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Ernst and Young oversell privatisation - by John Quiggin

Previously published (22/1/2015) on JohnQuiggin.com.

Ernst and Young, leading consultants to the Queensland government have released a report claiming that electricity costs would be lower under privatisation. Although the report was commissioned by private infrastructure lobby group Infrastructure Partners Australia, it's just a rehash of the same line EY have been pushing for years in similar reports commissioned by pro-privatisation governments. The central claim is that electricity prices have risen more in Queensland and NSW, under corporatisation than in Victoria and SA, under privatisation. What they don't tell you is that this merely offsets increases imposed in the leadup to privatisation, with the result that retail prices are much the same in all four states, and far higher than when the process of market reform (supposedly to reduce prices through competition) began in the 1990s.

Professor John Quiggin, of the University of Queensland criticised the Ernst and Young report on privatisation of the electricity industry.

The Ernst and Young report ignores the biggest factor leading to higher electricity prices throughout Australia: the failed process of market reform, corporatisation and privatisation of which the LNP government’s asset sales is a part, rofessor Quiggin said.

Although the problems have differed from state to state, there is no evidence that states which undertook full scale privatisation in the 1990s have performed any better. South Australia has some of the highest electricity prices in the world, and Victorian prices are comparable to those in NSW and Queensland.

Candobetter.net's Editor's comment. There is a very good resource on privatisation here: http://www.herinst.org/BusinessManagedDemocracy/government/privatisation/risk.html

Original Source: http://johnquiggin.com/2015/01/22/ernst-and-young-oversell-privatisation/

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Comments

The Big Bad Debt, as calculated for the Qld. Govt's political agenda by independent auditor Peter Costello (ROTFLMAO), includes GOC operational debt. This is a standard business item on most any business balance sheet, public or private, and deserves no panic or rush toward it's elimination. Again the 4th Estate has been found with its hand deep in its own pants.