Legislative Assembly for the ACT: 1999 Week 1 Hansard (2 February) . . Page.. 4 ..
MR QUINLAN: They own the metering, which is part of the retail business. They can provide this service through that building, through one unit in Canberra. They can bring to Canberra the benefits of competition with a number of suppliers, as many as wish to come. They can bring to us, the people of Canberra, the full benefits of competition when we get back to looking positively at ACTEW.
This committee sees risk in the alternative of paper investment. ACTEW being largely real property, the alternative is to increase our paper investment, to increase our exposure to the vagaries of investment markets. Mr Hird has said in his dissenting report, and probably will tell you, that ACTEW regularly conducts risk profile reviews. It is in his report. It is a little bit mystifying. He actually asked us to remove a section in the report that referred to this sort of risk and then told us that the Government runs reviews of risks. Now, why do you run a review of risk if you have not got a risk?
Ms Carnell: We think there is a risk. That is why we want to sell it.
MR QUINLAN: Just for your benefit, we have included in the report quotations from the Government's financial management report of November last which tell us that we lost money on our superannuation investments in August, in September and in November. If we had had more of our assets out there in investment form we would have lost more money. We would have lost more money, risk profile reviews notwithstanding. We also see, over the longer term, risks in allowing a succession of governments to sit on a very large pile of cash. Can we expect all of those governments, in succession, to resist the temptation and retain those assets as funding against superannuation provisions? We have seen this Government already selling assets and already using capital for operating expenditure, as recently as last year.
Clearly, there are alternatives to the flogging off of ACTEW. Before this Government came clean on its plans for ACTEW it was putting together a budget. Budgets were not predicated upon the assumption of a sale of ACTEW. In this clever and caring budget, as set out in Budget Paper No. 1, the Government makes this promise:
Over the next four years we will put aside a total of $200m towards meeting the cost of our accruing liabilities. This represents the single greatest commitment by any government since we first assumed the liability in 1989.
Is this clever and caring, or just too clever and a bit careless? Beyond those funds, which apparently the Government saw as available before it wanted to make a case to sell ACTEW, there is the corporation itself. Its consultants, ABN AMRO, said ACTEW could comfortably borrow $300m and repatriate that money to the Government as a contribution and still not affect the Territory's credit rating. The Government's consultants also included ACTEW's projections for earnings before interest and tax, for example, of $74.5m by the year 2002.
Then there is the vexed question of taxation equivalents which we are told ACTEW is able to avoid now and will forever. Well, I have some good news. The good news is that if they take some of the capital from ACTEW and replace it with borrowing they will make less profit. They will provide less in dividends, but they will also be liable for