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Legislative Assembly for the ACT: 1999 Week 12 Hansard (25 November) . . Page.. 3779 ..

State Electricity Losses

MS CARNELL (Chief Minister) (6.06): We have had lots of discussions in this place in recent days about ministerial responsibility. As ministerial responsibility does not stop with Ministers but runs to the whole Assembly in some circumstances, I think it appropriate to read into the record an extract from today's Australian Financial Review. An article headed "Taxpayers take a whopping charge on State power bills" states:

Yesterday, Queensland Power Trading Corp admitted, in a report to Parliament, that it had blown its entire shareholders' funds, racking up $575 million of losses on long-term power purchase contracts.

QPTC's trading losses will cost Queensland taxpayers much more than the headline figure of $575 million, which is a discounted cash flow figure.

The actual cash losses over the next 30 years will be between $1.1 billion and $2.2. billion, but you won't find those numbers in the annual report.

QPTC's horror loss estimate brings to $1.6 billion the total estimated losses revealed to date by NSW and Queensland government electricity corporations since the establishment of the national electricity market less than two years ago.

Just to put that into perspective, that's more economic damage inflicted on taxpayers' wallets than either Alan Bond or Chris Skase inflicted on their respective shareholders.

... ... ...

There are two basic reasons for the big losses so far.

One is that a deregulated electricity market is just like that for any other commodity: volatile and unpredictable.

Two is the fact that State authorities, lacking street smarts and vigilant shareholders, are unsuitable players in such high-risk markets.

Mr Speaker, let me list the sorts of losses that have happened so far. Energy Australia have lost $315m; Pacific Power, $300m plus; Queensland Government, $400m; Queensland Power Trading, $575m; and Macquarie General, $14m. That makes $1,604m lost in just two States.

Ministers and members of this house have a responsibility to take this sort of information extremely seriously and to take it on board when assessing what the future of our power entity, ACTEW, should be.

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