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Legislative Assembly for the ACT: 1999 Week 4 Hansard (20 April) . . Page.. 972 ..

MR STEFANIAK (continuing):

time as we are absolutely certain which sandpits have not been sprayed and can be reopened, we will take the necessary precautions. If that means replacing sand in sandpits throughout Canberra, we will do that.

It is unfortunate that, as a result of the action of one overzealous individual, this has to occur, but primarily we have a duty of care to our students and I will err on the side of caution in exercising that duty, because I think that is right in relation to the students concerned.

ACTEW - Proposed Merger

MR QUINLAN: Mr Speaker, my question is to the Chief Minister. In the ABN AMRO report that recommended the selling off of ACTEW, these international economists stated quite clearly that the ACT could absorb a further $200m to $300m of debt.

Ms Carnell: You mean that ACTEW could.


Ms Carnell: That is not what you said, but that is all right.

MR QUINLAN: I have been phased, Mr Speaker. They said that ACTEW could absorb a further $200m to $300m of debt. One can readily impute a maximum recommended debt-equity ratio of some 33 per cent. That is a maximum of $1 debt for each $3 of equity. Is that clear enough? You have had a bad morning on your books. Will the Chief Minister concede that setting up a merged enterprise with a debt-equity ratio higher than that figure would sit outside the zone of prudent financial management, at least in the view of the Government's and ACTEW's preferred consultants?

MS CARNELL: In answer to the first part of the question, yes, the Government or ABN AMRO did indicate that ACTEW could manage to repatriate capital of between $250m and $300m back to the ACT Government, and the ACT Government accepts that that is possible. It certainly will stretch ACTEW to do that. It will certainly mean that ACTEW will have to borrow the money. That will add to the borrowings of the ACT Government, as the borrowings of Territory owned corporations are added to the total borrowings of the Territory, but it is still quite possible.

I assume that Mr Quinlan is getting to looking at the details of a proposed merger between Great Southern and ACTEW. Mr Speaker, we have a working party set up to look at all these issues - whether a merger is an appropriate outcome for both Great Southern and the ACT and what sorts of benefits we would get out of that sort of merger. It would be absolutely stupid to pre-empt those discussions at this stage.

I am not 100 per cent sure what Mr Quinlan was talking about with regard to debt-equity ratios. I assume he was going to add, by way of a supplementary question, what Great Southern's debt-equity ratio is at this stage. There is no doubt that Great Southern's debt-equity ratio is higher than the ACT's, not because their debt is all

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