NSW gov’t pushes ahead with power sale

July 18, 2014
70% of NSW residents do not want the privatisation of electricity assets to go ahead.

NSW Premier Mike Baird has pushed ahead with plans to privatise the state's power network, without waiting for the results of the NSW election in March next year.

The Stop the Sell Off campaign has condemned the move, saying it makes a mockery of the premier's claim that he would seek a mandate from voters before pressing on with the sale of 49% of the state-owned electricity network businesses Ausgrid, Endeavour Energy, Transgrid and Essential Energy.

Stop the Sell Off campaign director Adam Kerslake said on July 15: "Investment banks Deutsche Bank and UBS have quietly been awarded a multi-million dollar contract to advise the NSW government on the sale process for the electricity network.

"Mike Baird said he would take the electricity privatisation to an election, giving the people of NSW the chance to have their say, but by locking in lucrative contracts with the investment banks that will design and carry out the sale, it's clear that he has already declared victory.

"The premier is treating the public with contempt by not only assuming that he will win the next election, but that his controversial policy will be supported by the upper house.

"It's no surprise investment bankers have been queuing up at the premier's door, because they know the big end of town will be the only winners if the poles and wires are privatised.

"We are calling on the premier to stop spending taxpayers' money on privatising public assets before he has even given the voters the chance to have their say.”

The Australian Competition and Consumer Commission (ACCC) has issued a warning that the sale of the NSW electricity network would push up power prices and have a negative impact on the public.

In a speech on June 23, ACCC chairperson Rod Simms presented a harsh assessment of the sale proposal, saying: "Selling monopoly or near monopoly assets with the primary aim of maximising proceeds, without due consideration of the competition implications, is effectively a tax on future generations."

Kerslake said it was the second blow delivered by the ACCC to the NSW government's privatisation plans in recent months after the premier's proposed $1.5 billion sale of Macquarie Generation to AGL was scuttled due to the impact on competition.

"We have said from day one that selling monopoly public assets is bad for consumers, with any short-term windfall from a sale more than eroded by higher prices and reduced services as future owners look to maximise their profits."

"We are calling on the premier to heed the advice of the ACCC and abort this proposal to privatise the monopoly electricity network companies.”

The privatisation of the state's power network will be a key issue in the state election next March. There is overwhelming opposition to the state government’s plans, with a recent poll commissioned by Stop the Sell Off showing 70% of residents do not want the privatisation to go ahead.

In an attempt to head off this discontent, Baird has sent a letter to all residents outlining his plans to sell off the power network. He has promised to spend $20 billion on infrastructure, including a new rail tunnel across the harbour and new regional roads. He has also promised that the jobs of employees will be protected and electricity prices will be discounted by 1% until 2019.

The Stop the Sell Off campaign, which is jointly funded by the Electrical Trades Union, the United Services Union and Professionals Australia, issued a reply on July 9.

"The NSW electricity network is the most valuable income generating asset owned by the people of NSW. Last year alone, Ausgrid, Endeavour Energy and Transgrid returned $3 billion in revenue to the government. This money is used to fund our schools, hospitals and community services," the statement said.

"The premier now wants to sell these publicly owned companies for $20 billion to fund toll road projects in Sydney.

"The Australian Energy Regulator found that electricity prices are lower in NSW than South Australia, where electricity has been fully privatised and deregulated.

"Electricity privatisation has not led to lower prices anywhere in the world and will not lead to lower prices in NSW.”

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