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Legislative Assembly for the ACT: 1998 Week 11 Hansard (8 December) . . Page.. 3198 ..

MR STEFANIAK (continuing):

distribution companies have recorded a reduction in disconnection levels for non-payment, by 47 per cent for residential and 36 per cent for business. This reflects a major commitment to provide a better and more customer focused level of service.

Mr Speaker, it has been suggested that the electricity retail business is the only activity which is facing competition, that all we need to do is sell that part of the business and the problem will be fixed. I think that is simplistic in the extreme. ACTEW's distribution business also faces significant risks. For example, the proportion of households switching to gas for space heating increased from 6 per cent in 1983 to 46 per cent in 1994. Gas has the dominant share for heating, water and cooking in newer suburbs. Once the Longford to Sydney gas pipeline, which will also feed into the Canberra market, brings competition and lower gas prices to the ACT, substantial falls in the amount of electricity sold in the ACT are possible. Lower overall electricity sales could render the distribution business worth even less in government hands. Customers would also suffer as ACTEW's overheads were spread through reduced sales, further driving some customers away and changing household energy mixes.

Private providers would also be able to deliver improved water and sewerage services; but, because of the nature of those businesses, the Government has decided to retain important strategic assets in government ownership. That is something that I think a lot of people do not realise. (Extension of time granted) The concession arrangement for the dams and the water and sewerage treatment plants will have built into it rigid standards that will ensure that environmental requirements and health and safety are assured. The concession arrangement will allow the Territory to capture around $160m in value which flows from keeping ACTEW as a multi-utility, without any detrimental effect on social and environmental outcomes.

As I stated earlier, the Government's proposed course of action in relation to ACTEW achieves the best possible outcome considering all the factors. The new regulatory framework which is being put in place even as I speak will ensure that consumers and the environment get a better deal than they are getting now. Competition will lead to improved services, as has occurred in the telecommunications industry, and efficient service delivery will lead to reduced prices in the long run. As well as these benefits, one of the most significant risks to the Territory will be completely erased. We will be put in a much stronger position to meet our financial obligations and the sale and concession of ACTEW will go some way to reducing this Territory's operating loss.

Those outcomes can only be achieved if this Assembly agrees to the sale and concession of ACTEW. If it does not agree to the disposal of ACTEW and thus facilitate the best solution to the unfunded superannuation liability, ACT taxes and ACT charges will rise dramatically in time and service provision will decline. In those circumstances, how will the Opposition and the crossbench members be able to explain to their children and their grandchildren that they allowed the value of the Territory's biggest asset to decline and consigned them to a high cost and low service provision future or, alternatively, a life away from a declining Canberra? At least members of the Government will be able to say, "We tried".

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