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The New South Wales Government, Mr Speaker, has acknowledged the need to corporatise its power utilities as part of the Federal Government's Hilmer national competition reforms. The New South Wales Treasurer, Michael Egan, has said that competition reforms will produce major economic benefits for Australia, and his Government is determined to see that New South Wales consumers, businesses and employees are the winners. Similarly, the ACT Government is just as keen to ensure that ACT consumers, businesses and employees are the winners from corporatisation. As the benefits of corporatisation are clearly evident to the Labor Government in New South Wales and also the Federal Labor Government, the question is whether the opposition by ACT Labor is just a knee-jerk reaction to anything that this Government proposes.
Mr Humphries: This is a jerk reaction, actually.
MR HIRD: Yes, Mr Humphries. One wonders, then, whether the ACT Labor Opposition really understands the issues. Mr Berry certainly does not understand the difference between privatisation and corporatisation. To suggest that a corporatised ACTEW will lose sight of its customers and focus primarily on gaining profits is absolutely incorrect. Consumers are the reason for ACTEW's existence. The bottom line, for those who have not been in private enterprise, is that no corporation can survive if its services are no good and its prices too high. Mr Connolly touched on that.
Under corporatisation, ACTEW will have to compete for customers and justify prices charged for electricity and water when new competition policy, agreed to by both Liberal and Labor governments across Australia, is introduced. This agreement has important implications for ACTEW, as ACTEW will face competition in areas where it currently holds a monopoly. In electricity, ACTEW will have two core business activities - the retail sale of electricity, and electricity distribution. ACTEW will be able to buy energy from any source and, within some limits, sell to any buyer. Distribution wires will have to be shared with other retailers, who will be allowed to sell to the same customer group; and a national external regulator will oversee the prices. This means that ACTEW will have to compete for customers, justify prices, allow others to use the distribution network, and market improved services and customer support.
In water, the reform program will be similar to that for electricity. This will mean regulations, a code of conduct, market rules, metering and technical specification, pricing oversight and a dispute resolution process. ACTEW will be required to focus more on demand management and customer services. Through corporatisation, ACTEW will be permitted to get on with its business of delivering energy, water and sewerage services. At the same time we, the Government, and the community will be ensuring that standards, levels of service, community services, environmental targets and responsibilities are met. Moving to a more private sector model of capital investment and business management will place discipline to perform on the board and management. There will be increased focus on costs and returns. This will require a clear commitment to the level of performance shareholders can expect. All the discipline of the Corporations Law will bear on ACTEW to make it fully accountable for its performance.