FOR MEDIA1 JULY 1983
The attached letter was today given to the Tasmanian Premier, Mr Gray.
aAA USTRA, L IA 4
PRIME MINISTER CANBE~ RR A
~ i uLt. 1983
My dear Premier
Now that the High Court has made a decision favourable to
the Commonwealth in relation to South West Tasmania, I am
writing to inform you of measures of assistance that the
Commonwealth is prepared to provide to your Government once
work permanently ceases on the Gordon-below-Franklin project.
The measures proposed take account of the discussions between
yourself and Senator Walsh in Hobart on 22 June, our
discussions in Canberra on 28 June, and subsequent discussions
on detailed matters between officers of our two Governments.
I stress that our pre-eminent concern is, as it has always
been, the welfare of all Tasmanians and especially Tasmanian
workers in relation to the interests of Australia as a whole.
Immediate Employment Aspects I
At this stage the prime concern of both Governments must
undopibtedly be the livelihood of those persons who have been
directly employed on the project. The Commonwealth is
therefore prepared to reimburse the State, for a period of
one month from cessation of work, in respect of payments made
to persons presently engaged in the project area for wages and
other award costs attributable to their continued employment.
Payments to individuals under this element of the Commonwealth's
proposals would of course cease as soon as they had been placed
in alternative employment.
During this period it would be expected that the State would
make best endeavours to arrange alternative employment, and
it would be the Commonwealth's expectation that by the end of
that time most would have been provided with alternative
employment for an initial period at least. Our Governments
would need to review the situation before the month expires.
For contractors currently engaged in the project area, the
Commonwealth would reimburse the State in respect of the
labour costs of contractors on the sam6 basis as proposed for
Hydro Electric Commission employees. As to other expenses
to which contractors may be liable as a result of the stopping
of the project, the Commonwealth acknowledges an obligation
to ensure that contractors are not placed in jeopardy, and
would be prepared to cover relevant unavoidable financial
commitments. The exact nature of any additional assistance
to be provided will need to be considered on a case-by-case
basis in the light of the particular terms of each contract ./ 2
V7 2.
arid the obligations faced by the contractors. I suggest
that officers of our two Governments get together as a
matter of urgency to work out an overall approach to this
problem and to develop proposals for dealing with individual
cases. I turn now to the question of alternative employment
projects that could be undertaken at short notice. As
Senator Walsh has indicated to you, the Commonwealth would
be willing to accelerate, where appropriate, works in
progress on its own account in Tasmania, and is giving
urgent consideration to further works that might reasonably
be undertaken. Because of lead times it would be a few
months, however, before it would be possible to offer
employment on such projects.
I am informed that a significant part of the workforce
currently engaged on the project is working on the Crotty Road
which was to be the principal access to the Dam site. The
Commonwealth would not wish, of course, to continue construction
of the road for this purpose, and indeed will not b~ e
contemplating any new works in the World Heritage area until
the appropriate studies have been completed and decisions made
about the future management of the area.
I understand, however, that the part of the Crotty Road on
which work is currently proceeding from the Crotty Village
end lies outside the World Heritage area, and that there is
the possibility of developing it for some distance with a
view to the eventual completion of a road to Kelly's Basin.
Given the tourist potential of the South-West region, this
may well prove to be a sound course to follow, but our
Governments would, of course, need to give some detailed
consideration to this matter. For the very immediate future,
however, I suggest that we allow work to continue in order to
maintain the workforce and to keep options open for further
development if that is subsequently agreed.
There will also be employment available for some men to
put other works that have been undertaken in the project area
on a ' care and maintenance' basis in order to minimise
potential adverse environmental effects. In order that
necessary work of this kind can be undertaken within the World
Heritage area, the Minister for Home Affairs and Environment
will be taking the appropriate action under the World Heritage
Properties Conservation Act 1983 as a matter of urgency.
At your meeting with Senator Walsh on 22 June you put forward
a number of possible employment projects, some of which
could be started at short notice, in areas of State and local
government responsibility. I stress that the Commonwealth's
overriding concern for the immediate period ahead is to
ensure that alternative work is found as quickly as possible
for persons previously engaged on the Gordon-below-Franklin
scheme. / 3~
With this in mind, we could therefore agree to a number
of the proposed projects proceeding forthwith viz the Ring
Ri'ver Railway deviation, Hydro-Electric Commission maintenance
projects, Strahan to Zeehan Road, Zeehan to Lower Pieman Road,
and the Southern Outlet ( Huon Road).
As to the basis on which the Commonwealth would provide funds
for projects the Commonwealth would, of course, wish to be
satisfied that the cost of such projects are reasonable and
does not, for instance, envisage reimbursement of costs that
the State would normally pay in any event. I understand that
our officers have already held preliminary discussions with
regard to costs and have made arrangements for further urgent
detailed work.
I anticipate that the Commonwealth would be in a position to
forward a draft financial agreement to the State, covering
income maintenance payments, payments to contractors and
alternative work projects in the near future. This agreement
would operate on the basis that the State receive regular
and prompt reimbursement of expenditures necessarily incurred
by it under the arrangements agreed between our Governments
and would include the normal information and audit requirements.
Other Matters for Study
You will recall that, in discussing the State's requiest for
reimbursement of the cost of works already undertaken on
the power scheme ( including ancillary projects and preliminary
investitjations), both Senator Walsh and I referred to a number
of considerations that the Commonwealth would need to bear in
mind before coming to a position on appropriate arrangements.
In order that the necessary action can be put in hand, I now
formally ask that the State submit a detailed claim, with
all necessary supporting evidence.
Another matter which you discussed with us was the State's
request for an undertaking from the Commonwealth to meet the
difference between unit power costs produced by an alternative
energy source and the costs that would have been applicable
had the power been generated at the projected Gordon-below-
Franklin power station. It will be necessary as a first step
for the State to develop detailed proposals which can then
be put to study and joint discussion.
Administrative Aspects
I see a need, especially in the early stages, for frequent
discussions between officials of our two Governments on the
outstanding issues I have mentioned and any others that may
arise in respect of the arrangements. To faci-litate and
formalise this process I suggest that we agree to the
establishment of a joint Commonwealth/ State working party.
From the Commonwealth end I would see the composition of this
working party as including officials of the Departments of
the Prime Minister and Cabinet, Resouirces and Energy, Finance
and Employment and Industrial Relations, with other Departments
Co-opted as desirable. / 4
While both Governments would clearly be equal partners in
such a working party, it would be necessary that one
member be designated as Chairman in order to assist the
prompt and orderly despatch of business. I suggest that the
Chairmanship might lie with the Commonwealth.
As to reporting by the working party to our respective
Governments I would assumre that, where matters are agreed by
officials on both sides, a joint report to us would be
appropriate. Where matters cannot be agreed at working party
level, it would of course be for the officers to seek further
instructions from their respective Governments.
Substantial matters would, of course, continue to be dealt
with at Head of Government or Ministerial level as appropriate.
I would appreciate your early reaction to the proposals I
have put fLorward in this letter.
Yours sincerely
R. J. L. Hawke
The Hon. R. T. Gray, MHlA
Premier of Tasmania
HOBART TAS 7000