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Legislative Assembly for the ACT: 1998 Week 8 Hansard (29 October) . . Page.. 2422 ..

MS TUCKER (continuing):

The terms of reference for the ABN AMRO study were particularly focused on examining options for ACTEW with a view to maximising the financial returns to the Government while minimising commercial risk. The broader public interest questions, such as the impact of a sale on consumer protection, service standards, environmental protection, safety standards and infrastructure maintenance, and the overall net benefit to the community of a sale, were buried in the fine print of the terms of reference and in the end were dealt with very poorly in the consultants' report.

The ABN AMRO report acknowledged that there is the broader issue of the overall economic impact of alternative options, including the impact on employment, gross Territory product and household disposable income, but declined to undertake such an assessment because it thought it would be too speculative. On the other hand, being given no information at all on these issues makes it very difficult for Assembly members to make a judgment.

The report at least acknowledged the need for an improved regulatory framework to achieve the objectives of consumer and environmental protection, but made the claim that this reform is required irrespective of any options being considered in relation to the ownership of ACTEW. This claim has been questioned by the Government's own review of the ABN AMRO report by David Hughes. The report assumes that there is no difference between various forms of private and public provision of services against the environmental and consumer objectives, provided the right regulatory arrangements are in place. However, Mr Hughes notes that this view is controversial and required some comment by the consultants. He states that there is a widespread alternative view that supply is more secure under public provision and that public provision is superior on environmental and distributional grounds. Mr Hughes also notes that the treatment of ACTEW employment issues is quite cursory and no examination was done of the mechanics of transferring existing ACTEW staff to a new owner.

The ABN AMRO report is also seriously flawed in that it does not separate the issues relating to the supply of water and power. While there is an emerging electricity market in eastern Australia, where the price of electricity is the driving factor and where ACTEW is competing directly with other electricity suppliers, water provision in the ACT is a highly environmentally sensitive natural monopoly requiring long-term planning in relation to cycles in weather patterns and strict adherence to water quality standards. It is a precious resource, Mr Speaker, and not at all compatible with privatisation.

Another important aspect of this inquiry is to look at the experience interstate and overseas of privatisation of government utilities. Already we have had figures thrown around this Assembly about what has happened elsewhere when privatisation occurred, often provided second- and third-hand. Rather than having these figures debated via censure motions as we did yesterday, it would be much more helpful for Assembly members to have direct access to the source documents and get briefings from experts who have been monitoring these changes.

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