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Select Committee on Electricity Prices
09/10/2012
Electricity price increases in Australia

GOLDIE, Dr Cassandra, Chief Executive Officer, Australian Council of Social Service

NANCE, Mr Andrew, Adviser, Australian Council of Social Service

PAPE, Ms Andrea, Senior Policy Officer, Energy and Climate Change, Australian Council of Social Service

[16:29]

CHAIR: I welcome representatives from the Australian Council of Social Service. Do you have an opening statement that you wish to make to the committee.

Dr Goldie : We would particularly like to thank you for the opportunity to appear before you this afternoon. We warmly welcome this inquiry. This morning I joined a number of others out on the lawn of Parliament House, where there was expression of deep concern about legislation, which has now passed parliament, to take another 100,000 sole parents off the parenting payment and put them onto the Newstart allowance. These are very vulnerable families and as of 1 January they will now be facing a cut in their income of between $60 and over $100 per week. We already have almost a million people living on the allowances, and if you are single person that is just $35 a day. So energy prices matter. They matter to many people, but they particularly matter to people who are living on the lowest incomes in Australia and well below the poverty line. So this is a very important inquiry for us and we urge you to particularly give attention to those single mums and their kids and to the others who will be on the lowest incomes in Australia.

Senator EDWARDS: And the single dads?

Dr Goldie : And the single dads, yes. Ten per cent are fathers and 90 per cent are mothers.

With affordability of energy prices declining and vulnerability increasing, this inquiry does come at a critical time. It is also a challenging time for organisations like ACOSS and other consumer advocates, as it does coincide with some significant reform projects. We have the power of choice review—I heard you talk about that and we will address some of that in our presentation as well—and the AER rule change. Added to this, of course, we have various state based pricing determinations for retail and wholesale prices, so it is a complex area and we certainly endeavour to do our best to represent the interests of people on particularly low incomes. Our observation, though, is that these processes are intently focused on discrete components of the national electricity market. That is why we think this Senate inquiry is particularly important at this time. It is ideally going to enable us to have a helicopter view of the whole picture in terms of what is being delivered out of the energy system, particularly when it comes to both accessibility and affordability.

Hardship does not just come in the form of disconnection. It comes in other forms as well. With people on very constrained incomes, fixed low incomes, choices are made every day about whether or not to switch the light on or keep it off. I am sure a number of the senators will have watched the Four Corners program and you will have heard the story of that young girl who sleeps in dark at night because they cannot afford to have a light in her bedroom. We are all very familiar with the picture of the person, who is living on a low income, sometimes elderly, who stays in bed in winter to keep warm or does not have people over because they cannot afford to cook the food that would be required. So it is at its heart a very human concern that we are discussing today.

Of course the fallout from rising energy prices does not hit only the household directly; it has broader impacts. These are health impacts, negatives such as social isolation and an inability to be able to afford other essentials—for example, clothing—and to be able to go and face up for another job interview to try and get a job. It has a big impact on our sector. We run an annual survey. Every year we do the survey, which is our best assessment of the impact of various policies on people's lived experience, and the findings were particularly concerning this year when it came to affordability to keep a roof over one's head—and energy prices are a part of that. Our observation is that these concerns are typically externalities to the National Electricity Market discussions.

We did have some PowerPoints for you but they are in handouts and I believe you have them before you now.

CHAIR: Yes, we do.

Dr Goldie : I will refer you to slide 1. It has some quotes from the government's draft energy white paper which do make it clear that, from the government's perspective, energy policy, on the one hand, and social policy, on the other hand, are seen as distinctly different activities of government. I particularly draw your attention to the quote where it talks about:

… well-functioning energy markets that interface efficiently with other policy mechanisms, but do not internalise non‐energy objectives in energy market design.

In other words, these are associated policies but they are not core to the endeavour of the energy market system.

On the next slide, slide 2, there are various other quotes from the AEMC and COAG which also demonstrate that these entities believe that external targeted policies and assistance will ensure affordable energy for vulnerable consumers. These are referred to as the social safety net and community service obligations. Yet, as I said in my introduction, I think we are well aware that there are some serious gaps in the social safety net as it currently stands. People living on allowances, for example, are not eligible for the utilities allowance that pensioners currently receive and there is no rational reason for that.

I refer you to slide 3. The Power of choice draft report also appears to have flicked the question of social policy; that is, making sure that vulnerable consumers are not pushed over the edge by the advance of metering technology and time of use pricing. It is all sound public policy if we have policies that respond to the rapidly rising energy bills, but we are simply not having policies keep up. So, unfortunately, affordability is treated as an afterthought. State based concessions and social safety nets have failed to keep up. We have heard, of course, in some cases of the doubling of prices. Affordable housing is not so affordable when you take the energy costs associated with it. Our experience is that the energy market reform process has severed the historical link between social policy and energy policy. Not only has that link been broken but the gap appears to be widening. So the question then is: if affordability is declining and vulnerability is increasing, which public policy domain should fill the gap? From our perspective, we believe it is this unstructured and under-resourced gap between energy policy, on the one hand, and social policy, on the other hand, that deserves our highest order public policy focus. The gap raises fundamental questions about the role of government, obviously, and the role of the market in ensuring the long-term economic and social interests of all consumers.

In our last slide we have five dot points which highlight our key policy suggestions. The integration of energy policy with social policy is on the top of that list, and we can talk to a number of examples about how that could be done. Some of these recommendations are in our submission, which you have before you. Also, with your leave, we would be wanting to hand up fairly shortly a supplementary submission to provide more detail, because this is an extended inquiry and we do want to make sure we have got as much detail before you as we can when it comes to our recommendations.

So that concludes my opening comments. Of course we would be very happy to speak to the specific five dot points that you have in front of you there, which include also our support for: the national energy advocacy centre; a serious investment in energy efficiency for low income households; tackling some of the resourcing and structural issues associated with regulator; and, of course, the national energy consumer framework. Thank you.

CHAIR: Thank you, Dr Goldie. This is the fifth public hearing that the committee has undertaken. There are common themes beginning to develop from all of the submissions and from people's oral evidence, particularly related to the reasons behind electricity price increases, and we have heard some of them here today in relation to network charges. But a common theme is also increasing peak demand. Many people say, in response to that—and I think this is underlying the AEMC's Power of choice review—that, if you are going to reduce peak demand, you need to make people aware of the price of electricity and the price of producing, transmitting and retailing it. Currently, 99 per cent of Australians would not have a clue what they pay for their electricity. So they are using that as a basis for advocating time-variant pricing and the introduction of smart meters and the like. I just want to know what your response to that is. The committee is looking at that issue, but also we are keen to work out how we protect vulnerable consumers in that sort of framework. So perhaps you could deal with both of those issues.

Dr Goldie : I might pass to Andrea to take the first question.

Ms Pape : Implementing time-of-use tariffs to low-income consumers can have problems, and we noted in the Power of choice report that they were proposing a level of bands and that low-income consumers would be in the lowest band and would have an opt-in way of participating in time-of-use and smart meters. We would make the point that the second band, the opt-out band, may include vulnerable consumers as well, and that would need to be taken into account.

In terms of awareness of pricing, ACOSS has long supported the introduction of the NECF, and we were hoping to see that rolled out on the start date of 1 July. So far, I understand, only two states have formally adopted it. So we would urge all states to move on that as quickly as possible. Did you have anything to add?

Mr Nance : We have read all of the transcripts and most of the submissions as well, and our supplementary submission talks to this question directly. The Power of choice report has proposed a gradual introduction of time-of-use pricing and the introduction of the advanced metering infrastructure to go along with that, and we think that, in general terms, that is a reasonable approach. But we also want to make the point—and this is in the slides—that the Energy Market Commission, in making that recommendation, has two companion recommendations, and one is about targeting government energy efficiency policy towards low-income households and the recalibration of state government concession regimes to match the price impacts of the introduction of these prices. So, presumably, if a household that was categorised as vulnerable for whatever reason did, under these new pricing regimes, have an increase in costs then the concessions would be tailored to suit that.

That is a good example of the sort of thing that we are talking about where, if energy policy is pushing prices in one direction, social policy can balance that on the other hand—as can energy efficiency policy, for that matter—and the net effect can be balanced so that affordability is preserved. So they see the price signal that says, 'I should be trying to avoid consumption at this point in time; it is more expensive,' but, in terms of overall affordability, either through the tax and transfer system in terms of income or concessions in terms of expenditure, that sort of balances out and vulnerability is not made worse. That is the sort of thing that we would like to see.

Our concern with it is that the AEMC has responsibility for part A, which is introduction of pricing. The Department of Climate Change and Energy Efficiency or state governments would have responsibility for part B, which is the energy efficiency programs. And then the state governments would have direct responsibility, through their human services arms, for delivering concessions. There is nothing that actually joins them together formally. They are all reasonable recommendations, but—and this is the sort of response we will go back to the AEMC with—if it proved that the other arms and legs of government did not act, or did not deliver on part B and part C, would they actually hold back on part A?

I think we can presume what the answer to that might be: 'No, we'll just keep doing our stuff; that's their problem.' Historically that is a pattern and it is one of the reasons we are in the situation we are in now. There is this fragmentation of responsibilities, with nothing joining it together. That is why our key headline recommendation is that moving on this stuff is inevitable and probably logical, but it needs to be joined together. At this stage we are not seeing that.

Senator THORP: Many of the educational programs around energy consumption encourage householders to insulate their homes, install double glazing, install window coverings, install pelmets, replace ageing energy-guzzling appliances, replace old water cylinders, put in photovoltaics. I think we would all agree those are good ideas, but where does the fixed- or low-income household fit into that revolution?

Dr Goldie : This is exactly the point. Most people on low incomes have little control over the premises because they are renting. Sometimes they are in the public or community housing setting, but most are renting in the private rental market. It is very important that we design schemes that either empower people to do audits of the property, for example, to see what can be done that is within their control and the access to finance for that. We have to accept, though, that there would need to be significant financing arrangements in place for this and we should see this as a contribution both to the affordability and to keeping those families above the poverty line. We should also see this as a contribution to the environment. Often we see this as a big spend, but in fact the economic and social benefits that would flow from these kinds of schemes would be of significant value.

Ms Pape : NILS, the no-interest loan scheme, is currently available for low-income households that have some sort of control over modifications to their homes—non-tenants, generally. The problem with that is that it cannot be used by everyone. If you are heavily in debt then taking out a loan for a new fridge or some insulation is probably not a good idea. In our first submission we have recommended the national implementation of the NESI, the National Energy Savings Initiative. We have also recommended that it focus more on the higher-value items. The market for light globes and showerheads is probably reasonably saturated now, so this initiative needs to move on to items that will make more of a difference. That could meet some of the cost of modifications to lower-income homes. You could look at NILS making more of a contribution to that. We have also suggested a direct funding out of general revenue to put towards the costs of these items.

Senator THORP: My home state is Tasmania where cold weather is an issue. Much of our new housing stock is built to at least a six-star rating—unfortunately, not enough of it but it is getting built. There is also retrofitting to some extent. There is nothing making the private rental market put any of these things in place. Do you have any thoughts on that?

Mr Nance : This comes up regularly. Whenever we talk about energy-efficiency projects the elephant in the room is usually the split incentive between the landlord and the tenant and getting these sorts of investments. I do not know if there is a single answer to this. There is certainly a need to engage with those landlords, and in some cases those landlords are governments—NRAS and through public housing, state and federal governments are significant landlords in that regard. That may be one camp which could be dealt with in one way.

The other one is a clear market failure. I guess it is interesting to reflect not just on the speakers before us but on the one before that—Low Carbon Australia, I believe. They are trying to use more creative financing options to overcome identical market failures, in a theoretical sense at least, to see capital investment made and supported through lower loans, leveraging, private sector funds and so on, to assemble these projects and make them go forward.

You can see that the economics of that have been made to stack up in projects of that scale. It is no different. It is only the scale that changes when you are talking about households. So I guess it is about understanding the what the incentives are for landlords to make structural investments or capital investments in their properties and then understanding what levers are available to do something about that. It is down, largely, maybe, to tax treatment. It has certainly been a popular approach in the US to use the taxation system to leverage spending in the areas where you want.

Senator THORP: I want to make sure I understand what you are saying. Private landlords have tax advantages through negative gearing and other such things. Are you suggesting that that area of tax could be looked at in terms of—

Mr Nance : I would not necessarily—

Senator THORP: You cannot get as much money back if you have not got a really insulated house, for example.

Mr Nance : It was more about the idea of accelerated depreciation of investments. Capital investments do not really fall into the negative gearing. So if you are making structural changes it does not actually fit into the deductible quantum that you can pull forward; whereas operational expenses, like the management of the rental property and water rates—those sorts of general expenses—are. It is not necessarily going to be the answer for everything but it is important to understand the incentives that are in the market, and to deal with those incentives. People do respond to those incentives.

I would make the same comment about our predecessors in these chairs, and the network businesses. They are excellent at responding to the incentives in front of them and they will never be criticised for not doing it well. If we do not like that behaviour it is important to see incentives that we do like—and they will follow them, and follow them well. We often find ourselves thinking that we wish they did something other than follow the incentives in the market, and that is just not practical. It is still infrastructure. It is stuff that requires capital and it has a value over time, and it needs similar treatment. It is just on the other side of the market.

Senator BOSWELL: In terms of low-income people there must be a lot of stress on them in paying their bills. Are you seeing that?

Dr Goldie : Absolutely. The demand for emergency relief assistance has shot through the roof.

Senator BOSWELL: How does that work? If they do not pay do the electricity companies accommodate them?

Dr Goldie : As you know the National Energy Customer Framework has a standard in place in relation to hardship and disconnection, but part of the issue here is that people need to know that they can access these kinds of hardship provisions.

Senator BOSWELL: What compensation did the government pay these low-income people when they were compensating for the carbon tax?

Dr Goldie : The value of the household assistance package was based on an indexing, I think, of 0.7 per cent on the base income support payment you were receiving, including family payments. So our assessment of the package was that, overall, it was adequate to cover the impact of putting a price on carbon pollution. The one group that we were concerned about in terms of adequacy of compensation was the group of people on the Newstart Allowance, because the base rate is so low that with the percentage it meant that they got the least of anybody when it came to compensation assistance.

Senator BOSWELL: What roughly would be the carbon compensation to these low-income people?

Dr Goldie : I think it worked out to be between $4, $7 and $10 depending on what kind of payment.

Senator BOSWELL: That is $4 a—

Dr Goldie : I think it is $4 a week. I might have to double-check that, but I think that is correct.

Senator BOSWELL: I have had quite a few people ring me up and say they are struggling with it. What about regional Australia? Are you getting a lot more complaints from regional Australia?

Dr Goldie : Our view would be that for people on the very low fixed incomes, who are the primary constituents for us, there is no question that the levels of income support are not keeping up with the rising prices associated its affordable housing, and energy prices are big for this reason. The Newstart allowance is only indexed to the CPI, unlike the pensions, which are indexed to wages. Every time there is an indexation on these payments people on the allowances fall further behind. This is one of the reasons there is a very important inquiry before the parliament right now into the adequacy of the Newstart allowance to look at the indexation arrangements over that as well as the base rate.

Senator WILLIAMS: Would these low-income earners you represent include aged pensioners, unemployed, and disability pensioners?

Dr Goldie : Yes.

Senator WILLIAMS: Partially disabled? And carers—are they included in it?

Dr Goldie : Yes.

Senator WILLIAMS: So, you represent all those people. I know in my job the biggest ear chewing I ever get is on the cost of living, and of course electricity plays a major role in that. People might own their house, own their business premises and own their farm shed or whatever, but with these feed-in tariffs—those most generous, stupid tariffs offered in New South Wales of 60c gross feed-in that even members of the previous government have said was stupid—isn't it the case that the people you represent simply had to pay for that? They were renting a premise in many cases and they could not access a loan from the bank to install the feed-in tariff, get onto the scheme, jump on the bandwagon. Is that what you found in your organisation?

Mr Nance : I am happy to take that one. I am from South Australia. We did similar things, and they can probably describe some of the—

Senator WILLIAMS: How much was the South Australian gross feed-in tariff? Or was it a net?

Mr Nance : It was a net tariff.

Senator WILLIAMS: That is a big difference to gross.

Mr Nance : It is; no doubt about it. But the same principles apply. When the South Australian one was introduced it was all predicated on the assumption that it would not go very far; it would be taken up by a few, and if it got too out of hand there would be a review. Certainly in the South Australian case the review was supposed to be at 10 megawatts, and by the time they changed the tariff there was over 100 megawatts installed. So it started out with one intention of being headline grabbing and manageable and ended up somewhere else.

Some data I have seen recently suggests that outer suburbs—the mortgage belt that tends to get talked about—is one of the areas where this has been taken up the most, and that there has been some sharing of the benefits of it from folks that maybe are not doing particularly well. But it does not change the fact that people who rent and people on very low fixed incomes have not participated in the scheme, other than maybe one or two rare examples.

Senator WILLIAMS: But they had to pay for it.

Mr Nance : But they are paying for it, yes. And we would draw a contrast in terms of the policy approach to a carbon price, where there was an attempt to balance that impact on affordability, whether it was matched dollar for dollar, by saying, 'Expenditure is going up, but your capacity to pay will go up as well.' That is in contrast to the feed-in tariff schemes, where essentially your expenditure is going up. In South Australia it is currently standing at a bit over $100 a year for the average consumer.

Senator WILLIAMS: For the average house?

Mr Nance : For the average household.

Senator WILLIAMS: When you go to areas like Jamestown, you see all those windmills there, in country that was never ever timbered.

Mr Nance : Yes.

Senator WILLIAMS: The farmers like it. They get $5,000 a tower a year. But the average Joe Blow is paying about $100 a house for those windmills.

Mr Nance : It is not so much the windmills; this is just a solar feed-in tower. I can get to the other one later, if you like. But there has been nothing to match it. If affordability is somehow linked to your capacity to pay divided by what your expenditure is, then if expenditure goes up and capacity to pay does not change, affordability declines. It cannot go any other way. So, in this sort of situation, if it was matched in some form—whether through a change in the concessions or through the tax and transfer system to more income—you could see that that balance has to have some hope of being preserved, but it clearly has not.

To us, that is systemic. Feed-in tariffs are state based. I am sure we could find other examples which have come at Commonwealth level but it is this disconnect between social policy and energy policy in whatever form, this yawning gap, this growing gap that is the fundamental problem. That is a systemic problem and that is a good example of it.

Senator WILLIAMS: The one we had in South Australia, brought in by the previous Labor government, was 60c gross feed in; yours is a net—

Mr Nance : Yes.

Senator WILLIAMS: which is a lot less and of course that has cost consumers a fortune. This government went to get out of the contracts and got bombarded. It actually had contracts signed up and had to honour them, as you do—a contract is a contract. Back to the windmills in South Australia because I was quite amazed to—I grew up in Jamestown, even though I am a senator for New South Wales and know most of the state very well. I used to drive trucks in most areas carting livestock. What is the cost of all those windmills in South Australia? If you were to talk about the net feed in tariff as about $100 a house, how much do those windmills cost? Do you have an average figure for them as well?

Mr Nance : I guess the thing is that the cost under the renewable energy target—

Senator WILLIAMS: Under the federal RET?

Mr Nance : Yes. The cost of the renewable energy target is spread nationwide so there is not a disproportionate impact in South Australia. In the overall cost there are some countervailing forces. So while the cost of the renewable energy certificates pushes prices up, the end result—because essentially we got more capacity in the market, it has tended to defeat the wholesale price. I do not think it is to the point where—

Senator WILLIAMS: Port Augusta is turned off at the moment.

Mr Nance : Yes, it is having a little break and may come back later on. I will guess we will see where that turns out. There is definitely a cost. I do not think I could put a number on it. It gets a little bit lost in the schemes. Overall the renewable energy target is for 10 per cent of volume this year for each retailer. They have to find renewable energy certificates at about $40 each for 10 per cent of all consumption. $40 is 4c a kilowatt hour, so I guess the overall impact is around 0.4c.

Dr Goldie : If I could complement Andrew's answer to make the point that, for example, we have been a firm supporter of putting a price on carbon pollution but we have always said that it needed to be done in a way which ensured that people on the lower incomes were not going to be disproportionately impacted by the price and in other areas such as the one you are talking about there is no mechanism to compensate.

Senator WILLIAMS: Low-income earners do get compensation for electricity but for many of the businesses, their cost of producing food—I have one grain processor in Tamworth whose carbon tax component last month was $27,000. That is going to go onto the price of food as well. Would you agree with that?

Dr Goldie : As I say, we have been satisfied that the compensation for people on lower incomes has been adequate.

Senator WILLIAMS: Let me take back the question. This is important. Consumers you represent, the low-income earners, have been compensated for the cost of electricity but businesses in the food processing industry do not get compensation. When their electricity prices soar, some are 24 per cent—it is on a very low base and their cost of electricity has gone up some 24 per cent. They have to pass that cost on in the way of food. Is that not going to lead to an extra increase in the price of food for the people you represent?

Dr Goldie : That was part of the work of the Treasury modelling—the overall flow-on impact through the economy of putting a price on carbon. We have of course said we will be watching it closely like everybody else to see what the market actually does.

Senator WILLIAMS: We are watching it very closely too, I can assure you. If the smart meters are installed in those low-income-earners' houses, how much does it cost to install one? Do you know, Chair? At a guess, quickly.

CHAIR: At a guess, 500 bucks each.

Senator WILLIAMS: Okay, 500 bucks. When people want to get a smart meter, they could perhaps cook their dinner at nine o'clock at night, perhaps their lunch earlier, and they could work on that to save electricity if it were charged on the usage per cost-time, if you understand what I mean. Would you agree with that?

Mr Nance : Yes. That is the point and I guess that is the signal that it is trying to send.

Senator WILLIAMS: Do you see that as very beneficial to the people you represent?

Mr Nance : To the extent the result, in a long run, is less cost in total and folk are able to change their consumption patterns—

Senator WILLIAMS: If they are unemployed, unless they are out looking for a job that day—and, mind you, there are people unemployed who do not look for jobs, I can tell you—they could use that to advantage because they have all day to cook.

Mr Nance : There is no doubt there will be households that will be better off under that, and there is no doubt to us that there will be households that are worse off. I guess what we are saying—

Senator WILLIAMS: Under smart meters?

Mr Nance : Yes. And they could be worse off. There are a number of health disorders which require fairly heavy regulation of temperature, such as a controlled environment inside your home. Those are the sort of households that probably would be worse off under this sort of thing. Older consumers who probably would be at home more and are much more comfortable in their routines are unlikely to come out better off, but they may. The point for us is that if you are going to introduce that, and as the AEMC has indicated, you do it gradually. You match it with education and awareness. To the extent that you can then target your social policy—your supports, whether it is concessions or pensions—and target, say, energy efficiency initiatives that then target those sorts of activities then people can be better off. Our concern is that the reforms will refer to them, and defer to them, but the implementation of that will not be matched by the implementation of the roll-out of a change in prices. If we can guarantee that that linkage is solid then I think we will be much more comfortable with that reform program.

Dr Goldie : The reality is that for people who are receiving the Newstart allowance, they are required to apply for up to 10 jobs a fortnight. One of the reasons that we now have such widespread consensus that the Newstart allowance is too low and actually operates as a barrier to paid work—

Senator WILLIAMS: Dr Goldie, do you know what I did when I was young and unemployed?

Dr Goldie : The Business Council of Australia, the Australian Industry Group, the OECD, the Henry tax panel have all said that it is now so low. Our experience is that overwhelmingly households are very responsive to opportunities to save.

Senator WILLIAMS: Let me give you one clue for some of the people you represent. When I was young and left school in South Australia I did not have a job. I went shearing sheep. I did not choose to work upside down because I wanted to. It was a way I could earn some money and they were desperately short of shearers. For some of those people you represent, tell them to pick up a hand piece. There is good money in it.

CHAIR: Just a final question, which you could take on notice: we talked earlier about variable time pricing, smart meters, you mentioned the AEMC and a phased approach. Could you outline for us what sort of system would work to have your organisation's support for the rollout of smart meters and the rollout of variable time pricing? What protections would need to be put in place? What timeframe do you think would be appropriate, whether you think that that is something that should be dealt with through the National Energy Consumer Framework, and how we would deal with it? The second aspect to this question is what we need to be doing better, particularly in a regulatory environment, to encourage greater uptake of energy efficiency amongst low-income households, particularly renters. Take that on notice and have a bit of time to think about it.

Mr Nance : We have a large amount of that covered in our supplementary submission.

CHAIR: Have you? Okay. Do you wish to table the supplementary submission?

Dr Goldie : We will in the next couple of days, I think.

Mr Nance : We will add that final point.

CHAIR: Okay. Do you wish to table this document with slides?

Mr Nance : Yes.

CHAIR: Is it the wish of the committee that the ACOSS document be accepted as evidence? There being no objection, it is so ordered. Thank you Dr Goldie, Mr Nance and Ms Pape. It was a very informative discussion.