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Legislative Assembly for the ACT: 1996 Week 10 Hansard (3 September) . . Page.. 2974 ..

MR DE DOMENICO (continuing):

Prices are also reviewed independently in other jurisdictions. The New South Wales Government's Independent Pricing and Regulatory Tribunal, established in 1992 by the previous New South Wales Government, has resulted in a better deal for customers. It is clear, from the New South Wales experience and elsewhere, that an independent pricing review of providers, such as ACTEW, brings openness into the process of setting prices. Under section 49A of the Energy and Water Act, the regulations provide for the creation of an Energy and Water Charges Commission. This will be constituted by a commissioner. The commission will have powers to investigate the electricity, water and sewerage charges to be determined by ACTEW Corporation. The Government will have the power to refer specific matters to the commission. When the investigation is complete, the commission will decide on the prices that will apply. Under the terms and conditions of the Energy and Water Act, ACTEW Corporation's charges must comply with this direction.

The Government has decided that the commissioner's first task for 1996-97 will be a fundamental, back-to-basics look at the principles behind ACTEW's pricing. This review will be completed in time for any price variations scheduled for 1997-98. Mr Speaker, I have issued a reference to the commissioner setting out the parameters of the investigation and I am tabling this reference today, together with the regulations. The investigation will both seek public input and ensure that community views are taken into account. Accordingly, the investigation will involve seeking public submissions and holding public meetings. To initiate public discussion, an issues paper will be prepared by the commission for all interested parties.

The Government has a particular concern that the pricing review process is balanced. The process would not be complete if it focused exclusively on purely economic issues and did not take into account the importance of ACTEW's services for individual consumers and for the environment. To this end, the regulations set out a broad range of issues which the commission is required to bear in mind when making a determination. The regulations require that the commissioner consider the possibilities for greater efficiency in the supply of services by ACTEW Corporation and the right rate of return to the Territory for the investment placed in ACTEW. The regulations, however, also require the commissioner to consider broader issues, such as the need to comply with ecologically sustainable development and the social impacts of pricing decisions.

In the reference to the commission for the first pricing investigation, I specifically required the commissioner to bear in mind, amongst other things, the safeguarding of the environment by appropriate charging policies. This will include the principle of "polluter pays". The effect of the alternative charging policies on the demand for water services will also be highlighted. In setting prices or charges, the commissioner will be independent of the Government. I stress that, Mr Speaker. The regulations specifically provide that the Minister may not exercise control over the commission in its price setting functions.

Mr Speaker, the Government has been very fortunate in obtaining the services of Mr Paul Baxter as commissioner. Mr Baxter, a partner of Price Waterhouse, who has been based in Canberra since the late 1960s, has undertaken major evaluation and analytical work on behalf of government bodies and the private sector. He has spent 14 years in government and in the United Nations advising on industry analysis,

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