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Legislative Assembly for the ACT: 1998 Week 10 Hansard (25 November) . . Page.. 2869 ..

MS CARNELL (continuing):

Think about it - $1 billion. That comes on top of the New South Wales Government's decision to borrow $3.2 billion just in the last couple of weeks as part of its efforts to start addressing its unfunded superannuation liability. I do not know about you, but the thought of borrowing $4 billion - it is $4 billion of taxpayers' money, and I cannot believe that Mr Quinlan somehow feels that that is all right - certainly gives me a pretty cold feeling in the pit of my stomach.

It is generally agreed that if ACTEW were to survive as a Territory-owned corporation it would have to try to expand its business because, quite frankly, it is too small, Mr Speaker. If Integral needs to expand, boy, does ACTEW need to expand. But, to do that now, we would be faced with two options. First, ACTEW would have to go further than it has already done into the market, in an effort to undercut the prices of other suppliers. This, of course, would be nearly impossible, because the small volume of power that ACTEW deals with in comparison with its much larger competitors simply does not give it an opportunity to buy well in the market. It would also see Canberra taxpayers exposed to financial risks at a scale that I cannot even begin to imagine. We worry about borrowing $50m. Imagine borrowing $1 billion.

The outcome of that sort of gambling could be losses running into many millions of dollars. Do you seriously think that Mr Berry's Estimates Committee, which obviously looks at very important things like finances, would call me before it and congratulate me on ACTEW losing millions of dollars because they were trying to compete? Imagine him saying, "Chief Minister, not a problem. They were out there in the market doing their best. They have lost millions of dollars, but do not worry about a thing". I can just see the recommendation - "Chief Minister to be congratulated because ACTEW was giving it their best shot. They might have lost a lot of money, but do not worry". It is simply not going to happen.

Then again, Mr Speaker, ACTEW could do what Integral Energy is doing, that is, expand its market share by buying another power company. Right at the moment that is pretty much out of the question because, if you believe the New South Wales Government, our neighbouring power companies are not exactly on the market right now. But if they were, Mr Speaker, the minimum that ACTEW would have to borrow would be significantly in excess of $1 billion, and of course that would be underwritten by the ACT taxpayer. I presume that no-one in this chamber would believe that there would not be really significant risks with such an undertaking. For the life of me, I cannot believe Mr Quinlan and others opposite believe that that is an acceptable approach.

The other day Mr Quinlan made the comment: "If a bank is willing to lend the money, then it must be safe". I have to tell you that any bank will lend a government corporation money, simply because if it falls over the taxpayer picks up the tab. I only wish that Mr Quinlan was a regular subscriber to the newspaper that I think he got the initial information about Integral Energy from. If he had, he would have seen a very interesting article published on 2 November. I think it is an article worth while quoting a little bit from. I hope that other members of the Assembly are listening. The article states:

The increasing risk of public ownership of New South Wales electricity assets was spelt out on Friday in a set piece of exquisite embarrassment for the NSW Government.

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