JOINT COMMUNIQUE -ISSUED HOBART -26 JUNE 1984
The Prime Minister, Mr Hawke, and the Premier of Tasmania,
Mr Gray, signed a Memorandum of -Understanding in Hobart
today which covers the arrangements for Commonwealth assistance
to Tasmania consequent on cessation of the Gordon-below-
Franklin scheme.
The signing of the Memorandum of Understanding represents the
culmination of 12 months of negotiations. The key elements
of the settlement have been agreed following a number of
discussions over recent months between Mr Hawke and Mr Gray.
The agreed arrangements are set out below:
Creation of Alternative Employment Opportunities
The Commonwealth will make available a further and final amount
of $ 15 million for employment-generating purposes. $ 3 million
of this will be used for the upgrading of Hobart Airport
to limited international operation standard, with the balance
to be allocated to projects to be agreed between the two
Governments. Under the Interim Financial Agreement previously concluded
between the two Governments, a total of $ 34 million has
been spent or committed for employment creation purposes.
In addition, another amount of $ 3 million has already been
spent by the Commonwealth in upgrading Hobart Airport in a
project brought ahead of schedule specifically to help create
employment after work ceased on the Gordon-below-Franklin scheme.
In total, therefore, $ 52 million has been allocated by the
Commonwealth directly for the creation of alternative
employment opportunities.
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Electricity Subsidy
The Governments have accepted that the King and Anthony power
development schemes represent at this stage replacement of
112 MW of electricity that would have been produced by the
Gordon-below-Franklin scheme. The Commonwealth has agreed
to pay an amount of $ 200 million ( valued in January 1984 prices)
as a subsidy to be used by the Hydro-Electric Commission to
reduce the cost of producing 112 MW of electricity to the
cost of electricity that would have been produced by the
Gordon-below-Franklin scheme.
This financial assistance will be paid in 10 annual instalments
with each instalment being adjusted to take account of changes
from 1 January 1984 in the implicit price deflator for
non-dwelling construction.
The Commonwealth has also undertaken to provide a subsidy to
reduce the cost of a further 68 MW of electricity to the cost
of electricity that would have been produced by the Gordonbelow-
Franklin scheme, if and when the need for that electricity
has been demonstrated, provided that the 68 MW of electricity
is not incorporated in a hydro-electric scheme on the
Gordon or Franklin rivers.
Expenses incurred on the Gordon-below-Franklin Scheme
The Commonwealth is providing an ex gratia payment of
million to the State for payment to the Hydro-Electric
Commission for expenses incurred on the Gordon-below-
Franklin scheme. This will avoid the need for any increase
in electricity prices as a consequence of the bringing to
account of past expenditures by the Commission on the Gordonbelow-
Franklin scheme.
Mr Hawke and Mr Gray also signed financial agreements covering
the $ 200 million electricity subsidy and $ 25 million payment
in respect of work done on the Gordon-below-Franklin scheme.
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The State has acknowledged that, upon implementation of the
Commonwealth's commitments set forth in the Memorandum of
Understanding, the Commonwealth will have honoured completely
its commitments concerning assistance to the State in
relation to termination of the Gordon-below-Franklin scheme.
Commonwealth and State officials will meet as soon as possible
to examine and report to the two Governments on the options
for the Commonwealth subsidy in respect of a further 68 MW
of power. Other action to be completed includes
further extensions to the Interim Financial Agreement
to cover arrangements for the additional $ 15 million
in employment assistance. This will represent the
second extension of the Agreement, following the
recent signing by Mr Hawke and Mr Gray of a Supplemental
Agreement covering arrangements made since the
Agreement was signed last year;
long-term management arrangements for -the World Heritage
Area in the South-West. Tasmania recently put forward
detailed proposals for the Commonwealth's consideration.
While these are under study, the Commonwealth has
agreed to extend the funding of interim arrangements,
under which the Commonwealth had made a grant of
$ 500., 000 for the employment of additional rangers and
for ancillary measures to provide added protection
for the Area during 1983-84.
Mr Hawke and Mr Gray said that the completion of the Memorandum
of Understanding was a major achievement that symbolised the
ending of a sometimes difficult period in the relationships
between the two Governments. Through the arrangements that
had been agreed, lasting benefits would be achieved for
Tasmania.