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Legislative Assembly for the ACT: 1999 Week 1 Hansard (2 February) . . Page.. 38 ..

MS CARNELL (continuing):

Is this a problem for the future? No; it is a problem now, Mr Speaker. ACTEW's retail division made a profit of something like $7m last year, but so far this year it is running at not nearly that much. How much value will be lost if the Assembly decides to do nothing? The Territory could be up to $500m worse off. But that is only in the short term. Canberrans of the future will be left with the burden of the ACT Government's unfunded superannuation liability, which will mean that we will pay more tax and have fewer essential services available in the future, such as health and education, simply because there is no way that the ACT budget, in 10 or 15 years' time, can possibly afford an extra $100m-plus if the ACT does nothing or if this Assembly chooses to put its head in the sand.

The Government is not locked into any ideological position on ACTEW, unlike those on the opposite side. Why would any government choose to take on an issue this difficult if we did not feel we had to? Why did New South Wales Labor take on this issue? Why did the Victorian Government take on this issue? Why did the South Australian Government take on this issue? Why did the Western Australian Government take on this issue? The reason was that it is necessary. Whether it be Liberal governments or Labor governments, whether they be State, Territory or Federal governments, everybody has had to take on this issue. It is not something that is ideologically driven at all; but I have to say that it is a decision that needs to be taken.

We made no decision to sell any part of ACTEW until the outcomes of rigorous investigations into the risks that ACTEW faced and the pros and cons of the numerous options that were available had been considered. So, we did not rush in after the election and say, "We are going to sell it now that the election is over". We had in-depth studies of what our options were to maintain the value of ACTEW. The studies were carried out by experts in the field. The first of these studies, by Fay Richwhite, stated:

As a sole shareholder in the ACTEW business, the ACT Government is faced with a substantial dilemma in relation to the growth options available to ACTEW. While the pursuit of these growth options is the key to the enhancement of ACTEW's long-term commercial value, the pursuit of these growth options carries the risk of investment failure to varying degrees.

Fay Richwhite is not a consultant that works only for Liberal governments, Mr Speaker. It has regularly worked for Labor. Similarly, and more recently, ABN AMRO, who are renowned experts in the field, delivered a scoping study into ACTEW, which indicated that ACTEW could be worth about $500m less in value if the utility remains in public control. The reasons for this are simple. First, governments have unlimited exposure to the full range of commercial risks faced by businesses they own, whereas private sector corporations do not. In this context, members may care to reflect on what happened in Victoria and South Australia with the failure of State owned banks, simply because there was unlimited liability. At the moment in New South Wales there are a number of cases pending for New South Wales owned electricity corporations, ones that could end up costing the New South Wales Government over a billion dollars, again, Mr Speaker, because of unlimited liability that runs with government owned entities.

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