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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.

Privatisation of Queensland Electricity Assets: A Preliminary Evaluation

The report by past Federal Treasurer Peter Costello of his supposedly independent investigation into Queensland State finances on behalf of the Queensland Government Commission of Audit recommended the full privatisation of Queensland Government's electricity generators. Only last year, the Queensland public, outraged at the asset fire sale embarked upon by former Premier Anna Bligh without any electoral mandate whatsoever from the 2009 state elections, savagely punished Labor at the ballot box leaving only 7 sitting Labor members in a house of 89.

That, less than a year after, the new Government of Campbell Newman has contrived an excuse to continue with policies, that have been so resoundingly repudiated by Queenslanders, provoked outrage. An example of the outrage felt is a new opinion poll taken by news.com, which shows that Qld privatisation [is] opposed by 85%: poll.

Professor John Quiggin of the University of Queensland responded on 6 March with a post on his web site. That post included a link to a pdf report which, by examining the disastrous history of privatisation across Australia in recent decades, comprehensively demolishes the case for any privatisation.

ETU raises white flag in fight against Queensland fire sale - Why?

On Saturday 10 April, at a Brisbane anti-privatisation forum held by Search Foundation, the Secretary of the Queensland branch of the Electrical Trades Union (ETU), an avowedly hard-line anti-privatisation union, revealed his view that the fight against the Bligh Government's fire sale was lost.

What you can do: If you are a member of a union affected by privatisation, particularly a member of the ETU, contact your union and demand that meetings be called so that this question be decided democratically by the membership. See also: "If the unions get off their knees, privatisation can be stopped!" of 4 May 10, Queensland Not For Sale - the Qld Council of Union's anti-privatisation web site, "Time for the B team" of 11 Apr 10 on johnquiggin.com and "Explaining Bligh’s privatisation push: Search Foundation forum" also of 11 Apr 10 on larvatusprodeo.net

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Updates, 2 May 10: Branch secretary claims ETU misrepresented by article and my response and a further response by Tony Reeves; Motion carried unanimously by meeting of AMWU members in Redbank Railway workshops in June 2009 calling for industrial action to defeat privatisation.

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