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. 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.