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Legislative Assembly for the ACT: 1998 Week 11 Hansard (8 December) . . Page.. 3196 ..

MR STEFANIAK (continuing):

commercial risks faced by businesses they own, whereas private sector corporations do not. In that context, members may care to reflect on what happened in Victoria and South Australia with the failure of State-owned banks, which saw people's life savings wiped out and the values of homes which people had struggled to buy over many years going down by 30 per cent in many instances. It was not a pretty sight.

Private sector owners will be able to extract additional benefits and efficiencies through economies of scale as ACTEW, which is now one of the smallest utilities in Australia, could become part of a much larger whole. Private sector owners have access to finance to be able to pursue growth and diversification and the willingness to take the associated risks, whereas prudent governments do not. What it means is that ACTEW is worth $500m more to ACT taxpayers if we sell it now and extract full value from the asset. We have a window of opportunity, but I do not know how long that window is going to stay open.

This premium, as the consultants' report shows, will decline over time if we sit on our hands and do absolutely nothing. In fact, the premium could decline very quickly if New South Wales and South Australia elect to sell or lease out their electricity businesses, which would release about $30 billion - I repeat $30 billion - worth of assets onto the market. ACTEW would struggle for recognition in the face of such a huge market for investors' funds and any ACTEW sale would be swamped. The Government's commitment to maintain the value of the asset, our commitment to the people of the ACT, can only be met through the proposed sale and concession of the asset.

What is the Labor Party's plan to maintain the value of ACTEW? Is it to inject enough money into it so that it can generate the economies of scale to compete? Many people, recognising the market risks, would see that as throwing good money after bad. And at what cost? What services would Labor cut to fund ACTEW's expansion? What taxes would they raise? Similarly, what services would they cut and what taxes and charges would they raise to meet the growing superannuation requirement that I have mentioned already? Or would they simply cut existing benefits for current staff? Those are some of the very hard choices that we face. I think those things are quite unpalatable if there is a better way out.

The Labor Party and others have made numerous statements about the evils of privatisation. They refer to the Victorian experience, the Queensland experience or the South Australian experience. The fact is that those statements are misinformed and blatantly wrong. Whether the errors are deliberate or based just on pure ignorance is a matter for conjecture. Either way, I think Labor have been proven wrong in virtually every assertion that they have made.

Let us look at some of the situations that have occurred interstate. In Queensland, power supply has often reached crisis point in times of peak usage. It has been stated that on an unseasonably hot day Queensland's energy reserve could sink to just enough to supply six large office buildings. As a result, people are required to cut back on the use of lights, pool filters, airconditioning units and so forth. Queensland is likely to experience blackouts in the event of further maintenance problems. Queenslanders have had to endure the worst blackouts in a decade in recent months. These problems have all arisen under public ownership, not private.

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