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Privatisation backlash: Government fire sales have slowed following Qld Elections

It was maddening to hear a number of mainstream and lesser media organs come out observing that the Labor Party lost the recent Queensland election because of ex-Premier Anna Bligh's and ex-Treasurer, Andrew Fraser's counterintuitive and unpopular insistence on going ahead with privatisation and population growth policies, when you spent time recording the efforts of a man who continually tried to raise these issues and was preparing to run for election as an independent on these very matters in a major Brisbane seat. James Sinnamon was engaged in a long running campaign to raise the media profile of the Queensland public's right to choose on population and privatisation, when a terrible road accident removed him from active political life. Reviewing Laura Tingle's "Great Expectations in Quarterly Essay, June 2012, brings home the awful consequences of not having Australian political alternatives to canvass the selling off of institutions. See "Tingle shoots blanks despite great expectations." See also ABC markets new privatisation grab of public assets

James is on film grilling the then Queensland State Treasurer, Andrew Fraser about his failure to consider the financial and political costs of encouraging massive population growth in Queensland, and giving an election speech where he predicted the selling of Queensland Rail and Port among other assets. And he ran a battle on with the Queensland ETU, which he challenged to run an effective anti-privatisation program. James was planning to run against Arch Bevis in Mount Coot-ha in 2010, but instead spent months in hospital with severe head injuries after being knocked off his bicycle by a four wheel drive on a rarely frequented byway. James's removal from candidature on the issue of privatisation seems truly ironic because Bevis, who had held onto his seat through hell and high waters for years, finally lost it to the Liberals, simply because neither the Greens nor the Socialist Alliance nor the Democrats could bring themselves to offer the public an alternative on the obvious issues of privatisation and population policies in Queensland. James intended to run against Andrew Fraser in 2012 in the Federal election, but sadly, he was still in rehabilitation interstate.

It's a shame that apparently no-one thought to stand in any recent state election campaign explicitly opposed to the zombie economists' policy of privatisation. It seems as if Queenslanders' emphatic repudiation of privatisation at the 2012 state elections and the repudiation of privatisation in the 2011 NSW elections has at least helped to cause the Victorian Government to re-think some of its plans to sell-off the few public assets that Kennett didn't flog off.

In March the Baillieu Government announced that it intended to flog off the Port of Melbourne, but changed its mind anticipating the drubbing that the Queensland Labor Government of Anna Bligh was about to face on 28 March as a result of its privatisation policies. Whilst the sell-off of public assets seems to have slowed down, the sale of other Australian assets to foreign interests has gathered steam, including the sale of farmland to Qatar. [1]

More recently, the Baillieu Government has talked about charging tolls on public roads. James Sinnamon, May 2012.

Public institutions and services embody civil rights for Australians; their loss impacts on democracy as well as quality of life

Australians do not have a Civil Code that grants them rights defensible at law, unlike France and almost all European polities except for the United Kingdom. Australian rights were contained in public institutions that administered goods and services for Australians and were answerable to Australians. Such institutions were Telecom, a regulated banking industry and various Ports, Roads, Railways, public housing, electricity, gas and water. They were provided and maintained in exchange for income tax and subsidised, regulated payments. All such assets have either been diminished or completely sold off in trends that began during the Hawke-Keating era. (In some cases underfunding began earlier. Public housing is an example, where Primeminister Menzies, in the 1960s, began to reduce funding for public housing and to encourage private development, at the same time as he encouraged higher immigration.) When these insitutions and assets have been sold off, the rights they fulfilled have been abrogated or have completely disappeared. Now the services they provided can only be purchased and adequate basic resources including shelter, heating and water are now unaffordable to a widening group of Australians.

It was maddening to hear a number of mainstream and lesser media organs come out observing that the Labor Party lost the recent Queensland election because of ex-Premier Anna Bligh's and ex-Treasurer, Andrew Fraser's counterintuitive and unpopular insistence on going ahead with privatisation and population growth policies, when you have worked hard recording the efforts of one Queenslander independent who continually tried to raise these issues democratically and was willfully ignored by the mainstream media and the Queensland State Government.[2]

Until 18 May 2010, James Sinnamon was engaged in a long running preparation to raise the media profile of the Queensland public's right to choose on population and privatisation. A small portion of his efforts is recorded in four films on YouTube, of which the first is Part One of Privatisation and the Right to govern.

In Privatisation and the Right to Govern, (Parts 1, 2 and 3) Sinnamon goes one-to-one with the Queensland State Treasurer, Andrew Fraser, about Fraser's failure to consider the financial and political costs of encouraging massive population growth in Queensland.

In James Sinnamon's Privatisation Speech -Dave Zwolenski Launch, James predicts in detail the selling of Queensland Rail and Queensland Ports among other public assets.

James also ran a battle on with the Queensland ETU, challenging them to run an effective anti-privatisation program. They didn't like being shown up. See "If the unions get off their knees, privatisation can be stopped" and "ETU raises white flag in fight against Queensland fire sale - Why?" and "Labor wrecker of 2007 claims union anti-privatisation campaign a threat to re-election of federal Labor.".

Why James Sinnamon did not run for government in 2010 and 2012 on the privatisation issue

As mentioned above, James was planning to run against Labor's long-reigning Arch Bevis in Mount Coot-ha in 2010. Instead James spent months in hospital with severe head injuries after being knocked off his bicycle by a four wheel drive on a rarely frequented byway on May 18th. As noted, the ALP's Arch Bevis, who had held onto his seat through hell and high waters for years, finally lost it to the Liberals. The main reason was probably because neither the Greens nor the Socialist Alliance nor the Democrats could bring themselves to offer the public an alternative on the obvious issues of privatisation and population policies in Queensland. In failing to offer this alternative, all parties participating contributed to what Laura Tingle documents in "Great Expectations," Quarterly Essay, June 2012, as the bipartisan sacrifice of institutions by governments in Australia, leading to government loss of power to deliver government to the people in Australia. See

James had also intended to run against Andrew Fraser in 2012 in the Federal election, but sadly, he was still in rehabilitation interstate. was James's creation as a tool in his long-run political reform program which had specific and broader aims. One of those aims was to bring real debate into Australian politics. It still is. James is still the owner of and still contributing, although at a reduced rate and quantity. We continue to hope that he can return to a more active role in politics.

It was also ironic recently to read at, on 2nd of April 2012 an article entitled "Queensland-labour-movement-should-call-refounding-conference," the following:

"Queensland ETU billboard poster. The ETU was the only union to campaign boldly against privatisation. But it did so in a way that was bound to be counter-productive politically, rather than by rousing the labour movement to overturn Bligh."

Ironic because James Sinnamon's campaign against privatisation had been ignored by Worker's Liberty, although he had been a long time activist on privatisation. It was also noticable that Workers' Liberty kept the mention of privatisation a long way down the article, preferring to precede it with motherhood stuff.

As mentioned above, James Sinnamon had challenged the ETU to lift its game on privatisation again and again, where Workers Liberty had remained completely silent on the issue. And, according to the record James kept, the ETU's campaign was anything but bold. Here is a link to the articles he wrote on the matter. ;
"ETU raises white flag in fight against Queensland fire sale - Why?" and
"Labor wrecker of 2007 claims union anti-privatisation campaign a threat to re-election of federal Labor"

Below is the transcript of one part of a three part film where James Sinnamon interviewed Andrew Fraser about privatisation and the costs of population growth. It is called, "Privatisation and the Right to Govern." Here is a link to the film.

Towards a better history of what really happened

SINNAMON: (continued from above) The second alternative that you haven't responded to is population growth.

Now, my letter from Anna Bligh read, said, that we are paying for ... um... we are selling the assets in order to pay for infrastructure that is necessary to cope with population growth.

Now it is the */choice/* of Queensland Government and Commonwealth Government to deliver the greater population. Back in 2005, Peter Beattie put in an advertisement in the Courier Mail newspaper that asked people to move interstate- move from interstate into Queensland. He never told the people that four or five years down the track, we were going to be paying for extra population growth by selling off the family silver.

FRASER: Well, James, in fact, the biggest population flows, rather than interstate migration, are, in fact, from overseas migration.

SINNAMON: That's right ...

FRASER: So, let me finish my point, please ...

FRASER (continues): and secondly from increase in the natural birth rate. And, I do not believe, as a nation, that we need to have Checkpoint Charlie set up at the Tweed River. It's not only unconstitutional; it's unAustralian. Secondly, I don't support having birth limits for Australians who want to start a family and the reality is that population growth is not a pre-determined government policy, but, the challenge is for us to deal with the population flows which are occurring. So we can't stop people from coming over the border from New South Wales and Victoria. The Federal government sets the migration policy. People are free to move about within Australia, and, thirdly, I don't support a population limit in terms of birth limits, so there is a challenge that needs to be dealt with.

Comment: This "Checkpoint Charlie" jibe presumes that only two extreme positions can be taken. At one extreme is for Governments to not in any way act to discourage the movement of people interstate or overseas or encourage women to limit the number of their Children. If this extreme is rejected, then the one must necessarily be in favour of the other extreme of brutally coercive meassures to limit population growth and restrict the movement of people into Queensland. See also introduction to Part 3, above.

Andrew Fraser's claimed abhorrence of Government coercion sits uncomfortably with his past record as Minister for Local Government, when he imposed then Premier Peter Beattie's disatrous and unpopular forced local Government amalgamations. When the local Governments attempted to organise ballots to see to determine whether local residents supported or opposed the enforced amalgamations, the Courier Mail newspaper in the story "Rebel council faces the sack" of 10 Aug 07 reported, "Local Government Minister Andrew Fraser ... warn[ed] any counting or collating [of ballots] would attract instant dismissal." (See also "Queensland mayors defy dismissal threats to consult their communities" of 12 Aug 07.)

SINNAMON: Both you and Anna Bligh came out after Kevin Rudd made the statement in favour of Australia's population increasing to ... um...I think the figure was 40 million by 2050 or something like that.

You both said, that 'We can meet the challenge' ...

And it's obvious - the newspapers - every day of the week - are full of stories about how the Queensland government has failed, completely failed to meet the challenge of past population growth.

Our streets are a schmozzle. We are being told that our rates and our electricity rates must go up; we must pay more for water, because we have to build more infrastructure to pay for the additional numbers that the Queensland government has deliberately encouraged to come here.

Now, if - ah - and then back in - when the auditor general's report came out and you - it slammed the Queensland government's management of health, management of transport, Anna Bligh stood up and said, "It's not my fault, it's the fault of population growth." And yet, when there's a raging debate about increasing Australia's population by another 60 per cent, both you and Anna Bligh came out and publicly said that we can rise to the challenge.

Other people who are responsible, who care about our future, recognise that there are limits to what water, what we can pay for, said, "This is not on, this has to be stopped." The fact is that the Queensland Government, at every point, has encouraged population growth and it hasn't told the public, 'if we grow the population of Queensland, then you've got to pay for that population growth with selling off the family silver.'

FRASER: The reality that we have to face, James, as we said very clearly in the public arena, is we have to make choices. There's not - There's a finite resource out there in terms of the ability to raise debt. You don't accept that; you agree with more and more debt. I don't. That's the starting point to the debate.

SINNAMON: No, I don't agree with more and more debt. I think there has to be a limit too. So I propose one way to limit ...

FRAZER: What's your limit?

SINNAMON: Stabilise population. And if we are paying [by] selling off our public assets ...

FRASER: Do you support cutting the migration intake, banning interstate migration, and capping the birth rate?

SINNAMON: I say start with stopping international immigration. I say that, if the Federal government is so irresponsible that they want to increase our population by 60 million, then our state governments have responsibility to say, "Hey, we are having to flog off our assets to pay for this."

We are ... and we had to find the money to build desalination plants because there won't be enough water for people to drink, if we don't ... I mean ... we need that point of leadership. Now, a few councils, like the Sunshine Coast council are trying very hard to put a population cap up there. The Queensland government is bent over backwards to make sure that that doesn't work. You know, they're over-ruling their ... um... Instead of supporting those councils they are using every possible opportunity, including this advertisement back in 2005 to actually encourage more people to come here.

You know, it's clear that the Queensland government has created the problem that it now says it has to solve by flogging off our assets. Which are opposed by 84 per cent under Beatty so that people were never asked about in the first place. They were never asked about population growth. They were never asked about flogging off our assets.

FRASER: [Note distortion of terms] I'm happy to have a public debate about whether or not people think we should cap the birth rate orwhether we should put Checkpoint Charlie up at the Tweed River. I happen to think that the community won't support it.

And neither do I. And neither does the government.

Comment: A subsequent opinion poll showed that 60% of Queenslanders wanted a population cap -- a strong majority, if not as strong as the majority opposed to privatisation. That the majority is not higher -- perhaps due to a more successful and unrelenting propaganda campaign -- is of concern, but that figure still shows Fraser to be wrong. (See also "Premier Bligh pretends Queenslanders cannot cap population growth although 60% want to" of 7 Dec 09.)

SINNAMON: Do you think that it's excusable to actually encourage population growth as well? I mean, we're not talking about "CheckpointCharlie", we're just simply saying that the population has increased to astronomical levels that already raise ...

FRASER: I think we need to be honest about what controlling population growth means, and that means migration controls ...

SINNAMON: That's right, yes.

FRASER: That mean's Checkpoint Charlie, and that means, capping the birth rate, and I don't support it.

SINNAMON: It means that ... okay... well, basically we disagree, don't we? I say any community has a right to say what numbers come in tot his community. I'm saying that, if the community has to go bankrupt, as you are basically saying we are...

You're saying, you're basically telling me, and Anna Bligh has said, that we have to sell-off the family silver, we have to pay for ever-higher electricity rates, we've got to pay more water ...

We've got to basically throw the Mary River people off their farms, and so on and so forth. It's just never ends - to pay for population growth.

Privatisation and the Right to Govern - Part 3

Go to embedded video.

SINNAMON (from before):Now I think that the community are entitled to have those alternatives put to them.

FRASER: James, you and I have very different views on this and you exercised your democratic right to stand as an independent candidate in the last election and put those views into the arena. I also stood as a candidate and others did and others are welcome to in the future and I'm happy for the debate tocontinue from here on in, but I don't agree that the propositions you're putting forward are supported by the broader community.

SINNAMON: Well, what do you say to the fact that 84 per cent of the people oppose privatisation, and that they felt - 66 per cent felt - that they were misled in the last election?

FRASER: What I've said - what I'll say to you - is what I've said all day every day, and that is, we had to make a choice; none of the choices were easy: cutting wages, freezing wages, less teachers, less doctors, less school cleaners, when population's increasing. Or you can make a decision about those things that government has done in the past, but, needs to make a choice about whether we choose to fund new rolling stock and new railway lines for BHP and Rio Tinto or, whether we put it into schools and hospitals and other resources that only governments would provide. We're not selling - ah - the timber business as the whole land ... we're selling the right to mill the trees... They're sold anyway, so they're getting the right to mill the trees. That's what we're proposing to transact there. Those are just the elements of what we are doing in making a decision about doing those things that we need to do ... and those things that are the priorities of government. And, when it comes to it, investing in hospitals, investing in schools, investing in disability services, are all the things that we believe, as a Labor government, ... are the priorities over building infrastructure for commercial interests that are able to do it themselves. That's the essential choice that we had to make and it's the one we made.

SINNAMON: Are you going to stop encouraging population growth? Are you going to come out and tell the public, tell the government, that we are ...

FRASER: We're not encouraging population growth, we're just dealing with the natural consequences.

Comment: See introduction to Part 3 about this claim.

SINNAMON: Why not tell the Queensland public that we are paying for the past population growth with selling our public assets and inall sorts of ways? And why don't you get up and say to the Queensland public that, if this continues, then, what prospect do we have of having anything left in another fifty years time?

FRASER: Well, the problem with your analysis, James, is that it doesn't accept the fact that we're proposing to put $15 billion worth of assets onto the market, from an asset base of more than $200 billion... and by the time we finish, the asset base will be over $250 billion. So, this year alone, we're building an $18 billion dollar infrastructure program which supports building the asset base. Now, the debate we're having here is about $15 billion, which represents ... ah... a component of just one year'sinvestment that we're undertaking. So, everything that we are proposing to put to the market facilitates the capital expansion of the state. Building more assets, each and every day, each year, into the future. And that's the bottom line.

Comment: If this were true, then it would count as a substantive argument for privatisation. As result of selling $14 billion worth of assets, the Queensland Government's asset base is increased from $200 billion to $250 billion. Part of the reason for this would lie in the fact that more infrastructure assets are needed for Queensland's increased population, anyway. MUch of the money is being openly raised by increasing the charges for services as discussed above, so would not be dependent upon asset sales. All the same the figures Fraser has provided don't seem right and need further scrutiny.

SINNAMON: Okay. This letter in the Courier Mail, Friday, said that you haven't yet released the business case for privatisation. When do youintend to do that?

FRASER: We've put the rationale into the broader public arena.

SINNAMON: The general business case, the actual hard figures that actually show the sort of thing the figures of John - Professor John Quiggin's been asking for. When do you intend to do that?

FRASER: Well I debated Mr Quiggin on radio on Friday.

SINNAMON: For five minutes. For all of five minutes. Hardly a debate, I would have thought.

FRASER: Well, I certainly was ... ah... happy to debate him. The reality is we've had to make this decision and all those ... ah... figures are in the public arena, all the entities have reported as government-owned corporations, and ultimately ... and ultimately, you proposed a different policy and platform at the elections, which didn't gain the support of the people. You're entitled to put your views, James, and I'm entitled to put mine.

SINNAMON: Yes, I that's a bit [??vague]. I think that if people realised that privatisation was up for ... was an issue at the last election it would have been a very different story. I don't think you would be treasurer today if people realised that you were going to sell off $14billion of their assets. And I don't think Anna Bligh would be Premier.

FRASER: Well, you're entitled to put your views, James, and you're entitled to ... ah... proceed with them. That's your perfect entitlement as a citizen and I respect that. I've allowed you to film and record this interview. Use it for whatever political purpose you like into the future.

SINNAMON: Just one other question, Andrew, if you're wrong, if you're proven wrong, and our leaders have been proven wrong every time about privatisation, particularly the privatisation of the retail arm of electricity ... where we were promised cheaper electricity. If you're proven wrong, four or five years down the track, just as the Federal government was proven wrong about privatisation of Telstra, what recourse will they have? How do we get out of the mess that will have been created, that most people believe will happen?

FRASER: James, ultimately, I believe that what we are doing is the right thing to do ...

SINNAMON: How do we ... You're not answering my question ...

FRASER (continues from above): and that what we are doing is the correct thing to do, and that's what's decided to do.

SINNAMON: How do we, what recourse do we have? We have no recourse against Peter Beattie who privatised Ergon without ourpermission ...

FRASER: The recourse as ever, is daily media scrutiny, the parliament, and election. That's the way it's always worked in Australia.

SINNAMON: We've had no recourse against Peter Beattie, who sold off the assets against our wishes and we're all paying higher electricityprices. We believe that the same will happen.

SINNAMON (continues): What recourse will we have when it all goes pear-shaped, as people believe?

FRASER: I'm happy to be accountable for all my decisions, James.

FRASER: Thanks for meeting.

SINNAMON: Yeah. Just as Peter Beattie is accountable today. You know, he's headed off and we're in hock because of the decision that he made today and we'll be [indecipherable] ...

FRASER: Well, I disagree with you. You're entitled as a political candidate to put your view and I'm entitled as a political candidate to put mine.

SINNAMON: Why won't you hold a referendum on this? People ... 84 per cent of people are against it, why can't people have the final say on privatisation? You haven't swayed me.

FRASER: Because we're elected to make decisions. We're elected to make the tough decisions.

SINNAMON: People oppose that decision. They have consistently opposed that. They have opposed every privatisation. 70 per cent ofpeople opposed the Telstra privatisation. I believe that you know that they would have opposed you and would have voted you out if they were aware that you ... if they had had any hint that you were going to privatise, and I think ...

FRASER: Well, James, you're advancing a contradictory thesis that ... um...that one time you're saying I did say that in the election campaign, and the second time ... the second part of your question is that I didn't. So you need to decide which accusation you're going to make against me and the government.

My comment: I am not sure what Andrew Fraser was referring to here. I never conceded that he had been forhtright about his intentions during the course of the elections. What I had pointed out on a number of occasions was that he had not given a categorical assurance that there would not be any privatisations during the course of the elections. That is why I repeatedly asked that he either make that categorical commitment or be prepared to debate privatisation. It is obvious in the electionsThis was a truly bizarre argument that seemed to come from nowhere. My thesis was that the people of Queensland had not been informed of Andrew Fraser's intention to sell $14 billion worth of their assets during the state elections in spite of my repeated earnest requests to both him and Anna Bligh during and before the elections that they do so. As I said in the interview, if they were not prepeared to preclude privatisation during the course of the elections, then privatisation was at stake in the elections and it should have been debated.

SINNAMON: No, I believe that you're [??indeciferable] ...

FRASER: You're a political candidate and you're entitled to your views. I need to progress, so thanks very much for coming along.

SINNAMON: Okay, well thank you for your time.

Appendix 3: Correspondence concerning my request for a debate amongst candidates contesting Mount Coot-tha electorate

James Sinnamon took from Andrew Fraser's reply, that the 'candidate's forum' would be something approximating a debate. It turned out not to be. I was first speaker on the night and given only 10 minutes. No opportunity was provided for me to respond to Andrew Fraser's 'rebuttal' of my arguments against privatisation in my own speech.

His many other attempts to get Andrew Fraser to properly debate privatisation and the issues at stake in the elections can be found in "Open letter to Anna Bligh and Andrew Fraser asking that any planned privatisations be put to the public at forthcoming elections" of 17 Feb 09, "Andrew Fraser's three different responses to a question on privatisation" of 17 Mar 09, "Brisbane ABC suppresses alternative candidates in state elections despite listener dismay with major parties" of 30 Apr 09.


[1] Editor: This article adapts a comment by James Sinnamon to this site on 9 May 2012. That comment was adapted from one that James Sinnamon unsuccessfully attempted to post in response to article "Zombies reach Australia," on He writes: 'Point 7 of that site's discussion policy (which I hadn't read) states: "Comments with large numbers of links will trigger spam filters and be rejected automatically". So it was deleted. Whilst this is understandable I still think this is unfortunate. The strength of the Internet is for material, particularly material arguing opposed viewpoints to be directly linked or else linked to from a single document, thereby allowing readers to more easily consider the comparative merits of contrary arguments. Solon and JFK would have surely agreed. That is why my articles and comments often contain a number of links. (At least I have been able to post a shorter comment from that page containing a link back to here.)'

[2] John-Paul Langbroek also challenged privatisation, calling for a public referendum on it. Perhaps that is why he lost the leadership of the Liberal Party with, incredibly, a total outsider with the same policies as the Queensland ALP, taking it over.See John-Paul Langbroek and why the Liberal National Party won't survive unless Labor Governments reform

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PRIME Minister Julia Gillard was playing pure politics when she used a speech to the Energy Policy Institute of Australia on Tuesday to blame state governments for soaring power prices.

Queensland has had a 80 per cent hike in household electricity prices in the past five years. Mr Newman will seize every opportunity he can to blame his predecessors for financial and policy mismanagement.

Queenslanders are also paying the price for meeting growing demand, both from an increasing population and, in the southeast in particular, a rapid take-up of airconditioners, which places big strains on the system on the hottest days of the year. High rise living means being captive to powered appliances such as air conditioning, clothes drying and heating even in the more southern states.

Privatising the Government's electricity businesses to put them in the hands of efficiency-focused private companies. This would provide consumers with "greater choice" and "more competition" but also free the government from the public beating it receives each year when the Queensland Competition Authority announces the electricity price increase for the next 12 months. It also free governments from trade unions and industrial relations.

editorial - shedding light on power prices

Prior to Kennett’s election, the government-owned State Electricity Commission of Victoria (SECV) was responsible for the supply of electricity in Victoria. Despite being accused of being unproductive, an Electricity Supply Association study of 1000 utilities around the world found that SECV was in the top ten for efficiency of resource use and that it was also highly efficient in terms of technical efficiency of distribution. The SECV in fact delivered affordable electricity to consumers whilst making a healthy profit. Project Victoria nonetheless called for the privatisation, deregulation and corporatisation of the State’s electricity demonstrates its ideologically driven nature.

Neo-liberal think tanks and neo-liberal restructuring: Damien Cahill and Sharon Beder

Victoria's State Electricity Commission (SEC) generated and sold power to Victorian consumers from 1926 to 1998. In every single year it reduced the real price of power to customers. This meant that for ordinary households buying electricity took a smaller part of their earnings in each successive year. the SEC also trained thousands of apprentices in electricity and other workplace skills. Eventually, many of these highly skilled tradesmen found their way into the wider workforce. In a similar manner, the SEC also trained engineers and other skilled workers, not all of whom chose to remain in the commission's employ. Either way, the community got the benefit of skills-training provided by the SEC.

ECONOMIC AFFAIRS: Privatisation has failed to deliver cheaper electricity

In 2000-1 the price of electricity in the National Electricity Market increased by 60%. When retail deregulation was introduced in Victoria, price caps continued with ‘safety net’ prices being set by the government to avoid the political implications of these large price increases. Privatisation of electricity in Victoria had failed to deliver any increased generating capacity and generator breakdowns were threatening blackouts.

About $2.5 billion over 15 years could be saved if electricity distribution reliability was slightly reduced, according to the Australian Energy Market Commission's (AEMC) review of rule changes for the state government.

More than $11 billion is poured into power infrastructure to stop "blackouts" occurring in peak periods, totalling about four days every year. Reducing reliability is an assault on productivity, on our lifestyles, and on our energy bills.

Now, we could be forced to compromise electricity reliability to contain the costs of power.

Blackouts costing Australia 11 b

The real costs of supplying energy are in distribution rather than generation. The "poles and wires" must be replaced, maintained, and also expanded to cope with population growth. Thus, reliability will be compromised to pay for economic growth.

While Julia Gillard blames the States for the surging costs of power even before the introduction of the carbon tax, it is Federal policies that drive our population growth.

Planning Minister Matthew Guy recently announced the creation of 6 new suburbs. All these new consumers, over 60,000 per year, will need either upgraded, or new, "poles and wires".

The costs and impacts of a growth-based economy are passed onto the people of Victoria, whose hip pockets will be raided to pay for basic utilities. The constraints to growth are becoming clearer, and economic growth is becoming more uneconomic.