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Legislative Assembly for the ACT: 1998 Week 11 Hansard (9 December) . . Page.. 3355 ..

MS CARNELL (continuing):

It suggests that all that can happen with electricity retailing is that the profit may go. That, I have to say, is the least of our worries, because, as we have seen in the market already both in South Australia and in New South Wales, potentially in Victoria as well, electricity retailers lose money, and big money, quickly because they are operating in a spot market, a spot market that can vary significantly in cost of electricity over a very short period of time.

Mr Speaker, I understand or the market seems to believe that at least one electricity retailer in New South Wales lost $10m in a week. That sort of loss is real. It is real for a government and it is real for the community. If I came into this place and said, "Oops, sorry, Mr Speaker, sorry Assembly, ACTEW lost $10m last week. I know that you will forgive me because we were trying. We were in there in the market doing our best; we just happened to lose", I know what would happen. The Assembly would immediately call for my resignation and for the resignation of the board and the CEO and would have absolutely no - - -

Mr Corbell: So, this is all about protecting your job, is it?

MR SPEAKER: Order! The cross-chamber exchanges will cease. The Chief Minister is answering the question.

MS CARNELL: Mr Speaker, not even the Australia Institute can find a reason to keep the electricity retailing. The rest of the business, as we know, is basically a toll business, a business that will not grow, simply because the ACT is not growing. Mr Speaker, on our evidence, our advice, the ACT can get a significantly better return on that money invested in what is predominantly a toll business by investing it in our unfunded superannuation, paying off debt and in other things such as a community fund.

Mr Speaker, all of the figures show that to be the case. The Auditor-General said yesterday that, if there were any indication that the value of ACTEW was going to increase in the future, there would be a good reason to keep it. If the value of ACTEW was going to escalate as our unfunded superannuation liability and our debts escalated, then the benefit of keeping ACTEW would be there. As the Auditor-General said yesterday in his report, that is not the case. The indications are that the value of ACTEW will actually decrease. The value of ACTEW decreases, the unfunded superannuation liability increases, and the gap widens.

To answer Mr Quinlan's questions very succinctly, yes, the risk is in the retail market, but it is not just the risk to the profit; it is the risk to the fundamental core of the business by losing lots of money quickly. Mr Speaker, the reason you would go ahead and sell is simply that the value and the return to the people of the ACT, according to the Auditor-General, ABN AMRO and just about everybody else who has looked at it except possibly the Australia Institute, are better.

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