NSW: Electricity privatisation opposed

31 October 2011

Professor Bob Walker and Dr Betty Con Walker today called on NSW Premier Barry O’Farrell to maintain his pre-election stance of opposing the sale of the State’s highly profitable electricity assets.

Releasing a Briefing Note, Prof Walker and Dr Con Walker said that Mr O’Farrell’s own 2011-12 Budget reveals that the Government is expecting to receive some $6.5 billion in dividends and tax equivalents over the five years to 2014-15.

The loss of these revenues would impact the forecast Budget results directly, leading to deficits in each year of the Coalition’s first term of government if the funds are merely used to pay down debt or are invested in already subsidised rail infrastructure.

A sale would also deprive the Government from reaping the benefits from the significant capital investment made by the electricity agencies from their own resources over recent years – with some $19 billion spent over the seven years to 2010-11 – at no cost to the Budget.

Moreover, Prof Walker and Dr Con Walker noted that the negative impact of the part-privatisation of electricity assets has now been confirmed with the Budget Papers concluding that in the period to 2014-15, there will be a negative impact on the Budget result of $347 million.

Premier O’Farrell has no mandate to sell the State’s electricity assets. More importantly, the unquestionable conclusion is that any further electricity privatisations would not be in the best financial (or other) interests of the State.