PORTS Australia chief executive Mike Gallacher has called for Commonwealth government action following a ruling by the Federal Court regarding fees at the Port of Newcastle.
Port of Newcastle unsuccessfully sought to overturn an ACCC decision to “declare” port access services after coal exporter Glencore objected to major price increases.
Mr Gallacher said the decision had implications beyond Newcastle and the ports industry.
“Ports are the main link in Australia’s supply chain and imposing inappropriate cost structures on these important assets has implications for the entire network, potentially increasing the cost of living for Australians. Free markets are capable of setting the price for our ports,” he said.
“This decision now raises serious questions about the long term economic viability of private investment in government’s privatisation or leasing of critical infrastructure. The court’s decision has by extension cast a heavy cloud of doubt over the economic confidence that investors look for to seek a financial return at a time of record low interest rates.
“The confidence in an investment return is more critical today than it has ever been before.”
Mr Gallacher said many of these assets were owned by Australian funds and superfunds, investors including “many Australian mum and dad investors”.
“It will impact the quality of services infrastructure can provide and value of current and future privatised assets at a time when the federal government is encouraging states to sell off their assets,” he said.
“There are industries who have been subjected to similar arbitration models that have huge backlogs tying up vast amounts of resources and time from both sides.”
Mr Gallacher said the Productivity Commission and the Harper Review had already recommended a ‘declaration of infrastructure’ should only occur when it was in promotion of public interest.
“The Federal Government has previously indicated its support for these findings and its intention to consider proposed implementation of legislative change,” he said.
“This needs to be initiated as a matter of urgency.”