Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

I thank Senator Fifield for that question, because this issue does affect his great state of Victoria. As I think most people know, the New South Wales Labor government announced last year that it had decided to sell its 58 per cent stake in Snowy Hydro Ltd, and it is clear that New South Wales is going to proceed with that sale regardless of whether the other two shareholders, Victoria and the Commonwealth, decide to sell or not. Victoria has 29 per cent of this company and the Commonwealth has 13 per cent. We have now decided, in light of the actions of New South Wales, that there is no value in the Commonwealth holding on to its minority 13 per cent stake in these circumstances and that in fact it is in the interests of Australian taxpayers that we join with the New South Wales government to sell our shareholding.

I think the most important thing for senators to note, coming as they do from all the states, is that this sale will have absolutely no impact on the volumes of waters flowing down the Snowy, Murray and Murrumbidgee rivers. It should be made clear that the Snowy Hydro Ltd does not actually own any of this water. The public own the water and all that Snowy Hydro Ltd has is a licence issued by the New South Wales government that permits it to make use of that water, but that licence permanently locks in for 75 years this company’s obligations to make annual releases into the Snowy, Murray and Murrumbidgee rivers.

Those New South Wales state government obligations to maintain this licence are further enshrined by the agreements that New South Wales has signed with the Commonwealth and Victoria and locked in through the Murray-Darling Basin Agreement. So all of those people—and there are many—with interests in the flows down these three rivers, whether it is for the irrigation or the environment or other uses, can be absolutely assured that the sale of Snowy Hydro, primarily by New South Wales but now with us joining in, will not affect in any way those flows. I have noted that some say a privately owned Snowy might seek to escape those obligations; that is categorically not possible because of the interlocking agreements legally binding the company. Any bidders for this company—and New South Wales prefers an IPO, which would be our preference too—must comply with those water rights rules.

We have formally flagged with the New South Wales government and the company that there is an issue about the notification to irrigators of the timing of the required releases into the Hume and Blowering dams and how irrigators can have their views heard on those issues, and New South Wales and the Snowy company are happy to discuss that with us. I should also emphasise that this sale will not affect the obligation of the company to maintain its headquarters in Cooma. That was part of the agreement that all governments reached at the time of corporatisation.

Snowy Hydro Ltd is actually a very important part of the national electricity market. It does provide peak generation capacity, and its role is vital to providing a competitive national market. So I do welcome New South Wales’s decision. I think it naturally follows that we should sell our shares. The Victorian government is considering its position. Victoria joined with New South Wales and the Commonwealth to corporatise the Snowy back in 2002, and the logical outcome of that agreement between the three governments is that we should now proceed to a full sale.