John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Hansard source

I thank the honourable member for Gilmore who, along with the honourable member for Eden-Monaro and the Special Minister of State and a number of other members on this side of the House, including the member for Riverina and one or two on the other side of the House—or on the cross benches at least—have expressed some concerns about this issue. If we are interested in analysing what it is all about, we should recall that the decision of the New South Wales government to sell its 58 per cent ownership of the Snowy really decided what was going to happen. The Commonwealth holds 13 per cent, the New South Wales government 58 per cent and the remainder is held by the Victorian government. I note also that, when the resolution to approve the sale of the federal government’s 13 per cent was presented to the parliament, the Labor Party in opposition supported that resolution. I note also that as recently as last Friday the Leader of the Opposition reaffirmed the support of the federal parliamentary Labor Party for the sale of the Snowy.

As I indicated to parliament last week, we support the sale of the Commonwealth’s 13 per cent share in the Snowy Hydro for three reasons. Firstly, with New South Wales as the majority shareholder, with 58 per cent of the company, having announced that they were going to sell, there was little point in the Commonwealth holding on to our minority 13 per cent, unless we were going to use budget funds to buy out the New South Wales government share, and we took the decision that that would not have been a good use of those budget funds. Secondly, the water needs of downstream users and the environment are fully protected by the current water licensing regime. There is a common belief, which is mistaken, that the water is owned by the company—it is not. It is owned by the public via the New South Wales government and is made available by a 75-year licence. Thirdly, we believe that the private sector is better at running private businesses than the government.

I am aware that the member for Gilmore, the member for Eden-Monaro in particular, and a number of other members of this House are concerned about the potential for foreign ownership of the Snowy Hydro. As a result, as I foreshadowed last week, the government has considered and decided to introduce into legislation measures to implement foreign ownership caps and other Australian protections in relation to Snowy Hydro Ltd. This is fully consistent with the approach we have taken in relation to entities such as Telstra and Qantas. The government will introduce legislation in June that imposes the following permanent restrictions on Snowy Hydro Ltd. Firstly, no foreign individual or company will be permitted to own greater than 15 per cent of Snowy Hydro. Secondly, foreign ownership in total will not be permitted to exceed 35 per cent of the company. Thirdly, the head office of the company must remain in Australia and be located in Cooma. Fourthly, Snowy Hydro Ltd must maintain a substantial business and operational presence in Australia. Fifthly, at least two-thirds of the directors of the board of Snowy Hydro and the chairman of any meeting of the board and shareholders must also be Australian citizens. Finally, Snowy Hydro Ltd must remain incorporated in Australia.

The New South Wales and Victorian governments have indicated that they will support this Commonwealth legislation. We will seek to have the legislation debated and passed by the end of June 2006. This would allow the sale to proceed about the middle of this year. In addition, the selling governments have already proposed to the ASX that a 10 per cent limit on any individual, domestic or foreign shareholding be placed in Snowy Hydro’s constitution for at least four years to ensure an appropriate spread of ownership. The three selling governments will continue to seek approval for this proposal from the ASX.

I know there will be those who will continue to oppose any sale of Snowy Hydro, but with the protection for water users and the protections on foreign ownership I believe that we can proceed with the sale confident that the Australian community can only benefit from the sale. Again, I record my thanks to the member for Eden-Monaro, the member for Gilmore and the member for Riverina in particular for the very effective and thoughtful campaign they have brought to bear on this difficult but important issue. The outcome reflects great credit on their advocacy.

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