Power sell-off exposed as daylight robbery

Wallerwarang power station, NSW. Proceeds from the sale of NSW’s power assets could be as low as $400 million.

Testimony to the NSW upper house inquiry into the sale of NSW’s electricity assets has alleged that only a fraction of the $5.3 billion price tag will reach the public purse. Billions will be eaten up by “associated costs”.

These costs include about $1.5 billion in government funds to buy a new coal mine north-east of Lithgow to ensure a cheap coal supply for the new private owners. A further $1 billion in coal price subsidies is guaranteed to the private energy companies over the life of the mine.

In addition, the legal and administrative expenses for negotiating the deal amount an estimated $300 million alone.

The opposition and the mainstream media have limited their criticisms of the sale to claims that the taxpayers could have got a “better deal”.

In contrast, the NSW Greens and Socialist Alliance have criticised the sell-off outright.

Responding to opposition leader Barry O’Farrell’s statement that taxpayers been “short-changed”, Greens MP John Kaye was more blunt.

"This is worse than short-changed,” he told ABC News on January 18. “This is tied up bashed and robbed.”

Peter Boyle, Socialist Alliance lead candidate for the NSW Legislative Council, has also called for the next government to reverse the sale

“This sell-off will make it harder to address the climate change emergency,” Boyle said. “The NSW government
is forfeiting an opportunity to shift to renewable energy.”

NSW Treasurer Eric Roozendaal has defended the sale, claiming it will free NSW taxpayers from future risk in the sector. On January 19, he said it will still add $3 billion to state coffers, after other costs are deducted.

NSW Treasury Secretary Michael Schur, who appeared before the inquiry on January 18, disagreed. He admitted that taxpayers will have to repay the existing debts of state-owned energy companies Delta Electricity and Eraring Energy — amounting to at least $1.2 billion.

The government will also remain liable for up to $360 million in compensation to the new owners for any future outages or power failures during the life of the power stations.

Schur pointed out that the sale means the government will also lose about $600 million over the next four years in state taxes that will now be paid to the Commonwealth.

Not counting the loss of about $750 million in annual dividends, the proceeds from the sale after costs could be as low as $400 million.

Labor Premier Kristina Keneally — who has sought to stop the inquiry from taking place — has continued to hinder the process.

The eight energy company directors who resigned over the sale have been summonsed to appear before the inquiry or face court orders. But Keneally’s government has refused to guarantee legal protection to witnesses and even warned it may sue the ex-directors if they testify.

As a result, on January 20, four ex-directors of Eraring and Delta refused to attend the inquiry hearing, citing the lack of legal protection.

If you like our work, become a supporter

Green Left is a vital social-change project and aims to make all content available online, without paywalls. With no corporate sponsors or advertising, we rely on support and donations from readers like you.

For just $5 per month get the Green Left digital edition in your inbox each week. For $10 per month get the above and the print edition delivered to your door. You can also add a donation to your support by choosing the solidarity option of $20 per month.

Freecall now on 1800 634 206 or follow the support link below to make a secure supporter payment or donation online.