Legislative Assembly for the ACT: 1998 Week 11 Hansard (8 December) . . Page.. 3191 ..
MR QUINLAN (11.32): Mr Speaker, in the course of what limited public debate there has been the Government has persisted with the line that Mr Humphries used again today that ACTEW faces substantial risk. That risk is, in fact, based on the market risk that ACTEW faces. Despite repeated objections to the application of that market risk across the rest of the organisation as a justification for the sale of all of that organisation, the Government has persisted with it. I guess that is because, in fact, the arguments of the Government boil down to two things: There is some risk and we want the cash. The risk that applies to ACTEW - the main risk, the only risk; change as a result of market changes in Australia - relates purely to the retailing arm of ACTEW, which just happens to be split. I think some of the functions of retail reside within ACTEW energy and some within ACTEW retail.
What ACTEW does is it buys and sells electricity. Any value added that ACTEW applies is in the distribution. So, in fact, as you would understand, the buying and selling of electricity by ACTEW raises very little money and is projected to raise very little money in itself. There is a table within the ABN AMRO report which is sourced back to ACTEW and which shows the earnings before interest and taxes of the various elements of ACTEW. It clearly shows that the retail function is barely contributive to ACTEW overall.
So, what we must be clear on first is that this risk and this thing that is used repetitiously applies to only one part of ACTEW, a part of ACTEW that is projected to provide very little of its earnings in the future. The distribution arm of ACTEW, the water and sewerage elements of ACTEW, is a monopoly and whoever owns those elements will retain monopoly ownership, effectively. So, let us keep this element of risk in perspective and let us have the other side of the public debate, which is gaining strength as of today, let me tell you, where we in fact do look at the real need rather than the rather wide claims of the Government.
Further, in the course of the debate, there has been an inference that can be drawn that private operation is better than public operation. To put it another way to all those employees of ACTEW: "You are no good. The private sector can do what you do a whole lot better, so we are going to flog off the enterprise". We have heard some discussion about the capacity of the private sector to grow the business. If there are new owners of ACTEW, they are very likely not to be based in Canberra. They are very likely to be outside Canberra. Their business will grow. It will grow by the size of the business that they just acquired because the Government flogged it to them. Growing the business! How do we grow electricity, water and sewerage for the benefit of the ACT, growth in the ACT? Electricity sales are not going to grow because the owner is going to be elsewhere. He might get a greater share of the market, but it will have nothing, absolutely nothing, to do with the ACT. Water? It is hard to see how you grow that business. I might return to that as to the dangers of even trying. Sewerage? I will leave it to your imagination how you would try to grow a sewerage business.