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Executive Summary NT Opposition Submission to the Inquiry into the Privatisation of State and Territory Assets and New Infrastructure Executive Summary The Territory Opposition sought public hearings of the Senate Inquiry into the Privatisation of State and Territory Assets and New Infrastructure in the Territory following the CLP Government’s asset sales program that has seen the sale of public assets without a mandate. The Territory Opposition is concerned about the haste of the asset sales, the lack of considered and public debate. The NT Country Liberal Party Government has failed to demonstrate undertaking business case and cost benefit assessments and has failed to engage with, and listen to, the community. There is also no evidence the CLP Government has considered the broader community and business impacts, including the development of Northern Australia. In no instance has the CLP Government provided detailed business case analysis or an engagement process with the community. In comparison, in other jurisidictions we have seen Governments engage in extensive community engagement providing feedback mechanisms, and seeking public mandate for asset sales or leases at the ballot box. The CLP Government did not signal to Territory voters in the campaign for election in 2012 any intention to sell public assets. In just over two years since being elected to Government, they have sold, or taken action to prepare for sale, the majority of government business divisions or corporations, all without a public mandate. In 2013 the Government announced the privatisation of Darwin Bus Service and the Government Printing Office would be closed. In 2014 the CLP Government commenced to split the PowerWater Corporation, the Territory’s public power, water and sewerage utility. The CLP Government has made conflicting public statements about the future ownership of these assets, most recently suggesting they could be privatised. Following this, the CLP Government sold the Territory Insurance Office without consulting the public about any cost benefit analysis. The Chief Minister made public statements that sale would attract the 15% bonus payment from the Australian Government under the Assets Recycling Program, despite providing no indication that a business case had been undertaken to identify if such a sale would qualify. The sale proceeded against public sentiment and concern about the future risk to insurance costs and continued access to the comprehensive flood, storm surge and cyclone cover needed in the Territory. 1 NT Opposition Submission to the Inquiry into the Privatisation of State and Territory Assets and New Infrastructure In November 2014 the CLP Government tabled legislation in the parliament to proceed with the leasing of Darwin Port, with no public consultation about the cost benefits to the taxpayer. This legislation is expected to pass the Legislative Assembly sitting. Also in November 2014, the CLP Government indicated it was considering privatising the proposed new public Palmerston hospital. The original public hospital proposal was jointly funded, with federal government funding secured by the CLP Government prior to the 2012 NT election. The level of secret asset sales activity by the CLP Government is unprecedented in contemporary Australian governance and policy. The lack of business case and community impact analysis is of significant concern given the already high cost of living in the Territory. The Northern Territory is a large jurisdiction with a small population-base, a combination that poses unique and well-acknowledged challenges in service delivery, particularly essential services, and should be a significant factor in analysing the public benefit of maintaining assets in public ownership. Community debate indicates sentiment in the NT is against asset sales with Territorians concerned about impacts on cost of living pressures from privatising the TIO and the essential services. Territorians have been subject to the significant price rises in the past two years for power, water and sewerage and there is concern about the impact on tariffs should the CLP Government sell our essential services infrastructure, particularly how the government will regulate a monopoly owner against profit gouging. The Australian Government has identified the Northern Territory as central to the development of Northern Australia, and strategic to the military defence of Australia. Despite this, there is no evidence that the CLP Government is considering the impact of asset sales on the future development of the north, particularly Darwin Port and essential services infrastructure, nor consulting with the Australian Government about these factors. The prospective purchasers of Darwin Port and the Territory’s utility assets are likely to be foreign investors, including foreign governments 2 NT Opposition Submission to the Inquiry into the Privatisation of State and Territory Assets and New Infrastructure The Senate inquiry into the development of Northern Australia, Pivot North heard evidence from a range of stakeholders about the importance of maintaining public ownership of key assets to future development. The approach of the CLP Government to sell off public assets is a short-term strategy and politically motivated to fund for the government’s re-election campaign, in the absence of any demonstrated capacity to drive economic growth for the future of the Territory. The sale of these assets foregoes the future financial returns at a time when the Territory economy has been positioned to leverage off the growth underpinned by the nation’s second largest private investment, the Ichthys LNG project. Across the border in Queensland, the public, presented with an opportunity to vote on asset leases, sent a resounding message against privatisation. The current agenda of the CLP Government indicates privatisation of the port, essential services, our prisons and new hospital will occur in the absence of a mandate. Territorians deserve the right to have a say on behalf of future generations. This submission outlines the process taken by the CLP Government associated with the sale of public assets conducted to date and the preparation for sale of other public assets. 3 NT Opposition Submission to the Inquiry into the Privatisation of State and Territory Assets and New Infrastructure Darwin Bus The CLP Government announced privatisation of Darwin Bus Service in December 2013. This sale was undertaken without a public mandate or consultation. The management of this privatisation exercise was inconsistent with that undertaken for the Government Printing Office as bus drivers were not afforded the option to take a redundancy. The CLP Government guaranteed bus drivers would retain their wages, conditions and entitlements under the sale.1 Despite those guarantees, it has been reported that drivers have since lost their entitlement to paid meal breaks. 2 Territory Insurance Office The Territory Insurance Office (TIO) was established in 1979 to meet the specific cyclone, storm surge and flood insurance needs of Territorians due to difficulties in getting interstate companies to do business in the Territory after Cyclone Tracy. The TIO provided banking and insurance services and administered the Motor Accidents Compensation Scheme on behalf of the CLP Government. The Motor Accidents Compensation scheme is funded by Territorian motorists through a portion of their vehicle registration charges. The scheme provides injured people with an entitlement to compensation for certain expenses they will incur as a result of a motor vehicle accident. The Territory Insurance Office (TIO) was an important asset to Territorians providing the insurance safety net needed for our unique conditions. Prior to the sale, TIO was the only insurer providing no-loophole cyclone, storm surge and flood insurance cover needed for Territory conditions. While other private insurers serviced the Territory market, none provide the same level of cover provided by TIO. 1 Jobs to stay as Buses sold off, NT News 7 December 2013 2 Emilia Terzon, Darwin's bus drivers devastated' by loss of paid lunch breaks, says transport workers union, ABC News, 30 October 2014, http://www.abc.net.au/news/2014-10-30/bus-drivers-angry-about-unpaid-lunch- breaks/5851536 4 NT Opposition Submission to the Inquiry into the Privatisation of State and Territory Assets and New Infrastructure The Katherine flood experience highlighted the importance of having a local Government-owned insurer in the Territory. TIO was the only insurer that met its obligations without delay and many resident insured with private providers had to resort to legal action to obtain insurance payouts, adding to their distress. Many local businesses also found TIO was their only insurance option for flood and storm surge cover after the Katherine floods in 1988. During the public debate about the sale of TIO, a Katherine resident publicly stated they could only access one other private insurer other than TIO to provide insurance, but at an extra $8500 per year. 3 A resident, Paul, living in a storm surge area in Darwin told local media a private insurer’s quote for insurance was more than 100% higher than TIO, for cover “as close as I could get” to TIO. ABC Radio 23 October 2014. A local insurance broker publicly raised concern that a privatisation of TIO would see home and business owners at risk of being unable to obtain policy cover, particularly for storm surge: “TIO are the only open market insurer in Darwin, one that’s actually offering
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