NSW electricity privatisation

Electricity privatisation continues to cause bizarre consequences as yet another State Premier will apparently do anything to push it through, despite almost total lack of electoral support. See our history of attempts to privatise electricity in NSW. It reads like a war on democracy. Now that war is against the State's wildlife. During his first week in government, the NSW Premier, Barry O`Farrell, made a strong promise to environment groups and the people of NSW that he would not allow shooting in National Parks. Now he has done a deal with the Shooters and Fishers Party so that they will support his electricity privatisation bill. Shame on Barry, Shame on the Shooters and Fishers who many see as just another front for the Libs in NSW, posing as another party.

Barry O'Farrell gunning down democracy

The Premier of NSW has today broken a pre-election promise to keep recreational shooting out of our National Parks. He has announced that the government will be opening up 34 National Parks, 31 Nature Reserves and 14 State Conservation Areas across the state to recreational hunters.

During his first week in government, the Premier made a strong promise to environment groups and the people of NSW that he would not allow shooting in National Parks. Now he has done a deal with the Shooters and Fishers Party so that they will support his electricity privatisation bill.

National Parks are for the protection of nature and for the enjoyment of the NSW public, not for blood sport. This decision by the government shows complete disregard for public safety and for the purpose of our National Park system.

The government is ‘greenwashing’ this deal as a way of managing feral animals, but control of feral animals is best achieved by professionals, not by sporting hunters.

If you are as horrified about this as we are, please take a few quick actions:

1) Give your local member a call today and tell them how you feel about this appalling decision. You can follow this link to look up your local MP's contact details.

2) Visit the SMH website and vote in their poll against shooting in national parks. (Poll closes at midnight 31 May.)

3) If you have time, please write a letter to editor (either of your local paper or one of the State-wide papers), and/or make a call to talkback radio about this issue.

4) Comment below this article.

The National Parks Association of New South Wales (NPA) has a number of key concerns about this decision:

1) The purpose of National Parks is to protect the environment and allow the quiet enjoyment of nature, not for blood sports.

2) This decision poses a huge risk to the safety of the public, who just want to bushwalk, have a picnic or enjoy nature with their families.

3) Control of feral animals should be left to the professionals. Recreational hunting is not an efficient or cost-effective tool for feral animal control in National Parks, and may have serious impacts on our native wildlife.

4) This is a major betrayal of the public by the Premier, who has consistently promised that there will be no recreational hunting in National Parks. It is completely unacceptable for our protected areas to be used as a pawn in a political trade-off.

See below for a list of parks that the government proposes to open up for shooting.

The website of the Invasive Species Council has more information about why so called 'conservation hunting' by amateur hunters is not an effective means of controlling feral animals.

"The NSW and Victorian governments have been funding recreational hunting and opening access to public lands on the basis that hunters can control feral animals.

But evidence (including the failure of numerous bounties) shows that, at best, hunters can supplement more effective methods of feral animal control or provide control in small, accessible areas.

Funding recreational hunting as a primary method of control is a waste of taxpayers’ money. There is also the risk that opening up public lands to hunting creates an incentive for maverick hunters to shift feral animals into new areas – as has occurred particularly with pigs and deer.

The Invasive Species Council has been working with other environment groups to oppose the NSW Shooters Party legislation to expand hunting into national parks, allow private hunting reserves, and permit the release of exotic birds rated as a serious or extreme pest threat by Australian governments."

More information at National Parks Association of New South Wales.

Affected National Parks, Nature Reserves and State Conservation Areas

The government is proposing to immediately consider opening the following National Parks, Nature Reserves and State Conservation Areas up for shooting.

National Parks 

Central NSW	Abercrombie River National Park	Turon National Park
	Coolah Tops National Park	Warrumbungle National Park
	Goulburn River National Park
New England Tablelands	Bald Rock National Park	Nowendoc National Park
	Basket Swamp National Park	Piliga East National Park
	Boonoo National Park	Piliga West National Park
	Gibraltar Range National Park	Oxley Wild Rivers National Park
South Coast and Highlands	Benambra National Park	Tallaganda National Park
	Brindabella National Park	Woomargama National Park
	Kosciuszko National Park (excluding ski fields)	Morton National Park
	Wadbilliga National Park	South East Forests National Park
Outback NSW	Goonoo National Park	Paroo-Darling National Park
	Gundabooka National Park	Yanga National Park
	Mallee Cliffs National Park	Murray Valley National Park
Northern Rivers	Yabbra National Park	Nightcap National Park
	Richmond Range National Park
Hunter/Mid North Coast	Dorrigo National Park	Watagans National Park
	Myall Lakes National Park	Barrington Tops National Park

Nature Reserves

Central NSW	Macquarie Marshes Nature Reserve	Pilliga Nature Reserve
New England Tablelands	Gibraltar Nature Reserve
Outback NSW	Big Bush Nature Reserve	Lake Urana Nature Reserve
	Boginderra Hills Nature Reserve	Langtree Nature Reserve
	Buddigower Nature Reserve	Ledknapper Nature Reserve
	Cocopara Nature Reserve	Loughnan Nature Reserve
	Coolbadggie Nature Reserve	Narrandera Nature Reserve
	Goonawarra Nature Reserve	Nearie Lake Nature Reserve
	Gubbata Nature Reserve	Nocoleche Nature Reserve
	Ingalba Nature Reserve	Nombinnie Nature Reserve
	Jerilderie Nature Reserve	Piliga Nature Reserve
	Kajuligah Nature Reserve	Pucawan Nature Reserve
	Kemendok Nature Reserve	Pulletop Nature Reserve
	Round Hill Nature Reserve	Quanda Nature Reserve
	Tarawi Nature Reserve	Yanga Nature Reserve
	The Charcoal Tank Nature Reserve	Yathong Nature Reserve

State Conservation Areas

Central NSW	Mullion Range SCA	Mount Canobolas SCA
Hunter/ Mid North Coast	Barrington Tops SCA
New England Tablelands	Butterleaf SCA	Torrington SCA
	Cataract SCA	Watsons Creek SCA
	Mount Hyland SCA	Werrikimbe SCA
Outback NSW	Goonoon SCA	Paroo-Darling SCA
	Gundabooka SCA	Yanga SCA
	Nombinnie SCA

 

Source: Kirstin Proft
Biodiversity Conservation Officer
National Parks Association of NSW
PO Box 337 | Newtown 2042 | New South Wales
T 02 9299 0000 |
W http://www.npansw.org.au | E [email protected]
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Greens member of the NSW Legislative Council, John Kaye, has previously stood up against privatisation of that state's electricity and we have published some speeches to that effect by him here at candobetter.net. Major newspapers carried quotes about his opposition and we publish here what he says on his website. I would like to take this opportunity to remind people that James Sinnamon, the owner of candobetter.net isa fierce opponent of privatisation and had intended to run as a candidate in the seat of Brisbane in the 2010 Federal Election on this issue. Unfortunately he was hospitalised for months after a terrible collision between his bicycle and a 4WD and so he never ran in an election where, ironically, he just might have won against the usual odds. We will write about this one day.

"The NSW Government's $5.3 billion electricity sell-off was a "mad dash for cash" carried out with "appalling" timing, says a former director of a state-owned energy company. Overall the deal netted the state government $5.3 billion, an amount heavily criticised for being poor value by the state opposition."

Editor: The above sentence comes from an article published in the Australian here: "Chaos hits $5.3bn NSW power sell-off as directors on two boards quit in protest " therefore we cannot publish it in total on candobetter.net.

It goes on to say that the NSW Greens are going to "introduce legislation in the next parliament to return the electricity industry to public ownership and stop future governments selling assets without the approval of both houses of parliament, Greens MP John Kaye announced on Saturday 5th Feb.
http://news.ninemsn.com.au/national/8206806/nsw-greens-vow-to-reverse-electricity-sale

John Kaye presents a good example which the Victorian and Queensland Greens probably won't follow

Wish the Victorian Greens and the Queensland Greens would stand up on their hindlegs over privatisation as well.

We have previously carried a few speeches by John Kaye on this issue.

Here is what John Kaye has published on his website:

Welcome to the website of Greens NSW MP John Kaye

The people of NSW have a right to know what Treasurer Roozendaal and the Keneally government have done to their power assets.

It's not too late to reverse the sell-off

The Keneally government has walked away from the mess they have created leaving NSW with a dysfunctional electricity industry.

The unsustainable mix of private gentraders at some power stations and public control at others can only be resolved by reversing the original sale.

The collapse of the second wave of sell-offs will make it easier to bring all of the state's coal-fired generators back under public control.

Take action! 

Send an email message to be sent to members of the NSW Legislative Council ('Upper House') to voice your opposition to the Treasurer's power sell-off and to call for the sale to be reversed.

Now is not the time for electricity retail fire sale

NSW Greens Media Release 19 September 2008

Pushing ahead with the sale of the state's electricity retailers during the greatest credit crisis since the 1929 stock market crash would be financial recklessness, according to Greens NSW MP John Kaye.

Dr Kaye said: "Businesses across the globe are offloading assets at bargain basement prices as the financial sector goes into global credit meltdown.

"Selling at the bottom of a market is the least prudent course of action, especially when the retailers are returning dividends to NSW taxpayers.

"NSW Treasurer Eric Roozendaal would do well to note that ‘buy high, sell low' is not a winning formula when it comes to asset management.

"At a time when securities markets globally are walking into a lift shaft and credit is drying up, privatising anything would be fiscally reckless.

"The very firms that have been investing in infrastructure assets and utilities including Macquarie Bank and Babcock and Brown are the ones that have been taking a hammering on the markets.

"NSW faces a choice.

"Ideologically driven privatisation would offload a valuable asset at fire sale prices and leave households increasingly exposed to the hostile power markets.

"The alternative is strategic management of the state's retail electricity sector to achieve sustainable prosperity," Dr Kaye said.

For more information: John Kaye 0407 195 455

John Kaye
Greens member of the NSW Parliament
phone: (02) 9230 2668
fax: (02) 9230 2586
mobile: 0407 195 455
john.kaye[AT]parliament nsw gov au www.johnkaye.org.au

Contents: O'Farrell pilloried, Parliamentary debate ignored, Earlier misreporting: Iemma exhorted to ignore Labor conference, public will, What can be done about this?.

Analysis of the reporting of electricity privatisation initiatives in New South Wales brings disturbing confirmation that the major Australian newsmedia does not accurately report essential facts on issues of vital concern to us. Indeed, it often acts as a conduit for propaganda against our best interest.

Throughout NSW's struggle against a push to privatise electricity, barely any of the newsmedia paid regard to the fact that the NSW Government had no mandate whatsoever to sell electricity assets. Facts acknowledged in hardly any of the reports included:

• In the face of relentless propaganda in favour of privatisation, opposition to privatisation stood at between 79% and 86% according to opinion polls.
• Morris Iemma had explicitly promised not to privatise prior to the March 2007 elections.
• In the 1999 state elections NSW electors voted against the Liberal/National Opposition which stood for full privatisation.

O'Farrell pilloried

On 27 August, the day before the privatisation legislation was to be put before the NSW Upper House The Australian's Imre Saluzinsky shared with his readers his high expectations of NSW state parliamentary Liberal Party and leader of the state Opposition Barry O'Farrell in his article of 27 August "O'Farrell won't do a Debnam". There were, of course, those in the Liberal party opposed to privatisation, who were described by Saluzinsky, incredibly, as, at once, both "machiavellian" and "conspiracy buffs to the bitter end" who apparently had paranoid delusions that Labor would use the proceeds of the sale to pork-barrel their way back into office in 2011. Nevertheless, he predicted that O'Farrell and the Opposition would come good:

O'Farrell can either outsmart himself with such conspiratorial thinking, or demonstrate the Coalition is ready to govern. On previous form, he'll choose the latter path.

In response to this article, one reader responded:

Where does political morality lie in your equation, Imre? Both major parties ruled out power privatisation before the last election, and merely months later it becomes a 'must do'? Through their mismanagement Iemma and Costa need the money from the power sell-off for their political survival. Handing them the keys to the vault by aiding and abetting their political fraud will only prolong an inept Labor government. That is the reality facing the entire business community in NSW.

Saluzinsky did not answer.

When Barry O'Farrell failed to follow Saluzinsky's script, two days later Saluzinsky turned on him with a vengeance. On Friday 29 August in "O'Farrell's shame worse than Iemma's", He wrote:

The collapse of the latest reform push is a condemnation of the political class in NSW.

It shows the nation's largest state - over a third of the national economy - in the grip of reform paralysis. And it leaves the credibility of both Iemma and NSW Opposition Leader Barry O'Farrell in tatters.

... O'Farrell shifted ground. He sought independent advice, which backed the sale strategy, then he ignored it, preferring to maintain a united front with the Nationals rather than securing the state's electricity supply.

The Australian's editorial "NSW Labor and Libs are unfit for power" appeared critical of both the Government and the Opposition, however the latter was the main recipient of its venom. It began:

NSW Opposition Leader Barry O'Farrell has just done the unthinkable. By scuttling Labor Premier Morris Iemma's push to privatise the NSW electricity sector, he has raised the serious question of whether the Liberal and National parties can ever be fit to run the nation's largest state. After 13 years of do-nothing and scandal-soaked government from Labor, it is truly remarkable that the Coalition can't bring itself to support the one positive item on the Iemma agenda.

Here, the editorial writer is hardly being fair to the state Labor Government. Former Premier Bob Carr tried earnestly to foist electricity privatisation on the Labor Party in 1998 only to have it rejected by the Labor Party conference. In 2006 the Iemma Government attempted to lead the Federal and Victorian governments to privatise the Snowy Hydro scheme. Iemma could hardly be held to blame if the Howard Government, faced with a public outcry and the late Federal Independent MP Peter Andren's determined opposition, decided to pull out the rug from under privatisation. Clearly, in terms of The Australian's own world view, the Carr and Iemma governments had attempted to do other 'positive' things, which The Australian should have acknowledged.

This year, Iemma went one step further than Carr was prepared to go. He ignored the Labor Party conference vote. He also ignored public opinion and his own 2007 election commitment. What else, short of declaring martial law and jailing NSW upper house members opposed to privatisation, would the The Australian have had Iemma and Costa do?

The editorial goes on to ask, "And for what?"

Anyone placing their trust in the judgement and good will of the editorial writer would have gained the impression that O'Farrell had not provided any justification for his actions. In fact, he had supplied justification in a media release that day. Upper House leaders Michael Gallacher (Liberal Party) and Duncan Gay (National Party) both also provided reasoned and detailed arguments against the privatisation legislation in the Parliamentary debate before it was abruptly closed by an embarrassed Government.

Whilst the editorial was prepared to trust a Government it had itself labelled as 'inept', O'Farrell was not. In his media release, he wrote:

Furthermore, the Iemma Labor Government has an appalling record of dealing with the private sector ? it has failed the public in deals ranging from the Cross City Tunnel to the building of the new Bathurst Hospital.

Given their record of incompetence, Morris Iemma and Labor can?t be trusted to deliver a good result for taxpayers and consumers.

To many, these would seem reasonable concerns. In addition O'Farrell pointed out that there was uncertainty about the implications of the Federal Government's carbon trading scheme and that privatisation had not been put by Iemma to the NSW electors in 2007.

The editorial then moved on to stronger ground:

It is not even clear that Mr O'Farrell's obstruction passes the cynic's test.

Indeed, it had not. That test was being passed with flying colours by the editorial writer himself. The majority of the state Labor Party Parliamentary caucus, which had resolved to ram through the privatisation legislation in defiance of popular opinion, and the state Labor Party conference, has also performed exceedingly well in this regard.

In one small sense, the Opposition's stance may have been due to its instincts for self-preservation, if only because of the Murdoch press's own record of unprincipled opportunism. Had privatisation proceeded, it is hard to imagine that The Australian would not have quietly forgotten the Iemma Government's legendary incompetence and, instead, have begun to sing its praises once more.

The editorial writer then assailed the reader with facts and statistics that would have left him/her in no doubt that O'Farrell, or anyone else who may have wanted to hesitate for longer than five minutes before allowing privatisation to proceed, was stark raving mad.

[Because O'Farrell] "continues to ignore economics 101 ... the Australian would be unable to recommend a vote for a change of government in NSW."

This begs a number of obvious questions: If sound economic practice really required electricity privatisation, why couldn't the policy simply have been put to the electorate in March 2007? Why had it proven so hard to make the public, the trade unions and the NSW state Labor Party see this? Why had the public rejected privatisation in 1999 and remained adamantly opposed to it all along? Clearly neither The Australian nor Iemma deserved the public they had been stuck with.

Murdoch's Daily Telegraph editorialised on 31 August :

Mr O'Farrell ... also has a huge question mark hanging over his head after his performance last week.

...

Mr O'Farrell could not resist the lure of a cheap political victory to wound his opponent when NSW was crying out for some far-sighted leadership.

Presumably by 'NSW', the editorialist meant the small shrill chorus of bankers and investors.

O'Farrell and the NSW state Opposition received additional drubbings in reporting over the following days: "How the people of NSW were sold out" (SMH, 30 Aug) an opinion piece by Premier Morris Iemma. (A google search listed the story with a more provocative title: "How the power of one treacherous leader sold out the people of NSW". Clearly an editor somewhere thought better of that title), "O'Farrell backflip on power sell-off" (The Australian, 1 Sep)."Hopelessly devoted to self-interest" (Sun-Herald, 31 Aug), "O'Farrell's shame worse than Iemma's" by Imre Saluzinksy (The Australian, 29 Aug), "Luddite Liberals" (The Australian, Aug) by John Durie, "Barry O'Farrell misses a chance on electricity" (Sunday Telegraph, Aug. 08)

In Murdoch's Melbourne Herald Sun newspaper, one article, which seems to have since disappeared from the web, even referred to Barry O'Farrell as "O'Fool".

Against this torrent of condemnation O'Farrell was able to write an opinion piece on 1 September in defence of himself in the (Fairfax press) Sydney Morning Herald.

Parliamentary debate ignored

Astonishingly, even the debate in Parliament which had been recalled at a cost of $500,000 to the NSW taxpayer was ignored by electricity privatisation reporting. Facts revealed in the debate, but unreported in the media, included:

• Prior to the March 2007 elections "the Iemma Government issued emphatic denials that any such sale would take place". On 20 February 2007 Michael Costa stated "There are no plans to sell our retail electricity businesses". (Upper House Opposition leader Gallacher's speech)
• On 9 May 2007 Premier Morris Iemma, when referring to the Owen Review, ruled out any "sale of electricity generation, transmission or distribution."(Gallacher)
• In a Sydney Morning Herald article dated 25 May 2007 Iemma was reported as stating in a letter to Unions NSW that "The privatisation of the State Government-owned energy companies is not on our agenda".(Gallacher)
• On 23 November 2006 Michael Costa stated "There is no energy crisis in New South Wales - In fact, New South Wales has surplus energy."(Gallacher)
• Treasurer Michael Costa, as Secretary of the NSW Labor Council, had in 1998 and 1999 moved motions in opposition to former Premier Bob Carr's privatisation legislation(Gallacher)
• For 13 years up until the 2007 elections Treasure Costa and his predecessor Egan had boasted that NSW had healthy budget surpluses due to their sound financial management. "Treasurer Michael Costa told New South Wales taxpayers before the last election that they had nothing to worry about." (Gay)
• The Owen Inquiry report, which is the Government's principle justification for privatisation, has never been debated in the NSW Upper House. (Kaye)

In this light, why had the media not turned on Iemma and Costa, if it was truly concerned with reporting the truth?

Earlier misreporting: Iemma exhorted to ignore Labor conference, public will

Monday 5 May, 2008: The Australian's editorial "Rudd has a stake in NSW power sell-off", published after the NSW state conference voted 702 to 107 against privatisation, urges the NSW Parliamentary Labor Party to ignore the conference.

"Kevin Rudd has a lot riding on NSW Premier Morris Iemma's having the courage to defy Labor's state council and push ahead with the $10 billion privatisation of the state's electricity industry. To his credit, Mr Iemma says he is standing firm. ...

If electricity privatisation can be defeated because unions representing a few thousand electricity workers don't like it, how difficult would it be to stare down union interests to overhaul health and education?

...

The electricity debate is a classic example of the labour movement attempting to bully the government into making a decision that is not for the greater good. Mr Iemma must demonstrate that he is prepared to govern for all people and ignore the demands of state conference."

The editorial writer did not seem to have a problem with fact that 79%-86% of "all people" on whose behalf Iemma and Costa were supposedly governing, happened to agree with the "unions representing a few thousand electricity workers" and state conference.

7 May 2008: Murdoch's Sydney Daily Telegraph gloated at the Labor Parliamentary caucus's defiance of NSW public opinion in "Iemma's grin of victory over power industry sale":

"The rare record of an exceptional political victory came after Morris Iemma emerged from a post-conference meeting yesterday with the backing of his entire caucus for his plans to privatise the NSW power industry.

The Premier was so impressed by his coup - rendered by endorsements from even his rebel MPs as they filed out of the marathon meeting - that he celebrated by updating his Facebook site with the glowing new images.

'I'm very happy,' he said after giving a rare post-caucus briefing. 'There was nothing to vote on.'

An emboldened Mr Iemma then strode into Question Time and accused Opposition Leader Barry O'Farrell of being 'dumb', 'stupid', 'gutless' and having his head 'up his backside'".

Wednesday, 7 May: In a report "Iemma's caucus triumph" by Imre Saluzinsky and Andrew Faulkner, it was noted that Premier Morris Iemma's approval rating had dropped to 28%. Nevertheless the article confidently predicted:

"However, he is likely to receive a bounce in the polls from his display of strength in recent days."

In other words, the NSW public, would respect the 'strength' of a Government that had blatantly defied its will on the question of privatisation more than it would respect those who were intent on forcing Iemma to respect that will. This bizarre prediction was not realised and was quietly forgotten.

What can be done about this?

The material described and quoted above represents only a small fraction of many months of misreporting. Luckily the public weren't fooled this time. Luckily, a majority of their elected representatives also chose to represent their will in Parliament and to uphold basic principles of democracy and accountability, this time.

But it so easily could have turned out differently. More often than not such mass media misinformation campaigns have achieved their goals in the recent past.

It is in similar contexts that nearly all the other state governments in Australia have managed to privatise the people's electricity assets. It was in such a manner that Keating got away with privatising the Commonwealth Bank, despite a specific election promise not to. This is how all Australia's state-owned banks and insurance companies were privatised. This is how Howard got away with privatising Telstra. In the same way, Australia was dragged into the Iraq War, in spite of the most massive popular protests since the Vietnam War. This is how "Work Choices" was implemented and continues to dominate as law. That is how a slew of expensive, inappropriate and environmentally damaging infrastructure projects have been imposed against heated community objections in almost every part of this country. This is how successive governments have been able to impose high immigration levels on an uninformed and unwilling public. This is the way that local governments have been forcibly amalgamated in Queensland, NSW and Victoria.

It is time we challenged the right of newsmedia proprietors to act so blatantly against our interests.

If the newsmedia continue to serve the public so poorly, it must, itself, become the focus of popular protests, and progressive pro-democratic political parties must pledge to legislate to prevent the newsmedia from continuing to abuse their powers in this way.

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Also published on webdiary.

NSW Greens leader John Kaye defends Opposition leader Barry O'Farrell. O'Farrell and the NSW Opposition are now under concerted attack by the corporate sector and their newsmedia for having blocked Treasurer Costa's privatisation legislation in accord with the wishes of over 80% of the NSW public last Thursday.

See also: Iemma dodges his own $42 billion debt bomb (SMH, 1 Sep) by Barry O'Farrell, Mike Baird should make his move now - Online Opinion forum discussion about pro-privatisation state Liberal MP Mike Baird, now the darling of the corporate newsmedia.

What you can do: Join FaceBook site Support Clean Energy NOT Privatisation of NSW Electricity run by NSW Liberal MLA Peter Debnam. Peter Debnam's statement on privatisation can be found here and is also appended to this article.

O'Farrell pointing in right direction on sell-off while Baird losing plot

Media release: 31 August 2008

NSW Opposition Leader Barry O'Farrell's decision to stop the privatisation of the electricity generators is sound public policy, according to Greens NSW MP John Kaye.

Dr Kaye said: "Even from the standpoint of the Coalition's economic philosophy, passing NSW Treasurer Michael Costa's power sell-off legislation would not have been in the public interest.

"While Mr O'Farrell is being attacked by his friends in the business lobby, his focus on managing electricity demand would result in lower household energy costs and reduced greenhouse gas emissions.

"Unfortunately the Opposition's Energy and Finance Spokesperson Mike Baird appears to have fallen for the myth that this state needs more baseload generation capacity.

"Even though Mr Baird is now lining up behind the Opposition's official stance opposing the sell-off, he has clearly failed to understand that the Iemma government has been badly misleading the people of NSW.

"He should cast a critical eye over Treasurer Michael Costa's arguments.

"Whether it is to balance the state's books or to attract private capital into baseload power, whatever today's rationale for the sell-off is, it does not stack up.

"Mike Baird should also take a closer look at Mr Costa's declaration of war on the public sector.

"The power sell-off is only the opening gambit in a plan to devastate the delivery of public services and infrastructure in this state.

"Not only will this receive a deeply hostile reaction from the voters but it also makes no economic sense.

"Treasurer Costa is completely out of control and headed on a collision course with common sense.

"Mike Baird should do his duty as an Opposition spokesperson. He should join with the Greens, rebel Labor MPs, the union movement and the majority of his own party to block this potential disaster," Dr Kaye said.

For more information: John Kaye 0407 195 455

See also: Iemma dodges his own $42 billion debt bomb (SMH, 1 Sep) by Barry O'Farrell.

What you can do: Join FaceBook site Support Clean Energy NOT Privatisation of NSW Electricity run by NSW Liberal MLA Peter Debnam who resigned from the Liberal Front bench because at the time he considered that the stance by Opposition Leader against privatisation was not sufficiently strong. Peter Debnam's statement on privatisation can be found here and is also appended to this article.

Appendix: Electricity privatisation statement by Peter Debnam MP - 12th may 2008

Original statement published on www.peterdebnam.com.au

I have been opposed to Michael Costa’s Electricity Privatisation and despite lacking the numbers in Parliament to stop it, I’ve argued for the Coalition to take a strong stand against the privatisation and in favour of clean renewable energy. However, in my view, the conditional acceptance announced late last week by the Coalition effectively surrenders to Costa’s Privatisation.

Given my strong views, it is untenable for me to continue as the Shadow Minister for Energy and remain on the frontbench simply biting my tongue. As a result, on Friday I advised Barry O’Farrell that I will sit on the backbench when Parliament resumes this week and I understand Barry will today announce frontbench re-arrangements.

While stepping down from the frontbench, I will continue in Parliament until at least the 2011 state election and I will do everything I can over the next three years to aggressively hold this hopeless Government to account and get rid of them.

I will also work to expose the fraud of Costa’s Electricity Privatisation and, whether the Privatisation proceeds or not, I will promote the enormous opportunity for NSW to embrace and export the technology of Clean Renewable Energy – especially solar.

I describe the Privatisation as Costa’s because it is not a Labor Plan and the Premier is little more than an occasional mouthpiece for Michael Costa on this issue. Most of the grassroots Labor Party (not just the unions) oppose Costa’s Privatisation. They along with the community of New South Wales have been betrayed.

As I did, Morris Iemma went to last year’s state election, assuring the community that electricity would NOT be privatised. It was clear at that time there was no need for privatisation. It is only since the election, we have the seen the Premier and Treasurer’s increasingly hysterical claims that electricity must be privatised or the sky will fall in. The reality is that nothing has changed since the election other than the votes are in the ballot box for another term.

But less than a week AFTER the election, while I was still Opposition Leader, I was being lobbied by sections of the media to support Michael Costa’s electricity privatisation.

During the election campaign, I confirmed on several occasions that the NSW Coalition would NOT privatise electricity and noted there are more pressing issues other than ownership to be addressed - including the structure of the industry to attract private investment (not simply flog off current assets) and the need to transform the industry to clean renewable energy and to pursue energy efficiencies.

Indeed, we proposed significant changes in our 2007 Election Policy “For Future Generations – A Plan to protect the Environment and tackle Climate Change.” That policy included not only a 20% Renewable Energy Target by 2025, but also investment in solar water heaters for homes and schools and funds to support the development of Australia’s first large-scale solar generator in northern NSW. Those initiatives were well received.

I remain opposed to Costa’s fire-sale of assets which is simply to find more money for the Iemma Government to splash around in the next election campaign - with the added expense of handing over more than $100 million in fees to merchant banks participating in the Costa Privatisation.

Iemma's arrogance drives power retail workers to strike action

NSW Greens Media release: 29 August 2008

The United Services Union has called its members working in call centres of Energy Australia, Integral Energy and Country Energy off the job in protest against Premier Morris Iemma's 'plan B sell-off' announced late yesterday.

Greens NSW MP Dr Kaye said: "The Premier has treated electricity retail workers with complete contempt.

"Morris Iemma's sulking refusal to accept the will of the parliament has brought him into open warfare with the unions, his own party, and the people of NSW.

"Retail workers know their jobs are on the line. Private owners will ship call centre operations overseas as a cost-cutting exercise.

"The strike action also highlights the importance of maintaining public ownership of electricity retailers for the state's economy, household finances and efforts to reduce greenhouse gas emissions.

"Privatisation will undermine important opportunities for demand management that can control increases in electricity bills and reduce NSW's carbon footprint.

"NSW deserves a Treasurer and a Premier who put the needs of the community and the environment ahead of the greed of big business.

"The Greens support the electricity retail workers' strike action.

"It is in the state's interests to stop the sell-off," Dr Kaye said.

For more information: John Kaye 0407 195 455

John Kaye
Greens member of the NSW Parliament
phone: (02) 9230 2668
fax: (02) 9230 2586
mobile: 0407 195 455
email: john.kaye [AT] parliament nsw gov au
web: www.johnkaye.org.au

See also: Iemma unethical, says ALP backbencher, Torbay urged to fire up in power debate

Contents: Power retail sell-off plan punishes households and environment, Costa, Iemma must resign over back-door sale move, Costa's cowardly retreat from stunt gone wrong, speech by Dr John Kaye, speech by Sylvia Hale.

Power retail sell-off plan punishes households and environment

NSW Premier Morris Iemma's refusal to accept the will of the parliament and people of NSW is undermining the state's ability to reduce greenhouse gas emissions, according to Greens NSW MP John Kaye.

Dr Kaye said: "Public ownership of electricity retailers is just as important as the generators.

"In a time of rising wholesale energy prices, privately-owned retailers will treat households as cash cows.

"Privatisation will destroy important opportunities for demand management that can control increases in electricity bills and reduce greenhouse gas emissions.

"The Premier has treated the people of NSW and their parliament with complete contempt.

"He has allowed himself to yet again be bullied into an unpopular and undemocratic move by his Treasurer.

"NSW is in the grip of climate sceptic Michael Costa and his obsession with privatisation.

"At a time when reducing emissions is moving from being a personal commitment to becoming a national imperative, selling off the retailers will make it much harder to share the burden of climate change fairly.

"It is not surprising that the big business lobby has invested heavily in peddling privatisation.

"They are not just pushing the sell-off to help their mates in the banking industry skim off massive profits from the sale.

"They are making sure that when prices do rise, the costs will be born by households, not the big commercial and industrial consumers.

"NSW needs a Treasurer and a Premier who put the needs of the community and the environment ahead of the greed of big business," Dr Kaye said.

For more information:

NSW Greens Media release: 29 August 2008

Contact: John Kaye 0407 195 455

Costa, Iemma must resign over back-door sale move

The eleventh hour move by Morris Iemma to sell off electricity retailers after privatisation had been declared 'dead and buried' is a complete abuse of parliament, according to Greens NSW MP John Kaye.

Dr Kaye said: "The Treasurer has misled parliament. Michael Costa has no credibility and must resign.

"Michael Costa directly told the NSW Upper House that any sale would be determined by the parliament.

"He and his Premier have dishonoured the Westminster system.

"Premier Iemma’s manufactured excuse for the back-door sale is ludicrous. The so-called crisis in credit ratings comes from nowhere and is not believable.₁

"The capital markets should know that the Greens will work with the unions to undo this commitment to sell the retailers.

"The Premier has swapped excuses in midstream. This was supposed to be about encouraging investment in power generation. Now we are told it is to solve an alleged credit crisis.

"The government has no mandate to sell the state’s electricity assets.

"The utter contempt they are showing for parliament, the people and the democratic process has brought NSW politics to a new low," Dr Kaye said.

(NSW Greens Media Release: 05:12 pm 28 August 2008)

For more information John Kaye 0407 195 455

Costa's cowardly retreat from stunt gone wrong

The move by the Iemma government to delay the inevitable defeat of power privatisation after squandering money on a parliamentary recall will destroy its credibility, according to Greens NSW MP John Kaye.

Dr Kaye said: "Michael Costa has condemned his privatisation to a coward's death.

"The Treasurer's henchmen in the Legislative Council manipulated the parliament process because they know the lies and propaganda behind his privatisation push would not withstand scrutiny.

"The community will be furious that the Iemma government has squandered their money on a parliamentary recall that achieved nothing.

"When parliament reconvenes in late September the Greens will ensure that the Treasurer's sell-off plans receive the scrutiny they so richly deserve.

"We will work with the Coalition and responsible Labor MPs to deliver the final defeat to Costa's privatisation legislation.

"If this government tries to bring in privatisation by the back door using ministerial powers then the community will come after them.

"The obligation is now on Morris Iemma to tell the people of NSW that electricity privatisation is dead on arrival.

"Michael Costa should now do the right thing and resign," Dr Kaye said.

(Source: NSW Greens Media Release: 02:53 pm 28 August 2008)

Speech to NSW Parliament by Greens MLC Dr John Kaye on the issue of Privatisation of Electricity

*Dr JOHN KAYE *[1.22 p.m.]: I join with the Deputy Leader of the Opposition in opposing the motion for adjournment. It is an act of total cowardice to avoid debate on a central plank. Treasurer Michael Costa and Premier Morris Iemma have said that the vote on the electricity industry privatisation legislation was the most important single vote to be taken in this Parliament. But what did the Labor Iemma Government do? It ran away from the vote, and it seeks to hide from the inevitable defeat that this bill would have inflicted. Why did the Government do that? It knows that 80 per cent of the New South Wales population is opposed to electricity privatisation. The Government knows that 80 per cent of its own party is opposed to electricity privatisation, and it knows that every sensible and independent observer of the electricity industry agrees.

Handing public assets into private hands would be a complete and total disaster. To adjourn the debate is simply an attempt to avoid inevitable humiliation. It must be accepted now that the Costa-Iemma electricity privatisation is dead in the water. And it is dead in the water without appropriate debate and vote, and they have inflicted a cowardly death on the legislation. I note that Minister Kelly is now leaving the Chamber; he is embarrassed by what he had to deliver for the Costa-Iemma Government, and embarrassed by his failure to allow the bills to be debated appropriately.

The underpinning of privatisation was the Owen inquiry. The Chamber has not had the opportunity to debate the Owen inquiry, or the opportunity to determine whether the State needs new baseload capacity. The Chamber has not had the opportunity to test the presumption that we cannot afford to buy new baseload capacity, or to test the assumption that the private sector will not invest in the New South Wales electricity industry as long as it is publicly owned. As long as those assumptions are not tested in this Chamber, the Owen inquiry remains a document of propaganda and ideology. The Government lacks the courage to allow that document to be subjected to the scrutiny of the New South Wales upper House. In doing so, the Government denies the people of New South Wales the debate that Michael Costa and Morris Iemma promised them.

For the past 12 months, Premier Iemma and Treasurer Costa said that there would be debate on the privatisation of the electricity industry, but that has now been denied us. If Premier Iemma and Treasurer Costa sneak away from this Chamber and try to privatise the industry behind closed doors, this Chamber will go after them as will the New South Wales union movement---the activists who have campaigned long and hard against privatisation---and 80 per cent of the New South Wales population who are opposed to it. We will find whatever rock they will hide under, and we will make sure that they pay the price for selling off assets.

It is time this Chamber had a debate about privatisation. We will make sure when the Chamber resumes that that debate is held; it has to happen. The Government cannot run the propaganda and lies in the media that have been heard from Michael Costa and Morris Iemma and not conduct that debate in this Chamber. Adjourning the Chamber now will not avoid debate at a future time. The Government has extended the agony for itself. The Government does not have the majority in this Chamber---the media and the people know that. People who have campaigned against privatisation know that, and Government members know that full well. Running away and hiding will not destroy the evidence that power privatisation was always going to be bad for the people, bad for households, bad for the economy and bad for the environment.

It remains absolutely true that the Government cannot continue down the path of spreading myths from Tony Owen that have been propagated by the Business Council of Australia, the Alliance for a Better New South Wales, the business lobby and the Premier and the Treasurer. The Government cannot keep relying on those myths unless it is prepared to hold debate in this Chamber; if it is not, it will have no public credibility. By hiding from this debate, all it has done is guaranteed that the people know what is really going on. The Government will not stand up to the scrutiny of this Chamber; and it cannot, because what it is doing is a complete and total tissue of lies. If debate on this matter is not listed for when the Chamber resumes on 23 September 2008, we will have to take matters into our own hands to ensure that it is held. The Greens oppose the adjournment.

Speech by Greens MLC Sylvia Hale to NSW Parliament on issue of Privatising Electricity

Ms SYLVIA HALE [1.32 p.m.]: Two years ago this Government attempted to privatise the Snowy Hydro scheme. That time it was saved from itself by a statewide campaign of opposition that made it clear that privatisation was unacceptable to the community. Protests and opposition started in the Snowy region and spread across the State, from village to town and into the cities. The State Government tried to tough it out, but ultimately the Federal Government's withdrawal from the process forced the hand of the State Government, which then withdrew from its attempted privatisation of Snowy Hydro. That decision was significant in saving the Government at the subsequent State election in March 2007.

Unfortunately, the State Labor Government has wilfully chosen not to learn from its mistaken attempt to sell Snowy Hydro. In 2008 the New South Wales Labor Government is determined not to save itself. It is so determined to thumb its nose at the people of New South Wales who overwhelmingly oppose privatisation that it took the extraordinary step of recalling Parliament to try to push through its bills. It has now taken the extraordinarily cowardly step of adjourning Parliament rather than face a defeat on the floor of the House. The Government has lost its commitment to the best interests of the residents of New South Wales, its ability to read the electorate, and its instincts for self-preservation. In the face once again of statewide community opposition, the Government appeared initially determined to push ahead with a privatisation proposal for which it has no mandate and to which the vast majority of the people of this State is opposed.

In the face of overwhelming opposition from the community, from the trade union movement and from its own rank and file members, why is the New South Wales Labor Government so keen to tread this self-destructive road? Many people in New South Wales will look at what has happened today and wonder what the Labor Party has become and whose interests it now serves. It appears that the leadership of the parliamentary Labor Party has determined that the future of the New South Wales Labor Party is as the party of big business. It has deliberately turned its back on its own members, on the trade unions and on the community generally in order to embrace the agenda of the State's large corporate interests.

It was instructive this week to see the pro-privatisation urgings of the corporate sector being led by the so-called Alliance for New South Wales' Future. This is the latest front group set up by the head of the Property Council, Ken Morrison, and his corporate lobby group mates. The last such group Mr Morrison fronted was the Coalition for Planning Reform. That was the group whose wish list formed the basis of the Government's deeply unpopular changes to the planning system—changes that, like the privatisation proposal before us, pretty well every Labor candidate in the upcoming local council elections is trying to disown. All these various coalitions and alliances that Mr Morrison fronts are supposedly motivated solely by the best interests of the residents of New South Wales, and their members become deeply offended by any suggestion that they are merely pursuing the financial interests of the corporations that make up their membership. They may claim public altruism, but there is no doubt that they are really lobbying in the financial interests of the big end of town. That is fair enough; it is what their corporate sponsors pay them to do.

What is disturbing, however, is the extent to which the so-called Labor Government has embraced the agenda of these corporate interests. One can hear the eager, servile capitulation of the Premier, the Treasurer, and the Minister for Planning: "Rewrite the planning laws the way you want them? Certainly, Mr Morrison. Hand the State's electricity assets over to the corporate sector? Of course, Mr Morrison". I do not know why Labor does not simply appoint Ken Morrison as Premier and cut out the middleman! The policy outcomes would be the same. The relevant bills were introduced in the lower House on the same day that Frank Sartor introduced his developers' wish list of a planning bill. This demonstrates clearly and finally for all to see that Labor's parliamentary leadership has turned its back on its rank and file members and its trade union base in order to fall into the loving embrace of the corporate sector that now funds its election campaigns and sets its policy agenda. As with Snowy Hydro, from the outset the Greens have opposed the privatisation of the State's electricity assets. We are united in our condemnation of the Government's pro-privatisation agenda.

Footnotes

1. ↑ On pages 257-259 of Naomi Klein's "The Shock Doctrine" there is a narrative of another manufactured credit crisis in Canada in 1993:

In September 1995, a video was leaked to the Canadian press of John Snobelen, Ontario's minister of education, telling a closed door meeting of civil servants that before cuts to education and other unpopular reforms could be announced, a climate of panic needed to be created by leaking information that painted a more dire picture than "He would be inclined to talk about". He called it "creating a useful crisis."(p259)

See also: NSW electricity privatisation can be stopped!, Open letter to NSW state Opposition members urging a vote against electricity privatisation, Open letter to NSW Labor parliamentary caucus members to urging a vote against electricity privatisation

Upper House Liberal leader Michael Gallacher's speech against electricity privatisation

See also: comment below and Duncan Gay's speech

The following speech has been copied from the NSW Legislative Council Hansard of 27 August 2007.

The Hon. MICHAEL GALLACHER (Leader of the Opposition) [12.44 p.m.]: The Government has had 13 years to get the important issue of this State's future power generation right and, as members will shortly hear, it has got it wrong. The New South Wales Liberal-Nationals Coalition will not support the Iemma Government's Electricity Industry Restructuring (Response to Auditor-General Report) Bill and the associated cognate bill. The Liberal-Nationals Coalition does not take this decision likely. There are three key reasons for our dissatisfaction with this proposed electricity industry restructuring: the continued uncertainty surrounding the Commonwealth Government's emission trading scheme; the current state of capital markets is not conducive for the sale of such a valuable asset; and the Iemma Government's history of financial and infrastructure delivery mismanagement and incompetence. Underpinning all three reasons is the fundamental issue of trust. The community does not believe that the Government can be trusted to get this privatisation right. The community does not believe that the Iemma Government can be trusted to spend the proceeds of the sale in a transparent and honest manner. The community also does not believe that the Iemma Government can be trusted to put public interest ahead of the Labor Party's re-election plans.

The community's concerns are well founded. The 2007 State election did not deliver the Iemma Government a mandate to embark upon the sale of this State's electricity assets. In fact, the Iemma Government issued emphatic denials that any such sale would take place. The arrogant dismissal of concerns held by the Government's own members and its party, whilst contemptible, is not surprising. The Government's failure to put the question to the people of New South Wales demonstrates beyond any shadow of a doubt that this is a Government out of control, out of step and out of options. Mr Iemma betrayed the trust when he refused to reveal his true plan about the future of electricity prior to the 2007 State election. By opposing this legislation the New South Wales Liberal-Nationals Coalition will ensure that the people of the State are not betrayed.

The Treasurer's ever-shifting position on the privatisation of electricity portrays him as a political opportunist. As an executive member of the Labor Council he opposed the privatisation of electricity. On 12 February 1998 as Acting Secretary of the council he moved the following executive recommendation:

That …the Labor Council reaffirms its opposition to the Egan Electricity Privatisation Proposal.

At a Labor Council meeting on 21 October 1999, in his position as Secretary of that council, he moved the following executive recommendation:

That …the Labor Council continue its campaign against contracting out of Government employees' work and jobs.

As well as opposing electricity privatisation the Treasurer has also spoken of the need to put social concerns above market fundamentalism. In his inaugural speech to this House in September 2001 he spoke of what he imagined as a better world:

While it is true that I respect the power of the market mechanism, I reject market fundamentalism, which places all market outcomes above social concerns … Societies structured on markets that do not deliver social outcomes supported by the majority of the community are doomed to failure.

Perhaps the Treasurer should have considered his own advice before bringing this legislation to the Parliament. In addition to those sentiments in his inaugural speech, he said:

Barrie Unsworth advised me that this inaugural speech was an important speech because it provides a public benchmark to judge one's contribution to public life. I hope that at the end of my time in this House I will be judged as having contributed to prosperity, opportunity and fairness.

As I said earlier, the Treasurer is a recent public convert to the "privatisation at all costs" agenda. As late as before the last State election—in this House on 23 November 2006—the Treasurer said:

There is no energy crisis in New South Wales … In fact, New South Wales has surplus energy.

A month out from the State election, on 20 February 2007, he was reported in the Australian Financial Review as saying:

There are no plans to sell our retail electricity businesses.

Yet here we are in an extraordinary sitting of this Parliament, having been recalled at great expense to the taxpayer, to pass legislation to privatise the electricity assets.

That I stand shoulder to shoulder with my Coalition colleagues, the Nationals, and accuse the Government of betrayal is not political rhetoric. The Government's Ministers pledged that they would not sell our State's power in any restructure, but not 12 months later, in a backflip, they and announced that they would. That is a betrayal. The Treasurer does not have a monopoly on opportunism when it comes to electricity privatisation. In the other place on 9 May 2007 the Premier said, when referring to the Owen review:

The Government goes into this review with an open mind, and only two things will be ruled out. The first is nuclear power. As I have stated previously, there will be no consideration whatsoever of nuclear energy for New South Wales. Second, there will be no sale of electricity generation, transmission or distribution. On all other matters I am yet to be convinced and will await Professor Owen's expert advice.

The Premier even has been accused of lying to Unions NSW. In a Sydney Morning Herald article dated 25 May 2007 he was reported as stating in a letter to Unions NSW:

The privatisation of the State Government-owned energy companies is not on our agenda. In fact, the NSW Government's commitment to this sector is stronger than ever … with record investment in new and upgraded electricity infrastructure.

I reiterate: This represents a betrayal of trust. It is a lack of trust that underpins the Coalition's opposition to these bills. While such significant uncertainty surrounds the creation of the proposed emissions trading scheme, New South Wales's taxpayers cannot be confident they are receiving full value for their assets. My colleague the Deputy Leader of the Opposition in this House, the Hon. Duncan Gay, will further outline our concerns regarding the Federal Government's emissions trading scheme.

The great disappointment in all of this is that rather than engage in a constructive conversation with the Rudd Government, Michael Costa has wasted time threatening Labor rank and file and berating the Opposition. When the bills are rejected by this House, responsibility will fall squarely at the feet of the Treasurer. From the outset he misled the community, isolated his colleagues and politicised the process. The Treasurer has failed to show leadership. Leadership is about engaging the community in open dialogue, leadership is about asking the hard questions, and leadership is about inspiration and bringing people along on a journey toward a desired outcome. At no point has the Government engaged the New South Wales public in anything resembling leadership consultation. Conversely, it has betrayed and engaged in spin, and in this House it will pay a hefty price for its hubris.

The proposal to privatise electricity does not meet the public interest test. In so many ways Australia's capital market conditions are not conducive to a positive outcome for the people of New South Wales. Since the release of the Owen report in 2007, Australian stock markets have fallen significantly. The Australian All Ordinaries fell almost 20 per cent, and the Australian utilities sector index fell almost 30 per cent. The impact of falling markets is clearly evident in the Hon. Michael Costa's consistent downward revision of the value of the assets. In December 2007 the Treasurer described a $15 billion price tag as conservative. In June 2008, he estimated the price at "around $10 billion". If a public company mysteriously lost $5 billion off the value of an asset in the space of six months, the Australian Securities and Investment Commission would declare an immediate audit. I point out that $5 billion is equivalent to the cost of 5,000 hospital beds or 130 new schools.

Importantly, the negative impact of capital markets will not be limited to initial public offerings; it will also affect trade sales. Market multiples will be used as a part of any basic valuation for a trade sale. Furthermore the global credit crunch makes it more difficult for companies to secure debt funding. My colleague in the other place the member for Manly estimates that the cost of underwriting $10 billion in current market conditions is $400 million more than at the same time last year.

The Iemma Government has spent the last week trying to make the future of its electricity plans all about the Opposition. The Treasurer has made numerous claims about why the Opposition should support the legislation—claims that simply do not stand up to scrutiny—and says that the Owen report found that $15 billion needs to be spent on electricity infrastructure. However, he is yet to explain why spending on electricity assets has been so neglected and why allegedly we need to come up with $15 billion by 2013. We reiterate that even as late as before the 2007 State election on 23 November 2006 the Treasurer stated in this House, "There is no energy crisis in New South Wales … In fact, New South Wales has surplus energy."

Responsible government is about planning for the future and anticipating the need for the replacement and ongoing maintenance of assets, particularly major assets such as power stations, hospitals, schools and police stations. The Treasurer claims that the details of the Commonwealth's emissions trading scheme will be clear by the end of the year, but what he does not point out is that, just as the New South Wales Government does not control its upper House, the Rudd Labor Government does not have control of the Senate. There is no way the Treasurer can be assured that legislation for the emissions trading scheme will be in place by the end of the year or that that legislation, even if it is amended or passed, will operate as intended.

The Treasurer also believes that financial market conditions, now or indeed at the end of the year, will be conducive to the sale of our State's electricity assets. Nobody, not even the Treasurer, knows what the market conditions will be at the end of the year. What we know now is that since the release of the Owen report in September 2007, the Australian stock market has fallen significantly. As I have said, the Australian All Ordinaries fell by almost 20 per cent and the Australian utilities sector index fell by almost 30 per cent. International rating agency, Fitch Ratings, stated:

The final valuation of NSW's coal-fired generation assets will be affected by the details of (the) carbon pollution reduction scheme (CPRS) due to be introduced in 2010. Uncertainty over how the CPRS will affect the electricity generator's cashflows and of the present state of credit markets are likely to affect the value of proceeds.

It should never ever be forgotten that the only reason the Government faces defeat is that it has failed to secure the votes of its own caucus members. This predicament is entirely of the Government's own making. The Coalition's approach to electricity privatisation was never about ticking boxes or meeting deadlines. It has always been about what is in the best interests of the New South Wales community. Our approach to this legislation has not been about the father-knows-best politics of the Australian Labor Party. From the outset, it has been about doing what the people expect of us.

My colleagues in the other place each represent more than 40,000 voters in their respective electorates. The Leaders of the New South Wales Liberals-Nationals involved each and every one of those 40,00 voters in formulating the Coalition's final position. The Hon. Michael Costa and his leader cannot say the same. The Auditor-General's Report and the Rural Community Impact Statement have played an important role in our decision. We also considered a range of factors, including external economic conditions and the current state of flux in the energy sector. The process has involved wide consultation with groups ranging from business interests to energy sector employees and of course the general community.

Ultimately the Coalition decided that the Government cannot be trusted with the privatisation of electricity. Let me echo the words of the State's Leader of the Opposition, Barry O'Farrell, who confirmed this morning that the New South Wales Liberals-Nationals will have an energy policy to put to the people of New South Wales before the next election. Our policy will include the principle of private sector involvement where it meets the public interest. It will consider the broadest range of methods that deliver to the public the best outcomes in electricity. What our electricity policy will not be is the singular agenda of an individual member of Parliament who is intent on rushing through a fire sale of the State's most valuable asset.

Much has been said in the press concerning the effect that this decision will have on the Coalition's relationship with the business community. Irrespective of what some business groups might think about the role of private enterprise in electricity generation, most members of the business community would agree that the Government cannot be trusted with even the most basic economic endeavours, let alone something as substantial as electricity privatisation.

Ultimately, the key stakeholders in the proposed sale of the State's electricity assets do not sit in New South Wales boardrooms; they sit in lounge rooms. They open a power bill every three months. They will watch as market forces, both external and internal, affect the retail price of power generation. Some of them will be renters, some will pay mortgages, some will have children, and some will live on a pension.

While the Iemma Government decides how to divide the spoils of its sale across marginal constituencies, these people will decide what to cut from the family budget as the cost of living in New South Wales continues to increase. It should never be forgotten that if this legislation fails today it will be because the Labor Party has split. Two parties with conflicting agendas now run the New South Wales Government. I am proud to stand shoulder to shoulder with my Coalition colleagues The Nationals in condemnation of these bills and the manner in which they have been introduced. Today we oppose legislation that puts Morris Iemma and Michael Costa's interests and quick-fix financial gains above the interests of the people of New South Wales. The Opposition opposes this legislation.

Editor's comment on speech above

Although I am elsewhere highly critical of many other Liberal Party politicians, I found this speech by NSW Upper House Opposition Leader Michael Gallacher to be brilliantly incisive and informative. Thanks to Sheila Newman for having drawn my attention to it. Site visitors should also take the opportunity to read Treasurer Michael Costa's speech in support of the Electricity Privatisation bill in order to form their own judgement. It can be found on the Parliamentary web site. We intend to publish it here when time permits.

Readers should also contrast the damning case against Treasurer Costa and his Government presented here with the craven pro-NSW-Government coverage of electricity privatisation by virtually all the mainstream press, including that given by the supposedly independent ABC.

Why is it that newspapers, such as Rupert Murdoch's Australian which postures incessantly about its struggle to supposedly defend Your Right to Know so rarely report to the Australian public important basic facts about issues - like that of electricity privatisation - which can be readily found in the Parliamentary Hansards of almost every sitting day of the year?

The NSW's State Opposition's stance against privatisation is, unfortunately, not absolute. Ironically though, the NSW public and NSW unionists owe Michael Gallacher, Peter Debnam, Barry O'Farrell, Andrew Stoner and the whole NSW state opposition an enormous debt of gratitude. This is because the state opposition informed the NSW public of the truth about privatisation and the Labor Government record. The opposition then put its words into action. Of course, credit also rightly belongs to the Greens, the minor party and independent members, and those Labor members who defied the unprincipled stance of the Labor Caucus majority to vote against privatisation. Also credit is due to the trade unionists and community grass roots activists who campaigned so hard against privatisation. - James Sinnamon

Uppper House Nationals Leader Duncan Gay's speech against electricity privatisation

The Hon. DUNCAN GAY (Deputy Leader of the Opposition) [1.16 p.m.]: Today we have witnessed the contrast between two leaders: one leader who divided the party and another leader who brought two parties together. Never before have we seen greater contrast in this State. We have a political party that wants to hide in the back rooms of this State and not take decisions to the people. Its members do not want to walk up the front path to the front door of a house, knock on that door and say to the constituents in that house, "This is what we want to do." That party has defied the people's house of New South Wales and has not gone into the Legislative Assembly where the elected members of this Parliament represent the electorates of New South Wales.

We have seen vicarious cowardice on the part of the Premier and his tyrant Treasurer, who is probably already out there with the failed Babcock and Brown hunting for a job. Never before in this Parliament have we seen a greater contrast between those who are willing to listen to the people of New South Wales and act in the community's interest and a group who refuses to do so. That particular group unwisely spent taxpayers' money to recall the Parliament to debate a flawed scheme. The Parliament was offered one option, a flawed option that does not add up with the trading schemes yet to go before the Australian senate.

<8>

The balance of power in the Senate will be held by a small group of Independents, including the newly elected South Australia Senator, Nick Xenophon, the Family First party and the Greens. Who knows what cost that will put on power generation in New South Wales? The Treasurer, in a rare bout of honesty in this House, indicated that cost could be as much as $3 billion. No-one knows what that cost will be out of Canberra. No-one knows what the competing cost will be out of the current fire sale at Babcock and Brown, as it divulges similar interests into the markets in this country.

Yet, we were given one option: to support the sale, or nothing! Today in this House, questions must be asked: What has the Government been doing for the past 13 years? Why is it suddenly Barry O'Farrell's fault? For 13 years the Government has had a chance to fix this problem. For 13 years former Treasurer Michael Egan and Treasurer Michael Costa have told Parliament that the New South Wales taxpayers have had a surplus through the good financial management of the Labor Party. Treasurer Michael Costa told New South Wales taxpayers before the last election that they had nothing to worry about. One reason why the people of New South Wales and the Opposition cannot support this legislation is because the Government's Ministers cannot be trusted. Their word is not what they stand for.

The Government promised to fix the roads, it promised to lower hospital waiting lists and it promised to provide extra police, but it has not delivered on one of those promises. Not one Government promise has been fulfilled. The electricity legislation that was introduced today is dead in the water, because the Government did not consult with the people of New South Wales and it gave a flawed plan. The Government has reaped its own revenge. The Government has lost, and it deserved to lose. The contrast is stark—we will go to the people with a proper plan. [Time expired.]

See also: Open letter to NSW state Opposition members urging a vote against electricity privatisation of 28 Aug 08, Open letter to NSW Labor parliamentary caucus members to urging a vote against electricity privatisation of 27 Aug 08

The recently released NSW Auditor-General's report supposedly gives the green light to the NSW Government's electricity privatisation legislation. NSW Premier, Morris Iemma, has seized on this and has announced that he may recall the NSW Parliament as early as next week in order to rush through the privatisation legislation.

The actual words from the report (pdf, 354K), which NSW Premier Morris Iemma claimed as a "stunning endorsement" of his government's plans were "... nothing has come to my attention that causes me to believe that the Government's strategy for the transfer of assets to the private sector ... is not appropriate for maximising financial value for taxpayers."

These read like weasel words, intended to satisfy the political needs of the Iemma Government whilst maintaining a facade that the Auditor General has fulfilled his responsibilities to hold the Government accountable to the NSW public.

A condition imposed by the Auditor-General, which superficially appears to pose a hurdle to privatisation, is that a confidential reserve price for each electricity generation asset to be sold be arrived at. If, for any one asset, the bids fail to exceed that asset's secret reserve price, that asset's sale is to be scrapped. One "of the factors used to determine the reserve price for each transaction" is to be the asset's 'Retention Value'. The report doesn't specify what other factors are to be used in determining the reserve price.

The A-G's report describes the 'retention value'.

The Strategy Document outlines the intended approach to be adopted to estimate the value of the businesses under continued Government ownership. This approach values the projected future dividends from the businesses and projected corporate taxes paid by the businesses which are ultimately received by the State under the Tax Equivalent Regime. The projections should reflect the expected performance of the businesses under continued Government ownership taking into account any impact of Government ownership on the businesses’ growth strategy, capital structure and performance. The projected future dividends and tax payments should be discounted at an appropriate cost of equity reflecting the risks associated with the projected cash flows.

From the point of view of accountability and the public interest, there are a number of problems:

• The 'retention values' were unspecified.
• What is to stop the NSW Treasurer from applying 'factors' other than an asset's 'retention value' in order to reduce the reserve price?
• The process requires, on the one hand, concealing from the NSW public the calculated retention values, whilst, on the other hand, relying on those managing the sell-off to keep that knowledge from the intending purchasers.
• The 'retention value' is defined only in the narrowest financial terms. For example, it appears to accept shifting of costs, previously borne by publicly owned corporations, onto the public as a legitimate means to favorably assess comparative performance of the privately owned utility. One example of cost-shifting typically employed by privatised corporation is the reduction in on-the-job training of its staff.

In other ways, the report helps expedite privatisation. It states:

... it is in the interests of investor confidence and bearing in mind the long lead times for developers to physically obtain generation equipment, that any uncertainty relating to the proposed restructure should be removed as soon as possible.

The report also takes issue with the five year employment guarantee to current NSW electricity employees:

Based on information provided by Treasury, the planned measures for the proposed employee protections are generally consistent with other privatisations and Government restructures, except for the employment guarantees. A five year employment guarantee for certain Generator employees exceeds such guarantees in previous privatisations and restructures, which were for three years or less.

From the A-G's objection to the five year employment guarantee which he implies is excessive, we can see that he unquestioningly accepts the prevailing economic orthodoxy which is that the greater propensity of private owners to shed jobs is a factor in favour of private ownership.

Whatever can be said of the report, it fails to clearly demonstrate, as the NSW public who paid for the report are entitled to know, whether or not privatisation is in their best interests. It admits that its parameters are confined to dollar projections in the narrowest sense, and does not consider factors beyond this - notably democracy.

The fate of NSW's electricity assets, paid for over recent decades by the NSW public with taxes and through electricity bills, should not rest on such an obviously limited and deficient report.

Democracy disregarded

The NSW public, the rightful owners of the electricity assets, have consistently and emphatically shown their opposition to the sale. In the 1999 elections where they resoundingly voted against the NSW Liberal/National opposition which stood on a platform of full privatisation. The latest poll showed 79% opposition to the sale. An earlier poll showed 85% opposition. The NSW state Labor Party Conference, wholly consistent with the feelings of the broader community, voted 702 to 107 against privatisation, but was subsequently ignored by the NSW state Labor Parliamentary Caucus.

The plans to privatise were never put to the NSW public during the 2007 elections. As it is impossible to believe that privatisation had only occurred to Iemma and Costa since the election, it would appear that they deliberately concealed their intentions, knowing that they would have been rejected.

If democracy in this country is to have any practical substance whatsoever, then the NSW government has no mandate to proceed with the sale.

Given that the Iemma Government may well have the numbers on the floor, how is it possible for the NSW public to prevent this brazen theft from proceeding?

The public have already made it clear they don't support privatisation of electricity

As the Vietnam Moratorium and many other popular protest movements have demonstrated, Parliament does not always get its way when it is so far removed from the will of the public.

The most effective way to block privatisation would be for the Electrical Trades Union (ETU), members of which stand to lose the most should it proceed, to carry out their threat of industrial action. In all likelihood the ETU would not even need to carry out its threat. If it were simply made clear to the Iemma that, unless privatisation is abandoned outright, or the legislation put to the NSW public either through a referendum or at the next election, it will proceed with industrial action, it is hard to conceive of how this could not enjoy the overwhelming support of the NSW public and and it is hard to concieve of how Iemma, faced with such an ultimatum could see any alternative but to agree.

Whether or not the ETU decides to pursue this course, all parliamentary representatives must be held to account for their actions. As hardly any who have voted in Parliament for privatisation, least of all the Labor representatives, are acting in accord with the will of their constituencies then their constituencies have every right to have them replaced by others who will. In the case of the NSW Labor Party, whose will has also been ignored, simply supporting those few Labor members who have voted against privatisation is hardly sufficient. They should not hesitate to disendorse each and every member who have voted for privatisation, starting from Morris Iemma and Michael Costa. Given the generally appalling record of the Iemma Government and its abysmally low popularity, this would seem, in any case, to be the only realistic chance that Labor would have of retaining government in NSW in 2011.

If the public don't endorse the sale it can be revoked later on

However, the most important measure that should be adopted by those now fighting privatisation is to clearly warn those intending to buy NSW's electricity assets that they have no right to do so and be resolved to both remove from office all those who are pushing privatisation and to renationalise those assets.

All those who intend to buy NSW's electricity assets in open defiance of the will of the NSW public must be told in no uncertain terms that once a government, which is representative of the NSW public, comes to power, that they, and not the NSW public, will be made to bear the cost. Whatever costs, which were were illegitimately imposed on the NSW public in the course of privatisation and whatever further costs are necessary to renationalise those assets should be discounted in full from the money paid for the repurchase of these assets.

If this were stated clearly now, then they won't be able to say that they weren't warned.

When Barrie Unsworth complained on Sydney's local ABC radio of the New South Wales Labor Party's efforts to ensure that state Labor parliamentarians vote against the privatisation of NSW's electricity assets - a policy already rejected resoundingly by the electorate in 1999 and currently opposed by 79% of the NSW public - his interviewer Toni Matthews expresssed her total agreement with the former NSW Premier: "Why - It seems obvious to me - Why isn't it obvious to these younger members that you're talking about that they're creating mayhem within the party?"

On 15 July, Sydney's local Radio Station gave a free kick to the NSW government's efforts to hand privatise the electricity assets of NSW when fomer NSW Premier Barry Unsworth was interviewed on the Morning Show by a wholly sympathetic and uncritical Toni Matthews This was subsequently reported in other media including the West Australian and ABC's online news service. In the interview Barrie Unsworth spelt out his plans to again enlist Labor 'elder statesmen' to including former Prime Minister Paul Keating, former Labor Premier Bob Carr and former Labor Council heads Michael Easson and John MacBean, to wear down the resistance of the NSW Labor Party to the privatisation of NSW's electricity assets. The online ABC report was misleadingly entitled "Keating, Carr asked to heal NSW Labor".

The ABC reported:

Mr Unsworth has lashed out at NSW Labor state secretary Karl Bitar for actively campaigning against Mr Iemma and his power privatisation plans, which the former premier supports.

However, if Mr. Unsworth had been a little more consistent, he would have also 'lashed out' at the entire NSW Labor Party, which, at its conference voted 702 to 107 against privatisation and he would have 'lashed out' at the NSW union movement.

If Mr Unsworth had been consistent, he would have, above all, 'lashed out' at the NSW public, who have failed to budge from their emphatic opposition to privatisation. On 29 June it was reported that an opinion poll found 79% opposed to privatisation, even when the Government's rationale for privatisation was put to them₁. This poll is consistent with an earlier poll sponsored by the NSW union movement which found that 85% of the NSW public opposed privatisation.

It would therefore seem odd for Mr. Unsworth to have felt only resentful towards only a few Labor Party and trade union officials. Why Toni Matthews failed to point out these widely understood facts is unclear.

It is striking that Toni Matthews made no effort to challenge the seemingly very weak case put by Mr Unsworth for privatisation:

... I think it's an argument that has gone beyond its time because everywhere else in Australia electricity is conducted on the basis of a national market and there are some people - you would virtually call them Luddites in this state who can't comprehend that or don't want to accept that times change. I was saying to someone yesterday: Where's the state dock yard? Where's the state abattoirs? Where's the state brick works? I mean those sort of things come from another era and, quite frankly, governments should get on with the jobs that they're entrusted to do and get out of activity which is no longer relevant.

So, it would seem that 79% of the NSW public are 'Luddites' because, unlike Barrie Unsworth, they do believe that the provision of electricity, if not, perhaps, bricks, abattoirs and dockyards, are core government business.

In much of the interview Unsworth vented his indignation at the efforts made, within the NSW Labor Party, to remove the abysmally unpopular Premier Morris Iemma as leader of the NSW Parliamentary Labor Party. He told ABC 702 Sydney Local Radio:

"All this talk about forcing the Premier to leave office and searching for some other candidate is not in the best interest of the Labor Party,"

"I'm just appalled that there are people in trade union leadership and also now in party leadership positions who are seeking to achieve that end."

Toni Matthews, not for the first time and not for the last time in the interview, expressed her total agreement with the former Premier when she responded, "Why - It seems obvious to me - Why isn't it obvious to these younger members that you're talking about that they're creating mayhem within the party?"

Barrie Unsworth was particularly indignant at the attempts by the NSW Labor Party to ensure that Labor parliamentarians support, on the floor of Parliament, Labor's opposition to privatisation. He complained, "I have been able to confirm that parliamentary members in marginal seats have been brought to head office and in effect told that their preselections would be at risk if they didn't support the directives of head office".

"This is a democracy," Unsworth continued, "The people of NSW elected the Government, not people down in Sussex Street."

The full transcript interview lasting 8 minutes is included below. It is an illustration of how poorly the people of Australia continue to be served by its newsmedia, even the supposedly independent and 'left wing' ABC.

Unsworth's inititative, should it succeed in getting the NSW Labor Party to acquiesce before Iemma and Costa, will no more 'heal' the NSW Labor Party than did acceptance of the privatisation program of the Hawke and Keating governments 'heal' the national Labor Party back in the 1990's.

The privatisation of Qantas and the Commonwealth Banks, also carried out against Labor's own platform and also without any mandate from the electorate, only helped pave the way for 11 dark years of even worse misrule by the Howard Government. The privatisation of the remaining Government-owned half of the Commonwealth Bank followed Paul Keating's election victory in 1993. It was privatised despite a specific promise made by Keating not to. This only served to help demoralise Labor's own ranks and handed a perfect propaganda weapon to the Howard opposition, which had cynically voted in Parliament to support the breaking of Keating's 1993 election pledge₂. From then, amongst the repertoire of responses to any objection to the Coalition's own plans to privatise Telstra, was to remind the electorate that the preceding Labor government had "privatised everything that moved."

It became impossible, during subsequent federal elections campaigns, to convince many rural residents, hard hit by the Commonwealth Bank privatisation and Labor's overall neglect of rural Australia, that Labor was sincere in its stated opposition to Telstra privatisation, which, in any case, it has retrospectively endorsed.

In the inteview Unsworth accused the younger Labor Party officials of failing to understand history: "I mean if they had looked back over history, they would realise that disunity is death."

In fact it is Unsworth, himself, who seems unable to grasp the lessons of Labor's history. Whilst 'unity' under the pro-big-business leadership of Hawke and Keating, did not save Labor supporters and the broader Austrlian public from the catastrophe of the Howard years, open defiance of the NSW Labor Party of Premier Carr's earlier attempt to privatise electricity did not cost it office. In 1999, when Labor stood against a Liberal/National opposition pledged to fully privatise electricity, it won resoundingly, in spite of being led by Bob Carr. This is clear evidence that the NSW public can be discerning enough not to automatically turn away the Labor Party simply because of an episodic display 'disunity'.

NSW Labor's best chance to both hold on to office and to actually do something whilst in office, other than serve the interests of the corporate sector and property developers, would be for the ranks of the Labor to disendorse all of their parliamentiary supposed 'representatives', who have turned their backs not only on them, but also on the NSW public and basic principles of democracy, starting with Iemma and Costa

Footnotes

1. ↑ John Kaye calls on Iemma to dump sell-off as NSW public repudiate privatisation of 29 Jun 08 by John Kaye

2. ↑ To their credit, the NSW state Liberal/National Party Opposition has acted in a far more principled and decent fashion than did the Federal Liberal/National Opposition in the 1990's, not to mention the NSW state 'Labor' caucus. Paradoxically, it is thanks to the them, far more than to the Labor caucus, only a small handful of which were prepared to support Labor's own policy on the floor of the NSW Parliament, that the attempt to flog off NSW's electricty assets has been defeated thus far. This is in spite of such a stance threatening to strain their relationship with the NSW corporate sector as The Australian newspaper ominously warned in June. Had the Liberals and Nationals not inisted upon the privatisation legislation be referred to the NSW Auditor General, the legislation would almost certainly now be law.

See also: Unsworth report is a dead duck of 11 Mar 08 by Ed Lewis, John Kaye calls on Iemma to dump sell-off as NSW public repudiate privatisation of 29 Jun 08 by John Kaye, No Mandate, No Sale - Demand Costa and Iemma debate electricity sale in Parliament of 14 May 08 by John Kaye

Appendix: Full transcript of Interview of Former NSW Premier Barrie Unsworth by Toni Matthews

The follwing has been transcribed from MP3 file linked to from "Keating, Carr asked to heal NSW Labor"

BU:We've got an unprecedented situation at the moment where the leadership of Centre Unity (the predominant right wing faction in the NSW Labor Party) is undermining the Government of the state of NSW in the Premiership of Morris Iemma. Now, that's just untenable. I attended the party conference in May and the scenes that occured there I have never seen in my more than 50 years' membership of the party.

TM: Well, what do you mean? What kind of scenes are you talking about?

BU: Moving censures on the Premier and the party secretary giving leadership to the Centre Unity faction by actively campaigning and speaking against Premier Iemma. Now, Premier Iemma won the New South Wales elections last year, brought the Labor Party back into Office, continued the Labor Government that was commenced by Bob Carr back in mid-nineties and he should be rewarded for that - not attacked by the party administration as occurred at the conference.

TM: Well, it does seem a little unusual ...

BU: ... and as has occurred since then.

TM: ... mmm, and seems very destabilising.

BU: Well, I have been able to confirm that Parliamentary members in marginal seats have been brought to head office and, in effect, told that their preselections would be at risk if they didn't support support the directives of head office. Now, this is a democracy. The people of New South Wales elected the Government, not people down in Sussex Street (the head office of the NSW branch of the Labor Party). Now, I have been one of those apparatchiks. I know how the system works, and what I say is the elder statesmen of the Party should come together, have a look at what's happened to the party in this last 30 years - look at where it is at the moment - controlled by a group of younger, and in my view, inexperienced members, and look at the real issue. The real issue is keeping Labor in Government. The real issue is supporting a premier who won an election a little over twelve months ago, and will be in office for almost another three years, and all this talk about forcing the Premier to leave office and and searching for another candidate is not in the best interests of the Labor Party and I am just apalled that there are people in trade union leadership and also now in party leadership positions who are seeking to achieve that end.

TM: Forgive me, Mr Unsworth. Why - It seems obvious to me - Why isn't it obvious to these younger members that you're talking about that they're creating mayhem within the party?

BU: They haven't had the experience. I mean I have been reading some of their profiles on the weekend. They've been in the Labor Party for less than ten years and some of them are holding senior positions. I mean if they had looked back over history, they would realise that disunity is death, and if you destabilise the party you will be out of office and it's a lot harder to get back into office than it is to get out of office and I should know. Oppositions - they don't win elections. Governments lose them and having lost an election in '88, I can see the same situation occurring again in 2011 unless the party settles down, so it needs people who have had the experience, who were at the formation of Centre Unity such as those that I have nominated and I have nominated and spoken to John McBean who was party President and Michael Costa, who was secretary of the Labor Council, and both John and I were secretaries of the Labor Council. I know Paul Keating, because of the letter he wrote to the papers after the conference, is of a like mind and I have spoken to Bob Carr about the situation and I think that we've got to come together and give some direction.

I've spoken to delegates who were at the conference who were most uncomfortable with the direction they were given by the leadership of the Centre Unity at that conference. Some of them walked out and didn't vote and others voted, because they were under pressure, within their delegations and the leadership they were given was abysmal.

TM: It's twenty to nine on Mornings on 702. I am talking with former New South Wales Premier Barrie Unsworth about the current disquiet within the state ALP. Mr Unsworth, is this factional warfare playing into the hands of the Opposition?

BU: Obviously, it is! Obviously, it is! I made the point to the Premier, I think his popularity is at 28% - something like that, and I was editorialised once as "Mr twenty six percent", but I was able to claw back to 62%.

TM: That's just the media, isn't it?

BU: Well, I think ...

TM: (laughs)

BU:I think the media conducts the polling, and I've been in radio. I know a little bit about polling. Popularity comes and goes and it depends upon how you're treated by teh communication mediums and I think Premier Iemma has - he's got some very good policies. He's put in to action quite a number of them in the interests of the community in key areas such as health and transport and public security and this whole argument is just about electricity and I think it's an argument that has gone beyond its time because everywhere else in Australia electricity is conducted on the basis of a national market and there are some people - you would virtually call them Luddites in this state who can't comprehend that or don't want to accepet that times change. I was saying to someone yesterday: Where's the state dock yard? Where's the state abbottoirs? Where's the state brickworks? I mean those sort of things come from another era and, quite frankly, governments should get on with the jobs that they're entrusted to do and get out of activity which is no longer relevant.

TM: I gather that you have spoken to the Premier recently. How is he feeling about all this? He must be disappointed.

BU: I think that Premier Iemma shows great resilience and his public persona, I think, is tremedous because he's prepared to get on with the job and - sort of - brush off these frustrations, but i think we have got to send a message to the people who are white-anting the party that it's just not acceptable. It's not not just in the interest of the party, but all of the - you know - the millions of people in New South Wales that support the Labor Party that put them in office last year and expect them to do a job in the intersts of the people of this state.

TM: Mr. Unsworth, what would you say to those people who say, "Look, you've been around the block. You've had your time. It's now for the younger people, coming up through the ranks. If they make mistakes, so be it. Let them make mistakes. Let them learn.

BU: Well, you can't learn on the job. I mean, they should become a little more proficient. A lot of people that are in these positions today have never really worked. The system has changed. You have got a lot of staffers that get into these positions who have never had a job in industry. I mean, I - I am an electrician. I have worked as an electrician. I have come up through the ranks, and many of the people - and all of my contemporaries had that experience. You've got young inexperienced people now in positions of authority, and it's not just a question about "We've had our time". We've got the experience. We've got the runs on the board. We've been through all of these situations, the splits in the Labor Party, and we don't like it. And what we want to see is a bit of a steady-up. What it's all about is the egos of one or two individuals in the trade union movment and the ambitions of others in the party machine, who, themselves, want to see that they exercise parliamentary representative office.

TM: So, Mr Unsworth, if this factional issue isn't addressed before the next election, it's certainly going to have an effect on the results.

BU: Oh, huh. The next election's not for another three years. It'll be addressed well before then and I think it will have to be addressed again in the immediate future, because the Government has got to get on with the job, not be distracted by all this self-indulgent behaviour of a handful of people.

Update: Kelly denies Govt considering Snowy Hydro sell-off from ABC Online News 11 Jul 08 (see below)

The Canberra Times has reported that the Rudd Labor Government is now planning to acquire the Snowy Mountains Hydroelectric Authority in order to privatise it. This is in spite of fierce public opposition which forced the previous Howard Government to abandon its own privatisation plans and Rudd's own pledge before the 2007 elections to keep it in public hands.

The Rudd Government maintains that it is "opposed to outright privatisation as such''. Instead, it plans to lease the Snowy Mountains Hydro-Electric Corporation to private industry. However, as NSW anti-privatisation campaigner Greens MP John Kaye pointed out in a media release of 10 July, "There is no practical difference between Kevin Rudd's long term lease and John Howard's sell-off. Both would see control of the water in the scheme pass out of public hands to large multinational corporations."

John Kaye has warned that if NSW Treasurer Michael Costa succeeds in the privatisation of NSW's electricity assets, in the face of the strong opposition of 79% of the NSW public, that the Rudd Government may well feel encouraged to proceed with the sell-off of the Snowy Hydro.

According to the Canberra Times, the, by now, wholly familiar rationale for privatisation has been offered, that is, that it has to be privatised in order for the $800 million in investment said to be necessary can be raised by the private sector. No reason as to why the money couldn't, instead, simply be raised directly by the government either from general revenue or through loans was offered.

An impetus to privatisation also come unexpectedly in last week's Climate Change Review Draft Report. The report made the claim that ownership of the Snowy scheme by three governments NSW, Victoria and the Commonwealth could restrict future development and competitiveness in the national electricity market.

However, local community opponents to privatisation pointed out that Garnaut had paid no regard to the fact that the Snowy Hydro was a regulator of water. As former chief engineer with Snowy Hydro, Max Talbot, had written in a letter to the Prime Minister earlier this year after hearing that privatisation was being considered, Snowy Hydro was ''worthless as a business'' without its water licence.

''The licence is weighted towards the use of water for electricity production and trading rather than optimisation of the use of the water as an invaluable resource for irrigation, communities and the environment.

''It does not adequately regulate Snowy Hydro and contains compensation clauses that would result in the payment of hundreds of millions of dollars by governments to private owners should the licence need to be amended during its 75-year term.'

So if privatisation, in the guise of a long term lease were to proceed, the Australian community may be faced the unpalatable choice of forgoing vitally needed water or paying prohibitively for an breach of contract to the private operators of the Snowy Hydro.

Alpine Riverkeepers spokeswoman Acacia Rose was also critical of the Garnaut report's comments on privatising Snowy Hydro.

''The Snowy scheme is vital for water security and must be re-positioned for water storage and management despite the recommendations of Garnaut that focus primarily on energy generation,'' she said.

With diminishing rainfall for south-eastern Australia there will be less water available for energy generation.''

The fact that Ross Garnaut has so inappropriately used his authority to promote privatisation when privatisation has had such a disastrous track record and when it has been so emphatically opposed by the public, may be cause to question his preference for market forces, even if operating within the constraints of his carbon credits trading scheme, as the solution to global warming.

Update

The ABC reported on 11 July that Federal Member for Eden-Monaro Mike Kelly has put an end to speculation that federal Labor has done a backflip on its opposition to privatise Snowy Hydro.

In response to the abovementioned Canberra Times article Mr Kelly said that his Government has not changed its opposition and he stands by his election pledge to keep the corporation in public hands.

He claimed that the Canberra Times report was misleading.

Comment: The report didn't account for the inconsistency between the Federal Government's support for the privatisation of NSW's electricity and its professed opposition to the sale of the Snowy Hydro.

Appendix: Media Release for John Kaye, NSW Greens MLA

NSW power sell-off would renew Snowy Hydro privatisation push

10 July 08

The Iemma government's attempt to sell the state's electricity industry has become a test case for privatising the nation's largest hydro-electric and irrigation scheme, according to Greens NSW MP John Kaye.

Commenting on a story on page 1 of today's Canberra Times (''Snowy power may go private'

), Dr Kaye said: "Federal member for Eden-Monaro Mike Kelly has let the cat out of the bag.

"The Rudd government is carefully watching NSW Treasurer Michael Costa's push to sell off the state's retailers and generators.

"According to Mr Kelly, if Treasurer Costa is successful, the Commonwealth government will implement their secret plan to take over the Snowy and lease it out.

"It looks like a reincarnation of John Howard's privatisation plans that came to a sticky end in 2006 after massive public opposition.

"There is no practical difference between Kevin Rudd's long term lease and John Howard's sell-off. Both would see control of the water in the scheme pass out of public hands to large multinational corporations.

"The ante on the NSW sell-off has just been upped. The Iemma government's proposed sell-off is an environmental, social and economic disaster. It just got worse.

"The issue is no longer confined to the state's coal-fired power stations and retailers. It now includes Snowy.

"The state member for Eden-Monaro, Steve Whan, needs to get onto the phone to his federal colleague and reiterate the arguments he used in 2006 to oppose the sell off.

"No doubt Mr Whan will now be regretting his support of the Unsworth Inquiry recommendations to sell off the state's power industry.

"He will not be happy to see he has unwittingly become part of a renewed push to privatise Snowy.

"Mr Whan knows that this will be even more detested in his electorate than the already deeply unpopular power sell off," Dr Kaye said.

For more information: John Kaye 0407 195 455

The NSW rural newpsaper the Northern Daily Leader of 9 May 08 reported in its article NSW Government appears impervious to public opinion local state Independent member for seat of Tamworth Peter Draper's observation that the NSW Government appeared totally impervious to public opinion on the privatisation of electricity assets.

Peter Draper told The Leader that even if everyone in the State took to the streets in a peaceful protest against the plan it appeared as if it would still go ahead.

Mr Draper hoped people would write to NSW Premier Morris Iemma to let him know how they feel.

"It appears the Liberal Party are going to back the sale and even if Labor backbenchers cross the floor there is nowhere to cross the floor to," he said.

"The Labor Party is pushing it through as quickly as they possibly can."

Mr Draper said it appeared neither party believed the public needed to own any community utilities or assets and just wanted to sell them off.

"They forget they don't own them, the public does," he said.

The story also quoted two apologists for privatisation within the Labor camp, Tamworth-based Member of the Legislative Council Christine Robertson and former ALP state candidate Denise McHugh:

…Christine Robertson said "… so long as country
NSW is a consideration for equity in pricing and
distribution now and in the future, I don't think there
will be a problem." …

Perhaps, rural mobile phone users unable to have their landline telephone connections maintained or who have recently been forced to ditch their CDMA mobile handsets and fork out hundreds more for their Next-G mobile handsets, that is if they even have coverage, as a result of the privatisation of Telstra, may not feel quite so reassured.

Denise McHugh said she had not been present at discussions but that everybody wanted a good result for country NSW and the people of NSW.

"It's difficult because there are valid arguments on both sides," she said.

We would be most curious to learn from Denise McHugh what the 'valid' arguments in favour of privatisation are.

See also: Why Privatisation is wrong

As the NSW Labor government, in defiance of the wishes of the NSW public without any electoral mandate, and cheered on by the corporate newsmedia, presses ahead with its plans to privatise NSW's electricity assets, the New Zealand Government is moving in the other direction and has renationalised its rail network. It is notable that New Zealand's experience of privatisation since 1993 is precisely the opposite of the claims made of what privatisation will achieve here in Australia. According to NZ Finance Minister Michael Cullen, as reported in the ABC, “The selling off our public rail system in the early 1990s and the running down of the asset afterwards has been a painful lesson for New Zealand“

The ABC News of 5 May 2008 reported:

The New Zealand Government has announced it is buying back the nation's rail and ferry services, 15 years after they were privatised.

Under the deal, Australia's biggest freight company Toll Holdings will be paid $500 million.

New Zealand Rail was sold in 1993 by the then National Government, and then Toll Holdings bought it and split the business.

Under the deal, Toll gets to keep its freight forwarding operations, but the New Zealand Government will have complete control of the rail network.

The railways were re-nationalised in order to encourage companies to use rail to transport freight rather than road, as a response to climate change and the spiraling cost of petroleum. The New Zealand government was driven to re-nationalise the railways after a long-running dispute with Toll Holdings over who would bear the costs of upgrading the rail network.

Seemingly, in response to the evident popularity of the Labour Governments' move, the opposition National Party announced that it would not sell off any state-owned enterprise in its first term of office if elected this year. The apparent consensus now against privatisation instead of for privatisation drew a critical response from the New Zealand Business Roundtable in a media release of 8 May. The media release also took aim at other moves towards renationalisation and government intervention in the NZ economy:

… the buy-back of Air New Zealand … the establishment of Kiwibank, the renationalisation of ACC, and the Auckland Regional Council’s reversal of the part-privatisation of Ports of Auckland.;

The case in favour of privatisation largely rested upon the familiar ‘everyone is doing it’ argument:

A few years ago the World Bank observed that “Privatisation is now so widespread that it is hard to find countries not using the approach: North Korea, Cuba and perhaps Myanmar make up the shrunken universe of the resistant.”

They neglected to mention popularly elected Latin American governments in Venezuela, Ecuador and Bolivia, who are now in the process of undoing the theft of publicly-owned assets enacted either under the guns of by murderous military dictatorships, or, in the case of Bolivia, by the betrayal of popular trust by supposedly ‘democratic’ left-of-centre governments (see "The Shock Doctrine", (2007 by Naomi Klein)).

Naturally, they couldn‘t resist contrasting New Zealand ‘unfavourably‘ with Australia where both sides of politics, Labor and Liberal, at both the state and federal level still enthusiastically embrace privatisation:

Currently the New South Wales government is battling with trade unions to privatise its electricity generators. Victoria (under the Liberal government of Jeff Kennett) did so in the mid-1990s, ...

The government of West Australia is looking at private ownership of its water utility and the Queensland government is selling airports and entering into public private partnerships to build schools.

Australia has private prisons and many infrastructure PPPs (Public Private Partnerships).

The media release cited other supposed success stories of privatisation: Germany, The Netherlands, Ireland, and quoted politicians from the UK, where, in spite of Labour having been in government since 1997, privatisation is still the orthodoxy.

The media release cited a A Business Roundtable study which estimated that failure to privatise could cause NZ to miss out on a 1% increase to its Gross Domestic Product (GDP). Even if this could be substantiated, the GDP, which counts all economic activity, including, for example, repairs necessitated by natural or man-made disasters as positives, is hardly a reliable measure of true prosperity. Indeed, it would be not be hard to envisage how the financial paper-shuffling and the additional complexity necessitated by government regulation of privately owned utilities could be construed by the Business Roundtable as adding to NZ's prosperity.

The media release cited the results of a push poll recently conducted by proponents of privatisation in NSW:

A recent survey found that two out of three NSW residents don’t care whether the state government or business runs the electricity industry.

The media release made no mention of another poll conducted on behalf the Union movement of NSW found that 85% of the NSW public opposed privatisation. Those results are consistent with every other poll conducted on privatisation in Australia in recent years which, without exception, showed overwhelming public opposition to privatisation even in the face of relentless pro-privatisation propaganda by business leaders, the government and by the corporate newsmedia. When the NSW Liberal opposition put a platform for the full privatisation of electricity to the NSW public in the elections of 1999 it was roundly defeated.

When you take a public asset without permission and give it to private individuals, that is not 'reform' it is theft. Taking something without the owners' permission is stealing. In Chile in 1973, in Argentina in 1976, people were jailed and military coups were required, for state-owned industries, services and land to be sold off to private enterprise without permission. It was called 'reform' then and it is called 'reform' today. It is still carried out by governments at the behest of shonky economists who have trained in the Milton Friedman or similar schools of economics, which Naomi Klein in The Shock Doctrine, has shown up to be, at their worst, torturers and apologists for torturers. Today in Australia, in every state, we have elected dictatorships, with government conceived as 'elected delegates' rather than representatives of the people. How did this happen? Our press was corporatised, which means that the mainstream press now consists of a few global networks of intersecting industries of which only the public face is the media. Our mainstream media have so many vested interests that it is hard to imagine a subject they could report on which could not enhance their earnings somewhere. This problem can be analysed on many levels, but one is the creation and marketing of political and economic viewpoints via the creation and marketing of public figures. The mainstream media picks up on various elected public figures and makes or breaks them in images useful to its corporate interests. In the mean-time our government processes are attacked by the vested interests at another level, making it virtually impossible for people to organise effectively to have their voices heard. Our education, particularly in history, has been watered down into small modules to prepare us to be little cogs in giant conglomerations and teachers no longer educate children in the art of clear-thinking or in critical history. History has become, more than ever, an ideological view for widely marketed perceptions. Local governments are now ruled by State employed CEOs whose job it is to reinterpret local opinion until it satisfies the objectives of the state governments, which are involved in facilitating land and asset speculation, in the guise of 'reform'. Any of us who have tried to protest against massive, undemocratic and unwise projects, like the Channel Deepening, the injection of over a million more people into cities already straining at the seams, and short of water, will have run into some of the myriad of tricks now used to occupy public time and resources so as to deflect real public opinion and objections. See, for instance: Jack-boot planning coming to Victoria - Time to Protest is NOW I object to the application of the term 'energy reform' to a process whereby the public are being deprived of assets and control over energy and services without which most of us will die in this complex society. Even economists are admitting now that we have hit a petroleum wall. That is, that we are unable to increase petroleum production and that we must accustom ourselves to a continuous decline in the oil energy upon which the planes and cars, upon which we all rely on so much, run. As energy supply in all its forms, including coal, becomes increasingly straightened, you cannot tell me that the rich men and their stooges who currently run the NSW caucus, or any other Australian government body, are going to stand up to their mates in the corporations and tell them to give Australians their due. No, what will happen is that this already divided society, will increasingly define the poor as unworthy of basic services. Already they are justifying the deprivation of the NSW public their ownership of NSW electricity by defining the public servants who currently deliver electricity as some kind of bad guys who cannot be trusted to do a solid day's work and deliver a service. I mean, really! We are talking about rich people who pursue their interests in power-broking in between professional manicures, massages, ski-jaunts and hobnobbing with the idle rich. It is a good thing for the public to have substantial representation at every level in the public service in the delivery of fuels and the running of essential services. Without this pressure governments can use our dependence on these services against us. They can allow the services to run down. They can allow their rich mates to price the services out of reach of all but the elites. It is not just a good thing; it is an essential thing, when energy-supplies are on a downward curve, to keep public control of them. Why would I or any other Australian with their head screwed on trust Iemma and his peers to safeguard Australians' access to vital fuels and services if we cannot trust him and his peers to base their decisions on democratic consultation? The arcane Milton Friedman pseudo-science of privatising for efficiency, whilst blinding young students, credulous journalistic hacks, and naive foreign-aid personnel, has been discredited everywhere it has been tried. The current situation of reasonable comfort and complacency is set to change very quickly and our country is on the verge of descending into severe and worsening poverty. What will happen then? The upper middle classes, which had their silence bought by being involved in the profits at the shareholder level, won't be silent when their shares fall through the floor. Large industries, like nursing and the police, are kept in line through judicious application of carrots and sticks, but they won't be silent when the banks close down and try to call in their mortgages. Then will those who encouraged Iemma to sell off NSW Electricity encourage him to privatise the police and Rudd to privatise the army?

The arrogant contempt in which democracy is held by many of Australia's political and business leaders and much of the newsmedia could not have been made more clear by the determination of the New South Wales Government of Morris Iemma to proceed with its plans to sell off publicly owned electricity assets. This is being done against undertakings made to the union movement immediately prior to the 2007 state elections₁ and in the face of uproar from the NSW public two thirds of whom oppose privatisation₂.

Last Saturday, 4 May, the conference of the NSW Labor Party reaffirmed its opposition to privatisation with a resounding 702 votes to 107. Just like Iemma's previously aborted plan to flog off the NSW government's stake in the Snowy Mountains Hydro-electric scheme, privatisation of electricity has never been put to the people of NSW in an election. Indeed, only in 1999, the Labor Party won a resounding election victory against the Coalition which promised to fully privatise electricity. Ironically, then Labor Premier Bob Carr had previously tried to privatise electricity as Iemma is doing now, but had backed down following the repudiation of the policy by the 1997 NSW Labor Party state conference and subsequently by the NSW trade union movement.₃. Carr and the Labor Party campaigned on a platform precisely against the policy that Carr had previously tried to impose on the Labor Party and won. Following its defeat the NSW Liberal Party accepted the repudiation of privatisation by the NSW electorate and dropped this policy ₄.

On the day following the conference, in brazen defiance of that conference's decision, Iemma announced that he intended to push on with privatisation, regardless₅.

Labor backbenchers opposed to the sale have vowed to vote in support of the conference decision of what decision is reached int NSW Labor Caucus meeting scheduled for Tuesday 6 May. In April, the NSW Labor Party president Bernie Riordan confirmed protection for any Labor MP who crossed the floor to uphold party policy. He said they would not be expelled or lose their endorsement₆.

However, the NSW Labor Party needs to go much further than protecting state MPs who chose to uphold the conference decision. Any state MP who votes, whether in Labor caucus or on the floor of Parliament, for privatisation, starting with Iemma and Costa, should be expelled immediately from the party and disendorsed and new candidates, willing to abide by decisions of the Labor Party conference, be endorsed in their places. If the Labor Party fails to do this, then democracy will be a dead letter in their organisation.

If they act with determination to clean out the Labor Party, there may be still hope that NSW electors could be persuaded to give their vote to a renovated state Labor party, answerable to ordinary members rather than powerful business lobbies, at the next state elections. Indeed, given the extremely poor standing of Iemma in the polls, and given the barely concealed indifference to the electoral fate of the Labor Party by the likes of Costa, who clearly is looking to a future career in the finance sector, such a measure would appear to be essential, in any case, if NSW Labor is to stand any hope of electoral survival.

However, the NSW Labor Party machine cannot be depended upon to do this unless rank and file Labor Party members, unionists and minor parties and community activists opposed to the sale must continue with their energetic campaign against privatisation.

Appendix 1: A rogues' gallery of backers of NSW electricity privatisation

• Prime Minister Kevin Rudd
• Federal Treasurer Wayne Swan
• Labor state Premiers
• Jeff Kennett, former Liberal Premier of Victoria
• Former NSW Labor Premiers Bob Carr, Barrie Unsworth and Neville Wran
• Paul Keating, former Labor Prime Minister
• the NSW Business Chamber.
• Rupert Murdoch's Australian Newspaper
• The Federal Parliamentary Liberal Party
• Energy Users Association of Australia

Footnotes

1. Watkins denies govt broke power promise, SMH 30 Apr 08; Not privatising, just giving control to private companies to run as they see fit for a century by Tim Dunlop, 30 Apr 08; Iemma told unions he would not privatise power sector, Daily Telegraph, 30 Apr 08[back]

2. Citation need. I read this in an online newspaper. [back]

3. Premier's power play, SMH 19 Apr 08 www.smh.com.au/text/articles/2008/04/19/1208025491879.html[back]

4. Citation needed. The Liberal Party, has not unexpectedly, become ambivalent on this question. However, if it does remain true to its past words, privatisation can be blocked in the NSW upper house with the support of minor parties and independents.[back]

5. Bad sell but I'm pushing ahead: Iemma, SMH, 5 May 08 [back]

6. Hunter MPs threaten power sell-off revolt, Newcastle Herald, 5 May 08; Iemma facing party revolt over power sell-off, ABC News, 5 May 08; [back]

See also: NSW electricity links