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Legislative Assembly for the ACT: 1998 Week 11 Hansard (8 December) . . Page.. 3247 ..

MS CARNELL (continuing):

If available operating revenue and cost reduction measures are not capable of providing funds to meet liabilities as they fall due, the Territory's next option would appear to be asset sales.

With regard to the ACTEW sale, he went on:

The major benefit from selling ACTEW would be the conversion of physical assets into financial assets thereby providing funds to meet the Territory's financial liabilities as they fall due. As previously explained it seems there is little possibility of funds to meet the liabilities becoming available through surpluses generated from normal operations.

He goes on:

The proceeds of an ACTEW sale should be sufficiently large to solve the present unfunded liabilities problem if the proceeds are in the order of the estimates prepared by the Government's consultants.

Mr Speaker, with regard to the timing, the Auditor-General says:

The timing of any ACTEW sale is relevant. Obviously if ACTEW was significantly growing in value the financially sensible course would be to delay the sale as long as practicable. If the value of ACTEW was growing, and since a large proportion of the Territory's unfunded liabilities do not have to be met for some years, delaying the sale of ACTEW until the sale proceeds are required to meet the liabilities would be the financially sensible approach.

The Auditor-General goes on:

Unfortunately because of the introduction of the National Electricity Market, Competition Policy and regulation of the prices ACTEW may charge to its non contestable customers all responsible projections are that ACTEW, in its current form, will not grow in value, and in fact its value is most likely to fall significantly.

On the basis that ACTEW's sale value is likely to reduce over time the most financially appropriate course would be to sell earlier rather than later.

I will state that again. The Auditor-General said:

On the basis that ACTEW's sale value is likely to reduce over time the most financially appropriate course would be to sell earlier rather than later.

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