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Legislative Assembly for the ACT: 1998 Week 7 Hansard (24 September) . . Page.. 2156 ..

MS CARNELL (continuing):

Mr Speaker, I also made available to Mr Corbell a list of some of the contracts that will be coming up in the near future. For the interest of members, quite a large amount of Ecowise's business will be coming up for recontracting in the very near future. Of course, there are no absolute guarantees - in fact, no guarantees whatsoever - that Ecowise Services will be able to get or will get all of the contracts that will go out to tender. In fact, I think it is quite reasonable to believe, given the extra overheads that are imposed on Ecowise Services by the nature of their relationship with ACTEW and the ACT Government, that the pressure on them to get those contracts would be very real. In fact, if they were out there on their own, if they were out there owning their own company, it would reduce their overheads and make them significantly more competitive; and, therefore, able to pick up those contracts in, hopefully, a much more competitive way than they would in the current circumstances.

Mr Speaker, the main difficulty that the business will face, as I have said, is the potential loss of a number of large contracts. I am sure that nobody in this place wants to place the staff of Ecowise in a position where Ecowise could lose 40 per cent of its revenue. If that happened, that would produce quite significant losses in jobs and a reduction in the size of the business. By going down the path that the staff have suggested, those problems can be overcome. ACTEW will be paying out $1.17m in redundancies because the staff of Ecowise are, technically, employees of ACTEW and, therefore, are entitled to standard payouts based upon the triple R award.

The sale to the staff is supported by the Government for a number of reasons. Mr Speaker, I think it is important to say that it is also supported, of course, by the ACTEW board. The buyout proposal was originated by the staff. Quite significant discussions have occurred over a number of months. As members would be aware, the vast majority of the staff are excited about it and are looking forward to going ahead with what will be, if this Assembly supports it, an exciting new era for Ecowise. ACTEW has reviewed the business and considers that it is non-core business. Mr Speaker, some people may argue with that, but Ecowise Services already competes in the private sector and really is a non-core business in the general provision of electricity and water services for the people of the ACT, which is ACTEW's core business.

Mr Speaker, the previous poor performance of the business suggests that there really may be some chances, as I have said before, of downsizing in the foreseeable future. This would require ACTEW to pay redundancies in excess of the amounts now due, as the staff would have accrued further entitlements, and the likelihood would be that the assets currently being sold at a fair value would be sold at a fire sale value. Mr Speaker, from our perspective as a government, the staff have put forward the proposal, the ACT taxpayer is getting a decent price for the business, and we can be much more confident that in the future the staff of Ecowise will be able to maintain the size of the business - hopefully, grow the business - and maintain their jobs, maintain ownership in the ACT, and make sure those jobs stay in the ACT. From the ACT Government's perspective, we will get fair value for the assets that are now to be bought by the staff of Ecowise and at some stage in the future we will not have to sell them off potentially at below value in a fire sale situation. Mr Speaker, the Government agrees with the assessment of staff that the business has a much greater chance of being viable without the additional overheads imposed by ACTEW.

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