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A dip in the shark tank

July 24, 2021

Opinion by Greg Ray

IF you were a little confused by the recent Federal Court decision on the legality of the NSW Government’s penalty clauses preventing the Port of Newcastle competing with Sydney for container traffic, then you aren’t alone. I’m a little confused too.

I hope I’m not in contempt of court when I say I find it surprising to read the statement by Justice Jagot that “No private operator of the Port of Newcastle, acting rationally, could have satisfied itself that in the reasonably foreseeable future a container terminal at the port of Newcastle would be viable for so long at Port Botany has capacity”. The judge argued that the potential benefits of a container terminal in Newcastle depended on the project’s viability which, she said, had been “highly questionable” in 2013 and 2014. The weight of evidence suggested the same was true today, she said.

And yet it is a matter of record that the Government was concerned at the time it was leasing the Port of Sydney that buyers might not pay the highest possible price if they thought a competing container terminal at Newcastle was possible. It is a matter of record that the Government, responding to that concern, inserted penalty clauses in the lease documents for Newcastle that make the development of a Newcastle terminal unlikely. (And then lied and denied for years, hiding the secret penalty clauses from the public until they were eventually revealed.)

The judge, however, found that the penalty clauses did not substantially reduce competition. She also said that the Australian Competition and Consumer Commission and the Port of Newcastle confused the purpose of the penalty provisions with their actual effect.

The winner is Sydney

A jubilant spokesperson for NSW Ports – which opposed the ACCC – said the court had found the container provisions had been used to provide investors with certainty about the state’s container strategy to ensure the state received maximum value for the asset sales. Which means what? Surely it means the Government was trying to stop a container terminal in Newcastle in order to attract the highest possible price for the Port of Sydney. Why bother with the penalty clauses otherwise?

Ultimately it seems the court found that the Government and NSW Ports were entitled to immunity from legal challenge because the leases (and presumably their contents) were based on a “decision of policy”. If that’s the case then I’d have thought it would have been enough of a finding for the court to make. I struggle to see the point of the remarks about the potential viability or otherwise of a container terminal in Newcastle. Surely that kind of assessment is a matter for the owner of the business, and not a matter that any court needs to concern itself with? I mean, it’s the Federal Court, not Shark Tank, after all. If the Port of Newcastle wants to spend its private funds developing a container terminal and then discovers it’s not viable, well, that’s tough luck, isn’t it? Businesses make investment decisions all the time, and we’ve all see plenty of long shots turn up trumps while sure things have crashed and burned. You shouldn’t have to persuade a court that your investment plan is sound. The court of the marketplace will soon give you its verdict which, for a business, is the only one that really matters.

At any rate, I note that the Port of Newcastle has taken a swipe at the judgement, with its CEO stating that “any suggestion that Port of Newcastle wouldn’t proceed to building the container terminal if the restrictions were lifted is baseless and misleading.”

If the Government and the Federal Court insist that the penalty clauses imposed on Newcastle are not genuine constraints against competition then why not simply rescind them?

There is only one possible answer. They are genuine constraints. That’s what they were designed to be. What else could they possibly be? The goal was to give Sydney an unfair advantage over any potential competitors in container shipping in NSW.

Perhaps, as the court has ruled, such unfair measures are open to Governments to make, as matters of policy. If that’s the case then so be it. But let’s call it what it is – an unfair measure adopted as a matter of policy – and not muddy the waters with commentary about viability that can’t be tested while the unfair penalties remain in place.

Just my untutored opinion, of course.

If NewsCorpse wants Gladys gone, then I want her to stay

I have always found it sound policy, in attempting to understand events in the news, to read the opinions put forth by the hirelings of the Murdoch media empire and then to assume the truth will usually be approximately opposite to whatever those opinions might be.

Hence, in recent times, I’m obliged to assume that the people of NSW need to rally around our premier, Gladys Berejiklian and give her more support than we might otherwise feel inclined to. This is purely and simply because of the force and ferocity with which the Murdoch glove puppets have been attacking her. If the Murdoch empire wants her gone, I assume, she must be doing something right.

It’s in the context of the pandemic, of course, that Gladys has gotten offside with the local organs of the voice of global finance capital. It would appear – as far as I can see – that NewsCorpse would prefer a leader willing to “let it rip”. I assume this can only because big business thinks it is losing too much money as a result of lockdowns and it wants to pressure, bully and gaslight state premiers into following the lead of its gormless Scomo. Indeed, I share the common opinion that Gladys waited far too long to lock down when the Delta variant started getting a hold in Sydney. I presume she was under great pressure from big business and its nominees in her party, and if this is the case I regret that she appeared to buckle. But to be fair, I’m heartened that she seemed to find her courage after that terrible false start. She could certainly do better. Preventing tradies from Sydney hotspots traipsing up to the Hunter for work would be an obvious important step, and the fact she hasn’t done this makes me wonder why. Is it because letting the tradies travel gives her a foot in both camps? She looks like she’s locking down, but is she knowingly leaving some loopholes to keep the “let it rip” crowd happy?

We see NewsCorpse reporting breathlessly on Gladys’s cabinet opponents – notably some twit by the name of Parrot-head, or something that sounds like it – in a way that would appear to be offering them encouragement. We see NewsCorpse slagging Gladys, while simultaneously turning its famous blind eye to most of Scomo’s endless failures.

Sorry, but I just assume the worst about big business and its motives, and by extension about its media mouthpieces. I figure that the same corporations who cheerfully rip us off at every turn, who trash the planet whenever there’s a quid in doing so and who lie about just about everything they ever do have almost certainly not got our best interests at heart. I figure that if they believe lockdowns are costing them money, they’ll want lockdowns gone, no matter how many have to die because of it.

So, despite my many reservations about Gladys Berejiklian, as long as she is willing to stand firm against NewsCorpse and its puppet PM then I’m mostly in favour of her. But she really ought to stop those travelling tradies.

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