Legislative Assembly for the ACT: 1998 Week 9 Hansard (17 November) . . Page.. 2560 ..
MR SPEAKER: Order, everybody! The Chief Minister is answering a perfectly reasonable question.
MS CARNELL: Mr Speaker, ACTEW Corporation has provided me with an overview of its financial performance for the first quarter of the current financial year. That overview raises issues that should concern every member of this Assembly. Obviously, it does not concern those opposite, Mr Speaker, because they do not want to know the truth of this situation.
Mr Speaker, ACTEW's electricity revenue for the first three months was just over $57m. This compares with revenues of $65.8m for the same period last year and $65.5m for the first three months of 1996-97. In other words, so far this financial year, there has been a fall-off of more than 13 per cent in electricity revenues compared with a year ago. I will say that again, Mr Speaker, because Mr Quinlan and Mr Berry are speaking - a 13 per cent drop.
MR SPEAKER: Order! If members want to talk, they can go outside and do it.
MS CARNELL: I am advised by ACTEW, Mr Speaker, that this drop in electricity sales was due almost entirely to the impact of contestability in the electricity market. We also know that they have had to reduce margins for commercial customers. This is ACTEW's comment, not mine. As members will be aware, 55 per cent of ACTEW's total energy is currently contestable. It is worth noting too that ACTEW's operating profit before income tax for the first three months of this financial year was just shy of $19m. Mr Speaker, this compares with a pre-tax profit of $31.7m for the first quarter of 1997-98 and $21.1m for the first quarter of 1996-97. This amounts to a reduction of 40 per cent compared with a year ago and a drop of 10 per cent compared with the same period two years ago. Yet again, this is proof in black and white that the profitability of ACTEW is not only under threat but is diminishing in government hands.
I know that those opposite do not want to know, Mr Speaker, but the figures speak for themselves. I have to ask: How much longer will those opposite continue to ignore the evidence - the absolute bottom line evidence? Mr Speaker, I should point out that ACTEW has also advised that its total operating expenditure for the first three months of this year was up by $4.9m. ACTEW says that this is due to the additional cost of its redundancy program and higher interest costs. The corporation says that a total of 159 applications for voluntary redundancy were approved between July and September this year. So, Mr Speaker, you would have to ask: Why would this happen when the corporation remains in government ownership?
Quite simply, Mr Speaker, ACTEW is having to reduce its costs in its efforts to become more competitive, because right now it is largely uncompetitive in a very competitive market. Jobs are being lost, even though ACTEW has not been privatised. So much for the arguments of those opposite that, if it stays in government ownership, then jobs will be preserved, Mr Speaker. The fact is that that is not happening, for very good reasons.