Olsen tries the carrot, then the stick

By Anthony Benbow
and Bronwen Beechey

ADELAIDE — For the last 12 months, the Olsen Liberal government has been trying to privatise the state Electricity Trust (ETSA). A community and industrial campaign has so far thwarted Olsen's plan to ram the legislation through parliament, with the ALP, Democrats and independent MP Nick Xenophon opposing the sale.

The Liberals promised not to sell ETSA at the last state election, but after they were returned to government, they argued that the sale was necessary "to reduce debt". Studies show that the electricity revenue lost would exceed the interest saved.

After legislation allowing the sale of ETSA failed to pass the upper house, the government announced it would lease ETSA to a private operator for 20 years. On January 29, Olsen announced that the government would spend $1 billion from the proceeds of the lease on education, health, transport, the environment, family welfare and other community projects. The remaining revenue, estimated to be $3-5 billion, would be used to reduce the state debt.

Olsen believed the announcement would weaken the widespread opposition to privatisation, and put pressure on the ALP. But the proposal was rejected by parliamentary opponents, the trade union movement and the SA Council of Social Services. The only support came from business groups, who accused opponents of the ETSA sale of "playing politics" and "holding the state to ransom".

Opponents of privatisation have been joined by independent MP Mitch Williams and National Party MP Karlene Maywald.

Having failed with the carrot, Olsen has brought out the stick. On February 11, the government announced it was investigating a series of tax initiatives to make up the revenue lost if the sale or leasing of ETSA does not go ahead.

The government's preferred option is to add $160 to annual household electricity bills. The other possibilities being threatened include a levy on all households (a poll tax) and a new land tax.

From GLW issue 349