Electricity Industry Privatisation

Mr ANDREW STONER: My question is directed to the Premier. Will the Premier confirm that it is proposed that only 25 per cent—or around $2.5 billion—of any proceeds from the Government's power sell-off will be earmarked for new infrastructure, which would stretch only as far as the cost of his white elephant desalination plant?

Mr MORRIS IEMMA: The electricity package starts with this—

The SPEAKER: Order! I call the member for Clarence to order. I call the member for Coffs Harbour to order.

Mr MORRIS IEMMA: The Government's electricity reform package is not about proceeds—

Mr Andrew Stoner: My question is.

Mr MORRIS IEMMA: It is about ensuring that New South Wales has enough electricity for its future growth. Professor Owen erred on the side of caution and said, "I will come down on the side of 2014"—but it could be 2015 or as early as 2013. That is the purpose of the energy package: to ensure that New South Wales has enough electricity for its future growth. The State is growing, businesses and families need more electricity, and the package starts and ends with that. A side benefit is that it will improve the State's balance sheet and there will be proceeds. The Leader of The Nationals might like to know that those proceeds will be invested in infrastructure, schools, hospitals and transport projects such as the North West Metro.

Mr Andrew Stoner: How much?

Mr MORRIS IEMMA: We will come to that in a second. That is about our dividends—the member for Miranda was an economist; he might be able to assist you after question time—to invest in additional infrastructure for the State. What kinds of projects? The kinds of projects listed in this morning's reports of last night's budget. More metros—breaking free from our country rail system and building a twenty-first century public transport system. We will have a revolutionary transport system with more metros, but the timing of that would be dependant on seed funding from the benefits of electricity.

As to the investment of the proceeds into the community infrastructure fund, the investment will earn interest and that will cover the dividends from the generators—that is the answer to the first part of the question—but by restructuring the industry we also end up restructuring the State's balance sheet. In doing that we reduce State debt and when we do that we reduce our interest payments. The Leader of The Nationals has not taken that into account. One does not just look at what is in the community infrastructure fund as capital and what will be earned as interest, one also takes into account the fact that the State's balance sheet will be restructured and strengthened and that will provide additional capacity for the State to invest in infrastructure and services. The member for Miranda, being a former economist, can assist the Leader of The Nationals.