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Legislative Assembly for the ACT: 2002 Week 13 Hansard (19 November) . . Page.. 3740 ..

MR QUINLAN (continuing):

Of course, the concern amongst ministers, and the concern that should pervade this place, is to ensure that there is justice and equity in the process where it is possible, and one of the reasons that I made that statement earlier about 2 per cent of 2 per cent is to allow the Assembly to appreciate the fact that we may end up with what is a compromise answer in this insurance situation, purely for expedient reasons, but it may not be the most just answer.

The insurance crisis continues to unfold, and there is evidence of further problems in the market. We are a small jurisdiction, as I have said, that has been trying to influence the overall debate by proposing and implementing innovative strategies to deal with territory-specific issues. We have also offered significant input to the national agenda. However, there is a tide of reform that approaches us from both directions on the Hume Highway-from Victoria and from New South Wales-and from the other states, and it does not take a genius to realise that we may well be subsumed by that particular tide.

As I indicated to the Assembly in my ministerial statement in April of this year, things were going to get worse before they got better. There is significant pain for claimants in some of the consensus positions taken at the 15 November summit. This government will continue to apply its principled and compassionate approach to its responses to the insurance crisis: to continue development of its reform agenda with the protection of the rights of ACT citizens uppermost. However, we cannot escape our size and our geography. Mr Speaker, I will continue to keep members informed of developments as they occur.

Retail contestability of electricity

Ministerial statement

MR QUINLAN (Treasurer, Minister for Economic Development, Business and Tourism, Minister for Sport, Recreation and Gaming and Minister for Police, Emergency Services and Corrections): I ask for leave of the Assembly to make a ministerial statement concerning implementation of full retail contestability of electricity in the ACT.

Leave granted.

MR QUINLAN: Mr Speaker, on 10 October 2002 I announced the government's decision to introduce full retail competition for electricity in the ACT from 1 March 2003. In taking that decision, the government was faced with several issues. First, it faced the situation where ActewAGL, a unique public/private partnership with commensurate focus on profitability, supplies the majority of ACT customers.

With the expiration of existing contracts for the long-term supply of power to the ACT, the ACT customers are facing rising electricity costs in circumstances where there is commercial incentive for ActewAGL to purchase electricity from AGL. The object of the government's decision is to expose ActewAGL to competitive pressures to moderate the potential cost increases, effectively to ensure that there is competition.

Secondly, FRC, or full retail contestability, cannot be looked at in isolation. Since 1998, the ACT's electricity supply has been linked to the developing national electricity market. Thirdly, the government was required to consider undertaking FRC because of

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