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Legislative Assembly for the ACT: 2000 Week 3 Hansard (7 March) . . Page.. 639 ..

MR STANHOPE (continuing):

the guts, of ACTEW. What was the response of Mr Mackay to that very question that I put to him pursuant to the invitation made to all of us to have these questions answered by ACTEW? Mr Mackay said to me, "The impact will be no major change from the present". So we have the CEO admitting, when put to the test, that the joint venture will create no major change from the present in relation to growth in water, sewerage and electricity distribution.

That is now the justification that Mr Mackay gives. Having been basically bearded in relation to what effect on growth the joint venture will have, he now says, "However, the partnership should be better placed to respond to increasing potential redundancy in the wires, pipes and treatment plants brought about by increased use of domestic solar energy and recycled water". So the reason for the joint venture has now been reduced to the need to deal with potential redundancy as a result of increased use of domestic solar energy and recycled water. The enemy that we are now dealing with, in fact, is solar energy and recycled water. That is the issue we are now pursuing.

The Opposition attempted to get these matters dealt with in question time, but the Treasurer chose instead to introduce a preposterous new contention. He said that the biggest threat confronting ACTEW is contestability in the domestic electricity market - in the words of the Treasurer, "the sales to you and me and ordinary householders around the Territory". Mr Speaker, as the corporation's chairman has reported, ACTEW has coped well with increasing competition amongst its commercial market. Where is the evidence that it will not deal equally as well with the domestic market?

Further, in its media release announcing details of the joint venture, ACTEW said that the risk it faced came from increased competitive pressures in the generation and retail sectors; but ACTEW is not in the generation business, not yet at least, not unless the joint venture goes ahead and the corporation buys equity in the proposed gas-fired generator offered by AGL as a sweetener. We will love to see the way in which that proposal is dealt with in the contracts between ACTEW and AGL, will we not? We will love to see the timeframe put on the construction of the generator.

There is a further risk of competition, too - not in ACTEW's current business, but in the business it wants to get into. Just as the electricity business is being opened to competition, so is the gas business. Through this joint venture, ACTEW is exposed to the risk AGL faces in its core business, a risk that will be exacerbated by the arrival of the east coast gas pipeline and the redundancy of supply that that will bring.

Labor understands the nature of the risk argument; but, while the potential is there, the argument is unproven. The Government has not demonstrated or even attempted to demonstrate, because it cannot, the extent of the risk posed by a deregulated retail market. (Further extension of time granted) That begs the question: Why take such a dramatic step as this joint venture to cope with the threat of an unknown risk? If we do not know the extent of the risk to ACTEW's retail electricity business, what do we know of the prospects for the other elements of the corporation's operations?

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