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Legislative Assembly for the ACT: 1997 Week 11 Hansard (4 November) . . Page.. 3509 ..

MR WHITECROSS (continuing):

That arrangement, of course, related to previous financial arrangements about how governments operated which predated the idea of Territory-owned corporations. I think the amendments are sensible because they acknowledge the reality that, if a Territory-owned corporation did go out and raise funds on the market in its own right, with the approval of the Treasurer, and if the corporation subsequently defaulted on its repayments, the Territory would be expected to bail it out anyway, even if that was not, strictly speaking, legally required.

Mr Speaker, I think that we have made progress in relation to this matter. It is a clever little ploy by the Office of Financial Management to make a little bit of extra revenue on the way through, and I, for one, do not object to the Territory raising revenue. It is interesting, however, that this additional revenue-raising capacity would not be of much benefit to the Territory - indeed, may not even be necessary - were it not for the fact that the Government has chosen to extract a $100m extraordinary dividend from the Territory in the current financial year, which is forcing ACTEW to borrow.

It is interesting to note the remarks of Mr Service, the chair of the board of ACTEW, at the Estimates Committee meeting last Friday when he said:

ACTEW is lucky that it has inherited something that has been built up over a very long period of time which is an almost debt-free situation. We have a capital structure that is quite unlike most of our competitors'; very little reliance on debt.

Interestingly, Mr Service seemed to regard having very little reliance on debt as being a virtue, whereas the Chief Minister has consistently said that it was a major problem for ACTEW that it was not in debt enough and that ACTEW really had to go into hock a bit more and owe a lot more people a lot more money to improve its financial position.

Price Waterhouse, in commenting on ACTEW the other day in some public discussions about competition in the electricity market, indicated that one of the benefits for ACTEW of entering a competitive electricity market was that it had a low level of debt and, therefore, was well cashed up to compete in a national electricity market. It is interesting to contrast that with the Chief Minister's consistent remarks that it is a major problem that ACTEW is not in hock enough and does not owe enough people enough money and that if only it owed a lot of financial institutions a couple of hundred million dollars everything would be much better off.

Mr Service went on in his remarks at the Estimates Committee meeting to indicate that there was a very definite limit to how much debt ACTEW could really cope with before it got into trouble and before its capacity to compete in the electricity market was severely compromised. In fact, he said:

... where the precise point is, whether it is $150m or $220m, I do not know, we would have to do some work on that.

When you add the $100m we are taking this year to the cost of the light poles next year, which is another $100m, you get dangerously close to the kind of sum that Mr Service was saying at the Estimates Committee hearing only last Friday is a problem for ACTEW.

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