The NSW Coalition government announced on October 20 that it had sold 50.4% of the publicly-owned power distribution network Ausgrid to a consortium of AustralianSuper and IFM Investors for $16.2 billion.
In a statement on October 21, the NSW Electrical Trades Union (ETU) said, “The government refers to this amount as ‘gross proceeds’, which is code for once we pay the debt that we owe, the ‘net proceeds’ to the public are a mere $6 billion.
“The transfer of a publicly owned monopoly asset into private hands is never a good thing because inevitably the profit motive of a monopoly private owner results in higher prices and lower service and the loss of a revenue generating asset to the public.”
The ETU and the United Services Union (USU), which together represent the majority of Ausgrid workers, have demanded that the new owners of a controlling stake in Ausgrid — Australia's largest electricity distribution network — commit to a legally binding agreement that ensures existing employment numbers and service standards are retained at the privatised business.
ETU state secretary Steve Butler said: “We are demanding that the new owners, AustralianSuper and IFM Investors, publicly commit to retain all existing workers, to abide by the five-year job guarantees negotiated by the parliament prior to this sale, and to maintain the high standard of service that Ausgrid customers currently receive.”
USU general secretary Graeme Kelly said on October 20 the unions would be writing to AustralianSuper and IFM Investors seeking an urgent meeting to discuss staff protections and the future operations of the company.
“Electricity distribution is a natural monopoly. That means if service standards drop, if maintenance is reduced or emergency response times blow out, consumers have no ability to choose an alternative supplier for their power,” Kelly said.
“That is why unions have fought against this sale from day one, and why we will continue to fight to ensure the best possible outcome for workers and consumers going forward. Today's announcement will not see us back away from our commitment to protect the jobs of our members and the services that Ausgrid provides to the people of NSW.”
On September 23, Butler had responded to earlier news of the unsolicited offer from the Australian-based superannuation consortium by referring to the fact that only a month previously federal Treasurer Scott Morrison had blocked a similar proposed sale of the company to a Chinese group, citing “national security concerns”.
“Our position remains unchanged: handing over a monopoly asset that provides an essential service to the community to any private owner will result in higher prices for consumers and bad outcomes for workers,” he said.
“The federal government has been advised that it is not in Australia's national interest for Ausgrid to be sold off to a private entity, and our view is that it doesn't matter whether that buyer is a Chinese company or an Australian super fund, the risks remain the same.
“The only way to guarantee that this company remains fully in Australian hands, and that these risks are appropriately managed, is to keep it in public ownership,” Butler said.
The reality of the sell-off was underlined by commentator Giles Parkinson in RenewEnergy on October 24: “The sale of a 50% stake in Australia's biggest network operator, Ausgrid, to two Australian super fund managers has been hailed in just about all media quarters as a really good deal: Great for the [NSW] government, great for the taxpayer, great for the investors, and great for the investment bankers and advisers who will pocket massive fees.
“Great for everyone, that is, except for the consumer, who in coming years can expect to see huge increases in fixed network charges, and resistance from network and government shareholders towards solar energy and battery storage and the shift away from centralised power to distributed energy.”
Ausgrid, which serves 1.7 million customers in Sydney, the Hunter Valley and the NSW Central Coast, is a strategic public asset, and part of the government's insane neoliberal drive to sell off every piece of government-owned property in the state.
The privatisation of public electricity networks have already happened around the country, resulting in the loss of revenue for government treasuries. The income from these state assets is lost forever — funds that could be spent on hospitals, schools and other public services.
Moreover, we lose effective community control over the essential process of transition to renewable energy and the need to phase out coal and other fossil fuel-based power production.
It is time to turn back the privatisation tide, reject the sale of Ausgrid unconditionally and prepare to take back into public ownership the energy, banking and mining corporations that dominate our big-business economy.
Let’s put people before profit and defend and extend the public sector as part of a campaign to eventually replace private domination of our key industries by public ownership, under workers’ and community control.