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Gladstone Power Station Agreement
(Repeal) Bill 1999
Date Introduced: 24 November 1999
House: House of Representatives
Portfolio: Industry, Science and Resources
Commencement: On Royal Assent
To repeal the Gladstone Power Station
Agreement Act 1970 on the grounds that it is inactive
Under the Gladstone Power Station Agreement
Act 1970, the Commonwealth provided a $183 million loan to the
Queensland to finance a coal-fired power station. The power station
was intended to provide low-cost power in order to 'attract a
viable export orientated industrial complex to central
Queensland'.(1) The terms of the loan agreement, which is a
schedule to the 1970 Act, included biannual payments over thirty
years (ie to 2009).
In 1994, Queensland sold the station to a
consortium lead by Comalco for $750 million. Comalco operated an
Aluminium smelter at Boyne Island at Gladstone and planned to
expand its operations. As part of this process, the Commonwealth
and Queensland Governments agreed that Queensland would pay the
Commonwealth $59 million in total settlement of the original loan,
representing the difference between the outstanding balance and the
net present value(2) of the loan.(3) Discussions between the
Commonwealth and the Queensland Governments regarding early
repayment had been going on since at least 1992.
Notwithstanding this arrangement, Queensland was
still technically bound by the 1970 agreement to pay the
Commonwealth an additional sum of around $75 million.(4) While the
Commonwealth did have the ability to waive debts due for payment
under the Audit Act 1901, that Act did not specifically
allow waivers for future or prospective debts.(5) However, with the
coming into force of the Financial Management and
Accountability Act 1997 in 1998, the Commonwealth was able to
waive such debts.(6) The waiver of the $75 million was approved by
the Minister for Finance and Administration on 13 July 1998.
Accordingly, with all obligations between the
Commonwealth and Queensland Governments discharged, the 1970 Act no
longer has any function.
of Schedule 1 repeals the Gladstone Power
Station Agreement Act 1970.
- Second reading speech, the Hon John Gorton MP, House of
Representatives, Parliamentary Debates 14 April
1970, p. 1044.
- Present value is the discounted value of a future earnings
- Second reading speech, the Hon Warren Entsch MP, House of
Representatives, Parliamentary Debates 24
November 1999, p. 3900.
- This because the loan agreement did not provide for early
- In this case, the debt that would technically accumulate
between 1994 and 2009 under the terms of the loan agreement.
- Entsch, W. op cit. See sub-section 34(4) Financial
Management and Accountability Act 1997.
6 December 1999
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