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Legislative Assembly for the ACT: 2000 Week 3 Hansard (9 March) . . Page.. 872 ..

Mr Berry: No, not everybody.

MS CARNELL: Almost everybody, except Mr Berry, agrees that we have to address the issue of retail and that there are significant risks involved in the retail part of ACTEW. I am very interested that Mr Berry says that does not accept that. When you look at the millions of dollars that have been lost by publicly owned electricity retailers in Queensland and New South Wales, it tends to indicate that there are a few risks involved. In Queensland the reduction in value of the assets over quite a short period of time was about $500m. That is a huge amount of money. It is the sort of money that, obviously, the ACT could never afford.

We have basic agreement that we have to address the retail issue. That could be done by selling it - the Australia Institute has said that - or by some form of joint venture. Whatever it is, it is about moving it off line. If as Mr Quinlan has suggested we sell the retail arm of ACTEW, what would happen? Immediately some 46 jobs would go, the jobs in the retail arm. What would happen then? This is really important. We would not then have the retail arm and therefore we would have removed the risk. What would be left? What would be left is a toll-keeping capacity. What would be left is our capacity to charge other people to use our wires. What would left in water and sewerage is a capacity to continue to service the people of the ACT. There would be no capacity to grow at all.

In the distribution part of ACTEW, there would be an inevitable reduction in the return to the Government, in our profit margin. Why is that? The reason is that already the price regulator has indicated in his five-year price path that what we will be able to charge for use of our wires will decrease over the next five years. Mr Quinlan knows this. What else would happen? Our costs would go up. Because we would no longer have the retail arm, we would have to run almost all of our costs, apart from the 46 people - things like billing - on a much smaller revenue base. We would still have to bill people for their water and their sewerage. We would no longer be billing them for electricity. The costs would be very similar but, as a percentage, would be higher. Costs tend to go up by about CPI, unless you shed staff and do other things.

Our costs would go up and our revenue would go down. What does that indicate to anybody with any capacity to understand this stuff? It means that our margins would get squeezed. As the margins became smaller, the return to the ACT Government would go down and there would be less money for health, education and other things.

What would we end up with? We would end up with less return to government, lower profit margins to ACTEW and inevitable reductions in staff and no capacity to grow. All that could possibly happen would be a reduction in our dividend. That is projected to reduce to $36m and then further from there. That is real money to the ACT, and money we currently use on health, education and other things. I cannot believe that those opposite and Ms Tucker believe that that is a good option for Canberra. Without any doubt, we know that we would end up with reduced revenue and reduced job numbers for ACTEW simply because their capacity to pay, their profit, their bottom line, would get inevitably smaller over time.

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