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Legislative Assembly for the ACT: 2000 Week 3 Hansard (7 March) . . Page.. 633 ..

MS TUCKER (continuing):

In the electricity networks, water and sewerage businesses of ACTEW it is unrealistic to expect a major increase in growth, apart from incremental growth in the networks and pipe systems to meet any increase in population in the ACT. On the water side of the business there is also an environmental imperative not to promote an increase in water use. Water is a scarce essential resource that we should be conserving, not seeking out new markets for. Restructuring or selling the electricity retailing business of ACTEW would not reap the huge amounts of money that the Government is claiming that it would get from the ACTEW/AGL merger, but I believe that that approach would be more sustainable in the long run.

The Government says that the Territory would get around $100m from this merger deal, but it has not addressed the question of how much we will be losing in the long term if we have to share half of ACTEW's operations and profits with AGL. An issue that has to be looked at is what costs and benefits, other than economic benefits, there will be. One can challenge how long it will take for that $100m to become insignificant in terms of the ongoing lost opportunity to bring in revenue from the running of these services. If you have a serious interest in the long-term benefits and costs, you have to look also at the long-term environmental benefits and costs and the social benefits and costs. Of course, we never see a very sophisticated analysis being made of those things. Although we do hear it said that accrual accounting is a more sophisticated method of accounting, it fails miserably to take into account what are called externalities in the discussion, which are fundamental and important things for the community and the environment.

We have yet to see a detailed financial analysis of this merger, yet the Government wants us to accept on faith that this deal is in the best long-term interests of the ACT. At least when the Government tried to sell ACTEW a year ago it put out the ABN AMRO study, which attempted to justify the economics of the sale. However, with the AGL merger we have seen none of this financial analysis. I am surprised that Mr Kaine and Mr Rugendyke are comfortable with that lack of information. The Australia Institute has asked a number of important questions which I am looking forward to hearing Mr Humphries' answer.

I find it odd that the Government wants to give away, effectively, half of its control of ACTEW in return for gaining half control of AGL's local gas business. The Government wants to reduce the risk from electricity retailing, yet it will be taking on the risk of AGL's local gas business just when the gas market will be opening up to competition. You have to wonder whether AGL is actually getting a better deal out of this proposal by spreading its own risks in gas retailing. I would have thought that the Government had had its fingers burnt enough from speculative business ventures. I also fail to see how a fifty-fifty partnership between a government business enterprise and a private company can survive in the long term when each party will bring different and often contradictory objectives to the joint venture.

I hope that ACTEW will continue to be accountable to this Assembly and ultimately to the ACT people for its operations. Members should remember that written into the ACTEW legislation is an obligation on ACTEW to pursue ecologically sustainable development and to exercise social responsibility in its operations. While these

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