Tuesday, 10 May 2022

Bills

Transport Legislation Amendment (Port Reforms and Other Matters) Bill 2022

Second reading

Debate resumed on motion of Ms PULFORD:

That the bill be now read a second time.

Mr RICH-PHILLIPS (South Eastern Metropolitan) (14:44): The Transport Legislation Amendment (Port Reforms and Other Matters) Bill 2022 is an omnibus bill associated with the creation of Ports Victoria. The purpose of the bill is to amend the Transport Integration Act 2010 to provide for the establishment of Ports Victoria and to provide for the abolition of the Victorian Ports Corporation and the Victorian Regional Channels Authority. The bill also seeks to amend the Port Management Act 1995 to make consequential amendments arising from the establishment of Ports Victoria, including the conferral on Ports Victoria of certain powers which are currently vested in the Victorian Ports Corporation or the Victorian Regional Channels Authority.

The bill amends the Marine Safety Act 2010 to make amendments in relation to harbourmasters that are consequential to the establishment of Ports Victoria and its new functions and powers. It makes amendments in relation to pilotage services and pilotage service providers, which again are consequential to the creation of Ports Victoria. It amends the Rail Management Act 1996 to make miscellaneous amendments and to improve the operation of that act. It amends the Tourist and Heritage Railways Act 2010 to enable fees to be prescribed for the processing of applications by tourist and heritage railways operators to include the tourist and heritage railways group register, and it makes some other minor amendments. So this is an omnibus bill that makes a range of fairly technical amendments. The key amendment is to create Ports Victoria as a statutory entity. Ports Victoria was previously created in 2021 by an administrative act under the Transport Integration Act 2010, and this bill will now create it as a statutory structure.

One of the criticisms of this bill is that it does not address many of the issues which have arisen as a consequence of the privatisation of the port of Melbourne in 2016. In 2016 this house dealt with legislation to provide for the privatisation of the port of Melbourne. It was in fact the subject of a select committee inquiry which went through extensive public hearings and public engagement to flesh out many of the concerns that existed in the community and existed among port users as to the model that the government was adopting for the privatisation of the port of Melbourne. Some of the key issues which were identified at that time and which were of concern to particularly port users were the length of the lease which the government proposed to grant by way of the privatisation, with a 50-year lease with a 20-year option; the lack of clarity in the mechanism the government was adopting between legislative framework and what was going to be provided by way of contract; concerns around the risk of monopoly behaviour by the successful port operator taking on the lease, both monopoly behaviour and monopoly pricing; and concerns around what was proposed as the port growth regime, which was basically a compensation mechanism in the event that the state wished to develop port facilities in competition with the Port of Melbourne. One of the key concerns around that port growth regime was that it was an uncapped facility with uncapped exposure for the state of Victoria.

In privatising an asset like the port of Melbourne the objective of the government, any government with any privatisation, frankly, should be to drive efficiencies in the operation of the infrastructure, with the secondary consideration, or the secondary benefit, being to realise capital, and that was a very strong message which came from Rod Sims as head of the ACCC when he gave evidence. A concern that was raised time and time again through that select committee inquiry work and the privatisation process more generally was that the government was not focusing its privatisation efforts on driving efficiencies at the port of Melbourne, it was focused on maximising the capital that was released by the privatisation of the port of Melbourne. And sure enough we saw when that deal was concluded around $9.7 billion realised for the state through the privatisation of the port of Melbourne. But what we did not see was what the government committed to do and failed to do—to provide a regime which ensured that the efficiency of the port and the competitive pricing of the port were maintained. We had seen prior to the privatisation of the port of Melbourne a number of other ports privatised around Australia which led to substantial increases in operating costs—costs for leases, costs passed through for on-port services—and that was one of the major concerns that was raised with the lease of the port of Melbourne, that we would see the same thing here in Victoria.

We went through that select committee exercise. Assurances were provided by the government that it would have a regime in place to ensure that did not happen in Victoria—to ensure that there was not monopoly power, to ensure that there was not rent-seeking, to ensure that the port of Melbourne remained competitive and affordable. But in reality that has not occurred. We saw the Treasurer, dollar signs in his eyes—$9.7 billion—happy to take the cheque, which has now been spent, but not happy to put in place a regime which would have ensured the port remained competitively priced and efficient and, as a consequence, quite likely would have realised a lower lease dividend to the state than the $9.7 billion that was realised. So the focus of that exercise was very much on maximising returns rather than ensuring the long-term efficient, competitive structure for the operation of the port, and that is something that is now being reflected by operators, reflected by reviews—that that framework has not been as effective as it should have been and, as a consequence, costs for port users have gone through the roof, and of course that flows through to consumers. That is certainly one of the negative outcomes of the way in which that port privatisation was undertaken in 2016, and it is to the detriment of all Victorians over the long term.

Now, this bill does contain, as I said at the outset, a number of provisions with respect to towage services, with respect to establishing functions for Ports Victoria in its statutory structure and in relation to pilotage service standards. These are matters which the coalition will seek to amend when the bill goes into committee, and I would ask that those amendments and perhaps also the second set of amendments in relation to the transport plan under the Transport Integration Act be circulated.

Opposition amendments circulated by Mr RICH-PHILLIPS pursuant to standing orders.

Mr RICH-PHILLIPS: There are two sets of amendments the coalition will be proposing to this bill this afternoon. The first is a single amendment, for which I have given notice of an instruction motion, which seeks to insert an amendment into the Transport Integration Act 2010 with respect to the transport plan which is required to be produced under that act. There is now broad concern that that transport plan has not advanced in the way it should have, has not been produced and implemented in the way it should have—that despite the requirements of the Transport Integration Act we do not have a coherent, complete transport plan for the state. What this amendment would require is for the plan to be laid before each house within 120 days after the plan is produced so as to provide an extra element of accountability and transparency and provide, frankly, a degree of incentive for a comprehensive and coherent plan to be produced and made publicly available.

The second set of amendments addresses the provisions currently contained in the bill. The first five amendments are amendments to clause 5 which seek to expand the functions of Ports Victoria as laid down in the bill, and the purpose of these additional functions by way of amendment is to ensure that the development of the Victorian ports system is prudent and efficient and is carried out consistently with any relevant transport legislation or any standards and codes developed under relevant transport legislation; additionally, to monitor proposals relating to the development of the capacity of port land and port waters for which Ports Victoria is responsible; to monitor and provide advice, guidance and expertise to the minister on any emerging trends relating to the Victorian ports system, including but not limited to trends relating to the capacity of port lands and port waters; and further, to provide advice, guidance and expertise to port managers of commercial trading ports in relation to the preparation of port development strategies in accordance with the Port Management Act 1995.

The purpose of those proposed insertions expanding the functions of Ports Victoria is to ensure that one of the functions of Ports Victoria is to have a broader perspective and provide broader advice on the operation and efficiency of the ports system in this state and to ensure that there is that broader perspective provided to government and a broader monitoring role undertaken by Ports Victoria when it assumes its statutory structure.

The second set of amendments relates to the provision of the bill on conditions of towage service licences. These amendments, which will go into clause 32, in respect of determinations made under clause 32, additionally seek to add:

In determining whether to make a towage service licence subject to a condition under this section, Ports Victoria must be satisfied that the condition would not have an unreasonable adverse impact on the licence holder, having regard to the conditions to which similar towage service licences are subject …

Likewise, in a similar vein, in respect of the provisions of clause 32 where those provisions are replicated, a similar provision is sought to be inserted in clause 32 as a new paragraph (4) and subsequently as a new paragraph (5). This is in response to concerns raised by the towage service sector in ensuring that there are no decisions made which are disadvantageous to operators with an unreasonable test and that any decisions made in respect of individual operators are relevant and relative to other licence-holders as well. It seeks to insert a reasonable test in respect to disadvantage on decisions made in respect of individual towage licence holders.

The third substantive amendment in this set of amendments is in relation to the determination of pilotage services standards. This amendment would seek to insert into clause 33 of the bill an amendment which provides:

Without limiting subsection (1)—

which was the provision—

… standards determined under that subsection must provide for continuity of pilotage services, including but not limited to—

(a) the hours during which pilotage services must be provided; and

(b) the prevention or minimisation of threats to the continuity of pilotage services, including threats (whether temporary or permanent) to the availability of physical or labour resources required for the service …

Again, this is in response to industry concerns around the pilotage service standard provisions in the bill. It seeks to provide a structure and an assurance of continuity of service and a legal framework for continuity of service or at least the minimisation of disruption as part of the provision of clause 33.

This bill is an omnibus bill covering a lot of technical amendments with respect to the operation of our ports as well as the creation of a statutory framework for Ports Victoria. The coalition are not opposing this bill, but we do have those sets of amendments that we will seek to provide in the committee stage to improve the operation of this legislation.

Ms TERPSTRA (Eastern Metropolitan) (14:59): I rise to make a contribution on the Transport Legislation Amendment (Port Reforms and Other Matters) Bill 2022. I note I have had the benefit of listening to Mr Rich-Phillips’s contribution on behalf of the opposition. I do find it rather curious that it was in a way quite light on some of the detail in the bill, but nevertheless it was heavy on attacks on the government about privatisation. I will go to some of those things, because again it is incorrect for Mr Rich-Phillips to state that this is about privatisation. It is very rich to hear those sorts of noises coming from those opposite, particularly when we know the legacy that the Liberal government left the people of Victoria in regard to privatisation. So many things were privatised in Victoria under the Kennett government. There is a long list and a legacy that I could go through. But these things are very well known to all of us in here, and the legacy that has been left still provides challenges for governments many years after those things were done.

This bill does a number of things, and I will go to what this bill is about doing. It is about getting on with the job of implementing and formalising commitments the government has made in its formal response to the independent review of the Victorian ports system. The bill is a significant step in implementing the government’s response. Less than 12 months after establishing Ports Victoria we are fulfilling our commitment to the sector to implement all the recommendations of the review. I might just note for the sake of it, for those who might be watching along at home, and we have a very large audience of people watching along at home I am sure—

A member interjected.

Ms TERPSTRA: Absolutely we do—a very devoted following—and we must make sure we go to lengths to explain because—

A member interjected.

Ms TERPSTRA: Well, people might be at home COVID isolating, so they might find this quite entertaining, particularly a bill around ports. So we want to make sure we can provide some educational value to the good people of Victoria who do form part of our dedicated following.

In terms of port leases, a lease is not a sale of an asset. Normally when you privatise something you sell an asset. You divest yourself of that asset. You put it up for sale, and someone else buys it. This is a lease, so government still owns the property or the thing or whatever you want to call it, but it is a lease. It is a very long lease, granted, but the ownership of the ports is still vested in the government. So, as I said earlier, it is quite wrong to try and draw comparisons around privatisation and the like. It is simply a flawed argument.

I will return to why we are doing this, the benefits of this bill and what that is going to mean to Victorians, particularly when we talk about freight. We have just seen how challenged we are in terms of freight, and this is coming out of COVID—the recovery that we are now having. There have been significant challenges with getting freight around our state, and that is because we have got workforce challenges. So this bill could not come at a better time as well, because as we do start to scale back up into kind of normal operations this bill will be able to assist in streamlining how we can get freight around our state.

As I said, the bill is a significant step forward. We are fulfilling our commitment to the sector to implement all the recommendations of the review. This is just an overview of the things that this bill will amend in the legislation. It will embed the establishment of Ports Victoria in legislation and provide for the abolition of the Victorian Ports Corporation (Melbourne) and the Victorian Regional Channels Authority. It will adapt the charter of Ports Victoria to implement specific recommendations made as an outcome of the independent review of the Victorian ports system. It will implement review recommendations in relation to local ports, port development strategies and regulatory arrangements relating to harbourmasters, towage and pilotage and change the Port of Hastings Development Authority’s name and objectives to reflect its current role and likely future function in the Victorian ports system. It will avoid any doubt that it is up to the government to determine when the Victorian rail access regime commences, and it will put beyond doubt that the powers and functions of the minister under the Fisheries Act 1995 can be delegated to the chief executive officer of the Victorian Fisheries Authority. It will also make improvements to transport restructuring order provisions and other matters in the Transport Integration Act 2010 and make it clear that it is not necessary to prescribe a fee to be paid by applicants for registration in the tourist and heritage railway group register. So there are a number of important things not only in regard to helping streamline things in relation to freight but also in regard to a number of other machinery things that are important to support the legislation coming through and to have a better and more holistically functioning ports and freight system.

As I said, the independent review of the Victorian ports system, otherwise known as ‘the review’, was conducted in 2020, and this was the first holistic review into the ports system in 20 years. During the intervening period the system went through significant changes, including the introduction of a third stevedore in 2015 and the leasing of the port of Melbourne in 2016. The review process included extensive consultation across industry and stakeholders, including commercial port and local port operators. Overall the independent review of the Victorian ports system made 63 recommendations, all of which were supported and are supported by the Victorian government, together with long-term reforms that reinforce open market access to ensure the sustainable economic future of Victoria’s ports. The full government response addresses these recommendations while setting out three main areas of action. I touched on some of these earlier, but just to recap them in a very short, sharp way, the three areas of action include: establishing Ports Victoria, including creating Ports Victoria’s legislative charter and outlining key reforms, including to pilotage and towage services, as I mentioned before; developing the Victorian commercial port strategy, which will further define the government’s stewardship role, and articulating the key steps in ensuring the future of Victoria’s ports; and local ports and waterway management reforms that will seek to effectively support the economic and social value of these new assets.

The Victorian government has already acted to deliver on the review recommendations, as I said. We have created Ports Victoria, a new state port entity, to lead the strategic management and operation of Victorian commercial ports and waterways. The bill makes legislative amendments needed to implement the commitments the government made in the response to the review. So it is the responsible thing to do, right? You need to make changes to your infrastructure, you need to look at what is needed to change both now and into the future and how we can secure the economic viability of that asset. So that is a good thing, right?

I note Mr Rich-Phillips has said that the Liberals are supporting this legislation, but I note that they have tabled some amendments, and I note that we are not supporting the amendments. When I get to the end of my speech I will no doubt say that we will be insisting that this bill be passed through the house without amendment. As I said, we do not support the Liberal Party’s amendments.

In terms of consultation—this is very important—I know we often talk a lot about consultation in this chamber and there are lots of differing views on consultation, but I can say that the consultation around this particular issue has been nothing short of very extensive. Again I note those opposite try and look for things to criticise government on, but there is no doubt that there was a very extensive consultation strategy around this. It started with the independent review of the Victorian ports system in 2020. There were over 40 targeted stakeholder sessions and over 80 individual stakeholders, with consultation sessions across Victoria—extensive, I would think and I would argue. In 2020 the review’s discussion paper was released publicly, and there were over 70 written submissions received that informed the final report. Then in February 2021 the initial government response to the review was publicly released at a ports industry round table announcing the establishment of Ports Victoria. And in August last year the government response was publicly released. The reforms in the bill are focused on greater accountability and transparency in our ports system, completely contrary to what Mr Rich-Phillips tried to suggest—that there is no accountability and transparency in what we are doing. As I said, this is what our engagement and consultation strategy with stakeholders has mirrored indeed—so full transparency and accountability.

I might go to a little bit of a level of detail, because I know that there are other speakers who do want to speak on this. There are a lot of extensive notes here and, really, if you drill down into the detail in regard to this bill, there is a lot of detail. As I said, I will leave some other matters for other speakers to talk about, but I might just talk about a small matter.

I mentioned earlier the licensed pilotage service providers; we talked about how there were reforms to pilotage under these new provisions. The bill will provide for Ports Victoria to license pilotage service providers. The bill creates an offence to provide pilotage services without a licence. Licences issued by Ports Victoria will certify that the applicant has demonstrated it has sufficient knowledge, skills and expertise in relation to Victorian port navigation systems and harbourmaster directions and that it has sufficient processes and procedures in place to instil that knowledge and expertise in the pilots it engages so they can provide pilotage services safely in port waters. Safety is important, so it is very critical that we make sure we have a good system in place to make sure that people can be accredited and that there are some important criteria that need to be met in order to have a licence to be a pilot in Victorian waters—so very important.

The safety director at Transport Safety Victoria currently registers pilotage service providers, licenses pilots and develops appropriate standards for the training of pilots and pilot exempt masters. The safety director will retain responsibility for licensing individual pilots and registering pilotage service providers; however, the bill provides that registration must follow the issue of a licence by Ports Victoria—so they get issued a licence, and then registration must follow.

The bill also then provides that Ports Victoria must keep a register of licensed pilotage service providers and the waters for which they are licensed. This is very important: it goes to safety, and we need to make sure that we know whatever pilots are coming into Victorian waters are appropriately licensed and registered as well.

The Port Management Act 1995 requires ports to prepare a port development strategy. The ports will continue to prepare a port development strategy in accordance with the current cycle; however, the bill provides that the port development strategy for the port of Geelong will be prepared by GeelongPort Pty Limited rather than Ports Victoria—Ports Victoria will provide oversight of the port department strategy process—and the Port of Portland Pty Limited will be responsible for the port development strategy for the port of Portland. That kind of rolls off the tongue, doesn’t it? The ‘port of Portland’, very nice.

So the main purpose of this bill is to get on with the job of implementing and formalising the commitments, as I said earlier, that the government has made in response to the independent review of the ports system. We are supporting all of those recommendations, and this is an important step in making sure we get on with implementing those recommendations.

I might conclude, leave my contribution there and commend this bill to the house, but in so doing I will finish with these comments. Freight volumes are expected to more than double in the next 30 years, and it is critically important that our ports’ safe and efficient operations remain key to our state’s economic growth. This is why we are doing this. This is why we are starting to get on with the job of making sure we deliver these reforms. The government has recognised the importance of getting the governance and regulatory settings right, including the important steps of establishing Ports Victoria and enshrining its governance and functions in law. As I said, this bill is an important step in implementing the recommendations of the ports review and getting on with the job of making sure that we ensure our ports’ safe and efficient operations. It will be central to our state’s economic growth. I will conclude my remarks there by saying I commend this bill to the house but without amendment.

Ms SHING (Eastern Victoria) (15:12): It is again a really important opportunity in my contribution to this bill that I do not intend to squander in talking about the importance of ports and of related harbour and water management assets as they have been regulated within the state of Victoria and as they have undergone significant transformation in recent years. When Mr Rich-Phillips got to his feet to present the opposition’s position on this, including in the tabling of the two sets of amendments being put today, it was with a degree of nostalgia that I looked back on the select committee which investigated the viability of the long lease of the port of Melbourne and the exhaustive process which we undertook, including in public hearings around Victoria in fact, to understand the impact of and the details associated with that enormously important transaction, which was in and of itself extremely complex—an intricate process which then resulted in a report following that inquiry and in the passage of legislation in 2016.

The price that was eventually agreed upon for that long lease was $9.729 billion, give or take—an amount which was significantly beyond the expectations of many who had been part of the development of the proposal, including as it related to the building-blocks approach to the development of the best possible set of outcomes, the most productive set of outcomes, available for the ongoing approach to the maintenance of assets and to the building of efficiency into the port of Melbourne’s long-term operations. In the course of that particular inquiry and again in the passage of the legislation following the tabling of the report, it was noted that efficiency was at the very heart of the transaction around what was required and indeed what drove the transaction to culminate in the way that it did. To that end I note that these objectives have been realised and have been realised in a really significant way.

We have seen not only transparency being worked into the process of large-scale transactions such as this but also the importance of stevedoring and related activities and the importance of transparency as it sits at the heart of that work. This is where Victoria has very much led the way in relation to delivering that transparency and allaying concerns that have been previously elucidated by members of the sector, and that includes stakeholder bodies, individuals and peak body representatives who contributed to that particular inquiry.

When we look to that inquiry and the work that was associated with understanding the knock-on impacts of a long lease, I recall very clearly that the discussion on first and last mile was of key importance to making sure that the port of Melbourne retained its premier position as a hub for economic activity and indeed for growth. This is where it has been a state Labor government that has delivered rail at the port and indeed connected those intermodal hubs to make sure that freight and logistics are as smooth and as streamlined as possible in the way in which that port undertakes its activities. This is also about the long-term sustainability, viability and indeed attractiveness of this port as a means by which goods can be imported and exported, which is also important in making sure that we are delivering the best possible connectivity for road, freight and rail around the state and indeed to other ports around the country.

We sit in an enviable position as far as the efficiency of the port and the productivity that has been delivered go, and I note Mr Rich-Phillips’s commentary on efficiency. Since the lease of the port of Melbourne and the passage of that legislation in 2016, productivity has actually increased at the port by 26 per cent. So that is a really significant point to make and to underscore in the course of this particular debate, because when we compare the port of Melbourne to other ports around Australia, we are 30 per cent more productive than the next best performing port in Australia.

This also relates directly to the way in which we have managed to not only provide additional transparency, which I referred to earlier in relation to stevedoring operations, but also the costs of those last-mile investments, and this is where the $125 million investment into on-dock rail at the port has been so important. I note that the transcript of this inquiry into the long lease of the port of Melbourne, which led to that report and indeed to the exhaustive discussions and passage of legislation in this place—shepherded through by Minister Gavin Jennings, who sat at the table and answered questions for many, many hours around the intended operation of the port as a consequence of the long lease—went very, very clearly to the importance of first and last mile, addressing and recognising the economic and infrastructure-related needs of stakeholders in making sure that break-bulk and indeed containerised goods could make it to port without incurring excessive charges, charges that may in fact affect prohibitive outcomes upon a bottom line.

So the pricing compliance order report and the way in which that has been addressed relates specifically to the $6 billion that the port of Melbourne contributes every year to the Victorian economy, and we want to really make sure that the lease, which incorporates those checks and balances, is not only making the operations of the port more effective and efficient and productive but also protecting the rights of tenants and consumers. Again this is a part of the discussion around the intricacies of the debate, which was the subject of contributions and submissions to a very significant level of detail in the course of understanding the nature of the transaction and indeed coming to the conclusions that were reached in the report by the committee.

What we want to do in making sure that we implement and formalise the commitments of our government in response to the independent review of the Victorian ports system is to make sure that following the establishment of Ports Victoria we are in a position to commit further to implementing all of those recommendations from the review, which those who are taking part in this discussion around the bill will understand was a commitment following the issuing of that report, and making sure that we have got legislation that reflects what has changed and what is changing. That is where embedding these changes into legislation to provide for regulatory amendment—for example, the abolition of the Victorian Ports Corporation and the Victorian Regional Channels Authority—then means that we can have legislation which reflects the review, reflects the recommendations and indeed gets on with the recognition of the way in which the system and the regulatory framework are operating now and will continue to evolve to operate into the future.

We also want to make sure that there is no ambiguity around the way in which government determines when the Victorian rail access regime commences and also want to put a range of other matters beyond doubt, particularly as they relate to the powers and functions of the minister under the Fisheries Act 1995—and perhaps Minister Pulford may have something to say about this, given her intimate understanding of the subject matter in a previous portfolio—but also the delegation of the chief executive officer of the Victorian Fisheries Authority. So this legislation in fact gives effect to a range of recommendations, a range of aspirations around the objectives of increased efficiency and productivity and indeed greater measures of transparency which have been identified as priorities by key stakeholders.

With the time I have left I want to turn to the amendments that have been tabled by Mr Rich-Phillips, one I think very, very recently, as proposed in committee by Mr Davis. I will deal with that one first, if I can. After clause 27 there is a proposal to ensure that a copy of the transport plan is laid before each house of the Parliament within 120 days after receiving the plan from the secretary. It is actually really interesting to note. I did a quick search of documentation around transport plans that are already published, and these include road safety, commercial ports, bus, tram, train and freight. And this is where I suspect that Mr Davis or a colleague may well on his behalf seek to withdraw that amendment or indeed not press it on the basis that it is completely supernumerary—that is, it has no work to do, given the operation of current processes as they relate to the publication of various reports, including the reports in question here.

There have also been other amendments proposed in committee by Mr Davis, as tabled by Mr Rich-Phillips here. Again these amendments, as they have been put, in fact create a number of ambiguities. They create a number of challenges around the way in which this bill is intended to operate which either do not achieve the ends sought or seek to amend the objectives of the legislation and which otherwise create complexities and ambiguities which are precisely the opposite of what we are seeking to achieve. This is a bill which seeks to provide clarity, which seeks to remove ambiguity, which seeks to resolve any apprehension of unintended consequences and which seeks to further provide certainty to a sector which is continuing to grow and will continue to grow, particularly as international borders reopen and as we continue to maintain and build upon our enviable position as the most productive port in, indeed by a country mile, the country.

What I think is worth mentioning here, beyond what I have referred to already about the rail-to-dock investment of $125 million by this government, is the fact that following the long lease and therefore the movement of the income and the reward of the asset from state coffers to the federal jurisdiction it was interesting to note the sudden backflip undertaken under the asset recycling scheme and a refusal by the commonwealth government to remit that money, which is part of ongoing discussions and indeed agreements between the state and the federal jurisdictions. This was something which again led to a lot of chest thumping, including by a range of infrastructure ministers at a commonwealth level, which led to a significant level of, I would say, wilful denial of the plain truth of the matter that Victoria was owed indeed a proportion of, I think around 15 per cent of, that total price paid for the long lease. Indeed it took us announcing our Regional Rail Revival project and that investment to repurpose the money owing from that transaction for the commonwealth belatedly to come to the party and to recognise in fact that it had an unfulfilled debt to Victoria.

That did not stop the commonwealth from plastering its logo all over the infrastructure which we have invested in. You will see that there is siding at just about every regional rail station and rail line where there is construction occurring which contains the Australian government’s logo and is the subject of frequent, well, self-congratulatory statements from our colleagues in Canberra, and it was not that long ago when in fact they denied that they had any liability to Victoria, notwithstanding that the private operations of the long lease as a consequence of our transaction did not require them to remit any money at all.

In this regard I note that the $535-odd million for the Gippsland line rail revival was something which former infrastructure minister Darren Chester is all too comfortable standing up and talking about having delivered and the one Nationals member in this chamber is also very comfortable with congratulating her colleague on delivering. The plain fact of it is we in Victoria were owed a proportion of the total sum payable from the long lease of the port of Melbourne, to be remitted in exchange for the loss of revenue because it was going into a federal system and because of the application of GST as part of that system. What a shame that we now see a rewriting of history from those currently in Canberra. I look forward to a greater level of transparency being demonstrated by those who have otherwise taken the credit and a level of transparency which in fact delivers an equivalence to that which is delivered through the passage of this legislation.

So I commend the bill to the house. I look forward to its speedy passage, and indeed I reiterate the position that the government will not be supporting either of the amendments circulated by Mr Rich-Phillips on behalf of Mr Davis. I wish the bill, unamended, a speedy passage.

Ms TAYLOR (Southern Metropolitan) (15:27): I am happy to speak on this bill. The main purpose is to get on with the job of implementing and formalising the commitments our government has made in its formal response to the Independent Review of the Victorian Ports System. The bill is really a significant step forward in implementing our government’s response. Less than 12 months after establishing Ports Victoria we are fulfilling our commitment to the sector to implement all the recommendations of the review.

I am going to jump around a little bit, but firstly I do want to touch on port productivity. Our Andrews Labor government has really harnessed the value of the port of Melbourne, that economic engine room which is contributing $6 billion to our economy every year. Since the lease of the port it has increased productivity by 26 per cent and is 30 per cent more efficient than the next best Australian port, and we are slashing the cost of the last mile with the $125 million investment in on-dock rail at the port. Meanwhile, I should note that the federal government have stalled on the one commitment they made, to review part X of the Competition and Consumer Act 2010, surely among the most permissive regimes of shipping liner protections used by a developed country. On that note I should point out that it has taken a Labor government to put rail back at the port, connect it to the metro and regional intermodal hubs to keep freight moving, introduce a nation-leading pricing model and keep the port up and running during the pandemic.

Furthermore, something that really, really excited me with this development as well is that, if we note the imperative and the incentive to put rail back at the port, a 3000-tonne grain train removes 57 B-doubles from our roads—think about that—reducing carbon emissions, reducing congestion and greatly and significantly enhancing road safety. What is not to love about that? That is what got me really, really excited, apart from all the other advantages associated with that great development.

It is also consistent with our government, because we do take protecting our environment and sustainability very seriously. You can see here a very constructive mechanism. The numbers are real, they are factual and they are on the ground. We can see the imperative and the incentive to do this, so I am extremely proud that our government has brought forward this fabulous development. I think that is the best word for it—anyway, we will go with that today.

On to some other matters, and I know that my learned colleague Ms Shing has already alluded to—spoken in detail to, I should say—some of the issues that we have with the amendments proposed by the opposition, and I say that respectfully. If I go to clause 5, page 9, after line 13, the insertion proposed by those opposite is:

(f) to ensure that the development of the Victorian ports system is prudent and efficient and is carried out consistently with any relevant transport legislation and any standards and codes developed under relevant transport legislation.

We do not support that amendment. You may say, ‘Well, why?’. In part the proposal of the opposition is to add an object that requires compliance with ‘transport legislation and any standards and codes developed under relevant transport legislation’. This is unnecessary. Ports Victoria is already required to comply with these laws, so there is no need to add more in that sense. We know that the legislation is sufficiently prescriptive in that regard, so why add more when it is not going to ameliorate the outcome?

The other part of the proposed new object is to ensure the development of the Victorian ports system in a prudent and efficient manner. However, Ports Victoria cannot deliver this objective because it cannot ensure the development of the whole Victorian ports system is efficient because it does not have, nor can it exercise, the level of control required to ensure prudent and efficient decisions are made by—and this is the kicker—independent, commercially focused corporate entities. And I hope that is clear and you can understand how far and wide government can or cannot reach, so to speak.

Ports Victoria’s role is not to regulate or second-guess the roles and functions being fulfilled by the commercial port managers. Ports Victoria will support port manager strategic planning activities and provide the channels, navigation systems and other forms of marine infrastructure that are necessary to promote and enable trade. Merely providing Ports Victoria with an object does not enable that objective to be fulfilled. Similarly, merely adding functions does not enable the port to fulfil that role. If the opposition really want a different governance model for the Victorian ports system, then they need a comprehensive plan. The Andrews government has a comprehensive plan, and it is being implemented through this bill.

At the risk of labouring some of the amendments—we need to speak to them because they are relevant in this context and debate—I notice the opposition have suggested at clause 5, page 9, after line 24 inserting:

(ba) to monitor proposals relating to the development of the capacity of port land and port waters for which Ports Victoria is responsible …

We do not support this amendment. This amendment would add additional functions to those that the bill will provide to Ports Victoria. Again, this is unnecessary as the bill already prescribes the following functions for Ports Victoria:

(b) to manage and develop, or enable and control the management and development of, port land and infrastructure for which Ports Victoria is responsible; and

…

(i) to provide advice and information to port managers in relation to the integrated planning, development, management and promotion activities for ports …

I am going to go further with a proposition of the opposition, and that is the insertion of:

(bb) to monitor and provide advice, guidance and expertise to the Minister on any emerging trends relating to the Victorian ports system, including but not limited to trends relating to the capacity of port land and port waters …

and so forth. The government does not support this amendment. Why? This amendment, I have to say, again, is unnecessary as it is already covered in the bill, which clearly states that Ports Victoria’s objects are:

(b) to support the strategic planning and development of the Victorian ports system;

…

(e) to provide technical and consultancy services in relation to the Victorian ports system.

Now, this is a highly technical discussion, but the nature of this bill is technical—with good purpose. I should note that this amendment is also inconsistent with the Transport Integration Act 2010 as it is the role of the secretary to provide advice to the minister. However, the minister can give a direction and provide a statement of expectations to Ports Victoria regarding the provision of advice. So you can see here there is a bit of a theme that we have running, and that is there is no need to provide superfluous elements which may actually be at risk of confusing or simply serving no good purpose and that may not in any way enhance or improve the outcome, the impact, the fairness or otherwise of the bill.

If we go to clause 5, it is the proposition of the opposition, on page 10, after line 25, to insert:

(ja) to provide advice, guidance and expertise to port managers of commercial trading ports in relation to the preparation of Port Development Strategies in accordance with the Port Management Act 1995 …

Now, the government does not support this amendment. Why? Because the function is already covered by (i), but this is more limited. So there is the other issue, because it only relates to the provision of ‘advice, guidance and expertise’ in relation to the preparation of port development strategies. I am going through this in a detailed way. It is out of respect for the work that has gone into putting forward their various amendments, but it is also to say the corollary of that is that we are respectfully rebutting these amendments with good reason and purpose, because these are, as has been discussed already, the propositions that I have put on the table from the opposition—sorry, that was a complicated way of presenting it. Anyway, the amendments put forward by the opposition are largely unnecessary and are not going to enhance the performance or outcomes of the bill and ultimately deliver what needs to be delivered for Victorians.

In clause 5, page 13, after line 16, the opposition are proposing to insert:

(8) In this section—

Port Development Strategy has the same meaning as it has in section 91J of the Port Management Act 1995.

This amendment is consequential to amendment 4, which is not supported by the government, so hence we are not supporting that amendment.

If I go forward to clause 32, page 35, lines 11 and 12, ‘omit all words and expressions on these lines’ is the proposition by the opposition. We do not support this amendment. Why? This amendment and the two that follow propose to remove the discretion of Ports Victoria to have any regard to other matters that Ports Victoria considers relevant when deciding to grant or not to grant a towage licence. Towage, pilotage and harbour master services are the backbone of navigational safety in any port, and it is standard legislative practice to make provision for unforeseen events and conditions. That seems like common sense to me—that you have to allow for not only the foreseen but the unforeseen, particularly within this context but perhaps in all contexts. You always have to allow for unforeseen circumstances, I would have thought. Removing the ability of Ports Victoria to respond to anything unforeseen that might impact the safe navigation of Victorian waters, frankly, is irresponsible. It is irresponsible. We cannot take that path, so I hope that it is clear as to why we cannot validate that particular proposition in terms of an amendment from the opposition. You know, imagine an unforeseen event occurring which everyone reasonably expects Ports Victoria to respond to or to consider. Imagine that scenario. They cannot, because the legislation was so prescriptive that they are limited in their ability to ensure that safety. That does not make sense, does it? Hence that is why we cannot support that amendment. The level of discretion that the bill provides is necessary. The checks and balances on the use of that discretion are the review rights that the bill already provides. There are therefore appropriate caveats and protections in place with the review rights.

If we go to clause 32, page 36, after line 2, the insertion which has already been circulated by the opposition is:

(3) In determining whether to make a towage service licence subject to a condition under this section, Ports Victoria must be satisfied that the condition would not have an unreasonable adverse impact on the licence holder, having regard to the conditions to which similar towage service licences are subject.

Again, the government does not support this amendment. This amendment adds to the considerations Ports Victoria must make when determining whether licence conditions should be adopted. Linking the requirement to consider adverse impacts to conditions to which similar towage service licences are subject will be difficult if not impossible to reconcile with subsection (2), which explicitly provides the scope to vary the conditions that apply to a licence-holder from those that apply to other licence-holders in the same specified port.

If the concern is that Ports Victoria might impose a condition on a licence-holder that commercially benefits another licence-holder, then I would draw the opposition’s attention to the review rights the bill provides. The bill provides for applicants for licences and licence-holders to seek an internal review of the decision to grant or not to grant a licence or impose conditions. Following internal review there is a right to have the matter considered at VCAT, and that is a very significant, important element when addressing the particular amendment that has been put forward by the opposition.

I think I will have just enough time to go to clause 32, page 38, after line 6, where the opposition is proposing to insert:

(4) In determining whether to amend, remove or impose a condition of a towage service licence under this section, Ports Victoria must consider whether the proposed amendment, removal or imposition of the condition would have an unreasonable adverse impact on the licence holder, having regard to the conditions to which similar towage service licences are subject.

We do not support the amendment. It has the same flaws as the proposed amendment that precedes it.

I am going to run out of time to go any further, but I very much commend this very timely piece of legislation to the house, noting the incredible amount of work and consultation that have gone into building this legislation. I am very proud of our government’s investments in the ports and certainly the various developments which are going forward. We are tackling it head-on. It is all about the ports.

Dr CUMMING (Western Metropolitan) (15:43): I rise to speak on the Transport Legislation Amendment (Port Reforms and Other Matters) Bill 2022. This is mainly an administrative bill. Basically it amends the Transport Integration Act 2010 to allow for the establishment of Ports Victoria and for the functions and powers of the Victorian Ports Corporation and the Victorian Regional Channels Authority—the two organisations that are really being merged to form Ports Victoria—to be transferred. It also amends a number of other acts where these organisations are mentioned. This bill is, as I said, largely administrative. There are amendments to a couple of acts that seem to have nothing to do with Ports Victoria, such as the Tourist and Heritage Railways Act 2010, the Conservation, Forests and Lands Act 1987 and the Suburban Rail Loop Act 2021.

Now, while the port of Melbourne is not in my electorate, it is my front yard. It is vitally important to the people in my electorate. They are impacted every single day by trucks coming and going to the port, spewing out diesel and petrol fumes and contributing to what is the worst air quality in Melbourne. Their children suffer the highest incidence of asthma, which is one of the reasons why I instigated the recent air quality inquiry. At the end of 2015 this government announced that the West Gate Tunnel would fix this—that it would take thousands of trucks off the streets and therefore improve the air quality. It is meant to reduce travel times, but what have we got? Construction started at the beginning of 2018, and over four years later we have more trucks travelling through our streets, and now they are carrying toxic soil. We have had four years of traffic diversions and delays—still no tunnel and no road completed. But we have an increase in cost; it is around $3.924 billion. We have the opening expected in late 2025, so my community has to suffer this for another three years.

Let us go back to the bill. This bill makes amendments that are needed to implement the commitments that the government made in response to the independent review of the Victorian ports system, which was conducted in 2019–20. If this is about port reform, I would have expected to see some more substantial reforms. I expected to see something coming out of the review conducted by the Essential Services Commission last year. The commission said:

We consider the cumulative nature of the Port of Melbourne’s non-compliance is significant and sustained and is not in the long-term interests of Victorian consumers.

Our view is that the non-compliance is:

• significant, because it does not meet the objectives of the Port Management Act 1995 (Vic)

• sustained, because the impact on these objectives is not fleeting or transitory.

We consider the current regulatory framework does not have adequate incentives for compliance, which allows for significant and sustained non-compliance with the pricing order.

The report went on to say that:

The Port has overstated its aggregate revenue by $300 million and $650 million over the review period, which we consider reflects both significant and sustained non-compliance.

The cumulative nature of the Port’s non-compliance—that is, non-compliance in return on capital, aggregate revenue requirement, consultation with stakeholders, operating expenses, and pricing and costing—indicates non-compliance that is not transitory, which has significant—

if not future—

… financial impact and instils a lack of credibility with port users …

They also said that this could undermine the regulatory framework. Yet here we are, making changes to the regulatory framework but not addressing the issues such as compliance, pricing, costing or consultation, which were identified in the review. This government yet again has missed the boat.

Dr KIEU (South Eastern Metropolitan) (15:48): With great pleasure I rise to make a contribution to the debate and to support the Transport Legislation Amendment (Port Reforms and Other Matters) Bill 2022. This bill is a technical bill but nevertheless is a very important piece of legislation, and with the time given to me I will focus on some aspects of the bill. Our economy and trading relationships—for the consumer, construction and everything in the economy—are dependent on freight, transportation and of course ports. Freight volumes are expected to more than double over the next 30 years, so our ports’ safe and efficient operation remains key to the state’s economic growth and also to our competitive advantage. As ports are integral to our economy, the Andrews Labor government recognises that getting the governance, strategic and regulatory settings right is very important and critical.

The Andrews Labor government has leased the port and since then has really harnessed the value of the port of Melbourne. That economic engine room has contributed $6 billion to our economy every single year, and as my colleague before me mentioned, since the lease of the port of Melbourne it has increased productivity and is somewhere between and 26 and 30 per cent more efficient than the next best Australian port.

However, the complexity and the legacy arrangements relating to the privatisation and commercialisation of Victoria’s ports over the last 30 years prompted a review of the system to examine whether port governance and regulatory requirements remain fit for purpose to deliver on the government’s economic objectives, and so we had an independent review of the Victorian ports system, which was conducted in 2020. It was the first holistic review into the ports system in 20 years. During the intervening period the system has gone through significant changes, including the introduction of a third stevedore in 2015 and also the lease of the port of Melbourne, as I just mentioned, in 2016. This review included extensive consultation across industry and stakeholders, including commercial port and local port operators. Overall the independent review made 63 recommendations, all of which I am pleased to say are now supported by the Victorian government, together with long-term reforms that reinforce open market access to ensure the sustainable economic future of Victoria’s ports and of the Victorian economy.

We can see the full government responses to these recommendations. I just want to point out three main areas of action by the government: namely, to establish Ports Victoria, including creating Ports Victoria’s legislative charter and outlining key reforms, including to pilotage and towage services; to develop the Victorian commercial ports strategy, which will further define the government’s stewardship role and articulate the key steps in ensuring the future of Victoria’s ports; and also to manage local ports and waterways and to introduce reforms that will seek to effectively support the economic and social value of these assets of our state. The government has already acted to deliver on the review’s recommendations by creating Ports Victoria. It is a new state ports entity to lead the strategic management and operation of our commercial ports and waterways. This bill makes legislative amendments needed to implement the commitments the government has made in the response to the review.

The ports reforms and other matters bill at hand will amend the legislation, firstly, to embed the establishment of Ports Victoria in legislation and to provide for the abolition of the Victorian Ports Corporation (Melbourne) and the Victorian Regional Channels Authority; secondly, to adapt the charter of Ports Victoria to implement specific recommendations made as an outcome of the review; and, thirdly, to implement review recommendations in relation to local ports, port development strategies and regulatory arrangements relating to harbourmaster towage and pilotage.

In very broad terms, the bill defines the Victorian ports system and links this to Ports Victoria’s objectives, which are to promote and facilitate trade; to support strategic planning and development; to participate in emergency management at a state level; to undertake operational activities; and to provide technical and consultancy services in relation to the whole of the Victorian ports system, not only the commercial trading ports.

The bill also specifies the additional functions to be performed by Ports Victoria in relation to the licensing of towage and pilotage service providers; namely, a new towage licensing scheme is established by the bill, and Ports Victoria is empowered to administer it, including by setting different standards and requirements across the different ports and port waters.

A new pilotage licensing scheme is also established by this bill. The director of transport safety will retain responsibility for licensing individual pilots and registering pilotage service providers. However, this bill stipulates that their registration must follow the issue of a licence by Ports Victoria. This is because this will effectively certify that an applicant has sufficient knowledge, skills and expertise in relation to Victorian navigation systems and harbourmaster directions, amongst other things, so that they can provide pilotage services safely in our port waters.

The main purpose of this bill is to get on with the job of implementing and formalising the commitments that the Labor government has made in its formal response to the independent review of the Victorian ports system. This bill is a significant step forward in implementing the government’s response. Less than 12 months after establishing Ports Victoria, we are now fulfilling our commitment to the sector to implement all 63 recommendations of the review that concluded in 2020. I therefore commend the bill to the house.

Sitting suspended 3.58 pm until 4.20 pm.

Mr BARTON (Eastern Metropolitan) (16:20): I rise to speak on the Transport Legislation Amendment (Port Reforms and Other Matters) Bill 2022. The port of Melbourne is Australia’s largest capital city container and general cargo port, handling more than one-third of this country’s container trade. The functioning of this port is absolutely critical to Victoria’s economic prosperity. I believe this bill will ensure that the port runs efficiently and effectively.

The introduction of Ports Victoria comes at a critical time. The port has seen significant growth these past few years. In fact over the decade from 2009 to 2019 the number of containers handled at the port increased by around 40 per cent. Of course, like all transport, it is important that there is integration across all services. These containers come and go to destinations across all of Victoria, and around 7 per cent of the port’s containers use rail for part of their journey to and from the port, with almost all of these related to regional Victoria and interstate export trade. 87 000 empty containers used rail on their journey to regional Victoria and interstate exporters, with some also travelling via road. I hope to see Ports Victoria take a holistic view of the port as a transport service and look to how other services, especially rail, are integrated to attain the highest productivity.

There is a significant proportion, some 27 per cent, of full international and mainland import container destinations to the outer south-east of Melbourne. This is the second-largest region for import container movements and points to the continued sharing of major arterial and freeway networks with passenger vehicles. This demonstrates the critical role of rail to the south-east. Congestion issues remain a concern for passenger vehicles, the road freight transport industry and shared rail networks. We need Ports Victoria and all transport departments to engage in careful planning for future freight rail use, preserving corridors of network capacity and working closely with passenger services where the network is shared. I commend this bill to the house.

Mr TARLAMIS (South Eastern Metropolitan) (16:22): I thank Mr Barton for the brevity of his contribution. I had not anticipated being on so quickly. I also rise to speak on the Transport Legislation Amendment (Port Reforms and Other Matters) Bill 2022, and I think it goes without saying how important and significant the port of Melbourne is to the Victorian economy, it being a significant contributor, contributing $6 billion to the economy every single year. As Mr Barton indicated, it plays a major role in the Victorian economy. Since the lease of the port it has increased productivity by 26 per cent and has been 30 per cent more efficient than the next best Australian port. We are slashing the cost of the last mile with the $125 million investment in on-dock rail at the port. This bill will continue to make further changes and improvements that will continue to improve the port and its workings. That is why I am happy to speak with regard to this bill today.

The main purpose of the bill is to get on with the job of implementing and formalising the commitments the government has made in its formal response to the independent review of the Victorian ports system. The bill is a significant step forward in implementing the government’s response. Less than 12 months after establishing Ports Victoria we are fulfilling our commitment to the sector to implement all the recommendations of the review. The ports reform and other matters bill will amend the legislation to embed the establishment of Ports Victoria in legislation and provide for the abolishment of the Victorian Ports Corporation (Melbourne) and the Victorian Regional Channels Authority. It will adapt the charter of Ports Victoria to implement specific recommendations made as an outcome of the independent review of the Victorian ports system. It will implement the review recommendations in relation to local ports, port development strategies and regulatory arrangements relating to harbour markets, towage and pilotage and change the Port of Hastings Development Authority’s name and objects to reflect its current role and likely future function in the Victorian ports system.

It will make changes to avoid any doubt that it is up to the government to determine when the Victorian rail access regime commences. It will put beyond doubt that the powers and functions of the minister under the Fisheries Act 1995 can be delegated to the chief executive officer of the Victorian Fisheries Authority. It will make improvements to the transport restructuring order provisions and other matters in the Transport Integration Act 2010. And it will make it clear that it is not necessary to prescribe a fee to be paid by applicants for registration in the tourist and heritage railway group register.

The independent review that I referred to earlier, of the Victorian ports system, was conducted in 2020, and it was the first holistic review of the ports system in 20 years. During the intervening period the system had gone through significant changes, including the introduction of a third stevedore in 2015 and the leasing of the port of Melbourne in 2016. The review process included extensive consultation across the industry and stakeholders, including commercial port and local port operators. Overall the independent review of the Victorian ports system made 63 recommendations, all of which were supported by the Victorian government, together with long-term reforms that reinforce open market access to ensure the sustainable economic future of Victorian ports.

The full government response addressing these recommendations was extensive. As I said, we accepted all of the recommendations, but the three main areas of action were establishing Ports Victoria, including creating Ports Victoria’s legislative charter and outlining key reforms, including to pilotage and towage services; developing the Victorian commercial port strategy, which will further define the government’s stewardship role, and articulating the key steps in ensuring the future of Victoria’s ports; and local ports and waterway management reform that will seek to effectively support the economic and social value of these assets. The Victorian government has already acted to deliver on the review recommendations by creating Ports Victoria, a new state ports entity, to lead the strategic management and operation of Victoria’s commercial ports and waterways. This bill makes legislative amendments needed to implement the commitments that the government made in the response to the review.

The key reforms contained within this bill improve the consistency of governance at Victoria’s ports in several ways through the change in towage, pilotage and harbourmaster requirements. The new towage licence scheme is established by the bill, and Ports Victoria is empowered to administer it, including by setting different standards and requirements across the different ports and port waters. The new pilotage licence scheme is also established by this bill. The director of Transport Safety Victoria will retain responsibility for licensing individual pilots and registering pilotage service providers; however, the bill provides that registration must follow the issue of a licence by Ports Victoria. This will effectively certify that an applicant has sufficient knowledge, skills and expertise in relation to the Victorian navigation systems and harbourmaster directions, amongst other things, so that it can provide pilotage services safely in port waterways. Harbourmasters will also be specifically authorised to give oral and written harbourmaster directions to pilots operating in the harbourmaster’s waters to better support the existing marine safety scheme.

The bill will enable the minister to prescribe by order entities who are responsible for preparing a port development strategy for a particular port. Amendments to the Port Management Act 1995 will allow local port managers to undertake activities, including on a commercial basis, outside their port’s lands and waters. In addition the bill changes the Port of Hastings Development Authority’s name to the Port of Hastings Corporation to better reflect that the port will no longer be developed as a container port.

Now, with all of these changes that have occurred in this, it obviously has many implications, so there has been extensive consultation. The consultation on these reforms has been quite extensive. With the independent review of the Victorian ports system in 2020 there were targeted stakeholder sessions with over 80 individual stakeholders, with consultation sessions right across Victoria. In July 2020 the review discussion paper was released publicly. Over 70 written submissions were received that informed the final report. Then in February 2021 the initial government response to the review was publicly released at the ports industry round table, announcing that the establishment of Ports Victoria would be occurring. In August last year the full government response was publicly released, and as I said, the government has accepted all recommendations and is implementing those.

The reforms in this bill are focused on greater accountability and transparency in our ports system, and that is what our engagement and consultation with the stakeholders has mirrored. As I said, we continue to be committed to the port of Melbourne and its viability and increasing our support for the port to ensure that it continues to grow and becomes productive given its significance as an engine room that feeds significantly into the Victorian economy. That is why we have continued to invest in this year’s budget to basically create transport connections to the port through rail freight.

This year’s state budget is a really significant budget for the freight industry. It contains a massive investment in freight rail that brings Victoria closer to delivering a gold-class rail freight network tailored to the fast and efficient movement of export to port. We are already doing so much work connecting our exporters to ports. The Murray Basin rail project and the port rail shuttle network terminals are underway, and on-dock rail at the port of Melbourne is under construction. Our $181 million investment in the freight rail network in this year’s Victorian budget is enormously significant, and it builds on the $83 million investment we have delivered as part of our COVID-19 stimulus package. The $181 million means heavier and faster trains, it means boosting the capacity on the tracks so that we can increase the volumes and mass of freight carried per train and it means lifting the speed at which those trains can travel. Whether it be investing heavily in our new track, new sleepers or new ballast, we will be working with industry to identify areas in the network that create wealth to give certainty and uplift in the capacity of the trains that our industry can run on. So as you can see, we are serious about investing in this industry. We are serious about supporting the ports. This bill continues to build on that support, as does our significant investment in this year’s budget.

In terms of the amendments that have been introduced by the opposition, my colleagues in their contributions previously have indicated in some detail the reasons why they will not be supporting those amendments. They have gone into great detail in those contributions as to the reasons why we will not be supporting those amendments, and I echo those sentiments. I will not speak to those any further. We will be opposing those amendments, but obviously we will be supporting this bill. I would urge other members in this place to support this bill unamended, and on that basis I commend the bill to the house and wish it a speedy passage unamended.

Mr QUILTY (Northern Victoria) (16:33): I will be brief. The Liberal Democrats tend to cringe when we hear about a new government proposal to restructure government authorities. All the opportunities for increased bureaucracy, increased licensing and increased costs, combined with the reduced efficiency and increased centralisation, are generally a pouring of sand into the gears. Actions like abolishing the Victorian Ports Corporation (Melbourne) and the Victorian Regional Channels Authority—for everywhere that is not Melbourne—to create a single body tends to come at a high price for the regional bodies involved in those mergers.

While Melbourne is the largest port for containerised and general cargo, the port of Geelong is Australia’s fifth-largest port by tonnage, and the port of Portland is the largest sustainable hardwood chip port in the world. It is not just Melbourne that has an interest in our ports, although regional Victorians could be forgiven for not knowing this. For over 100 years the port of Melbourne has been prioritised over other Victorian ports, which have languished with failing infrastructure and closed-down rail lines. And here I do not just single out Portland; a string of ports have been neglected and their rail links allowed to deteriorate or become closed altogether. This is just another example of the long list of what Melbourne governments do to regional Victoria.

Having said that, and while the Liberal Democrats would prefer the government getting out of the way and leaving the running of our ports altogether to private business, it is not completely out of the question that the government should have a role in planning and infrastructure around international trade. The fact that the new authority is based in Geelong rather than Melbourne is a nice start, although the proposition that Geelong is regional is increasingly called into question. Perhaps if we had a government really committed to decentralisation, the authority would have been based in Portland instead—but half a bone is better than none.

The bill increases licensing requirements. That is probably unfortunate. It has not been made clear that there is a real, specific problem that needs addressing and not just a government wanting to expand licensing into all areas of the economy. But again I am less concerned about the licensing of harbourmasters than I am about licensing hairdressers. Clause 5 of the bill provides the minister with a specific directions power which can hinder or help Ports Victoria. The minister will be allowed to expand or limit the functions of Ports Victoria ‘subject to the considerations by the minister as to what is in the public interest’.

I have become increasingly opposed to giving ministers discretionary powers, and frankly I do not trust this government to know what is in the public interest. Wrapping our regional ports in additional red tape cannot make things better. We do not need more decision-making from the ivory towers or indeed beige towers of the Melbourne bureaucracy, we need less. This bill will allow decisions to be made that are far removed from those with local knowledge and understanding of regional ports and the way they do business and risks shutting down agile practices and emerging strategies at the coalface.

I note that if Ports Victoria was to suffer financial detriment due to the directions to perform or not perform a function by the minister’s call, then Ports Victoria may be reimbursed by the state from the Consolidated Fund. That sounds to me like endorsing incompetence, to take from a taxpayer-supported fund to reimburse another government agency.

At the heart of the changes seems to be an argument for safety. The government claims, after its own report on the transport and logistics nightmare that occurred in 2020, that harbourmasters have to be better regulated, but it is unclear if that is true. However, we will support the bill today. There is a possibility that the new authority will properly plan for the new Western Port. It needs reserved transport corridors, truck interchanges and railway lines that will bypass the Melbourne sprawl. The chance exists to get it right. We would hope the government would focus less on its Suburban Rail Loop and more on its freight lines.

Regional railway lines, and by extension the ports that sit at the end of them, are something of an interest of mine, as I am sure my staff could attest. Many a time I have made them look at old railway maps with me and talk about what could have been done with them and what could still be done with them other than pulling them up to make rail trails. I would love to see Portland get some more love and its railway lines upgraded, including the stranded and abandoned Mount Gambier line, and the terminal upgraded for mineral sands loading as well as wheat and woodchips. Perhaps that will get picked up under the new authority, although I will not hold my breath. And we have other regional ports that could be used more if the infrastructure was up to scratch.

We will support some of the amendments from the opposition, but certainly not all, because some strive to make this legislation worse and not better.

Mr ERDOGAN (Southern Metropolitan) (16:38): I am pleased to rise in support of the Transport Legislation Amendment (Port Reforms and Other Matters) Bill 2022. It is an important piece of work, and it is timely that it is before the house today. At a time when we are hearing about global supply chain issues, well-run and regulated ports have never been so important. Although I do not necessarily share Mr Quilty’s world view, we both agree that these are very important infrastructure pieces in the supply chain in our state and in our nation, so it is very important that the regulation meets that requirement.

To give an overview of what the bill does—and its purpose is very important—the main point of this bill is to get on with the job of implementing the commitments the government has made in its formal response to the independent review of the Victorian ports system. You may recall the 63 recommendations that came out of that review, and this is about making sure we implement all 63 of them in due course.

Specifically, the bill embeds the establishment of Ports Victoria in legislation and provides for the abolition of the Victorian Ports Corporation (Melbourne) and the Victorian Regional Channels Authority. So I think that is good. It amalgamates the two organisations into one. I understand the practical steps have already been done in terms of implementing that change, the management, into a single authority, but this formalises it in legislation. It adapts the charter of Ports Victoria to implement specific recommendations made as an outcome of the review. It implements review recommendations in relation to local ports, port development strategies and regulatory arrangements relating to harbourmasters, towage and pilotage and changes the Port of Hastings Development Authority’s name and objective to reflect its current role and likely future function in the Victorian ports system.

The bill also makes improvements to the transport restructuring order provisions and other matters in the Transport Integration Act 2010 and other minor technical amendments to the Tourist and Heritage Railways Act 2010, the Rail Management Act 1996 and the Conservation, Forests and Lands Act 1987, so it is a rather larger bill than what it might seem. It is an important reform, and it is needed because freight volumes are expected to more than double over the next 30 years. Our ports’ safe and efficient operation remains key to our state’s economic growth and competitive advantage. Given the importance of the ports system to our economy, optimising the government’s strategic regulatory settings for ports is of critical importance.

Following the privatisation and commercialisation of Victoria’s ports over the past 30 years, culminating in the 50-year lease of the port of Melbourne in 2016, the government made the decision to review the ports system and examine whether port governance and regulatory requirements remain fit for purpose to deliver on the government’s economic objectives. The purpose of the review was to assess the utility of the government’s overarching policy and legislative and governance settings in contributing to the efficient and effective functioning of the performance of the Victorian ports system. It was an important review that was undertaken, and the final report was released in November 2020.

The review found that the state’s current governance and organisational arrangements for Victoria’s commercial trading ports are functional but suboptimal in terms of their ability to deliver on the government’s objectives for the ports system. The current organisational arrangements are not purpose designed; they are a by-product of other processes designed to separate and transfer the commercial elements of the ports system to the private sector. The arrangements work because of the professionalism and goodwill of key players within the system, not because they are well designed. Problems with the current arrangements that were identified include unnecessary organisational complexity, a lack of clarity about roles and accountabilities for port users and stakeholders, a lack of a single or primary source of authority for effectively representing the state’s interest in the ports system, a lack of a state port entity of sufficient scale and scope to attract and retain high-level maritime policy and technical expertise, inconsistent approaches to the delivery and regulation of key port services across the ports system, insufficient coordination and control of key port services within ports and unnecessary responsibility boundaries, particularly for navigational control and safety. When all taken together or cumulatively these deficiencies not only detract from the efficiency of the system but also create a degree of risk exposure for our state.

The review found that the high level of fragmentation of roles and responsibilities between the different port entities impacts the state’s ability to plan and coordinate. It also reduces confidence in the safe, efficient and effective function of the ports system. The review concluded that the most benefit to the state is to be gained by combining the key waterside entities—that is, the Victorian Ports Corporation (Melbourne) and the Victorian Regional Channels Authority—into a single body responsible for waterside access, navigational control and safety in all of our commercial trading ports. The review also found that the current arrangements for the regulation of navigational safety in the ports system are unnecessarily complex and inconsistent across the different commercial trading ports. This relates to key operational safety roles such as harbourmaster functions and pilotage and towage services. The lack of clarity about roles and accountability for port users and stakeholders is resulting in key operational safety roles being inconsistently and unreliably delivered, potentially undermining safe port operation and posing significant reputational risk to our state.

The government responded in a timely fashion, as we have with many other key reviews that have taken place into state infrastructure. We listened and we acted. There were 63 recommendations, and the government quickly responded, indicating that we would be looking to implement all of them. This bill is a critical part of implementing those reforms and recommendations. Obviously it has taken some time for this bill to come to the house, but I think it is important to note that combining two organisations is never easy. The change of location of the head office, making executive management changes, change management and making sure the cultures align were all key, so time was taken in making sure we got that right the first time.

The new roles and responsibilities of Ports Victoria are important to understand as part of this bill. To address the high level of fragmentation in the current ports system the objectives and functions of the Victorian Ports Corporation (Melbourne) and the Victorian Regional Channels Authority have been integrated and expanded. To achieve this integration the bill creates a new definition of ‘Victorian ports system’ which includes all the components that make up Victoria’s system of commercial trading ports. These include ports and port waters; the physical components such as channels, shipping lanes, waterways, roads and railways; facilities for disembarking, unloading and the interchange of persons and goods such as intermodal transport facilities, freight yards, port facilities, wharves, jetties and piers; ferries, boats and ships et cetera; control, communications, navigation and location systems and technology and information equipment; management components such as strategic planning, operations planning and the operation of the Victorian ports system; and the labour component, including pilotage services providers, pilots, harbourmasters, towage services and many others.

The bill links to the new Victorian ports system’s definition of Ports Victoria’s objectives, which are to promote and facilitate trade, support strategic planning and development, participate in emergency management at a state level, undertake operational activities and provide technical and consultancy services in relation to the whole of the Victorian ports system, not just to the trading ports. While previously the Victorian Ports Corporation was responsible for Melbourne waters and channels in the port of Melbourne waters and the Victorian Regional Channels Authority was responsible for regional port waters and channels in regional port waters, Ports Victoria will now manage all port waters.

A clarity of purpose and functions is also important, and this bill provides that. It states that the functions of Ports Victoria are to establish and maintain ports systems and infrastructure for port land and port waters; to manage and develop port land infrastructure, including providing and maintaining marine safety infrastructure; and to provide navigational controls and safety services, including providing and maintaining navigational aids and developing standards and codes for navigational safety. Obviously, more broadly, this bill also makes an addition in terms of promoting sustainable growth in trade, developing and facilitating the cruise ship industry in Victoria and providing for a number of other functional benefits as well in relation to the licensing of towage and pilotage services across our state.

It does make a number of other changes as well that I think are important to understand. I also wish to touch upon the licensing arrangements for towage, which are quite significant. Part 3, division 1, of the bill inserts into the Port Management Act 1995 a new part 4A, which provides for the licensing of towage service providers. The new part 4A will make it an offence to provide towage services without a licence. It specifies the process that Ports Victoria must follow when specifying the requirements and standards that are to apply to the provision of towage services in a commercial trading port. It sets the licence period at five years, provides power to Ports Victoria to specify the licence conditions that apply to licence-holders, specifies the application process for licences and the renewal of licences, specifies the processes by which licences may be suspended or cancelled by Ports Victoria and establishes review rights in relation to licence decisions made by Ports Victoria. Ports Victoria is empowered to set different standards and requirements across different ports or port waters as is needed to ensure safety. This also gives the agency that flexibility to meet needs and makes sure it is fit for purpose.

In terms of coming up with this recommendation, obviously Ports Victoria did consult widely, and it is required to consult operators when determining requirements. In determining the different standards that apply, Ports Victoria must consult with the different port entities affected and must give notice of a proposed determination. So if they are going to change the settings, it needs to be in consultation. The notice published in the Government Gazette must set out the proposed form and content of the determination, indicate the written submissions that may be made on the proposed determination and specify the time in which the written submissions must be made. The process which is prescribed in the bill will ensure that private port entities and service providers will have an opportunity to have their say.

The new licensing scheme will come into effect in different ports and different port waters at different times. The bill provides for transitional regulations to be made. It is intended that the heads of power will be used to specify the period of time that towage operators have to comply with the new standards. Existing towage providers will have a transitionary period to comply with the standards and apply to be licensed. The new licensing requirements in this bill imposed on pilotage services are similar to the license scheme for towage service providers but are not meant to be the primary mechanism by which service providers are regulated in the interests of public safety.

It is also important to understand that existing towage service providers will not need to obtain a new licence. I think that is important. Whenever there is a transition such as this implemented in any sector, the existing operators are not necessarily disadvantaged during that transition period. So no, they will not need to apply for a new licence. Providers of pilotage services who are registered under the Marine Safety Act 2010 at the time the provisions commence are deemed to be licensed. They keep their licence—they are deemed to have that licence—so they do not have to fill out a new application form from the beginning. Accordingly, there is no immediate impact of implementing the new licensing scheme on existing operators. It is intended that the licensing will apply to any new entrants into the pilotage market. So that is an improvement, and it also allows existing operators to continue their business to make sure there are no effects on that supply chain and the way the ports are run.

All in all I want to obviously speak in favour of the bill. I feel that I have given a broad overview of certain aspects of the bill, in particular clarifying the purpose and how it will affect the licensing scheme as part of that. There are a number of amendments being pushed by the state opposition, which I will not be supporting. I want to make that clear from the outset, but I want to commend the bill in its existing form. It is a well-regarded form. I want to commend the minister and their office for all the work they have put in to bring it before the house and adopt the recommendations of that all-important review. I commend the bill to the house.

Ms SYMES (Northern Victoria—Leader of the Government, Attorney-General, Minister for Emergency Services) (16:51): I move:

That the debate be adjourned until the next day of sitting.

Motion agreed to and debate adjourned until next day of sitting.