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Legislative Assembly for the ACT: 1996 Week 5 (Hansard) 16 May) . . Page.. 1346 ..

MR WOOD (continuing):

The committee noted that the Government will establish an independent pricing regulation mechanism to take account of the Government's requirement that ACTEW demonstrate operational efficiencies in each of its business units. The committee accepts the audit as a valuable means of ensuring that ACTEW, as a public utility, strives to achieve optimal efficiency. This is the third audit reviewed by the committee in recent months bearing upon ACTEW's operations, the other reports being those dealing with the use of government passenger cars and non-salary entitlements of senior officers.

It lends strength to the committee's recommendations that the Government report to the Assembly on progress with the achievement of operational efficiencies in ACTEW and on the role and actions of the independent pricing regulator. We look to the efficiencies in ACTEW's operations to improve the delivery of services, to achieve better environmental outcomes and to pay higher respect to its community service obligations.

MS HORODNY (11.55): Mr Speaker, it should be noted that the Auditor-General's Report, "ACTEW Benchmarked", really addressed only the financial efficiency of ACTEW and not the efficiency of ACTEW in meeting its social and environmental obligations. The objective of the audit was to address "whether ACTEW is efficient and economical in the management of its resources". As such, the benchmarking methodology adopted by the auditor addressed only the first objective of the ACTEW Corporation, which is "to operate at least as efficiently as any comparable business". I would like to remind the Assembly that, on the initiative of the Greens, ACTEW was given other objectives when it was corporatised last year. These were to exhibit a sense of social responsibility by having regard to the interests of the community in which it operates; and, where its activities affect the environment, to conduct its operations in compliance with the principles of ecologically sustainable development.

There is, therefore, a major deficiency in the Auditor-General's approach, in that, while it might be a very thorough analysis of the "allocative efficiency" of ACTEW, it is telling only half the story. It has, in fact, not matched this economic analysis with an assessment of the environmental and social impacts of this so-called efficiency. Let me illustrate the point for those members in the Assembly who adhere to an economic rationalist view of the world. The audit found that the sewage treatment area of ACTEW is the most efficient area of ACTEW operations; but this tells us nothing about the quality of the effluent flowing out of the Lower Molonglo Water Quality Control Centre and its impacts on the Murrumbidgee River downstream from the ACT. People living near the Burrinjuck Dam, who face regular outbreaks of blue-green algae, may have a very different view of ACTEW's efficiency. The efficiency of electricity distribution by ACTEW was measured; but this tells us nothing about what greenhouse gases have been emitted in the production of this electricity. Future generations, who will suffer the impacts of greenhouse-induced global warming, may look back at this time with a very different view about ACTEW's efforts to reduce its greenhouse gas emissions.

The audit examined ACTEW's water supply operations; but again this tells us nothing about the quality of the water that comes out of our taps and whether we are consuming our water supply at sustainable levels. Canberra residents of the future, who may be faced with the need to build another dam in the ACT, may have a very different view on how well ACTEW has been promoting the efficient use of water and of water recycling. Indeed, they have done a lot of good work in this area, but there is always more to do.

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