Electricity Industry Privatisation

Mr GREG PIPER: My question without notice is addressed to the Premier. Under the Government's proposed power privatisation, how will the imminent carbon trading scheme affect the sale and lease prices of electricity infrastructure and can the Premier categorically rule out any State-provided indemnity?

Mr Barry O'Farrell: He is after detail too.

Mr MORRIS IEMMA: He will not get any of that detail from you, Barry, that's for sure, because you are the one who signed up to selling retail electricity and nothing else—nothing about capacity, nothing about supply, and, while in the process of selling retail, selling the State's hedge and leaving our generators exposed, making them stranded. What a great piece of policy that was, cobbled together on budget night.

The SPEAKER: Order! Members will cease interjecting.

Mr MORRIS IEMMA: The member for Lake Macquarie has no chance of getting anything out of you, that's for sure.

The SPEAKER: Order! I call the member for Bega to order.

Mr MORRIS IEMMA: Some commentators have suggested that the value of our electricity businesses will be eroded as a result of the commencement of a national emissions trading scheme. In response to the member for Lake Macquarie and those commentators: the size of the liability will depend on the targets and the caps that are set; it will depend on the coverage; it will depend on transitional arrangements for existing players, and it will also depend on the process of permit allocation. Another factor to be taken into account will be the penalties for excess emissions.

The Commonwealth Government has been undertaking modelling on the design of a national emissions trading scheme and has indicated to the States that the modelling and the final shaping of the scheme has to be carefully considered. That modelling is currently being done by the Commonwealth Treasury because we have all signed up to a national emissions trading scheme to tackle climate change and to reduce greenhouse gas emissions. We are doing so because we want to achieve the objective of reducing greenhouse gas emissions and not have a negative impact on our economy or a negative impact on our trade-exposed industries and existing players.

That is the message we have delivered to the Commonwealth and that is part of the work we are doing with the Commonwealth to ensure that the design of the scheme reduces greenhouse gas emissions and does so in a way that meets the targets but at the same time allows economic growth, creating jobs and investment. In relation to some of that commentary, I say a few words about Standard and Poor's and the comments it has made in recent times. Its comments about uncertainty on the rules around carbon trading apply whether the assets are in government ownership or whether they are owned by the private sector. It does not depend on ownership.

The risk and uncertainty around the carbon trading scheme and emissions are there whether they are public or private. In fact, what Standard and Poor's has had to say in recent times only strengthens the Government's case about retail and other issues that we have addressed in our package to secure the State's electricity needs. What we will do is continue to work with the Commonwealth to ensure that the modelling, the caps and the rules around this scheme lead to reduction in greenhouse gas emissions and investment in green energy and, at the same time, allow jobs, investment and economic growth to continue.

Mr Chris Hartcher: Do they think that?

Mr MORRIS IEMMA: Yes, they do. You don't because you are on record as having a policy of just to sell retail. Leave us stranded. Just a take a few billion dollars and go and splurge it, but do nothing about electricity for the State. Your stated position is, "We will just have to wait." Not sure what to do? He is not sure that he has to keep the lights on in New South Wales.