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Legislative Assembly for the ACT: 1998 Week 11 Hansard (8 December) . . Page.. 3195 ..

MR STEFANIAK (continuing):

Mr Speaker, the Territory is simply too small for that. We do not have goldmines. We do not have oilwells. This is not the sultanate of Brunei. This is the ACT. We cannot afford to buy ACTEW's way out of its difficulties. Furthermore, ACTEW has little capacity to expand its activities within the ACT, due to forecast modest population growth and increased competition from interstate. Is this a problem for the future? No, Mr Speaker, it is a problem now. ACTEW's retail division made a profit of $7m last year, and so far this year it has been running at a loss.

How much value will be lost if the Assembly decides to do nothing? The Territory could be up to $500m worse off. But that is only in the short term. The Canberrans of the future will be left with the burden of the ACT Government's unfunded superannuation liability - over $700m now and rapidly growing. What is it going to be in about 10 or 15 years' time? About $2 billion. That is well and truly over the total Territory budget for any one year. That would mean that Canberrans of the future would have to pay more tax and they would have available less essential government services, such as health and education.

Surely that is not what members opposite want. When this Government shows any inkling of decreasing a service or making some rationalisation, members opposite scream. What do they propose to do if they are in government a few years down the track and they are faced with a huge unfunded superannuation bill, if they are faced with a whole lot of competing demands and an ACTEW whose value is rapidly falling and is in real trouble? Failing to take the combined actions advocated by the Government will consign our community to a future of higher taxes and charges and reducing levels of service.

Mr Speaker, we are not locked into an ideological position on ACTEW, unlike those on the other side. We made no decision to sell any part of ACTEW until the outcomes of very rigorous investigations into the risks that ACTEW faced and the pros and cons of the numerous options that were available had been considered. Members opposite might laugh, Mr Speaker, but I have not heard them come up in any of the debates over the last few months with any ideas on how they are going to rectify the situation, how they are going to find the money. They would not have a clue.

Mr Speaker, these studies were concluded well after the election. They were carried out by experts in their field. The first of these studies - by Fay Richwhite - stated:

As a sole shareholder in the ACTEW business the ACT Government is faced with a substantial dilemma in relation to the growth options available to ACTEW. While the pursuit of these growth options is the key to the enhancement of ACTEW's long term commercial value, the pursuit of these growth options carry the risk of investment failure to varying degrees.

More recently, ABN AMRO, who are renowned experts in the field, delivered a scoping study into ACTEW which indicated that ACTEW could be worth about $500m less in value if the utility remains in public control. The reasons for this, Mr Speaker, are really quite simple. Firstly, governments have unlimited exposure to the full range of

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