JOHN Howard has forced New South Wales and Victoria to abandon plans to sell off the Snowy Hydro scheme after saying he would pull out of the deal.
OHN Howard has forced New South Wales and Victoria to abandon plans to sell the Snowy Hydro scheme after saying he would pull out of the deal.
The sale was now impractical following the Federal Government's decision not to sell its 13 per cent stake in the project, NSW Premier Morris Iemma said today.
"The Prime Minister has pulled the rug out from under the sale," Mr Iemma said.
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The Victorian Government had only ever agreed to sell its 29 per cent share after the NSW and Federal Governments had said they would sell their shares in the scheme, a spokeswoman for Premier Steve Bracks said.
"The Victorian Government will not proceed with the sale of its stake either," she said.
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Mr Iemma said the Federal Government's decision had fundamentally changed the nature of the planned sale through a sharemarket float.
"NSW expected that Commonwealth, Victorian and NSW governments would jointly proceed with the sale," he said.
The Federal Government's decision not to proceed made it extremely difficult for NSW to proceed with the sale, Mr Iemma said.
The proposed privatisation has come in for strong opposition from the public and some government MPs, and prominent Australians have also spoken out against the plan.
Mr Howard said today the Government had been swayed to change its mind.
"For whatever combination of reasons, there is overwhelming feeling in the community that the Snowy is an icon, it's part of the great saga of post World War II development in Australia," he said.
"It conjures many stories of tens of thousands of European migrants coming and blending with each other and in the process of working on the Snowy becoming part of this country. And people feel that.
"I have listened to that, and it is important that on occasions a government have both the courage and the willingness to change its mind on something."
The Federal Government initially decided to sell its 13 per cent interest after the New South Wales and Victorian Governments announced they would sell their larger stakes.
Selling Snowy Hydro had never been part of his public policy plans, Mr Howard said, and the feeling in his party had grown strongly against the sale.
He said Special Minister of State and the member for Eden-Monaro, Gary Nairn, had been "crucial" in persuading him and senior government members to change their minds.
"The decision to sell has created a lot of unhappiness in the Australian community, right across the political spectrum," Mr Howard said.
"I am not such a zealot about privatisation that you sell everything under the sun irrespective of the circumstances."
Mr Howard said the Government had no intention of buying the NSW and Victorian Governments' shares in the Snowy.
"We won't buy out the NSW and Victorian Governments," he said.
"It's for them now to decide what they do. We only hold 13 per cent."
Mr Iemma said the cancellation of the sale left the problem that Snowy Hydro needed to expand interstate but the NSW Government could not afford to fund this without cancelling the construction of schools and hospitals.
"If Snowy Hydro Ltd does not invest interstate, its competitors will and Snowy Hydro will face increased competition and lose market share," he said.
"The NSW Government still believes NSW taxpayers' funds should be spent in NSW, to build schools, hospitals and
infrastructure. It should not be spent building power stations and in SA and Victoria.
"This is an issue we now need to take up with the Commonwealth."
Mr Howard denied there were comparisons with the planned full sale of Telstra.
"There's a big difference," he said.
"There's a long term public benefit (to selling Telstra). It's the major telecommunications company in the nation.
"It's been our policy for each election. It was our policy in 1996, it was our policy in 1998, it was our policy in 2001, it was our policy in 2004.
"The sale of the Snowy was not part of our election policy; I've never campaigned around the country and argued the case for the sale of the Snowy."
Mr Howard said the Federal Government had initially not given much thought to the Snowy sale and had simply decided to proceed after the NSW and Victorian governments decided to sell their larger stakes in the scheme.
"We went along with the decision," he said.
"I don't know that it was given, at the time, an enormous amount of consideration."
Mr Howard admitted he had been taken off guard by the level of hostility the proposal had generated.
"I have been surprised by the level of public disquiet - it's turned out to be much greater than I expected," Mr Howard said.
"I don't mind admitting that."
Mr Iemma ruled out NSW making any contribution to the capital the Snowy Hydro scheme needs to grow in a competitive and risky market.
"That capital is not going to come from the taxpayers of NSW," he said.
"I'll make that very clear."