News National Former PM Rudd urges review of lease of Darwin Port to China company

Former PM Rudd urges review of lease of Darwin Port to China company

darwin port lease
Chinese company Landbridge purchased a 99-year lease over the port in 2015. Photo: NT government
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Former prime minister Kevin Rudd says the federal government should conduct a cost-benefit analysis to determine whether the 99-year lease of Darwin Port to a Chinese company is justified on national security grounds.

Landbridge secured the long-term operational control of the commercial facility in 2015 as part of a $506 million deal with the Northern Territory government.

The lease has been controversial from the outset and has remained in the national spotlight amid rising diplomatic and economic tensions between Australia and China.

In March, a federal parliamentary committee recommended the Commonwealth consider reclaiming Australian ownership of the port if the lease was deemed to be against the national interest.

The Joint Standing Committee on Trade and Investment Growth, chaired by a Coalition MP, suggested the federal government provide a report on whether the port lease should be subject to Australia’s recently enacted Foreign Relations Act.

darwin port lease
Kevin Rudd says Coalition ministers allowed the port deal to take place on their watch. Photo: ABC

Questions about whether the Morrison government would act on the committee’s recommendation intensified last week after it used the new legislation to void a Belt and Road Initiative agreement signed between Victoria and China.

On Sunday, Defence Minister Peter Dutton told the ABC’s Insiders program the government was assessing “thousands” of foreign agreements signed by states, territories and universities.

But he remained noncommittal as to whether the port agreement, which is a commercial contract, would come under scrutiny.

“I’m not pre-empting or suggesting that [Foreign Affairs Minister Marise Payne] is looking at it,” Mr Dutton said.

“I think it’s a question for Marise to look at these individual cases.

“If it’s not in our national interest, then, obviously, she’ll act.”

Speaking on ABC Radio Darwin on Tuesday, Mr Rudd said the public deserved to understand whether the lease arrangements were in the public interest.

“The federal government [should] produce a cost-benefit analysis on national security terms as would justify the retention of the existing lease arrangements so that the Northern Territory public, the Darwin public and the Australian public can have a basis for analysing what decision should now be taken,” Mr Rudd said.

“My prediction, by the way, is this is exactly the direction that Morrison will now take it.

“He will seek to tear up the lease, in my judgment, because it’s hurting his government politically.”

The lease was signed by former CLP chief minister Adam Giles, but Mr Rudd said key ministers within the federal Coalition government were also responsible for the outcome.

“[It was] all approved, all let through, by Morrison when he was Treasurer [and] Frydenberg was then Minister for Northern Australia,” Mr Rudd said.

He added that former minister Andrew Robb also took on a lucrative consulting job with Landbridge after he left office.

“For all those political reasons, Dutton, Morrison, Frydenberg know that they are deeply exposed on this issue.

“Hence, my prediction is that they will seek to scupper the lease and then there’ll be a huge financial liability on the part of the taxpayer.”

darwin port lease
The federal government says the port deal is not subject to the Foreign Relations Act. Photo: ABC

Chief minister Michael Gunner has repeatedly said buying out the lease at a cost of almost half a billion dollars would not be a good use of taxpayer spending.

Mr Rudd said it would be up to the federal government to pay, should they decide to revoke the lease.

“If the feds are going to do this, I imagine they will have to stump up the cash themselves,” he said.

Mr Rudd said he was not privy to current intelligence briefings, but he was aware of concerns raised by the US after the deal was signed.

“My understanding from Washington, for example, is that the US administration at the time was absolutely ropeable by the dim-witted nature of this particular decision back in 2015.”

The ABC has contacted the Department of Foreign Affairs and the office of Minister Marise Payne for comment.

DFAT has previously said the Darwin Port lease was not within the scope of the Foreign Relations Act.

NT CLP senator Sam McMahon said the lease differed from Victoria’s recently revoked Belt and Road Initiative memorandum of understanding with China.

“It is a commercial arrangement with a company; it’s not a direct arrangement with the Chinese Communist Party, so it does fall outside those terms,” she said.

Ms McMahon said she was not in favour of revoking the lease on national security grounds.

“As far as I’m aware from a Defence point of view, there are no security concerns,” she said.

“That’s on public record, that Defence currently have no security concerns.”

She said the lease should not be “arbitrarily torn up”.

However, she said she had recently asked Senator Payne to assess whether Landbridge was meeting its lease obligations in terms of infrastructure upgrades at the port.

“We have an obligation on our part to honour our side of the contract.

“But if there has been a breach of those terms of the contract, then we definitely need to look at whether we can take some sort of action.”