ETU letter to members

The trouble with the NSW Government’s announcement in relation to electricity privatisation is that it proves that they don’t understand how the sector operates.

I have never heard of a privatisation or long term lease of any electricity industry in Australia, or anywhere in the world, which has resulted in more jobs, lower prices or better service. NSW will not break this trend.

The majority of the ETU’s members employed in the electricity industry will not be affected as this proposal only applies to ETU members employed in the generators or who perform a retail function in the Distributors. All up, this involves approximately 300 ETU members. It is fair to say that the Government has come up with a number of innovative ways to buy their silence, but I think most members will see this bribe for what it is – a bribe of some 40 pieces of silver.

The State Council of the Union unanimously passed a resolution opposing the privatisation proposal and committing the Union to a vigorous campaign of opposition.

The ETU’s anti-privatisation campaign in 1997 wasn’t focused on employees - - - job losses were simply going to be a by-product. Our campaign was based on the long term effects that the Carr/Egan proposal would have on the wider community.

The Iemma/Costa proposal will have the same detrimental effect on NSW families and consumers.

The Premier has offered price regulation for the next five years through IPART. In the state of Virginia in the USA recently, a five year price cap expired. The following day, the privately owned supplier put up prices by a massive 78%!!!!!! Last month, Victorian consumers were slugged with a 17% price hike. The reason is apparently the drought. What a load of crap. Victoria’s major generating source is brown coal. Water is used for cooling purposes only. Obviously the easiest excuse for any politician at the moment is to blame climate change or the drought.

Currently, price spikes from the generators can be absorbed by the retailers because they are both Government owned. Therefore, if a retailer pays more to a generator than they have budgeted for, it doesn’t really matter because the profit of the retailer will fall but the profit of the generator will rise. However, this scenario goes pear shaped once you sell one or the other functions. The Government loses its capacity to “flatten” the market – the result being that consumers will have to pay the real cost, plus profit, of the privatised generator and the privatised retailer.

No matter how you look at it, prices will rise.

I read an article in today’s paper written by Michael Costa where he argued the success of past micro-economic reforms such as the sale of Qantas and the Commonwealth Bank. He claimed no one would support keeping these businesses in Government hands these days.

Every consumer in NSW will suffer if Iemma and Costa succeed. This is a bad idea – it’s bad policy. There is little or no detail, simply headlines and press releases.