Legislative Council Tuesday, 22 October 2002 THE PRESIDENT (Hon John Cowdell) took the Chair at 3.30 pm, and read prayers. COUNTRY TROTTING CLUBS Statement by Minister for Racing and Gaming HON NICK GRIFFITHS (East Metropolitan - Minister for Racing and Gaming) [3.33 pm]: By letters dated 2 September 2002, the Western Australian Trotting Association advised the Wagin Trotting Club, the Bridgetown Trotting Club, the Cunderdin Trotting Club and the Geraldton Racing Club that it had decided to relocate 16 country meetings that had been allocated to the four clubs in the schedule of race meetings released on 2 August 2002 to Gloucester Park. The meetings were to be conducted at Gloucester Park for stake money equivalent to that paid by the four clubs and, with the agreement of the Totalisator Agency Board, the clubs would receive a TAB commission of 0.75 per cent of TAB turnover. The meetings would become the financial and operational responsible of the WATA. The 16 meetings were to be scheduled in the Tuesday and Wednesday Sky Channel slots, replacing the 16 meetings previously allocated to the York, Northam and Narrogin Trotting Clubs. The York, Narrogin and Northam meetings so replaced would be transferred to a Saturday with Channel 12 coverage. The four clubs advised the WATA of their objection to the decision to relocate the 16 meetings and sought their reinstatement. The clubs initially sought my intervention in this matter in accordance with section 3(2) of the Racing Restriction Act 1917, which states - Where the Association proposes to make any change to the programme of trotting race meetings customarily conducted within the metropolitan area and the proposed change may necessitate a reduction in the number of trotting race meetings customarily conducted outside the metropolitan area or the making of any other change to any programme of trotting race meetings customarily conducted outside the metropolitan area, any dispute arising in relation to the matter may be referred to the Minister who may give the Association such directions as he sees fit in relation to the matter and effect shall be given to any such direction. In response to the letters from the clubs objecting to the transfer of the 16 meetings, the WATA advised them that the matter would be reconsidered at the meeting of the committee scheduled for Tuesday, 24 September 2002. By letters dated 26 September 2002, the WATA advised the clubs that it did not intend to change its decision regarding the relocation of the 16 country meetings to Gloucester Park. The Wagin, Bridgetown, Cunderdin and Geraldton Trotting Clubs informed me that they were in dispute with the WATA over this matter and sought my intervention as Minister for Racing and Gaming, in accordance with the Racing Restriction Act. On 3 October, I advised the WATA that I had formed the opinion that I should exercise the power conferred on me by section 3(2) of the Racing Restriction Act to issue a direction to the WATA to reinstate the race meetings, the subject of the dispute. I invited the WATA to show cause in writing by no later than the close of business on Friday, 18 October, why I should not issue a direction to reinstate the 16 race meetings. I considered the reasons provided by the WATA in its letter of 18 October 2002 to support its decision to relocate the 16 race meetings to Gloucester Park. The WATA did not provide any detailed analysis of the decreased costs to participants and the increased revenues that it expects from its decision to relocate the 16 meetings to Gloucester Park. More importantly, it has not provided a strategic plan for the industry against which to assess its actions in this regard. The WATA identified increased TAB turnover as an objective of its decision without any reference to the net profit that will flow to the industry from this decision. It also identified an objective of maximising on-course income, which is a matter for the country clubs concerned, yet the Northam and York clubs that are expected to benefit from this decision strongly oppose the WATA decision. The WATA’s decision presents a significant threat to the continued viability of the four country harness racing clubs concerned, and I was not convinced that the potential benefits identified by the WATA would outweigh the likely negative impacts on the clubs and their respective local communities. In the case of the four clubs, the meetings to be relocated present more than 50 per cent of the meetings customarily conducted by them. The Wagin Trotting Club will lose seven meetings; it will be reduced from 12 to five meetings. The Bridgetown Trotting Club, having only resumed trotting last season under the authority of the WATA, will lose one meeting, reducing it from two meetings to one meeting. Cunderdin Trotting Club, after having resumed trotting last season under the authority of the WATA, will lose three meetings, reducing it from four meetings to one meeting. Geraldton Pacing Club, which commenced racing in 1995 with the enthusiastic support of the WATA, will lose five meetings, reducing it from eight to three meetings. Such a reduction in the racing activity in these four towns will have a significant negative impact on each of the clubs and their respective local communities to the extent that it is feared that the WATA’s decision will lead to the demise of 2108 [COUNCIL - Tuesday, 22 October 2002] these clubs. Regrettably, the WATA has not provided any detailed analysis of the impact from an industry or club perspective, nor an indication of the extent to which trotting in these areas will decline as a result of its decision together with the impact of its decision on the local communities both economically and socially. Having considered all the circumstances of this matter in the interests of the harness racing industry as a whole, I have determined that I should exercise my authority to intervene in this dispute. Accordingly, I advise the House that yesterday I issued the following direction to the WATA, pursuant to section 3(2) of the Racing Restriction Act 1917 - The Western Australian Trotting Association is directed to set aside its decision to relocate 16 race meetings collectively from the Bridgetown Trotting Club Inc; the Cunderdin Trotting Club Inc; the Geraldton Pacing Club Inc; and the Wagin Trotting Club Inc; (the clubs), to Gloucester Park (as advised in the Association’s letters to the clubs date 2 September 2002) to the extent only that those race meetings to be held at the clubs on or after 1 November 2002, in accordance with the schedule of race meetings released on 2 August 2002, are to be reinstated. I am disappointed that I have had to intervene in this matter when the WATA, as the principal club, has not been able to reach agreement or obtain the support of the country harness racing clubs regarding the allocation of race dates. Consideration of the statement made an order of the day for the next sitting, on motion by Hon Bruce Donaldson. IRON ORE (YANDICOOGINA) AGREEMENT ACT 1996, AMENDMENT Statement by Parliamentary Secretary HON KEN TRAVERS (North Metropolitan - Parliamentary Secretary) [3.42 pm]: I inform members of the House that today an agreement to vary the Iron Ore (Yandicoogina) Agreement Act was tabled in each House of Parliament, pursuant to clause 33 of that agreement. The purpose of the variation is to permit Hamersley Iron-Yandi Pty Limited - “the company” under the Yandicoogina agreement - or a related body, or a joint venture in which the company or its related body corporate has a majority participating interest, to submit alternative project proposals under clause 23(6) of the Yandicoogina agreement to the minister for approval. Members may be aware that Hamersley Iron-Yandi Pty Limited, a wholly owned subsidiary of Rio Tinto Limited, has proposed to develop the hi-smelt project in Western Australia to satisfy its further processing obligations under the Yandicoogina agreement, and that the likelihood of the company seeking to do this was first flagged by the former Government in 1996. The hi-smelt project is proposed to be undertaken in two stages by an unincorporated joint venture of Rio Tinto (60 per cent), Nucor (25 per cent), Mitsubishi Corporation (10 per cent) and Shougang Group of China (five per cent). Stage 1 of the project will involve the development of plant with capacity to produce 820 000 tonnes per annum of pig iron, while stage 2 will duplicate the stage 1 plant, subject to the economic viability of stage 1. The variation will enable the minister to approve the proposal, submitted under clause 23(6) of the agreement, based on this ownership structure. The variation does not alter the obligations for further processing under the Yandicoogina agreement, and the hi-smelt project must receive environmental approval before the minister can approve it under the provisions of the agreement. In the event that stage 1 proves to be uneconomic, Hamersley Iron-Yandi Pty Limited must come forward to the minister with another project proposal in lieu of stage 2 to satisfy the remaining balance of its secondary processing obligations. It has been a long held desire of the State to have plants established in Western Australia that process and add value to our iron ore. The hi-smelt project has the potential to add significant direct value to the iron ore used and, with the capital value of stage 1 alone being $400 million, the project will be an important boost to the Western Australian economy. More significantly, the hi-smelt process, as developed here in WA by Rio Tinto, is seen as a major advancement for world iron-making technology.