Outcome on Port of Melbourne lease must be fair and benefit all
THE release of the report into the proposed lease of the Port of Melbourne has addressed some of the concerns highlighted by farming groups alike, however, according to the Victorian Farmers Federation (VFF) and the Australian Dairy Council (ADIC) there are still a number of key issues that need to be addressed to encourage fair competition and efficiency.
Both the ADIC and VFF welcomed the Parliament of Victoria’s report on the proposed lease of the Port of Melbourne, with ADIC chair Simone Joliffe having said that the dairy industry was pleased to see key recommendations address a number of concerns around the proposed lease.
“This report’s recommendations reflect the industry concerns regarding the impact of the lease on leaseholders,” she said.
“In particular, the recommendations to amend legislation that will lock in a role for the Essential Service Commission to manage complaints around port pricing is a positive acknowledgement of industry advice.
“However, key issues including safeguards for lease holders are not addressed.
“There needs to be greater oversight and safeguards on fees and charges for port uses.
“Further, the issue of compensation for leaseholders, the amount of money being allocated to rural and regional Victoria, the timing and process for development of a second port, and the investment in the freight infrastructure servicing the port must also be considered,” Mrs Joliffe said.
The Australian dairy industry is the fifth largest user of the Port of Melbourne, with more than 85 per cent of Australia’s total dairy exports sent via the port.
It is not only the point of export for Victorian dairy producers, but also for the dairy industry located in Tasmania and parts of South Australia and New South Wales.
The ADIC has previously expressed concern at rent potentially doubling by 2023, which will significantly impact dairy’s competitiveness globally.
Mrs Joliffe added that the pricing, ongoing cost effectiveness and efficiency of the Port will continue to play a pivotal role in the global competitiveness of Australian dairy.
“In conjunction with the VFF, the ADIC will continue to engage with the Victorian government to ensure the lease agreement encourages competition and efficiency,” she said.
VFF president Peter Tuohey said that in the lobby group’s submission it called for ongoing infrastructure investment into regional and rural Victoria, which he said he was pleased to see prioritised in the report.
“We have always maintained that regional Victoria should get its fair share of the lease of the Port given farmers and regional Victorians are the main economic drivers of its use,” he said.
“We have also made it abundantly clear that the lease of the Port of Melbourne must include safeguards around pricing.
“We are calling on both the State Government and Opposition to come to an agreement here,” Mr Tuohey said.
The report highlights a lack of high-quality rail links to the port and calls on the government to start work on the fully funded, $58 million port-rail shuttle immediately, and begin planning a rail link to Webb Dock, due to open as a container port this year.
The VFF has called for clarity around the term of the lease including the 20year lease extension.
“It’s pleasing that the report recommends proper parliamentary process to be followed for any lease extension,” Mr Tuohey said.
The VFF has expressed concern around the day-today costs of accessing the port which could skyrocket if a regulatory framework is not in place.
“The report has echoed some of our concerns of vertical integration should a future port owner become a stevedore, which would result in a potential anticompetitive operation.
“This is a $6 to $8 billion state asset and we need to ensure the lease balances the up-front value that benefits Victoria with the long-term interests of the state and port users,” he said.
STATE ASSET: More than 85 per cent of Australia’s total dairy exports are sent via the Port of Melbourne.