Newcastle unions oppose power sell-off

Gary Kennedy (Secretary Newcastle Trades Hall Council)
Newcastle Herald 5 Nov 2008

Last week an internal ALP committee voted to accept, albeit not unanimously, a new plan outlined by Premier Rees for the privitisation of the retail arm of NSW Electricity and agreed that it meets the party policy platform.

To say we in the Hunter were bitterly disappointed at this decision is an understatement and an already growing resentment toward the NSW ALP from workers and the community at large has increased as our previous leaders support this decision.

The new deal will see the leasing of the retail arm as well as selling off the generation development sites with some strict guidelines and the lease of the trading function to private enterprise.

The Government claims this will transfer the risk to private enterprise while guaranteeing generation, transmission and distribution remain 100 per cent in public ownership.

The generation development sites were buffer zones kept for the future expansion of generation and can now be bought by private enterprise who can construct and run generation in tandem with the current generators. Simply put, this means not a single extra megawatt hour will be constructed by the Government. This has serious ramifications.

Employees will be given guarantees on wages and conditions for five years and a job in their current location if they do not wish to transfer to the new private entity, and consumers will be protected from price gouging until 2013.

If this a such a great deal for employees and consumers who will want to buy/lease the assets?

Let's not kid ourselves, there are overseas organisations queuing up to jump on board.

The press release from the Premier stated: "Under the Government's outsourcing model for generation trading, electricity price and trading risk will be transferred to private-sector operators, who will pay the state-owned generator a fixed fee to cover the cost of producing the electricity. This guarantees the State a low-risk return on its assets."

This will provide a low risk but also a low return to the Government as private enterprise plays the market with our electricity touting for the best price it can get.

The point has not changed that private enterprise is driven solely by the need for profit and despite all the spin and fluff someone has to pay the piper.

The Government is handing over the control of our product, electricity, to a bunch of suits who will gouge a profit at every opportunity.

The retention of the generators was a magnificent win for the community, but we have not achieved all we could have and should have and we were so close to seeing the issue of electricity privatisation disappear for the foreseeable future.

In the current economic climate it is beholden on governments, both state and federal, to forget about budget surpluses, which are funds that have been paid for by taxpayers, and build necessary infrastructure.

Selling off assets that return huge dividends to Treasury is still a false economy and financial experts are clearly saying that a controlled level of deficit to build infrastructure is good for the economy.

This plan does neither and I worry we are going to see more government assets sold off at bargain-basement prices instead of spending our taxes on job creation and stabilising the economy.

However, we cannot change government policy on our own in the Hunter. We will need to work with everyone at all levels of government to fully understand what will happen and ensure the Hunter is well and truly looked after.