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Legislative Assembly for the ACT: 2000 Week 8 Hansard (29 August) . . Page.. 2502 ..

Mr Stanhope: Gary-ed. The first Gary of the new sitting week. Half an hour for the first Gary.

Mr Hird: I am trying to hear this.

MR SPEAKER: Order, please! Everybody.

MR QUINLAN: This decision makes it highly likely that there will be extreme pressure in the long run for a total sale of the electricity assets of the ACT and we will be captive in that to our joint partner. We will have lost.

After thumbing through the papers that I got this morning-I did not get time to read them-even the board of ACTEW recognises that there is a less than optimal price in what we have received for our assets because they do not include the control premium that should be associated with the disposal of these assets. So we have sold ourselves short, but don't you worry about that.

As I said at the outset, I congratulate this government on its capacity, at least out there on the streets, to create the illusion of being capable in business. Its record is appalling, and we have just taken another blundering step in a procession of very poorly managed business decisions. This is a government that is not good at business. As I have said in this place before, if you are in the business of doing business with government, then this is the government to do business with because you are bound to come out in front.

When we started out we were going to have a joint venture, but then reality started to bite. We realised that mixing a public entity with a private entity has considerable problems. The fact is that we cannot create an entity of limited liability. All we have got is a partnership, the most basic of business associations. We wish to retain the advantage of freedom from taxation as the publicly owned element, and AGL is required to operate as a private sector operation and pay taxes. (Extension of time granted.) Because we still wanted to flog some assets, the best we could come up with is a partnership. We have a partnership and we are the sole captive of AGL in our energy dealings. We get, as I said, the princely sum of $100 million or something like that for losing effective control of our public utility.

Ms Carnell: A minute ago you said it was a loose partnership. Now we have lost control.

MR QUINLAN: I was just moving to the constraints upon the dissolution of the partnership. At least the officers that came to us were honest enough to recognise, in their informal discussions, that once this partnership is put into place dissolution is virtually impossible. The only way it can change today is for AGL to buy us out, and to buy us out on their terms because we, in business, are dumb. We have continued to show this business naivety that has parleyed evenly. We do not want to sell public assets, but, even worse, we do not want to see them sold at less than their actual value. But we bargained ourselves out of that along the way because we tried to play with the big boys.

We discover that there are problems in relation to the capital structure of this joint venture, which means that because of the structure of AGL and its corporate financing at the international level it is virtually incompatible with an internal financing of the joint

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