Legislative Assembly for the ACT: 1999 Week 4 Hansard (20 April) . . Page.. 1001 ..
MS CARNELL (continuing):
potential for a substantial capital repayment for a merged entity is possible. If GSE and ACTEW were merged it would form a much greater whole; in other words, the whole would be bigger than the sum of the two parts. On this basis and considering the ACT's substantial possible contribution to any proposed merger with GSE, the opportunity exists for a significant return of capital. Would that be $800m to $900m, as Mr Quinlan suggests? That would seem to be highly unlikely, Mr Deputy Speaker, but those are the sorts of issues that will be sorted out by the working party. It is important that any merger is not the actual book valuation but the relative valuation of the entity. This must be determined on a consistent basis, which is not the case when using book values.
Once this relative valuation is determined and we have the debt structure for the merged entity, we will know how much capital repayment should be returned to the Territory, Mr Deputy Speaker. If a merger with GSE were to proceed, the capital returned to the ACT from the merger would be a function of asset valuation methodology - which assets are to be included in the merger - and the level of debt for the new entity. Mr Deputy Speaker, it is always interesting to me that those opposite think that it is fine to take $300m out of ACTEW in public ownership, but it is not okay to take the same amount out of a merged entity.
MR CORBELL (4.19): Mr Deputy Speaker, this is indeed an important matter of public importance. It is a matter of public importance which I feel will continue to galvanise and interest members of the Canberra community in the year ahead, and so it should as we are dealing with one of the most significant assets that the Territory holds. My colleague Mr Quinlan, in his comments earlier in the debate, referred to a fundamental lack of trust. I would have to say that that comment strikes at the heart of why Labor is raising this MPI today. The Canberra community has a fundamental lack of trust in this Government when it comes to the management of our assets. The Canberra community has a fundamental lack of trust in this Government's commitments that it will no longer be proceeding with the privatisation, part or whole, of ACTEW. That, indeed, is the reason why my colleague Mr Quinlan has said in his MPI that it is a case of the selling down of ACTEW Corporation through merger.
Why, Mr Deputy Speaker, does this fundamental lack of trust occur? I think, perhaps to look at a most recent example, we should look at the comments only 18 months ago of Mr John Mackay, the chief executive of ACTEW Corporation. On the announcement of his appointment, and less than a month before he actually took up his post, he pledged himself to saving the corporation from a merger, which he said would be a crying shame. Mr Deputy Speaker, he went on to say, when asked about the challenges faced by ACTEW in the competitive electricity market:
Our task becomes doubly challenging, I guess, in terms of countering the bids by competitors to move into our market.
He went on to say that he had absolutely no doubt that ACTEW could survive in its own right. Those are clear and unequivocal statements, Mr Deputy Speaker, and the Canberra community deserves to ask, and this Assembly deserves an answer, what has changed.