Open letter to NSW state Opposition members urging a vote against electricity privatisation

Dear member

Firstly, this is to congratulate you for having held the line on behalf of the NSW public against the demands of NSW Treasurer Michael Costa and Premier Morris Iemma and voted against their privatisation legislation. As you well know privatisation was rejected by the NSW public in the 1999 elections and the Liberal and National Party Opposition to their credit undertook to respect that verdict.

Since then nothing has changed. Opinion poll after opinion poll has shown nothing but overwhelming rejection of privatisation by the NSW electors. If, after all this time, and after all the taxpayer-funded propaganda thrust down their throats, 86% the NSW public remain, according to one opinion poll, opposed to privatisation and 79% remain opposed according to another opinion, when is it ever likely that privatisation will win the support of the NSW public?

Clearly it will not, because the case for privatisation simply does not exist.

Privatisation leads to ownership and control of a basic service, necessary for every member of a modern society to enjoy a dignified life, out of the hands of the people into the hands of, at best, a small minority of those people. Even worse, control can, and often does, end up in the hands of foreign companies. Should Chinese investors ever achieve a controlling stake, control could even end up in the hands of a foreign and potentially hostile government.

Privatisation doesn't work simply because the interests of the broader public and the interests of private owners are not one and the same, contrary to what is often implied by privatisation proponents. This has been demonstrated again and again by other privatisations including bank privatisations and the privatisation of Telstra. The claimed efficiencies of privatisation are, in reality, nothing more than the shifting of costs previously borne by the utilities, when they were government owned, onto the broader public and onto the environment. These include the provision of training and employment opportunities and the subsidy of necessary services, often to poorer members of the community, where the free market business model will prevent the delivery of these services.

Measures to make utilities more 'efficient' are just as much available to publicly owned utilities as they are to privately owned utilities. However, publicly owned utilities which are, through our democratic institutions, subject to the control of their owners, who, with their taxes and the payment of bills, paid for these utilities in the first place, rightly don't normally adopt these measures. As the experience of Telstra, which is shedding and off-shoring jobs, and eliminating on-the-job training as fast as it is able, private corporations are under no such constraints.

In fact, privatisation introduces massive inefficiencies that do not exist for publicly owned utilities. One clear example, as Telstra has shown, is the extraordinary amount of time and effort it takes on the part of our legislators to force the privately owned corporations to serve the public interest. If Telstra had not been corporatised and then privatised, it would have long ago provided every Australian with access to fibre-optic broadband access. This is what it had planned to do before the turn of the century in the 1970's when it was a world leader in telecommunications and not constrained to justify measures, which were so obviously in the public interest, in terms of a free-market business model.

As a consequence, a large proportion of the Australian public do not have access to fibre-optic broadband, and the cost of providing broadband to our schools that satisfy the privatised Telstra's bottom line now stands in the way of NSW schools being able to take advantage of the Federal Government's program to give every school student a laptop computer. One need not think hard to imagine how having NSW's electricity assets in private hands would add a further hurdle to this program by increasing to costs to schools of provision of the necessary electricity.

Once electricity is in private hands, future NSW governments will inevitably face additional hurdles to the provision of electricity services that would not exist if current arrangements were to be preserved. Inevitably, the privatised corporations will withhold the building of substations or the provision or repair of connections in areas deemed to be less profitable. Governments will be faced with the choice of subsidising the private owners, providing the service itself, or allowing the customers to do without.

Please don't allow this to happen. Please use your vote in Parliament today as the NSW public are earnestly asking you to do and vote against the privatisation bill.

Yours sincerely,

James Sinnamon
on behalf of



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