The Labor candidate for Holsworthy, Charishma Kaliyanda, has challenged sitting member Melanie Gibbons to support Labor’s legislation requiring the NSW Government to take the privatisation of electricity and water assets to voters through a referendum.
The bill – the State Energy and Water Utilities Protection (Referendum) Bill 2014 – was introduced into the NSW Parliament by Labor and will “ensure that our valuable electricity and water assets are not able to be privatised without the approval of the majority of the people of NSW.
“The Baird Liberal Government has said it plans to privatise our electricity poles and wires after the next election – something that will increase electricity prices for families and rob the state of over a billion dollars each year that funds infrastructure, hospitals and schools,” Ms Kaliyanda said.
“There is only one way that the Liberals can claim they have a mandate for the privatisation of the state’s electricity network and that is through a dedicated referendum held outside of an election campaign,” said Ms Kaliyanda.
“The electricity network represents decades of public investment in infrastructure that returns over a billion dollars each year to pay for building and maintaining schools, hospitals, roads and pays the wages of teachers, nurses and police.
“These are valuable public assets and the future of these assets should be determined by the people of NSW through a referendum.
“Every poll commissioned has clearly shown the majority of the community oppose privatising these critical public assets.
“The public deserves the right to carefully scrutinise the Liberals’ plan to privatise the electricity network through a referendum process.
“There are many questions that need answers about the impact this privatisation will have on family energy bills, reliability of the network and the cost to the NSW Budget.
“These are core public utilities and the consequence of privatising these assets is that the decision can really never be reversed.
“Once these assets are sold, they are gone – along with all the financial benefits to the people of NSW to pay for essential services like schools, hospitals and roads.
“The Auditor General has confirmed that the state’s electricity assets return $1.7 billion to the NSW budget to fund essential infrastructure and services. Under the Liberals’ plan to privatise the assets, at least $1.2 billion in dividends and income would be handed over to a for profit private company each year.”
What a load of rubbish from this Labor candidate. She obviously hasn’t even bothered to do a google search before making this bizarre claim, because even Wikipedia would show that electricity prices in Australia are 100-300% more expensive than the “privatised” U.S.
( http://en.wikipedia.org/wiki/Electricity_pricing )
This is despite Australia having plentiful coal reserves and access to other natural resources relative to it’s population.
Forget about the carbon tax adding 10% to our bills, the over regulated government run system is adding over 100%.
Hi Clinton,
Thanks for your comment. At no point in the article is there a comparison made between electricity prices here in NSW and in the US. I have also referenced the information which my comments are based on, the NSW Auditor General.
Given that you have brought up regulation, I believe voters deserve to know what could happen when government regulation to protect consumers is not in place or not stringent enough. In the interest of referencing information, here is a link to a New York Times article describing the devastating effect that Enron’s trading practices had on electricity prices and power delivery to consumers during California’s power crisis in 2000/2001: http://www.nytimes.com/2002/05/07/business/enron-forced-up-california-prices-documents-show.html
That is something I doubt anyone wants to see occur in NSW.
Kind regards,
Charishma Kaliyanda
Labor Candidate for Holsworthy
I have just approved your comment for publication, Charishma.
Regards
Eric
I could bring up disastrous examples of government owned power providers, Chernobyl for example. One example of a mess significantly created by the government does not cancel out the obvious that the vast majority of low prices and comfort we enjoy today is not because of bureaucrats but because of entrepreneurs focusing on their customers.
But lets have a look at the mess of regulation the Californian legislature put in place. In particular, the worse sort of regulation, price controls:
“The utilities were then required to buy their electricity from the newly created day-ahead only market, the California Power Exchange (PX). Utilities were precluded from entering into longer-term agreements that would have allowed them to hedge their energy purchases and mitigate day-to-day swings in prices due to transient supply disruptions and demand spikes from hot weather.”
Long term contracts are important for hedging risks. The legislature prevented this market mechanism.
Also:
“Energy deregulation put the three companies that distribute electricity into a tough situation. Energy deregulation policy froze or capped the existing price of energy that the three energy distributors could charge.”
Indeed, Democrat Governor Davis himself admitted:
“Believe me, if I wanted to raise rates I could have solved this problem in 20 minutes.”
Electricity prices are rising. Whether it’s the free market or government, neither can do anything in the short term about the fact that demand for electricity across the world is rapidly increasing. All government can do is shift that price to the taxpayer, who are the same people anyway.
The same was happening in California. The price of electricity was rising. Had it been government owned, the government would have raised prices, either directly, or by increasing taxpayer funded subsidies. But it didn’t actually deregulate by allowing private sector to do the same, it increased regulation. In particular, it increased price regulation. Previously, the owner of the electricity retailers (the government) was in control of prices, now, it was regulated so the owner could not control prices.
Had prices been able to rise, it would have encouraged investment into the market. Enron’s price gouging would have failed as retailers quickly set up additional generation capacity. Indeed, by doing this, Enron would lose out, as then the retailers would control their own generation. As a result, but even allowing prices to rise, the implicit threat of “taking your business elsewhere, even at a higher price” means that the other side doesn’t bother trying.
The Calafornian energy crisis was again, caused by government, increasing regulation on the power industry. There are sensible regulations, but the Calafornian government’s approach was not one of them.
We don’t want to see Chernobyl happening in NSW either, but I don’t use that as an argument against government power generation. We can all prop up straw men, but Wizard of Oz was 80 years ago, and taken as a whole you’d have to not have a computer or a mobile phone, or for that matter not eat to not realise that free enterprise produces lower prices.
Approved
No, she is right. According to Professor John Foster who is Director of
the University of Queensland’s Energy Economics and Management
Group,whenever services are privatised the price goes up. Private
companies want dividends for their investment. It’s not about a public
service. It happened in Victoria with electricity and South Australia. Prior to
privatisation and deregulation, electricity rates in eastern Australia were amongst the cheapest in the world. Now rates are soaring and are now amongst
the most expensive in the world. Privatisation is about a quick sell
off of assets as a short term budgetary fix, but in the end they lose
out of an important revenue. They sell the cow to pay for lunch, and
they have to buy their milk from then on. You need to research this much
more. Don’t be an advocate for something that is not in your interest.
I have approved your comment, thank you for your contribution.
Eric Kontos
Editor