Swell Of Anger Over Mean Cuts
Newcastle Herald
Thursday May 16, 2002
HUNTER shipbuilders Forgacs and Australian Defence Industries (ADI) are digging in for a sustained battle to stop at-tempts to centralise the $4billion naval shipbuilding industry in Adelaide.
In a post-Budget slap in the face, the Australian Financial Review reported yesterday that Defence Minister Robert Hill would submit a plan to Cabinet next month endorsing defence contractor Tenix as the Government's strategic partner for future naval shipbuilding ahead of the French-controlled ADI.
The report followed disappointment for Newcastle shipbuilders in Tuesday's Budget, which failed to allocate funding for a hotly contested upcoming contract for the construction of Navy patrol boats.
Tenix hopes to buy the South Australian-based Australian Submarine Corporation (ASC) from the Federal Government and base its new public company at the existing ASC shipyards at Osborne, near Adelaide.
If the plan went ahead, ADI's shipyards in Newcastle could close.
The Australian Financial Review reported that Treasurer Peter Costello is set to announce next week whether he will approve French defence company Thales' takeover of ADI, which wanted to buy a 50% stake currently held by partner Transfield Holdings.
It reported Government concerns that French control of ADI could cause problems with Australia's biggest ally, the United States.
Industry sources suggested yesterday that if the Tenix push succeeded it would leave the two Hunter shipbuilders with `crumbs'.
Forgacs managing director Peter Burgess said last night he was assured that no Government decision on the centralisation plan had yet been made.
`From our perspective those discussions are still being held and there is absolutely no firm position that exists with respect to future naval ship repair and shipbuilding,' Mr Burgess said.
`Forgacs has continuing involvement in those discussions and is presenting in strong terms the case for the Hunter.'
Federal Member for Newcastle Sharon Grierson said it was outrageous that the Government could allow the privatisation of ADI and then use it as an excuse to exclude the company from naval tenders.
`Both ADI and Forgacs have invested heavily in Newcastle but with one decision the Government can compromise their futures and bring about the further loss of manufacturing and high-tech jobs in Newcastle and the Hunter Region,' she said.
In other Hunter post-Budget analyses yesterday:
* Ms Grierson said Newcastle had been overlooked completely by the Budget, which slugged the aged, chronically ill and disabled.
* Liberal Member for Paterson Bob Baldwin was caught in a row over whether an election commitment for funds to upgrade the Bucketts Way would be provided in the 2002-2003 Budget or from next year.
* Liberal Senator John Tierney applauded future commitments to a major RAAF Williamtown upgrade and road funding for the F3 widening and other projects.
* The Newcastle and Hunter Business Chamber declared the Budget `responsible' for providing a base for low interest rates and continued growth, applauded new apprenticeship initiatives but lamented a lost chance to remove a 3% tariff on business inputs.
* Hunter MP Joel Fitzgibbon said the Government had raided road funds for its defence measures, with no funding for construction of the Kurri corridor, the Weakleys Drive intersection or the Muswellbrook bypass.
* The Democrats complained Job Network changes would make it harder for the unemployed by locking them into a single provider and denying them choice based on performance.
On another front, Australia's fuel producers have endorsed the Government's decision not to proceed with price controls on petrol, saying further regulation would lead to higher prices at the pump.
The Government said on Tuesday it had accepted recommendations by the Australian Competition and Consumer Commission (ACCC) against using regulation as a means to control fluctuating bowser prices.
Shell spokesperson Vincent Cosgrove said Australia had the most volatile retail prices in the world, but also the cheapest pre-tax prices, as the two went hand-in-hand.
`Capping this volatility would result in motorists paying higher pump prices,' Mr Cosgrove said.
He said Shell encouraged people to take advantage of the discounting cycle and buy when they saw a cheap price.
`In the current market, Sydney and Brisbane motorists looking for the cheapest petrol prices should . . . buy before Tuesday, while Melbourne and Adelaide motorists should buy before Thursday morning.'
In its report on fuel pricing, the ACCC made five recommendations, including one advising the Government not to regulate to limit price cycles and another to educate consumers about the petrol pricing cycle.
Mobil's retail sales manager Peter Buchan said the ACCC report had confirmed that competition exists among fuel retailers. `(It) demonstrates that retail price changes are the result of intense competition ? not collusion ? in the marketplace and that introducing price regulation would stifle that competition,' Mr Buchan said.
He said petrol companies were easy targets for unsubstantiated claims of collusion due to the high visibility of petrol prices in the market and the speed at which the prices moved.
Mr Buchan also expressed frustration at the ACCC's current investigation into alleged price-fixing practices.
`Over the past three weeks, Mobil has had as many as 12 people working up to seven days a week checking documents in order to comply with ACCC notices in relation to the investigation.
`Thus far, more than 150,000 documents have been reviewed and nothing has been found which would support the ACCC's allegations.'
Mr Buchan said that after about 40 inquiries over the past 20 years Mobil had not been found guilty of price collusion. Editorial Page 8
© 2002 Newcastle Herald
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