Legislative Assembly for the ACT: 1998 Week 2 Hansard (21 May) . . Page.. 518 ..
MR SMYTH (continuing):
The Fay Richwhite report, which was recently tabled in the Assembly, shows that the answer to all of these questions does not lie in putting your head in the sand. It does not lie in trying to ignore the future. It does not lie in doing nothing. What is quite clear from the report is that the emergence of the national electricity market means that this Government, this Assembly, must pave the way for ACTEW to become more competitive. If we do not do that, we risk the value of the asset that we have created. It has to deliver efficient, low-cost energy to consumers; but at the same time it must compete effectively with visitors from out of State. What we know now is that members on the other side would disavow the decisions taken in 1991, which were signed up to by the Keating and Follett governments, to open up these markets. But these decisions on how to protect this asset are now in our hands; and there are obvious, positive measures that we can take to maximise ACTEW's value in many ways - in how it is structured, in how it is financed, in how it is managed and ultimately in how it is controlled.
Mr Corbell spoke of the ACT ownership of ACTEW. Owning something that is worthless in the new market is a waste of all the hard work that has been done. The value of the ACT's investment in ACTEW is exposed in many ways in its own new business ventures, in overseas activities and in its entry into telecommunications. We have to take all of this into account, Mr Speaker. If we do not, we put at risk the value of the asset. The business environment for ACTEW is now markedly different as a result of regulatory changes. It is no longer possible to protect ACTEW's market from competitors.
The issue before us, I think, was quite succinctly stated by the Fay Richwhite report. There is no need to paraphrase it; I will quote directly:
Doing nothing and retaining the status quo is also an option. However, this does not effectively manage business risk and is likely to lead to erosion of business value and lost growth opportunities. The Government as owner on behalf of the community should make a positive decision about capturing the full commercial value of ACTEW rather than by default allowing the business to stagnate.
This is something that, I notice, those on the Opposition benches fail to appreciate. Members walk away. The benches are empty. Their view of this is empty, their knowledge of this is empty, because they do not understand that we now have an open and competitive market. But I will continue. The Fay Richwhite report says:
The Government as owner on behalf of the community should make a positive decision about capturing the full commercial value of ACTEW rather than by default allowing the business to stagnate. This approach requires the ACT Government to make a positive decision about the degree of business risk that it is willing to tolerate. Full consideration of all the options available would assist this decision.
That is what this Liberal Government will do. It has started this process. The Chief Minister has announced the scoping study. We will get on with the job. This Government has consistently stated that what we will do is maintain the value of these assets. For us to do that, ACTEW has to improve its productivity; it has to improve