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ABC News 24: 9am News -

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(generated from captions) Another Hussey comes to the

Australia to victory in the rescue, this time David steers rescue, this time David

one-day international. Good morning, you are watching ABC News 24, I'm Michael Rowland.

Shortly we will cross to the

New South Wales Parliament for

coverage of the Upper House

picture in inquiry. You can see the

picture in the top left part of

the screen.

block We expect an

appearance by Barry O'Farrell

and the shadow Treasurer and the shadow Treasurer Mike

Baird. He will cross to them when they start speaking. In

the meantime, the residents of the northern Victorian town of

Swan Hill are being told will

be at least Friday before the

floats peak. A massive body of

water is making their way towards them. Residents in small communities are being togd to evacuate

is well prepared, but residents don't know if they have done

enough. Just not knowing, it

would be better if it came would be better if it came and

we would know what we are in for. Waiting around is stefl. There's a lot of anxiety, we

are in unknown territory. The

reports coming through of how high it will be, you high it will be, you can't imagine how high that could be.

hoping for the best. It is a We are preparing for the worst,

massive effort of all these

people, who also have their problems, for them to come little problems and big

here, like they have today, here, like they have today, and

also some of them yesterday,

and the work and effort that

they are putting in is

absolutely magnificent. They

talk about friendship and what have you. Well, we have you. Well, we just did not

realise we had so many friends.

When time are tough, and when

you need them, well, we've got here ah anywhere around here them. Fantastic! If this bank

goes, the whole flats will goes, the whole flats will be

inundated with water and you'll

be buggered. If everyone can

pull together and do it, and pull together and do it, and a

few of us blokes who've got the

equipment to help, that's what

we're doing. Some very anxious

residents of Swan Hill. We are soon going to cross to soon going to cross to the New

South Wales Parliament, where

you can see the inquiry room

that will continue to

investigate the controversial sell-off of the

news, the death toll from

Queensland's flooding is set to

rise with the discovery of what

are believed to be more human remains, found in the Brisbane

Valley. Other remains, thought

to be human, were found in the

locker valley yesterday. Authorities have been working

around the clock to get flood

beginning of the school year. affected schools ready for the

Of Tasmania's Green Of Tasmania's Green leader Nick McKim has endorsed of Lara Giddings to become the

first female Premier. She will

be elected today, after David Bartlett quit the

yesterday. She made history in

1996, becoming the youngest

woman elected to an Australian

Parliament. Who gets the top

job not a matter for me. Do

you have a view on who you

prefer to see? I do have a

Tasmanian Parliament for over 8 view. I have sat in

years and Lara has been sitting

there, albeit from a there, albeit from a different political party, and I

Lara is capable and has the

capacity to be a very good

Premier for the state. We are

and Tasmania's economy is facing government challenges,

economies facing challenges, as all

economies are. I think Lara has

the capacity to lead us and

make the tough digs that will

and Cabinet will make, the context have to be made, and in the

Greens are very prepared to stand by Lara Giddings when those tough decisions are made, as long as they are sensible government decisions, we will be supporting them. Mick Tasmania Greens leader nick

Mick Kim. We cross to South Wales Parliament Mick Kim. We cross to the New

South Wales Parliament for coverage of the inquiry into the power sale. I am to welcome the the power sale. I am pleased

thank them for their attendance, Mr Barry O'Farrell,

leader of the opposition and Mr

Mike Baird, shadow Treasurer.

you have both sworn an both You do not need to be sworn, as

your office as members of you have both sworn an both to

Parliament. Do you wish to

make an open statement? We do,

claim. We thank you for the

invitation to appear. We do not

have direct knowledge of the transaction but we understand the communicate's the communicate's concern about

the deal. I congratulate you,

Mr Chairman, on withstanding applied to ensure this

committee proceeds, and we certainly hope that the eight directors do end up appearing, because because the committee has done

well to date, but it won't be

able to do all its work until

it hears from those eight

directors. This inquiry already uncovered a disgraceful

trail of deceit, incompetence

and cover-ups, in what is quickly becoming known as the

dud deal of the century. This won't be $5.3 million returned

to taxpayers out of this deal,

it could be as little as 10% of

that amount. This inquiry discovered that the real reason that amount. This inquiry has

for proroguing the parliament

was to shut down the inquiry

and stop the people of New

South Wales getting the facts about the transaction, the

reasons for it and the proceeds

from it. This inquiry has

discovered that, despite the Premier's alleged days ago, she is still prepared

to deny eight directors the

immunity they need to come in and give trufl and open

evidence and satisfy the public evidence and

about their reasons for

resigning in protest at this deal. This inquiry has discovered that the top treasury officials do not

believe that the deal was in the best interests of

It evidence provided is protected

by privilege. That is critical advice, because that advice

from Mr Walker confirms not just

inquiry but the just the validity of the

has gone on, the right of the public to demand to know what

public to have those details, to have that information,

before they exercise

democratic right on 26 March before they exercise their

and cast a vote across the

state. Mr Chairman, I would urge the committee to continue

to press the Premier to stop

trying to hide the facts of the deal, to stop

trying to continue to block the appearance of the eight directors, to ensure the

Premier does ensure that your request for papers is fully

complied with. But if, as I suspect, the Premier refuses, I

again say that, notwithstanding

whatever work you are able whatever work you are able to

do, should we be elected on 26 March, almost the first thing I

will do is establish inquiry in that whole affair, which would have which would have the power to all which would have offer the privilege that all

witnesses need, to get to the

truth, because we are

determined to get to the truth. Most amazingly, simply mazed that the Treasurer said they said they were continuing with a second round We are just over a month before

the Government goes formally

into caretaker mode. What keeps

me awake at night is the damage that Kristina

that Kristina Kenneally

Roozendaal can still do to the period where they are no longer misdirected, crazy and incompetent and misdirected decisions we have seen decisions we have seen of recent thank you for allowing me to appear. This has been

saga. As the fact come out, outlook for the taxpayers of

the state gets worse and the state gets worse and worse. The Coalition

its energy policies but we cannot do so until we see the full wreaked by Roozendaal Roos and Kristina Kenneally through asset sell-off. We establish a inquiry to get the truth and hold people accountable for the

hold people accountable for the dealings that will be exposed. We will hold

for the energy policy but will only

only do so when the full extent of the damage and information is out is out there. Mr Chairman, when

I proposed that there should

Whether proper value for money had been achieved from the had been achieved from the sale of a state asset, because if you sell a state asset

get one chance and your possible deal for Secondly, why eight Secondly, why eight directors appointed by some of whom have very strong been a characteristic of this

government over the

government over the last 16 years. Thirdly, to get years. Thirdly, to get value for consumers, small business and families, struggling with power bills and

trying to cope with power

increases and we need to know,

as a result of this a judicial inquiry, what a judicial inquiry, what impact the sale will have on Before I ask the shadow

statement, could I ask you a question, as rare as that, I, with leave, ask you a question: In the light of Brett Walker's advice, in the light of his certainty that the eight

directors and others could come along and give evidence with the knowledge, with the evidence and the being taken to convince them to

being taken to convince them to come, that without them being here this jigsaw that this jigsaw that is the dud deal of the century will never be completed it is just - we do need them to come forward to reveal openly about the order, Mr Chair. I to answer the question. As soon as the evidence

today, the committee will meet to consider that very matter.

It has not made has the advice of Brett Walker before it and it decision, which will be

public. Thank very much. Do you have a Before Mr Baird concerns about our time. I understand Mr Before Mr Baird begins, I have concerns about our understand Mr O'Farrell has to

understand Mr O'Farrell has leave here. I am with you with you for as long as you would like to see me. You will

stay until 11:00, if need be?

Whatever makes you happy. The

committee has scheduled until

11:00am, if you could stay that

would be convenient for the

committee. Mr Baird: I want affirmation of your role in in

affirmation of your role in in this, I appreciate you standing

up for the people of New South

Wales in looking for the truth of this of this transaction, against a government that has bullied and

intimidated, and we thank you

for your support of the eight

directors who have done likewise. Barry and I are delighted to attend the committee to give our committee to give our views. I want to put down why I think

this is a terrible deal for the people of New South

people of New South Wales, and

I am happy to do so and

appreciate the opportunity. If you go through Government's energy reform

process, it has been a failure

on any measure. The process has

failed for two key reasons. failed for two key reasons. The proceeds realised in the sale of this infrastructure are pathetically low and represent a shift from billions of dollars of value from the New South Wales taxpayer to the private sector. The process did

not achieve any of state Labor's state the energy objectives, and these these objectsives which objectsives which the government said it would

achieve or it wouldn't proceed,

and I go into detail

and I go into detail on why I think they have failed every

single objective they set.

Through the failures, the

transaction has failed the public interest government has aborted its

accountability to the New South

Wales public by ensuring there

has been no transparency around the process much the government

has refused to provide detail

and clarity on these critical points. The retention values,

including calculations and

assumptions for the individual

assets and the bundled assets and the bundled assets, and the net proceeds received,

which have been marked down by

over $2 billion, risk to the New South Wales

public under the contracts and

the black-out risk and the risk of cost overreturns, resimulation of the government

developing the coal run and the developing the cost over runs and developing the coal run cost over runs and what penalties are cost over runs and

penalties are payable if the

contract does not complete contract does not complete on

time, what future subsidies does time, and future electricity the ongoing development and development and why did no private sector private sector participant want to develop the project. The ongoing tax transaction does to the Treasury is working on that Treasury is working on that but we do not know what it is, directors resigned. With no transparency on the risks, limited transparency on the process, substantial the announced proceed to the

New South Wales public and the complete denial public be expected to believe that these transactions are in their because it is a significant risk and we have not seen significant risks and costs being imposed on the whole of New South Wales through New South Wales through the development. By this, New South Wales will re-enter the high re-enter the high risk mining sector, an area in which they

have no expertise chts it direct contradiction of their stated aim of exiting the

international market and international market and a

reversal of policy to exit the

mining sector in 2002. In committing to the the ifks including potential development costs blow-out. The development

cost was estimated to be $1.3 billion full costs not guilty released,

it is impossible to know how

the costs may rise on time, there is no detail of

the penalties the government will have to pay if they fail

to complete on time. These could completely destroy any remaining proceeds. remaining proceeds. Ongoing losses: The market estimates

that the total than it costs to mine the than it costs to mine the coal

will be more than $1 billion. A

Merrill Lynch report says that the coal costs will equate to $50 a tonne, which is a $17 $50 a tonne, which is a $17 a

tonne cash loss and on 138 million Talking Pictures is a

potential cost of up to $2 billion, well above the estimates, excluding the long-term view on coal price. The true costs need to be

understood. In terms of a long-term subsidy, if the the open market it could have realised billions of realised billions of additional revenue in the next 17 years. There is no clear path to sale. The subsequently sell the coal mine, but who will buy a loss-making project, loss-making project, and they have tried to do failed. The government failed. The government is also to coal risk. 40% of the generated is in generated is in the energy supply. Most of the key contracts have expiring in the next few years and any company that had this risk would have been managing it in a professional and diligent

with long-term profession

fix of tenure, you would not let the majority of that has exposed New South believe it is the fundamental reason we reason we have had to go back

into coal mining. It raises the question of what sort management processes are in place under this government, because this is a huge because this is a huge risk, a fundamental risk and been ignored at every turn. The has achieved significantly below what has been paid for similar assets. The mark believes the electricity generation of retail' sets

should have realised closer to

$15 billion than $3 billion. A couple of other independent reports, the independent reports, the independent expert report that Origin energy commissioned in September

and the Alinter report

and the Alinter report from 2010 showed that 2010 showed that similar generation assets generation assets had generated

10 times EBITDA. Bebit today

is earnings before interest, tax, depreciation and amortisation.

amortisation. Given that the assets is over $1 billion, assets is over $1 billion, the proceeds achieved for all generation of generation of assets should be

over $10 billion. The same

report looks at the megawatt price per million and shows in

2005 that was 1.5 million,

which is the first time which is the first time the concept of an emissions trading

scheme was tabled in the

federal parliament for coal

federal parliament for coal

generators. The government has

sold these rights at 5,400

megawatts of capacity and could have have realised $8.5 billion for the generation sale. The latter

analysis highlights the $10 billion figure for billion figure for the generation assets is not only generation assets is not only achievable but is likely conservative in relation to a

proper process. Referencing the

same independent expert report for the sale of

for the sale of the retail customer base since 2005 implies an average multiple of approximately 1350 a retail customer and applying this

multiple across all customers

implies a values of $4 billion.

Based on recent, this is not

opposition numbers, this independent experts across the

market who will look at the assets as their professional basis -

basis - they believe the

government should have achieved

closer to $15 billion for the state electricity assets they state electricity assets they

have just sold. Instead, the

government has net proceeds government has net proceeds of $3 billion, well below $3 billion, well below the $5.3

billion, dealing with the real costs of the mine development I

have articulated, and this means that the State Government

has undertaken a

has undertaken a $15 billion give away to the private

sector. The objectives - the

government has grossly failed to meet its own objectives. The four key objectives when four key objectives when it embarked on the energy reform process were simple. The first was to deliver a competitive electricity market in New South Wales, specifically by Wales, specifically by ensuring

that at least one new market

entrant is able to entrant is able to establish itself. This is not happened.

Where is the new entrant? There