❓ Mr Johnston questions the Minister for Energy about the plan to merge and de-merge Synergy and Verve, specifically regarding consultation with the Premier and cabinet, and the commencement date. The Minister avoids direct answers, instead criticising Labor's energy policies and denying privatisation plans.
AnsweredQoN 582Legislative Assembly
QuestionView source ↗
SYNERGY AND VERVE — RE-MERGER
582. Mr W.J. JOHNSTON to the Minister for Energy:
I refer to the
minister's plan, announced on the weekend, to merge and then de-merge
Verve and Synergy.
(1) Did the minister
discuss his plan with the Premier prior to this announcement?
(2) If not, what
consultation did the minister engage in on his plan with his cabinet
colleagues?
(3) When will the
plan commence?
582. Mr W.J. JOHNSTON to the Minister for Energy:
I refer to the
minister's plan, announced on the weekend, to merge and then de-merge
Verve and Synergy.
(1) Did the minister
discuss his plan with the Premier prior to this announcement?
(2) If not, what
consultation did the minister engage in on his plan with his cabinet
colleagues?
(3) When will the
plan commence?
AnswerView source ↗
Thanks very much for
the question; I thought the member was running away from me!
(1)–(3) Let me answer this. Our plan,
as outlined in the article, is to merge Synergy and Verve. Legislation will
come forward soon. We are doing that for a variety of reasons, but mainly to
fix Labor's mess. During the debate on that legislation, members
opposite will see how big a mess and what impost on taxpayers they wreaked. We
are going to merge those entities. We will drive costs out of the new entity.
Right now we are subsidising electricity in the south west interconnected
system to the tune of $380 million to $400 million a year. That is a system
that Labor promised would actually reduce prices, but prices have gone up by 66
per cent. That is what has happened. We are going to merge those entities and
drag costs out. Are we going to sell that entity? No. Do members know why? Who
would buy an electricity system that is losing $380 million? Who would buy a
merged firm—the combined entity of Synergy and Verve—that,
after dividends, taxes and subsidies are taken out, is this year expected to
lose $350 million? Can members tell me who would buy that? Maybe somebody in
the Labor Party would. Who would buy it?
A government member: The member for
Cannington!
Dr M.D. NAHAN : He might. I do not think Cbus would.
Nonetheless, that is what we are going to do; we are going to drive out costs.
We are also going to look at the market more widely, because the market that
Labor put in place was an absolute fiasco. One of the dirty little secrets of Labor
is that its disaggregation was based on privatisation. The whole objective was
to shift generation of electricity from the public sector to the private
sector. That is what has happened; 35 per cent of the generating capacity in
this state over the last six years has gone from the public sector to the
private sector. Is that not privatisation? The member for Cannington has said
that Labor will ramp it up. He basically has said that, over time, the
government should quit generation in this state. In other words, he is arguing
that, over time, Verve should get out of generation altogether. He made it
clear during the last election campaign that the Labor Party position —
Point of Order
Mrs M.H. ROBERTS : The member for Cannington asked three
specific questions. The minister has been speaking for nearly three minutes and
he has not yet addressed a single one of them.
Dr M.D. NAHAN : I am answering the questions. The member
for Midland is getting a bit nervous. The answers are coming.
Several members interjected.
Dr M.D. NAHAN : The member for Midland is getting a bit
nervous. She stands up and makes these false and useless points.
Several members interjected.
THE
SPEAKER :
Minister!
Questions without Notice Resumed
Dr M.D. NAHAN : Let me go on. The member for Cannington,
the opposition spokesman on energy, has said that Labor's policy is to
entirely privatise electricity generation in this state.
Mr W.J. Johnston : That is just not true. That is a lie. You
know it is a lie.
Withdrawal of Remark
The SPEAKER : I heard the member say, ''That is a lie.'' Can the
member please withdraw that comment?
Mr W.J. JOHNSTON : I withdraw.
Questions
without Notice Resumed
Dr M.D. NAHAN : The real question is: how does it get out
of electricity generation? The member for Cannington's view is that
Verve and the public sector should get entirely out of generation. How will it
do that?
Mr R.H. Cook : His question was: did you discuss it with
the Premier?
Mr M. McGowan : What consultation did you undertake?
Dr M.D. NAHAN : Labor's policy is to garrotte Verve
and destroy value. It can get out by either destroying the value in Verve or
privatising—selling the asset.
The SPEAKER : Minister, can you answer the question? There were three parts to the
question; can you answer those three parts of the question?
Dr M.D. NAHAN : Okay. We are going to fix the system. Are
we going to privatise? No. The real question is: what about the long term? Long
term is not this term of government—it is beyond that. I agree with
Eric Ripper's remarks from the debates in which he participated with
the Premier, as the then Leader of the Opposition, in 2001 and 2002. He said
that in the long term, just like with every other electricity system, they have
to evolve into multiple gentailers—retail and generation. That is what
Eric Ripper thought; that is what has happened.
Mrs M.H. Roberts : You are ignoring the Speaker's
ruling; answer the three questions. The Speaker directed you to answer them.
Mr M. McGowan : It is very simple.
Dr M.D. NAHAN : Yes, the Leader of the Opposition is a
simple man.
The SPEAKER : Minister, can you please bring this to a conclusion?
Dr M.D. NAHAN : Yes. That is where I think it is going. Did
I say that we would privatise Synergy and Verve after the merger? No, I did
not.
Mrs M.H. Roberts : Did you discuss this with the Premier? What
consultation did you have?
Dr M.D. NAHAN : Did the member for Midland ask the
question?
Mrs M.H. Roberts interjected.
The SPEAKER : Member for Midland!
Dr M.D. NAHAN : We are going to merge these entities, we
are going to drive costs out and we are going to reform the electricity
industry in this state, which the Labor Party had left in an absolute mess.
What will happen down the track after the next election? I do not know, nor did
I commit us absolutely. Once we get a market going, they will evolve into
gentailers. That is it.
the question; I thought the member was running away from me!
(1)–(3) Let me answer this. Our plan,
as outlined in the article, is to merge Synergy and Verve. Legislation will
come forward soon. We are doing that for a variety of reasons, but mainly to
fix Labor's mess. During the debate on that legislation, members
opposite will see how big a mess and what impost on taxpayers they wreaked. We
are going to merge those entities. We will drive costs out of the new entity.
Right now we are subsidising electricity in the south west interconnected
system to the tune of $380 million to $400 million a year. That is a system
that Labor promised would actually reduce prices, but prices have gone up by 66
per cent. That is what has happened. We are going to merge those entities and
drag costs out. Are we going to sell that entity? No. Do members know why? Who
would buy an electricity system that is losing $380 million? Who would buy a
merged firm—the combined entity of Synergy and Verve—that,
after dividends, taxes and subsidies are taken out, is this year expected to
lose $350 million? Can members tell me who would buy that? Maybe somebody in
the Labor Party would. Who would buy it?
A government member: The member for
Cannington!
Dr M.D. NAHAN : He might. I do not think Cbus would.
Nonetheless, that is what we are going to do; we are going to drive out costs.
We are also going to look at the market more widely, because the market that
Labor put in place was an absolute fiasco. One of the dirty little secrets of Labor
is that its disaggregation was based on privatisation. The whole objective was
to shift generation of electricity from the public sector to the private
sector. That is what has happened; 35 per cent of the generating capacity in
this state over the last six years has gone from the public sector to the
private sector. Is that not privatisation? The member for Cannington has said
that Labor will ramp it up. He basically has said that, over time, the
government should quit generation in this state. In other words, he is arguing
that, over time, Verve should get out of generation altogether. He made it
clear during the last election campaign that the Labor Party position —
Point of Order
Mrs M.H. ROBERTS : The member for Cannington asked three
specific questions. The minister has been speaking for nearly three minutes and
he has not yet addressed a single one of them.
Dr M.D. NAHAN : I am answering the questions. The member
for Midland is getting a bit nervous. The answers are coming.
Several members interjected.
Dr M.D. NAHAN : The member for Midland is getting a bit
nervous. She stands up and makes these false and useless points.
Several members interjected.
THE
SPEAKER :
Minister!
Questions without Notice Resumed
Dr M.D. NAHAN : Let me go on. The member for Cannington,
the opposition spokesman on energy, has said that Labor's policy is to
entirely privatise electricity generation in this state.
Mr W.J. Johnston : That is just not true. That is a lie. You
know it is a lie.
Withdrawal of Remark
The SPEAKER : I heard the member say, ''That is a lie.'' Can the
member please withdraw that comment?
Mr W.J. JOHNSTON : I withdraw.
Questions
without Notice Resumed
Dr M.D. NAHAN : The real question is: how does it get out
of electricity generation? The member for Cannington's view is that
Verve and the public sector should get entirely out of generation. How will it
do that?
Mr R.H. Cook : His question was: did you discuss it with
the Premier?
Mr M. McGowan : What consultation did you undertake?
Dr M.D. NAHAN : Labor's policy is to garrotte Verve
and destroy value. It can get out by either destroying the value in Verve or
privatising—selling the asset.
The SPEAKER : Minister, can you answer the question? There were three parts to the
question; can you answer those three parts of the question?
Dr M.D. NAHAN : Okay. We are going to fix the system. Are
we going to privatise? No. The real question is: what about the long term? Long
term is not this term of government—it is beyond that. I agree with
Eric Ripper's remarks from the debates in which he participated with
the Premier, as the then Leader of the Opposition, in 2001 and 2002. He said
that in the long term, just like with every other electricity system, they have
to evolve into multiple gentailers—retail and generation. That is what
Eric Ripper thought; that is what has happened.
Mrs M.H. Roberts : You are ignoring the Speaker's
ruling; answer the three questions. The Speaker directed you to answer them.
Mr M. McGowan : It is very simple.
Dr M.D. NAHAN : Yes, the Leader of the Opposition is a
simple man.
The SPEAKER : Minister, can you please bring this to a conclusion?
Dr M.D. NAHAN : Yes. That is where I think it is going. Did
I say that we would privatise Synergy and Verve after the merger? No, I did
not.
Mrs M.H. Roberts : Did you discuss this with the Premier? What
consultation did you have?
Dr M.D. NAHAN : Did the member for Midland ask the
question?
Mrs M.H. Roberts interjected.
The SPEAKER : Member for Midland!
Dr M.D. NAHAN : We are going to merge these entities, we
are going to drive costs out and we are going to reform the electricity
industry in this state, which the Labor Party had left in an absolute mess.
What will happen down the track after the next election? I do not know, nor did
I commit us absolutely. Once we get a market going, they will evolve into
gentailers. That is it.
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