Question regarding alleged cuts to Western Power's capital works budget and the impact on future generating capacity. The Minister denies directing cuts but admits to constraining borrowings to maintain the State's AAA credit rating.

AnsweredQoN 224Legislative Assembly
Asked
7 August 2001
Member
Portfolio
Energy

QuestionView source ↗

WESTERN POWER, CAPITAL WORKS BUDGET CUT
On Friday, 3 August, it was reported in The Australian Financial Review that the Minister for Energy and the Government had ordered Western Power to cut $300 million from its capital works budget. (1) Did the minister give Western Power an official direction to slash its capital works budget in that manner? (2) Given that Western Power’s capital works budget includes a lot of funds for the construction of new generating capacity, will the minister advise how he will guarantee that there will be sufficient generating capacity in the State to meet growing demand? Mr RIPPER

AnswerView source ↗

(1)-(2) I am confident about the outcome for Western Power and I hope that the Opposition shares that confidence. The mid-year review for Western Australia was released by the previous coalition Government in the last week of December. The Government has confirmed that no cuts have been made to Western Power’s borrowings or capital works programs, as was advised in the mid-year review. Naturally, Western Power wants to provide the best possible electricity system that it can in Western Australia; however, it aspired to go beyond the program that was revealed in the mid-year review. This Government has constrained Western Power to the previously advised mid-year review figures. I have not issued a direction under the particular section of the Electricity Corporation Act to which the member refers. To do so would require the direction to be tabled in Parliament within 14 days and the direction would then have to be published in Western Power’s annual report. However, other powers enable me to constrain the borrowings of Western Power. I have used those powers to constrain Western Power’s borrowings to the mid-year review figures for a very good reason; that is, the borrowings of Western Power and other government-owned corporations are factored into total public sector debt. Total public sector debt is an important aggregate to maintain the State’s AAA credit rating. I have taken responsible action to ensure that the State’s AAA credit rating is maintained. I have not acted contrary to the interests of the electricity system. The Government has constrained Western Power to the mid-year review figures.
(1) Did the minister give Western Power an official direction to slash its capital works budget in that manner? (2) Given that Western Power’s capital works budget includes a lot of funds for the construction of new generating capacity, will the minister advise how he will guarantee that there will be sufficient generating capacity in the State to meet growing demand? Mr RIPPER replied: (1)-(2) I am confident about the outcome for Western Power and I hope that the Opposition shares that confidence. The mid-year review for Western Australia was released by the previous coalition Government in the last week of December. The Government has confirmed that no cuts have been made to Western Power’s borrowings or capital works programs, as was advised in the mid-year review. Naturally, Western Power wants to provide the best possible electricity system that it can in Western Australia; however, it aspired to go beyond the program that was revealed in the mid-year review. This Government has constrained Western Power to the previously advised mid-year review figures. I have not issued a direction under the particular section of the Electricity Corporation Act to which the member refers. To do so would require the direction to be tabled in Parliament within 14 days and the direction would then have to be published in Western Power’s annual report. However, other powers enable me to constrain the borrowings of Western Power. I have used those powers to constrain Western Power’s borrowings to the mid-year review figures for a very good reason; that is, the borrowings of Western Power and other government-owned corporations are factored into total public sector debt. Total public sector debt is an important aggregate to maintain the State’s AAA credit rating. I have taken responsible action to ensure that the State’s AAA credit rating is maintained. I have not acted contrary to the interests of the electricity system. The Government has constrained Western Power to the mid-year review figures.
(2) Given that Western Power’s capital works budget includes a lot of funds for the construction of new generating capacity, will the minister advise how he will guarantee that there will be sufficient generating capacity in the State to meet growing demand? Mr RIPPER replied: (1)-(2) I am confident about the outcome for Western Power and I hope that the Opposition shares that confidence. The mid-year review for Western Australia was released by the previous coalition Government in the last week of December. The Government has confirmed that no cuts have been made to Western Power’s borrowings or capital works programs, as was advised in the mid-year review. Naturally, Western Power wants to provide the best possible electricity system that it can in Western Australia; however, it aspired to go beyond the program that was revealed in the mid-year review. This Government has constrained Western Power to the previously advised mid-year review figures. I have not issued a direction under the particular section of the Electricity Corporation Act to which the member refers. To do so would require the direction to be tabled in Parliament within 14 days and the direction would then have to be published in Western Power’s annual report. However, other powers enable me to constrain the borrowings of Western Power. I have used those powers to constrain Western Power’s borrowings to the mid-year review figures for a very good reason; that is, the borrowings of Western Power and other government-owned corporations are factored into total public sector debt. Total public sector debt is an important aggregate to maintain the State’s AAA credit rating. I have taken responsible action to ensure that the State’s AAA credit rating is maintained. I have not acted contrary to the interests of the electricity system. The Government has constrained Western Power to the mid-year review figures.
Mr RIPPER replied: (1)-(2) I am confident about the outcome for Western Power and I hope that the Opposition shares that confidence. The mid-year review for Western Australia was released by the previous coalition Government in the last week of December. The Government has confirmed that no cuts have been made to Western Power’s borrowings or capital works programs, as was advised in the mid-year review. Naturally, Western Power wants to provide the best possible electricity system that it can in Western Australia; however, it aspired to go beyond the program that was revealed in the mid-year review. This Government has constrained Western Power to the previously advised mid-year review figures. I have not issued a direction under the particular section of the Electricity Corporation Act to which the member refers. To do so would require the direction to be tabled in Parliament within 14 days and the direction would then have to be published in Western Power’s annual report. However, other powers enable me to constrain the borrowings of Western Power. I have used those powers to constrain Western Power’s borrowings to the mid-year review figures for a very good reason; that is, the borrowings of Western Power and other government-owned corporations are factored into total public sector debt. Total public sector debt is an important aggregate to maintain the State’s AAA credit rating. I have taken responsible action to ensure that the State’s AAA credit rating is maintained. I have not acted contrary to the interests of the electricity system. The Government has constrained Western Power to the mid-year review figures.
(1)-(2) I am confident about the outcome for Western Power and I hope that the Opposition shares that confidence. The mid-year review for Western Australia was released by the previous coalition Government in the last week of December. The Government has confirmed that no cuts have been made to Western Power’s borrowings or capital works programs, as was advised in the mid-year review. Naturally, Western Power wants to provide the best possible electricity system that it can in Western Australia; however, it aspired to go beyond the program that was revealed in the mid-year review. This Government has constrained Western Power to the previously advised mid-year review figures. I have not issued a direction under the particular section of the Electricity Corporation Act to which the member refers. To do so would require the direction to be tabled in Parliament within 14 days and the direction would then have to be published in Western Power’s annual report. However, other powers enable me to constrain the borrowings of Western Power. I have used those powers to constrain Western Power’s borrowings to the mid-year review figures for a very good reason; that is, the borrowings of Western Power and other government-owned corporations are factored into total public sector debt. Total public sector debt is an important aggregate to maintain the State’s AAA credit rating. I have taken responsible action to ensure that the State’s AAA credit rating is maintained. I have not acted contrary to the interests of the electricity system. The Government has constrained Western Power to the mid-year review figures.

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