❓ The Minister criticises the previous government's decision to approve a private port at James Point, arguing it was not based on sound economic analysis and would likely increase costs for port users due to diseconomies of scale.
AnsweredQoN 25Legislative Assembly
QuestionView source ↗
PRIVATE PORT, JAMES POINT
After having the opportunity to review the contract with James Point Pty Ltd to build a private port at James Point, will the minister advise members what studies have been undertaken to support claims that the port would result in lower costs to port users? Ms MacTIERNAN
After having the opportunity to review the contract with James Point Pty Ltd to build a private port at James Point, will the minister advise members what studies have been undertaken to support claims that the port would result in lower costs to port users? Ms MacTIERNAN
AnswerView source ↗
I understand that the member for Rockingham is concerned about this proposed private port development in the vicinity of his electorate. The previous Government justified the commissioning of a private port operating in competition with the Fremantle Port Authority on the grounds that it would reduce costs. Now that the Labor Party is in government and has finally had an opportunity to examine the secret contract, I can inform members that there is nothing in the contract with James Point Pty Ltd that guarantees lower costs to port users. As we suspected, no economic study has been undertaken on the need for, or the feasibility of, another port in close proximity to Fremantle. Alarmingly, at no time was any analysis conducted of the likely impact on port users of the effect of the diseconomies of small scale that would be imposed on the Fremantle port. The former minister for roads, parading as the former Minister for Transport, did not appreciate that ports have high fixed costs which makes trade growth important to reduce costs. Far from reducing costs, this new port is likely to result in higher charges for most users. Fremantle is a relatively small port by world standards. Numerous ports around Australia and overseas trade many times the amount of goods than does Fremantle. We have been unable to find a single example in which a Government has introduced a new port into the middle of an existing port to promote competition. Further, it is the height of economic irresponsibility to proceed down this path without an evaluation of whether these diseconomies of scale are outweighed by the perceived benefit of competition. One can conclude only that, given that the need for the private port had not been established, and given that no economic analysis had been undertaken, the former Government’s support for the port had more to do with the former minister for road’s rabid antipathy toward the Maritime Union of Australia and looking after his mates than with properly integrated transport planning.
Ms MacTIERNAN replied: I understand that the member for Rockingham is concerned about this proposed private port development in the vicinity of his electorate. The previous Government justified the commissioning of a private port operating in competition with the Fremantle Port Authority on the grounds that it would reduce costs. Now that the Labor Party is in government and has finally had an opportunity to examine the secret contract, I can inform members that there is nothing in the contract with James Point Pty Ltd that guarantees lower costs to port users. As we suspected, no economic study has been undertaken on the need for, or the feasibility of, another port in close proximity to Fremantle. Alarmingly, at no time was any analysis conducted of the likely impact on port users of the effect of the diseconomies of small scale that would be imposed on the Fremantle port. The former minister for roads, parading as the former Minister for Transport, did not appreciate that ports have high fixed costs which makes trade growth important to reduce costs. Far from reducing costs, this new port is likely to result in higher charges for most users. Fremantle is a relatively small port by world standards. Numerous ports around Australia and overseas trade many times the amount of goods than does Fremantle. We have been unable to find a single example in which a Government has introduced a new port into the middle of an existing port to promote competition. Further, it is the height of economic irresponsibility to proceed down this path without an evaluation of whether these diseconomies of scale are outweighed by the perceived benefit of competition. One can conclude only that, given that the need for the private port had not been established, and given that no economic analysis had been undertaken, the former Government’s support for the port had more to do with the former minister for road’s rabid antipathy toward the Maritime Union of Australia and looking after his mates than with properly integrated transport planning.
I understand that the member for Rockingham is concerned about this proposed private port development in the vicinity of his electorate. The previous Government justified the commissioning of a private port operating in competition with the Fremantle Port Authority on the grounds that it would reduce costs. Now that the Labor Party is in government and has finally had an opportunity to examine the secret contract, I can inform members that there is nothing in the contract with James Point Pty Ltd that guarantees lower costs to port users. As we suspected, no economic study has been undertaken on the need for, or the feasibility of, another port in close proximity to Fremantle. Alarmingly, at no time was any analysis conducted of the likely impact on port users of the effect of the diseconomies of small scale that would be imposed on the Fremantle port. The former minister for roads, parading as the former Minister for Transport, did not appreciate that ports have high fixed costs which makes trade growth important to reduce costs. Far from reducing costs, this new port is likely to result in higher charges for most users. Fremantle is a relatively small port by world standards. Numerous ports around Australia and overseas trade many times the amount of goods than does Fremantle. We have been unable to find a single example in which a Government has introduced a new port into the middle of an existing port to promote competition. Further, it is the height of economic irresponsibility to proceed down this path without an evaluation of whether these diseconomies of scale are outweighed by the perceived benefit of competition. One can conclude only that, given that the need for the private port had not been established, and given that no economic analysis had been undertaken, the former Government’s support for the port had more to do with the former minister for road’s rabid antipathy toward the Maritime Union of Australia and looking after his mates than with properly integrated transport planning.
As we suspected, no economic study has been undertaken on the need for, or the feasibility of, another port in close proximity to Fremantle. Alarmingly, at no time was any analysis conducted of the likely impact on port users of the effect of the diseconomies of small scale that would be imposed on the Fremantle port. The former minister for roads, parading as the former Minister for Transport, did not appreciate that ports have high fixed costs which makes trade growth important to reduce costs. Far from reducing costs, this new port is likely to result in higher charges for most users. Fremantle is a relatively small port by world standards. Numerous ports around Australia and overseas trade many times the amount of goods than does Fremantle. We have been unable to find a single example in which a Government has introduced a new port into the middle of an existing port to promote competition. Further, it is the height of economic irresponsibility to proceed down this path without an evaluation of whether these diseconomies of scale are outweighed by the perceived benefit of competition. One can conclude only that, given that the need for the private port had not been established, and given that no economic analysis had been undertaken, the former Government’s support for the port had more to do with the former minister for road’s rabid antipathy toward the Maritime Union of Australia and looking after his mates than with properly integrated transport planning.
Fremantle is a relatively small port by world standards. Numerous ports around Australia and overseas trade many times the amount of goods than does Fremantle. We have been unable to find a single example in which a Government has introduced a new port into the middle of an existing port to promote competition. Further, it is the height of economic irresponsibility to proceed down this path without an evaluation of whether these diseconomies of scale are outweighed by the perceived benefit of competition. One can conclude only that, given that the need for the private port had not been established, and given that no economic analysis had been undertaken, the former Government’s support for the port had more to do with the former minister for road’s rabid antipathy toward the Maritime Union of Australia and looking after his mates than with properly integrated transport planning.
Ms MacTIERNAN replied: I understand that the member for Rockingham is concerned about this proposed private port development in the vicinity of his electorate. The previous Government justified the commissioning of a private port operating in competition with the Fremantle Port Authority on the grounds that it would reduce costs. Now that the Labor Party is in government and has finally had an opportunity to examine the secret contract, I can inform members that there is nothing in the contract with James Point Pty Ltd that guarantees lower costs to port users. As we suspected, no economic study has been undertaken on the need for, or the feasibility of, another port in close proximity to Fremantle. Alarmingly, at no time was any analysis conducted of the likely impact on port users of the effect of the diseconomies of small scale that would be imposed on the Fremantle port. The former minister for roads, parading as the former Minister for Transport, did not appreciate that ports have high fixed costs which makes trade growth important to reduce costs. Far from reducing costs, this new port is likely to result in higher charges for most users. Fremantle is a relatively small port by world standards. Numerous ports around Australia and overseas trade many times the amount of goods than does Fremantle. We have been unable to find a single example in which a Government has introduced a new port into the middle of an existing port to promote competition. Further, it is the height of economic irresponsibility to proceed down this path without an evaluation of whether these diseconomies of scale are outweighed by the perceived benefit of competition. One can conclude only that, given that the need for the private port had not been established, and given that no economic analysis had been undertaken, the former Government’s support for the port had more to do with the former minister for road’s rabid antipathy toward the Maritime Union of Australia and looking after his mates than with properly integrated transport planning.
I understand that the member for Rockingham is concerned about this proposed private port development in the vicinity of his electorate. The previous Government justified the commissioning of a private port operating in competition with the Fremantle Port Authority on the grounds that it would reduce costs. Now that the Labor Party is in government and has finally had an opportunity to examine the secret contract, I can inform members that there is nothing in the contract with James Point Pty Ltd that guarantees lower costs to port users. As we suspected, no economic study has been undertaken on the need for, or the feasibility of, another port in close proximity to Fremantle. Alarmingly, at no time was any analysis conducted of the likely impact on port users of the effect of the diseconomies of small scale that would be imposed on the Fremantle port. The former minister for roads, parading as the former Minister for Transport, did not appreciate that ports have high fixed costs which makes trade growth important to reduce costs. Far from reducing costs, this new port is likely to result in higher charges for most users. Fremantle is a relatively small port by world standards. Numerous ports around Australia and overseas trade many times the amount of goods than does Fremantle. We have been unable to find a single example in which a Government has introduced a new port into the middle of an existing port to promote competition. Further, it is the height of economic irresponsibility to proceed down this path without an evaluation of whether these diseconomies of scale are outweighed by the perceived benefit of competition. One can conclude only that, given that the need for the private port had not been established, and given that no economic analysis had been undertaken, the former Government’s support for the port had more to do with the former minister for road’s rabid antipathy toward the Maritime Union of Australia and looking after his mates than with properly integrated transport planning.
As we suspected, no economic study has been undertaken on the need for, or the feasibility of, another port in close proximity to Fremantle. Alarmingly, at no time was any analysis conducted of the likely impact on port users of the effect of the diseconomies of small scale that would be imposed on the Fremantle port. The former minister for roads, parading as the former Minister for Transport, did not appreciate that ports have high fixed costs which makes trade growth important to reduce costs. Far from reducing costs, this new port is likely to result in higher charges for most users. Fremantle is a relatively small port by world standards. Numerous ports around Australia and overseas trade many times the amount of goods than does Fremantle. We have been unable to find a single example in which a Government has introduced a new port into the middle of an existing port to promote competition. Further, it is the height of economic irresponsibility to proceed down this path without an evaluation of whether these diseconomies of scale are outweighed by the perceived benefit of competition. One can conclude only that, given that the need for the private port had not been established, and given that no economic analysis had been undertaken, the former Government’s support for the port had more to do with the former minister for road’s rabid antipathy toward the Maritime Union of Australia and looking after his mates than with properly integrated transport planning.
Fremantle is a relatively small port by world standards. Numerous ports around Australia and overseas trade many times the amount of goods than does Fremantle. We have been unable to find a single example in which a Government has introduced a new port into the middle of an existing port to promote competition. Further, it is the height of economic irresponsibility to proceed down this path without an evaluation of whether these diseconomies of scale are outweighed by the perceived benefit of competition. One can conclude only that, given that the need for the private port had not been established, and given that no economic analysis had been undertaken, the former Government’s support for the port had more to do with the former minister for road’s rabid antipathy toward the Maritime Union of Australia and looking after his mates than with properly integrated transport planning.
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