PM Transcripts

FOR PRESS: LI R AV P. M. No. 67/ 16
HYDRO-ELECTRICITY DEVELOPMENT IN TASMANIA
joint Statement by the Prime Minister, the Rt. Hon. Harold Holt
and the Premier of Tasmania, the Hlon. E. E. Reece
The Commonwealth has agreed in principle to provide
bridging financial assistance to Tasmania for the financing of a five-year
programme of accelerated hydro-electric development in that State based
on the commencement of development of the rugged Gordon River area in
the south-west of the State.
The five-year programme is estimated by the State to cost
$ 212 million and its pur pose is to meet in the best way the projected
electricity requirements of Tasmania, particularly by the large electricityconsuming
industries in the State many of which are important earners of
export income. Because initial development of the Gordon River area will
necessitate large amounts of investment before the first block of electricity
can be produced from it, the implementation of the programme will cause
a temporary " hump" in the rate of increase of electricity investment in the
State. The Commonwealth has accepted that on present indications the State
would be unable to finance the programme without some Commonwealth
assistance of a temporary character.
The. Commonwealth has proposed, and the State has
accepted, that it would be desirable for an independent assessment to be
made of the planning basis of the five-year programme and of the cost
estimates of the programme. It is envisaged that this assessment will be
undertaken as a matter of urgency by the S nowy Mountains Authority.
The amount of assistance to be provided by the Commonwealth
will be determined in consultation with the State from year to year as the,
programme proceeds. Subject to an overall limit of $ 47 million, the amount
of Commonwealth assistance will be based on the need for assistance having
regard to the sources of finance available to the State from its own resources
and those of the Hydro-Electric Commission.
The purpose of the Commonwealth assistance is to hel p
the State over the " hump" referred to. It will therefore be of a temporary
or bridging nature and will be repayable by the State over the period of
eight years subsequent to the five-year programme. The rate of interest
will be the maximum rate applying to semi -governmental securities from
time to time. The arrangements will be embodied in a formal agreement
between the Commonwealth and the State which will be submitted to the
respective Parliaments in due course.
The Prime Minister emphasised that the Commonwealth
assistance is being provided because of the special situation described. It
is not to be regarded as a precedent for special measures of Commonwealth
assistance for the financing of electricity development in the States in other
cases. CANBERRA, 29th June, 1967.