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Legislative Assembly for the ACT: 2000 Week 7 Hansard (27 June) . . Page.. 2033 ..

MR QUINLAN (continuing):

What this really boils down to is that, rather than selling a great slice of ACTEW, we mortgage it. The effect, at the end of the day, is pretty much the same. By this particular exercise, we will have mortgaged a large slice of ACTEW. We will have effectively sold it off for the mid or the long term.

If that be some form of asset stripping, we are also concerned as to the future of assets not required by the joint venture. It is becoming quite clear that the joint venture is only going to be comprised of those elements and structures that are absolutely essential to the provision of the services and supplies of electricity and gas. So buildings and land and other accoutrements that are associated with ACTEW will also be excess to the deal, and we are concerned as to the ultimate destination of those assets and properties

We are further concerned that, regardless of the legal provisions that have been set up, dissolution of this partnership will be virtually impossible from about day 2, given that it will be an evolving mass. If it is restructured on a capital basis, it virtually would be impossible for an ACT government to come up with the funds to buy back what it has effectively mortgaged off into the joint venture. I have to claim that I did warn, in previous debates on this subject, that it could be open to capital restructure and it could be open to asset stripping of other forms as excess assets or so-called excess assets are disposed of.

Finally, Mr Speaker, we have a concern in relation to the structure itself. Because we have a marriage of a private sector organisation and a public sector organisation, the only corporate structure that works and maintains the public sector advantages in terms of income tax payable is a partnership. A partnership is the lowest form or the loosest form of corporate structure and carries with it risks in relation to joint and several liability of partners, so we are, in fact, by virtue of this particular exercise, placing a considerable amount of trust in AGL. I will make my personal comments on that outside this particular report.

In summary, I think I have to report to the Assembly that, first, we have not eliminated risk totally, and, secondly, that we have replaced some of the risk that we have eliminated with other forms of risk in terms of related party risks. We have set up a structure that, quite obviously, will be open to considerable pressure for capital restructuring, and effectively mortgaging off these assets that this Assembly has debated for a year and a half, trying to maintain them in public hands. Well, we are on the slippery slide, to a large extent, in relation to that. Just watch this space. (Extension of time granted.) We are satisfied with the relationship that we have built over time with the probity auditor.

Quite obviously, the deadline date, 30 June , that the parties had set and was anticipated all round, will not be reached. We are informed that the final agreements will be ready for signature some time through July. That is yet to be seen. I do not think it is important that anybody place pressure on the organisations to finish by a given time, given that we are now into and beyond 1 July. We do not want a quick job, we want a good job. A lot of people have put in a lot of work on this.

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