Page 2151 - Week 07 - Wednesday, 22 June 2005
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Water—price increase
MR MULCAHY: My question is directed to the Treasurer. I refer to the 12 per cent price increase for water to apply from 1 July 2005, confirmed by Actew in estimates on 2 June. According to the budget papers, all of Actew’s expected profit of $57 million for 2005-06 is to be paid as a dividend to the government. Is it the government’s policy to penalise Canberra’s water users with a price increase for saving water?
MR QUINLAN: I think that Mr Mulcahy would know that the price of water is set by the ICRC, the independent regulator. Therefore, the rest of the question fails. It does not have any basis. To humour him, let me say that Actew, to the best of my recollection, started life as one of the most low-geared public utilities in Australia. A very substantial suite of assets accrued to it after the amalgamation of the electricity and the water supply in Canberra.
I had a fair bit to do with this project. With no humility whatsoever, I say that Actew got a pretty damned good deal. In fact, it received a considerable number of assets—the headwork, et cetera—at a very low price. Beyond my time there, Actew went through an asset revaluation process, which recognised the full value of those assets.
I think Actew had—I am punting; the number is not material—in excess of $1 billion worth of assets on its books, and $1 billion worth of assets that it can depreciate. I am sure that Mr Mulcahy, with the understanding of matters accounting and economics that he has so far exhibited in here, will appreciate that depreciation is effectively a cash generator in itself. The provisions for depreciation come off the bottom line. They are therefore not calculated in the dividend. If you do a fund statement—a cash flow statement—within the—
Mr Mulcahy: Mr Speaker, I rise on a point of order. While it is fascinating, I have heard this dissertation before. I query the relevance of the minister’s answer. The issue about penalising people for conserving water is simply not being addressed, even in the broad. I ask that he be brought back to the question.
MR SPEAKER: There is no point of order. He is speaking to the subject. He is on the subject matter of the question.
MR QUINLAN: I will concede to Mr Mulcahy on one dimension: the point of order is very relevant. It points up—
MR SPEAKER: That has been ruled on.
MR QUINLAN: Yes, I know. But what is relevant is the fact that Mr Mulcahy would bring up that point of order and think that what I am saying is irrelevant to the treatment of people of the ACT. Over the years, the people of the ACT have had, and continue to get, a pretty good deal on water and electricity supply. I do not think that it could be claimed that, relative to other Australians, they are being penalised.
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