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Legislative Assembly for the ACT: 1999 Week 1 Hansard (2 February) . . Page.. 56 ..

MR SMYTH (continuing):

Because of that they had security and because of that, whether you were a good newsagent or a bad newsagent, you survived. The entry of Canberra Times Direct into that market has changed the way newsagents operate in this Territory forever. There is no going back. It is not whether you are a good newsagent or a bad newsagent; it is just that there is competition and there is a different player in the game that changes the market substantially.

No matter how good the local newsagent was, many people voted with their pockets when rung by a competitor and offered 10 weeks of Canberra Times for two bucks. Times are tough, things are tight and people look after their own. But it was not because the newsagents were bad; it was because the market had changed. What we saw was a competitor with far more muscle and the individual small business man or woman was unable to compete. Was it unfair? Who knows! Perhaps it should have gone to the Trade Practices Commission; I do not know. But what it did was change forever and slash from the value of a lot of tremendous small businesses in the ACT hard-earned asset value that they had accumulated inside their businesses.

The same applies to ACTEW. ACTEW is a small player in the market. It is a market that for a long time has been very secure and its practices are good. It is a good company. It is now unable to compete in the same market. That market has gone, and because it has gone we must take a critical look at what will go on here. If people have doubts about that, they should move here to adjourn the debate. If they still have doubts, they should adjourn it. After the report this morning which was supposed to give this Assembly options so that we did not have to sell ACTEW, a report which is nothing but a fairy floss document, perhaps we should adjourn the debate. Who knows! But what we have is a new electricity market, which means that no matter what ACTEW does it is unlikely that it will retain 100 per cent of the electricity market and it will continue to lose market share, as we have already seen.

We have already heard the list of those businesses. Yes, it has picked up some across the border, but it has lost more inside the ACT. It does not bode well for the future when you get some very large groups coming into the ACT hawking their wares. Mr Speaker, ACTEW does not have the economies of scale - it is not that ACTEW is good or bad; ACTEW is a good company - that would allow it to spot-purchase on the national electricity market and offer the sorts of deals that its competitors will be able to offer. That is economic reality. It is not the economics of optimism; it is the truth. We buy at a set rate because, like anything, if you buy so much you get a bigger discount. We do not buy at such a big rate.

Mr Speaker, if the government shareholders and ACTEW management are to have any hope of producing a decent dividend for Canberra taxpayers, ACTEW will have to learn to cut its costs elsewhere. It will have to become some sort of lean, mean corporate fighting machine, and that means one thing: It means restructuring and changes to the way it delivers its services. Some benchmarking already done says that ACTEW has electricity costs 40 to 50 per cent higher than the Australian average. How will they compete in the national electricity market? Water utilities and electricity distributors interstate have already targeted minimum cost reductions of some 25 per cent by the year 2000. How will we compete?

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