Jun 2014

BILLS - Asset Recycling Fund Bill 2014, Asset Recycling Fund (Consequential Amendments) Bill 2014

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‘Do not vote for privatisation it’s an economic taipan snake’


- Second Reading - 19 June 2014

Mr KATTER (Kennedy) (10:46): I second the amendment. There is no nepotism involved, but I think the finest statement I have ever heard on privatisation came from the state member for Mount Isa, in my electorate—a person called Robbie Katter. He said that when you corporatise or privatise an essential service, you provide to that corporation the right to tax you at whatever level it feels like for forever. Enron: The smartest guys in the room should be compulsory reading in this place. There are four books on Enron, and I have read them all. The head of Enron told the President of the United States and the Governor of California that corporatisation would be wonderful for them—this is what he said—because they would get more schools, more police and more of every government service if they sold California's electricity industry. We now know what the outcome was.

The congressional inquiry informed the people of America that Californian electricity consumers had been skinned of $74,000 million in the space of four years. Of course the president and CFO of Enron both went to jail—perhaps not because they had broken the law; probably just because of the people's rage about the lies that had been told.

Exactly the same story is occurring now. I read in a North Queensland paper where one of the politicians up there said that they needed a new football stadium. I think we have a magnificent stadium now, at the Cowboys, but they need a new one up there, and they want a roof on it, and we will have to sell the port and the railways. There is a very famous book called The Bible, and there is a story in there about a bloke who sold his birthright for a bowl of porridge because he happened to be a bit hungry that morning. It was not a real good deal.

Those who come from Melbourne will be well aware that 200 years ago the people of Melbourne were offered some blankets and some baubles, and they gave the greater Melbourne area to some blokes who had come in from overseas. There is obviously precedent for what is going on now—blokes from overseas have come to us and said, 'Just give us all these essential services and it'll be really good for you.' I think my blackfella brothers and cousins down there in Melbourne would say, 'We got conned.'

Let us go to reality land. In the year before corporatisation, which is privatisation by another name, the cost of electricity in Queensland—and all the states are the same—was $859 a year. That is what the consumer paid in 2005. By 2013, that had risen to $2,100, and by June 2014 it had gone up to $2,395. That is 400 per cent higher than before corporatisation. Yet, the government is advocating that this is the pathway we go down. I can say with great conviction that the economy of this country has been carried by the coal industry. At stages it has comprised nearly 30 per cent of the entire income for this country. Do not let the ALP come along with their hypocrisy here—they have sold more of the assets than the LNP. Qantas is gone; the Commonwealth Bank has gone. The Commonwealth Serum Laboratories! Your life depends upon the Commonwealth Serum Laboratories; now it is a money-making machine for some foreign corporation. It even extends to the very production of money. They are talking about selling the Mint, which puts a whole new meaning on the phrase 'licence to print money'. When I was young they used to say, 'He is the sort of bloke who would sell you the Sydney Harbour Bridge.' The only joke now is that it has not been sold. But don't hold your breath.

Let me turn to electricity. Close to half of Australia's export earnings comes directly or indirectly from mineral processing. That depends upon the price of electricity. The aluminium industry in Australia is one of the big three; coal, aluminium and iron ore have carried the economy of Australia for nearly half a century now. Why did we get aluminium? We produced virtually no aluminium in Australia except for the hydroelectricity produced in Tasmania, which is very cheap. Queensland got a massive aluminium industry because we had a restricted resource policy, a reserved resource policy. Every country on earth has a reserved resource policy. The Americans allow no gas to be exported from the United States unless there is no-one in the United States that wants that gas. That is called a reserved resource policy.

In Queensland, our opponents used to call us the agrarian socialists. I do not know what you would call the Country Party, the National Party now. It is part of the Liberal Party and has been for about 20 years. Under the Country Party regime we took I think two per cent of the coal mined in Queensland for free. If you mined coal in Queensland you gave a tiny two per cent to us, but that was enough to fire the Gladstone power station, which provided more than half of the state's electricity. We put out one and a half thousand million dollars for that power station, which was then half of the Queensland budget. You talk about borrowing—the biggest borrowing government in human history probably was the Queensland government. We borrowed it because we absolutely knew that when we could provide the most cost-effective, cheapest electricity in the world we would get the aluminium industry. So not only could we provide the consumers in Queensland with the cheapest electricity in the world because we had the biggest power station in the world and the economies of scale were magnificent, but it was fuelled by free coal. This is a mortal sin to the free marketeers, and don't let the ALP be hypocrites here. They have been governing most states and federally for most of the last 25 years and most of the selling-off was done by them. But these blokes on the government benches are now saying, 'What is left to sell?' They are scrounging around and they are finding a fair bit.

Let me return to electricity. Queensland had the cheapest electricity in the world. Under the socialists and then under the LNP it is now part of Australian grid and this graph shows that we have the second highest electricity charges in the world. Our enemies used to call us agrarian socialists. Under agrarian socialism we had the cheapest charges in the world, and now we have the second highest charges in the world. There is the graph I asked for from the Library. Before corporatisation we were still amongst the cheaper electricity countries in the world. So that is not enough of them, they want full privatisation. A 400 per cent increase over 8½ years in electricity charges is not good enough. They have to get a lot more donations from their corporate backers. The previous speaker, the leader of the Greens in this place, referred to this sort of thing. I was the third-ranking minister in the Queensland government before it fell and I am not naive or so holier than thou enough to think that political parties are run on fresh air, and you have got to reward those people. For heaven's sake, reward them with knighthoods or reward them with places on boards, but do not reward them by giving them the people's assets.

The intellectual underpinnings of this are from Wat Tyler and Bishop Langton, one of the greatest men in human history. He drew up a document called the Magna Carta. If you want to know about it and understand about it, go and see the Russell Crowe movie Robin Hood. In that movie they said, 'You, Mr King, do not own these assets. The land, the water, the resources and assets of this nation do not belong to you, they belong to the people, and you have no right to sell them or to take them off us.' That is exactly what is taking place here. I do not notice too many outside of Mr Bandt and myself who are prepared to go out there and fight as our forebears did in the run-up to the Magna Carta. I do not notice too many Bishop Langtons around the place either.

Let us climb back down to specific examples. Tasmania had the cheapest electricity in the world, along with Queensland, because all of their electricity came from small hydro systems which were enormously cheap. They got the aluminium industry before Queensland did. Remember this is your second or third biggest export item for 50 years in Australia. This is an item that has been carrying the nation, with cheap electricity.

So I talked to the Deputy President of the ALP in Tasmania, a very erudite lady whose stepfather was Chief Justice, I think, for Tasmania. I said, 'Why do you now have the highest electricity charges in Australia and Australia is amongst the highest in the world?'

She said that the reason is pretty simple. When you privatised the generating corporation they required a 20 per cent capex and profit. The capex had to be serviced and a profit had to be made—so there was 20 per cent. Then, the transmission corporation had to make 20 per cent—so that is 20 per cent on 20 per cent. Then, of course, the distribution and retailing arm had to make 20 per cent—so it is 20 per cent on 20 per cent on 20 per cent. So just straight off we had nearly a 100 per cent increase in the electricity charges in Tasmania—20 per cent on 20 per cent on 20 per cent, you can figure it out for yourself. If you start with $100 per unit you end up with $173. It is almost a doubling straight off.
Here you have a monopoly, or a monopoly shared by two or three people, because there are really only three generators in this country—you might argue four. I have always said the problem in this place is that your mummies and daddies never had you play Monopoly. If you played Monopoly you would know that when you own two utilities you have twice as much money per unit as when you own one utility. And if you own four utilities, for the same unit you have four times as much as if you owned only one utility. If you owned all of them then you have 700 per cent.

I want to turn to the industry that carried Australia, the coal industry, and that was built on— (Time expired)

Mr KATTER (Kennedy) (12:02): I seek leave to speak a second time on this. There was some confusion before.

Leave granted.

Mr KATTER: I will continue with what I was saying. I spoke about the example of Tasmania, where they went from having the cheapest electricity in the world to probably the most expensive in the world. Tasmania is more expensive than the Australian average. How did that happen? It happened through privatisation. All the same generators and all the same distribution systems are operating. The state has not grown in population, so it is not as if they had to spend money on capital outlays to expand the system. There has been no capital expenditure whatsoever, and yet the price for electricity down there—as in the rest of Australia—is 400 per cent higher than it was prior to corporatisation and then privatisation. How many arguments have you got to put up for the fools in this place to realise that policy must be judged on its outcomes? Surely you cannot come into this place and put up some ideological rubbish that is based upon not a single shred of substantial economic argument or reality.

Let me give you another example, Mr Speaker, used by one of the founders of our little political party, the KAP. The government I was in built the Gateway bridge. We said we would keep the toll on it for 20 years, until it was paid off and each year we also serviced the interest owed to the people who lent us the money. After 20 years, the toll would be taken off and the people would have this magnificent asset that they would own and be able to use for free. Well, two years before the 20 years were up, the ALP government sold the Gateway bridge. Some 100,000 commuters a day use that bridge—and the member for Moreton probably has a lot of constituents who use that bridge. So 100,000 Brisbane people are now paying $50 a week that is a tax imposed by the ALP government in privatising that bridge. Let me again quote the Member for Mount Isa, a person called Robbie Katter. He said: When you corporatise— or privatise— an essential service - you give to that corporation, the right to tax you, at whatever level they feel like, for forever.

So here it is. The ALP government got themselves $400 million to buy their way through the election—which they won, so it probably did help them. They got $400 million to throw some baubles and blankets to the dumb masses, or 'We'll build you a nice little civic centre in your suburb,' and 100,000 people in Brisbane were taxed at the rate of $50 a week—not $50 a month or $50 a year; $50 a week. That is the taxation that was levied upon those poor people.

The cost of corporatising the electricity industry in Queensland is $1,700 per home per year. It is on a continuous growth curve. In fact, that curve now is slanting upwards in Queensland—it is 400 per cent higher now than it was before corporatisation. But even assuming that privatisation does not make that graph steeper—which of course it will—and it stays where it is, the consumers of Queensland will be paying over $6,000 a year for electricity in four years time. But, not only are they not admitting to their mistakes, they are actually compounding, dramatically, their mistakes by forcing the privatisation of everything else in the state of Queensland.

Let me give you another example. In Queensland the state is bankrupt—it was bankrupted by the ALP, but the LNP are spending $51,000 million, 10 per cent more than the ALP spent, so if the ALP were the great bankrupters, the LNP are even greater bankrupters. What are they spending this money on? We just heard about the BaT tunnel, but the Premier spending $670 million on tearing down a virtually new building—25 years is virtually new: you get a lot more than 20 years out of high-rise construction—and putting in its place an even bigger you-beaut building. The current offices of the Premier, the Deputy Premier, the Treasurer and all of them are in what used to be called the 'Power Tower'. It is the equivalent of the Pentagon—most people understand America better than they understand their own country—and is where the public servants and all the powerful people reside. They are going to tear that building down and get one of their corporate cronies to build a building in its place for $670 million. And they are going to say, 'This is good for the people of Queensland, we can get it for $670 million.'

Hold on a minute. They have got to get a capex return on that and they have got a maintenance cost, which Treasury says for all buildings is one-seventh of the cost. Then there is the servicing charge on the capex, so that is another 15 per cent. That is $70 million, roughly, plus another $60 million, so we up to about $150 million a year. It was costing the people of Queensland virtually nothing for the building that is there. Now they are up $170 million a year so that (a) the Premier can live in even more palatial digs and (b) their corporate donors are going to be looked after with the building of this building. That is the real reason, of course, why we are privatising the assets, so that the big corporations can get hold of an essential service and charge what they like. This is one of the greatest fixes that you have ever seen. There is precedent for it, as I said. In 1215 at a little place called Runnymede in England—some of my forebears, I am told, happened to be there on the day—we said, 'Hold on, Mr King, the Crown doesn't own England, the people own England.' Well, that is not a concept that is abroad in Australia. The concept abroad in Australia is that the Crown owns it.
Probably the most important argument of all in a country like Australia is about when you say that the government is out of building development infrastructure. I have listened to about 12 speakers today and every single one of them has referred to 'infrastructure'. In my day, infrastructure was a railway line into the coalfields, it was a port for coal, it was a beef road—that was infrastructure. Not one single speaker today mentioned that sort of infrastructure: development infrastructure. It is a very simple concept to me, as a person who has had cattle all my life. We always say: you can air-condition the living room or you can water the far paddock. You can increase your productivity and your real wealth or you can spend the money on self-indulgence—that is your choice. Every single speaker here today has spoken on self-indulgence. If I can again quote the welterweight champion of north-west Queensland, Robbie Katter, he asked: 'What do you get for the BaT tunnel?'—that tunnel that was referred to by the previous speaker in this place.

The government is broke in Queensland, but they can find $1,000 million to build a new pleasure dome for themselves and they can find $5,000 million for yet another tunnel in Brisbane—which, I might add, brings this so-called infrastructure to 24 kilometres of tunnelling in Brisbane. Melbourne has got hardly any tunnelling. Sydney, with five million people, has only got 14 kilometres of tunnelling. But Brisbane, with a little over one million people, has got 24 kilometres. But let me go back what Robbie Katter said when he asked what you get for that $5,000 million: 'I'll tell you what you get for the $5,000 million. What you get is an extra four minutes of viewing time on your television at night.' A few thousand people in Brisbane will get to watch television for about an extra four minutes a day.

If that $6,000 million that they are spending on the 'Taj Mahal' and the BaT tunnel had been used to build the railway line into the Galilee Basin, coal would now be moving out of the Galilee Basin, which holds half of Australia's coal reserves. That coal would be moving if the railway had been built not by private development, not by Gina Rinehart nor by Adani, but by the government, the people.

To understand this we have to turn the clock back to 1960. In that year in Australia there was great consternation because we again had to import coal from overseas. We were a coal importing country in 1960, and I can refer you to a number of books if you want to question me on that. Probably the best is on the 'microeconomics of developmentism' by the dean of the faculty at ANU, but I can quote you many other books.

We were a coal-importing country. How did we go from being a coal-importing country, within 10 or 15 years, to being the biggest coal-exporting country on earth? How did we do that? I will tell you how we did that, because I was there at the time. We built a railway line. The government—the people—built a multi-user facility. We could have said to Utah, 'If you want a railway line you build it.' If they had built it they most certainly would not have let Theiss on that railway line, nor any of the other Australian companies, like BHP.

There was a decision taken by Charles Court in Western Australia. The very, very great Australian Andrew Forrest has said that development was held up by 15 or 20 years in iron ore because BHP was forced to build the railway line themselves. Naturally they said, 'It's our railway line; no-one else is going to use it.' So no-one else could.

In Queensland it was a multi-user facility. When the government's total income was around $3,000 million a year we borrowed $1,000 million and built the railway line. That is why you have a coal industry today. Nearly 30 per cent of this nation's total income from overseas, for the last 50 years, has come from coal. Why do we have the coal industry?—because an enlightened government said, 'No; we don't believe in free markets, non-free markets, privatisation or non-privatisation. We don't understand any of this ideological rubbish. There's a whole stack of people who want to mine coal. None of them individually has the money to build a railway line. If someone individually builds a railway line that will be his railway line and he can screw everybody or stop them from using it.' We said, 'That's a stupid idea; we'll build the railway line.' So we built the railway line.

The rest is history; Queensland became the greatest coal-exporting state on earth, producing $50,000 million in terms of today's money, every single year, for the Australian economy and the people of Queensland. We did that, and we did it by building a railway line. It would have been anathema to the people in those governments. We were considered the most right-wing government in Australia. So I do not know what right wing and left wing mean. All I know is that Adam Bandt is considered very left wing and I am considered very right wing. We both agree on one thing: this country was built by government building the ports, the railways and those assets that were necessary for the development of our country.

You may say that private enterprise can do it. Private enterprise would do it for their own selfish interests. If Mr Adani is allowed to build the railway line in Queensland and he owns that railway line then that would not facilitate growth; it would facilitate profits for him. Under section 457 visas, which were introduced by the ALP—do not let them criticise the Liberal Party—and which the Liberal Party say they are going to double, we will get little to no benefit at all.

(Time expired)

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