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ACTEW claim on jobs gets dousing

ACT Economic Development Minister Andrew Barr, left and Actew Managing Director Mark Sullivan warned that trimming the government-owned corporation's operating budget could lead to job losses.

ACT Economic Development Minister Andrew Barr, left and Actew Managing Director Mark Sullivan warned that trimming the government-owned corporation's operating budget could lead to job losses. Photo: Graham Tidy

The independent pricing regulator has attempted to pour cold water over the suggestion that reducing the amount ACTEW charges customers could lead to job losses.

In a draft determination released this week, the ACT Independent Competition and Regulatory Commission said it was considering cuts to water and sewerage prices that would save typical Canberra households about $230 a year.

Territory-owned corporation ACTEW would reduce its annual water and sewerage operating costs by about 5 per cent a year in 2013-14 and 2014-15.

ACTEW managing director Mark Sullivan and ACT Treasurer Andrew Barr warned that trimming the government-owned corporation's operating budget could lead to job losses.

But ICRC senior commissioner Malcolm Gray said the commission had considered the possible impact on employment when reaching the draft determination.

''What it seems to me is that they need to reconsider the rate at which they grow the staff numbers, rather than get rid of staff,'' Mr Gray said on Wednesday.

''When you're confronted by the need to look closely at your cost base - and this is not something that's foreign to companies all over the world, companies all over Australia are doing [it] - slashing staff numbers is well documented as the least smart way of going about it.

''What you need to do is look at your business processes and look for efficiencies there. And that's what we'd expect ACTEW to do.''

ACTEW has almost 400 staff.

The ICRC was concerned by increased spending by ACTEW in recent years.

Operating and maintenance expenditure on water and sewerage rose from $105.9 million in 2008-08 to $125.5 million in 2012-13.

''What we've seen over the past five to 10 years is a steady growth in real costs for ACTEW when certainly the requirement for

water has been falling, not rising,'' Mr Gray said.

The ICRC has recommended that the government consider splitting ACTEW into two territory-owned corporations. The first would be responsible for water and sewerage services. The second would be a holding company responsible for the gas and electricity retail partnership with AGL, known as ActewAGL Retail.

The commission will accept public comment on its recommendations and the proposed price determination until April 12.

5 comments

  • ACTEW only has 400 people?? Wow!

    I note with no surprise that, if the cuts come through, they will be spread across two years. Unlike increases of 17% that happen overnight...

    Commenter
    Outraged of Palmerston
    Date and time
    February 28, 2013, 6:55AM
    • The growth in costs is everywhere - all businesses have been faced with the same issue.

      I wonder then whether the Commission has also considered the impact of the cost of water reduction on the rest of the business community. If Actew cut their costs it all also mean a reduction in work available Actew pays its services to.

      Commenter
      View
      Date and time
      February 28, 2013, 7:00AM
      • Lets start with your job Mr Sullivan, your obscene salary would keep nearly 10 real workers in a worthwile job.

        Commenter
        MIKE the HAMMER
        Location
        ACT
        Date and time
        February 28, 2013, 7:56AM
        • No need to worry about Mr Sullivans salary. I distinctly recall Mr Sullivan putting his job on the line if the Cotter Dam project costs blow out. We all know what has happened there so there is a saving on his wages. Next they could get rid of all the alliance partnerships they use to deliver projects at inflated prices and the budget will go close to balancing.

          Commenter
          derf
          Location
          Latham
          Date and time
          February 28, 2013, 9:16AM
          • I would not be surprised if the partnerships you referred to have been identified by the commission, but not publicly highlighted or acknowledged.

            Commenter
            Steve
            Date and time
            February 28, 2013, 12:19PM
        Comments are now closed
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