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Monday, 7 November 2011
Page: 8276

Senator WONG (South AustraliaMinister for Finance and Deregulation) (11:05): I do not have in front of me the entirety of the ESAA modelling and what the treasurers of the states said. But I am advised that the propositions in there assume a failure of financial markets to provide the sorts of hedging products that would be required. That is the assumption in that modelling. The proposition that is being put forward is that therefore these different price impacts will occur. First, we do not accept that the financial markets will not be able to provide such products. Second, even if that were the case—which we do not accept—the government has arrangements in place through the package to provide financing, including on the advice of the council. So there are a number of assumptions in what you raise. First, there is the question of whether the market will be able to provide these. We think yes and financial providers have also indicated that to be the case, which is important. Second, even if that is all wrong, the government has said that the Treasurer can authorise the provision of financing on certain terms if required. There are a range of policy requirements around that. So I think there are range of safeguards on this issue, and I again say that in many ways the larger risk is the coalition's talk—although I know they seem to talk about this a bit less—about the effect on electricity prices of the uncertainty imposed by the blood-oath of rescinding this, because that obviously is a signal to markets as well. Having said that, I suspect it will go the same way as their superannuation policy.