When Premier Jeremy Rockliff and his deputy Guy Barnett were busy spruiking what they proudly described as “the biggest shake up of our government businesses in a generation” over the weekend there was one glaring omission.
The headline idea – merging GBEs – has been investigated and deemed unnecessary by this government before.
In 2015, then Minister for Infrastructure Rene Hidding told the GBE scrutiny committee* that Treasury reviewed a potential merger between TasPorts and TasRail, finding only limited benefits.
Back then, Mr Hidding pointed out the destabilising effect of having a report out there with the matter of a merger unresolved.
If that was true in 2015, it’s even more true of the proposed merger raised by the government this week, at a time when TT-Line and TasPorts should be laser-focussed on building the required wharf infrastructure to finally welcome the new Spirit ships.
The Liberals claim to want an open and honest consultation about their proposed merger plan – if they are genuine about this they should have no difficulty immediately releasing the review in the viability of the TasPorts/TasRail merger from 2015.
While Labor welcomes most of the proposed changes to GBE governance proposed by the Liberals, the proposal in its entirety is riddled with risks.
Only two days in it is already looking more like a desperate attempt to distract from their Spirit failings rather than a serious and achievable endeavour.
*Tuesday 1 December 2015 - House of Assembly - Government Businesses Scrutiny Committee - Tasmanian Railways Pty Ltd
Mr GREEN - Moving on the merger of TasPorts and TasRail, last year you said there was nothing on the table with respect to a partial or whole merger of TasPorts and TasRail. In April this year your Government said any merger was on hold. How much did the review cost the Tasmanian people?
Mr HIDDING - It is not a matter for TasRail because TasRail has not contributed to it, but I will take that on notice because it is a matter for Treasury which ran the review. I think it was all internal. I am happy to get that information for you.
Mr GREEN - While you are thinking about it, can you give us an outline of the recommendations the report made so that we get an understanding of where you see TasRail and TasPorts and any synergies?
Mr HIDDING - The consideration came from various views expressed from time to time that these two companies operate in the same supply chain. In fact, there are some areas where the intersection is not particularly clear. For instance, TasRail operates the ship loader on the wharf that TasPorts owns in Burnie. There are other examples of that. It was considered a wise thing to do to look at whether the state would be better off with one company rather than two.
The net result of the findings were that while there would be benefits, they would not be particularly dramatic. There are some benefits in staying as they are and some going the other way. In other words, it was pretty evenly balanced as to whether it needed to happen at all. In recognition of that and of the destabilising nature of having a report hanging out there with that matter unresolved, the government took the position that there was not enough motivation, from that finding, for us to move to combining the companies into one company. We cleared the decks by saying it would not be reconsidered for at least 12 months. Since then, we have said it would not be reconsidered in the term of this government. That gives a clear playing field for executives, boards and what-have-you to cooperate.
Josh Willie MP
Shadow Treasurer
