Electricity Privatisation: Consultants Fees

Extract from Hansard

Legislative Council
27 July 1999

Sandra Kanck
Deputy Leader Australian Democrats
Member of the Legislative Council

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The Hon. SANDRA KANCK: I seek leave to make a brief explanation before asking the Treasurer a question about the cost of consultant fees involved in the privatisation of South Australia's electricity industry.

The Hon. SANDRA KANCK: The Treasurer touched on these matters during Estimates, and in a media release on the same day he acknowledged that the consultants received $34.6 million in the 1998-99 financial year, which is four times the budgeted figure. The Treasurer claimed that the amount ballooned as a result of the complexity of trying to split ETSA and Optima into seven electricity businesses. Later he claimed:

We have already recouped more than $34 million that has been spent this year on consultancy costs; also the electricity businesses have paid $20 million of the total $43 million all up cost for disaggregation.

1. What moneys were paid to consultancies involved in the disaggregation and privatisation of South Australia's electricity industry in 1997-98 and 1998-99?

2. How much money has been budgeted for consultancies involved in the disaggregation and privatisation of South Australia's electricity industry for 1999-2000 and 2000-01?

The Hon. R.I. LUCAS: I will check the honourable member's questions. I was distracted at the outset of her question, so I missed the first couple of sentences, but I caught her coming home strongly, so I think I gathered all the detail I need.

The Hon. R.I. LUCAS: As the Hon. Mr Elliott says, I might have it out of context, so I will protect myself by saying I will go back and check the full context of the honourable member's question. With respect to the broad quantum of figures, the answer is that about $20 million was expended. The honourable member asked how much was spent in 1997-98 and in 1998-99, and I would need to check that. I am not sure about the division between those two years but, as for the cost of the disaggregation, the quantum was that about $20 million was expended.

In respect of how much is to be expended on disaggregation in 1999-2000 and 2000-1, my understanding is that it would be nothing, unless there were some unpaid bills or flow-on costs of some sort. I will check that. If there were to be any cost it would obviously be much smaller than the $20 million figure, because the disaggregation was concluded late last year. I would imagine that all the cost should have been brought to account in the 1998-99 financial year, so I cannot see any reason why costs should be flowing across into 1999-2000. Certainly, there is no reason why there should be any disaggregation costs in 2000-1. The costs of continuing with the consultancies in 1999-2000 and 2000-1 will be for the purposes of the disposal of the electricity assets, which, as the honourable member knows, has now been approved by both Houses of the Parliament.