Snowy deal collapses. 02/06/2006. ABC News Online


The sale of the Australian icon the Snowy Hydro Scheme is off.
The Commonwealth has pulled out of the sale, prompting the New South Wales and Victorian Governments to follow suit.
The Prime Minister John Howard had been a strong defender of the sale but today he backed down.
"It is important that on occasions a government have both the courage and the willingness to change its mind on something," he said.
Mr Howard's decision follows mounting pressure from the community and his own MPs.
"I am not such a zealot about privatisation that you sell everything under the sun, irrespective of the circumstances," he said.
Federal Opposition Leader Kim Beazley welcomes the decision but has seized on the Prime Minister's change of heart.
"He said previously you couldn't partially own something, and today he's said you could," he said.
But Mr Howard's turnaround on privatising Snowy Hydro will not be extended to Telstra or Medibank Private.
The Greens are taking credit for the Government's backdown.
Greens leader Senator Bob Brown says the legal opinion sought by his party forced the governments into a corner.
"The motions into Parliament in March were effectively an illegal way of selling the shares," he said.
"The Government had to come back, bring a bill into Parliament two weeks from now.
"Mr Howard wasn't prepared to face the Parliament in two weeks with the meltdown coming from public opinion within his own ranks."
NSW reaction
NSW Premier Morris Iemma says the Mr Howard has "pulled the rug" from under the sale leaving his state with no choice but to cancel it.
Yesterday during a speech in Canberra, Mr Iemma said the sale was a "done deal", but after the Prime Minister's announcement he says NSW will not proceed with any sale, including the option of just selling its 58 per cent stake.
"Now we get into a political melee at a time when you need the confidence of the markets and the public for a sale," he said.
He says the major problem now is the capital that is needed to keep the Snowy going, saying he does not want taxpayer's money used to expand it.
"What we will be seeking from the Commonwealth is to engage in a process whereby the three governments and the shareholders resolve Snowy's capital requirements," he said.
NSW Nationals leader Andrew Stoner says it is a huge victory for people power.
"Communities right around NSW especially those along the Snowy and through the irrigations areas in the south of the state will be absolutely overjoyed," he said.
"The PM has listened to the people and that's forced the hand of the NSW Government."
Laurie Arthur from the Rice Growers Association says he did not think there was any way to stop the sale.
He says irrigators were worried about their access to water once the scheme was privatised and most will be pleased with the about-turn.
"I'm sure probably 80 per cent of irrigators are delighted that Snowy Hydro will not be privatised," he said.
"I think some of our people think that governments don't do a particularly good job of running companies and so it's still a very complicated issue and I would predict that we haven't actually seen the last of it within the next 10 years would be surprised if it doesn't raise its head again."
Vic reaction
The independent Member for Gippsland East, Craig Ingram, has declared today's decision to call off the Sale of Snowy Hydro, a victory for the people.
Mr Ingram says he believes many Liberal and Labor MPs were uncomfortable with the sale proposal.
"I think yes there's been a lot of members of Parliament that have been very uncomfortable about it, the real disappointing thing is that very few of them spoke up, that's what being a Member of Parliament's about, you're supposed to actually speak up on issues of a vital importance to your constituents," he said.
The Federal Member for Gippsland, Peter McGauran, has been working to facilitate the sale.
Earlier this week Mr McGauran said he was confident water security issues around the sale could be solved.
Mr McGauran says this morning's decision was in response to public protests.
"It's good news, look we made the decision as a Cabinet, thinking we'd taken into account and having been forced to do so by the New South Wales sale of their majority shareholding, but we've listened to people," he said.
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