should be good news for Newcastle.