Scott Morrison says his government is weighing up the implications of a Federal Court decision which shuts Newcastle out of the state's freight shipping market.
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The Federal Court on Tuesday dismissed an Australian Competition and Consumer Commission action over the legality of controversial port sale deals which have stymied a container terminal development in Newcastle.
In a response to questions to the Prime Minister's office, a spokesperson said the government was "carefully considering" the judgement and its impact on the proposed terminal.
"The government is keen to see further development in the Hunter to realise the region's potential," the spokesperson said.
Justice Jayne Jagot announced her decision on Tuesday morning but will not publish her full judgement until the various legal parties have had a chance to review it.
A spokesperson for NSW Treasurer Dominic Perrottet said the government would not comment until it had considered the judgement in detail.
The court proceedings concerned 50-year agreements, known as port commitment deeds, which were entered into as part of the privatisation of Port Botany and Port Kembla by the NSW government in May 2013.
The secret Botany and Kembla deeds, revealed by the Newcastle Herald in 2016, oblige the NSW government to compensate the lessee, the NSW Ports consortium, if container traffic at the Port of Newcastle exceeds the cap.
Another 50-year deed, signed in 2014 when Newcastle port was privatised, requires the Port of Newcastle consortium to reimburse the government for any compensation paid to NSW Ports.
This reimbursement would effectively double the cost of moving a container at Newcastle, giving NSW Ports a statewide monopoly.
The ACCC launched its action against NSW Ports in 2018 under the Competition and Consumer Act.
NSW Ports then filed a cross-claim against the government and Port of Newcastle. Justice Jagot also dismissed the cross-claim.
It is not yet clear whether the judge ruled that the deeds were not anti-competitive or whether NSW Ports was entitled to "derivative" Crown immunity under the Competition and Consumer Act because the consortium was dealing with the NSW government.
The ruling is a win for the government and Premier Gladys Berejiklian, who has publicly defended the deals signed by former Liberal premier Mike Baird when he was treasurer.
ACCC boss Rod Sims told the Newcastle Herald that he was "incredibly disappointed" with the decision.
"Obviously, with this decision, it means we've got a good chance of being stuck with a monopoly container port provider in NSW for the next 50 years," he said.
"This damages the NSW economy.
"It shows why privatising assets with anti-competitive arrangements like this is just so damaging."
The ACCC's lawyers will review the judgement before deciding whether to appeal.
Mr Sims said the "ball is in the government's court" regarding whether it would "buy out" the compensation arrangement with NSW Ports.
"I don't fully understand the financial consequences for them, so it's hard to say," he said.
"What I do know is suppressing competition like this has got to be very bad for the NSW economy, not to mention the economy of the Hunter."
A Port of Newcastle representative said the company was disappointed with the outcome but could not comment further until it had seen the reasons for the judgement.
The delay in publishing the written judgement will give the parties' lawyers an opportunity to identify which parts of the document should be redacted under their confidentiality agreement.
READ MORE
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Port of Newcastle, which paid $1.7 billion for the port lease, is keen to develop a large-scale container terminal to diversify its operations in the face of possible declining coal exports.
The consortium has been pursuing a political solution to the issue alongside the court proceedings.
The government's statement on Tuesday echoed Mr Morrison's comments in support of resolving the container terminal issue when he visited port representatives in March.
"There are some processes under way that are addressing those issues," he said at the time.
"Let me be very clear about the outcome I want to see, whether it's the port in Newcastle or the port in Townsville or Gladstone, I want these ports to be able to service the regions as fully and as competitively as is possible."
The port itself has some political clout on staff in former NSW Nationals director Ross Cadell.
Mr Cadell, who was appointed the port's special projects director early last year, was pre-selected two weeks ago to represent the Nationals on the Coalition's NSW Senate ticket in the coming federal election.
Mr Sims denied the court defeat was a blow to the ACCC's standing.
"People forget how many cases we've won. We've got about an 85 per cent hit rate," he said.
"Even on competition cases we've had a lot in recent years."
Newcastle MP Tim Crakanthorp said Labor "wants this fight to continue" and would be poring over the judgement.
"I recall meeting with the ACCC years ago to help expose this secret deal, so this is an incredibly disappointing decision after what feels like has been a marathon," he said.
"The ACCC may have lost the case, but common sense tells us that there is a business ready to spend billions of their own dollars making the Hunter stronger, and the government should be letting this happen.
"Now more than ever we need to be laying the groundwork to diversify our economy but this deal has placed a straitjacket on the port's growth and completely sold out our region."
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