SECOND READING SPEECH
by
THE PRIME MINISTER. THE RT. HON. R. G. MENZIES
IN THE HOUSE OF REPRESENTATIVES, CANBERRA, THURSDAY. 19TH OCTOBER. 1961
COAL LOADING WORKS AGREEMENT ( NEW SOUTH vJALES') BILL, 1961.
The purpose of this Bill is to obtain the approval of Parliament to an
Agreement between the Commowealth and the State of New South Wales providing
for finp~ ncial assistance to the State towards the cost of installing improved,
coal loading facilities at the ports of Newcastle, Port Kembla and Balmain.
This project is one of the major State works to which 1 have referred
before as being projects which should make a significant contribution to the
promotion of increased export earnings. Increased and diversified exports are
essential. The ex Port of coal overseas from New South ,, ales has expanded notably
in the last three years and is already making an important contribution to
Australiats balance of payments. During 1960461, over 1.9 million tons valued
at about E7.4. million were exported through the three ports concerned in the
present project. The exports wore shipped mainly to Japan, to meet the
requirements of that country' s rapidly growing industries. There are good
prospects of a further substantial increase in the trade. Forecasts based on
studies of Japan's future coal requirements and discussions with Japanese
industrialists indicate that coal exports from the New South Wales ports coul4
increase to œ l2million per annum within a few years and to over œ l6million pe~ r
annum. in this decade. These exports will be possible without prejudicing in
any way the needs of the Australian steel industry. In addition to the
valuable export earnings which can be expected, the New South WJales coal
industry and the coal mining districts should bene fit directly in many ways
from the wider market for New South Wales coal.
The expansion in coal exports which is in sight cannot materialise,
however, unless the facilities for loading coal at the ports are improved and
the improvements are complete-d in the shortest practicable time The trade is
very competitive. The overseas buyers might turn to other sources for their
coal requirements if they thought that the New South Wales ports would not be
able in a few yearst time to provide adequate and economical facilities for co4
shipments. Of primary importance is the need to deepen the harbours and berths
to receive the larger vessels now coming into use in the coal export trade.
Larger vessels offer significant freight advantages. Coal exports are expected
to be carried increasingly in ships of 25,000 tons capacity and upwards as
compared with the present 10,000 to 12,000 tons. Equally important is the need
for modern equipment at the wharves, capable of loading coal at reasonably fast
rates, so that the full benefit of larger ships can be gained through quick
turn-around and reduced harbour and wharfage dues. Faster loading equipment at
the wharves necads, in turn, adequate storage and access facilities to maintain
the supply of coal to the loaders.
The New South W-, ales Government has a full realisation of the problems
associated with the expansion of coal exports and the trend towards larger
vessels. For some time it has been studying the prospective volume of the
trade and planning the facilities required to handle it. The maintenance and
development of ports is a State responsibility and the Commorwealth Government
has no intention of intruding into State rights and responsibilities in this
field. In the present case, however, the expansion of exports in prospect was
sufficiently important for the Government to believe it had an obligation to
inform itself about the progress being made by New South Wales and to
ascertain whether there was any way in which the Commonwealth could help in
the carrying out of the project.
lt became apparent during the discussions which took place with the
New South Wales Government that the Commonwealth could make it possible to
reduce materially the time taken to complete the work. Without outside
financial assistance, New South ' ales could not undertake to construct the
works at all three ports simultaneously. It would be necessary to spread out
the works over a pcriod of about six years and to complete some sections of the
total programme before starting on others. -rven this programme could have
been delayed for financial reasons. Financial assistance from the
Commorwealth, on the othar hand, would make it possible to compresF the
timetable by removing financial obstacles to the completion of the port
facilities in the shortest time practicable on engineering and other physical
grounds. This is estimiated at 3 to 4 years, and the shorter construction
period could make a significant difference to Australiat s ability to secure
favourable export contracts.
The outcome of the discussions between the Commonwealth and the
State was a formal submission by the New South Wales Premier of estimated copts
and of proposals concerning the way in which Commonwealth financial assitance
might be put to best use. On the basis of his submission and the detailed
knowledge of the programme which had been gained during the discussions, a
Commonwealth offer was formulated and was accepted by the State.
The main features of the assistance agreed upon were described in a
statement which I i~ sued on 29th August. The New South Wales Government
undertook to ensure that a prcgramme of work, involving the spending of some
œ 10,660,000 on three harbours, would be carried out as expeditiously as
praz-ticable and that the funds necessary for that purpose would be provided as
required. The total programme includes the deepening of harbours and the
provision of deep water berths as well as the installation of coal loading
plant and related works. The Commonwealth, for its part, undertook to
provide financial assistance to New South ' dales in respect of the coal loading
plant, including the associated wharfage, storage, road and rail facilities,
up to half the estimated cost of the coal loading w~ orks, that is, up to an
amount of œ 2,650,000. The Commonwealth assistance is to be provided on a F,
f or Z matching expenditure basis with the State, up to individual maxima of
œ 1,500,000 at Newcastle, œ 1,070,000 at Port Kembla and E80,000 at Balmain.
Out of the total Commonvealth assistance, up to E1,000,000 is to be
made available from the Coal Industry Fund of the Joint Coal Board. As I
pointed out in my statement of 29th August, any assistance which the
Commowealth might provide to revenue-producing works of this kind would
normally take the form entirely of repayable advances, In this case, however,
we had regard to the uncertainties in the costs of works of this magnitude and
in the estima~ tes of the eventual volume of coal exports through these ports.
The State naturally accepts whatever risks are involved in these respects,
but the Commowealth has been anxious to give the State all reasonable support
and decided to make part of the assistance available by way of grant. This
will also serve to reduce the charges which would otherwise be levied for the
use of the new facilities.
The remaining part of the assistance, amounting to up to
œ 650,000, is proposed to be made available by the Commonwealth in the form
of advances repayable by the State. Negotiations have been conducted between
the Commonwealth and State Governments on the terms and conditions of the
repayable advances and a formal Agreement has been drawn up and signed on
behalf of each Government. It is the Bill to give effect to that Agreement
which is now before the House for approval.
The Bill itself is brief and provides mainly for approval of the
Agreement and for appropriations from the Consolidated Revenue Fund for
advances to be made by the Commonwealth in accordance with the Agreement.
The Agreement is set out as the Schedule to the Bill and its
contents may be summarised as follows;
The preamble is, in effect, a brief description of the reasons for
and the nature of, the whole Commowealth financial assistance, including the
grant element as well as the repayable advances. The arrangements for the
grant assistance referred to in paragraph of the preamble are straightforward
and do not require further approval. They are simply that when the
State applies for funds, it will apply for grants as well as advances in the
same manner and supported by the same kind of evidence of expenditure. The
Commowealth will arrange for payments to be made to the State in the
proportions of grants to a&'-ances set out in paragraph of the preamble.
The terms and conditions of the repayable advances are given in detail in the
body of the A'greement.
Clauses 4 and 5 of the Agreement provide for the making of advances
by the Commonwealth to the State up to the amounts specified either as
reimbursements of expenditure ailready made by the State or, if the Treasurer
approves, in anticipation of expenditure to be made, on or in connection with
the coal loading works. The advances are to bear interest at 5 3% per annum
and are to be repayable in 10 years by 20 semi-annual payments. The State
undertakes in clause 9 to carry out the coal l. oading works with o view to their
completion as part of the harbour works at the earliest practicable date,
subject to the Commonwealth providing financial assistance as agreed. Th2
remaining provisions relate to variation of the schedule of works, the provision
of estimates, the supply of information, audit and the giving of notices. A
description of the works is set out in the Schedule to the A greement under two
headings, the harbour works and the coal loading works.
I conclude by emphasising that the programme which the New South Wales
Government has embarked upon is an important contribution to the expansion of
the export trade. Some of the work has already begun and other sections are in
an edvanced stage of preparation. At Balmain, dredging has been completed anq
tenders have been received for the new coal loading facilities. At NewcaqtlQ,
tenders have been called on a world-wide basis for the removal of rock from the
bar at the harbour entrance and it is proposed to dredge the leads and channels
and the berths, to provide a depth of at least 36 feet of water to -the coal
loading plant. It is planned that the coal loading plant will be able to load
at a rate which is yet to be dotermined but which will be at least 1500 tons an
hour as provided for in the schedule to the Agreement. At Port Kembla, planning
is well in hand for the construction of a coal berth on a new site in the
Inner Harbour and tenders have been called for a loader with a capacity of.
2,000 tons an hour. The plans include the provision of adeo ' uate storage and
access to the wharf and the deepening of the berth to at least 36 feet of water.
The Commonwealth Government is satisfied that the installation of
these works will permit the coal export trade to be maintained and expanded and
that financial assistance from the Commonwealth in the manner proposed will
contribute importantly to their early completion.
I have grent pleasure in commending the Bill to the Hou3e.