The Guardian 13 February, 2008
Iemma government faces revolt
over electricity privatisation
Peter Mac
Last week the NSW Treasurer, Michael Costa, stated that the government would proceed with a $15 billion 100 year lease (effectively the sale) of the State’s electricity system, and that he just didn’t care if the ALP expelled him over the issue after its next conference in May.
Bernie Riordan, current President of the NSW Branch of the ALP, and Secretary of the Electrical Trades Union, has said that Costa should save everyone a lot of trouble and quit now.
Costa’s arrogant contempt for the opinion of others confirms rumours he plans to quit politics and join one of the major financial institutions, possibly the Macquarie Bank.
In 1997 Bob Carr’s ALP government in NSW attempted to privatise the NSW electricity system, but failed after a furious rebellion by electricity workers and other ALP members. The then state treasurer, Michael Egan, left Parliament afterwards.
History may repeat itself. An estimated 14,000 electricity workers will go on strike and march on parliament on February 26 over the issue, and the privatisation bid has a strong chance of being rejected at the ALP Conference.
However, Costa has claimed that if the government loses the vote, it would go ahead with the sale anyway, even if Costa was expelled from the ALP as a result.
In any case, a defeat of the government’s current move would not end the war over privatisation of electricity generation, or other essential services for that matter. In the long-term the Iemma Government intends to allow private corporations to build and run new power stations, contributing power alongside the existing publicly-owned facilities, which are rapidly ageing.
A privateer’s paradise
The Iemma government has attempted to justify the sale of the electricity system by claiming that the funds derived from the sale would be used to provide new schools and hospitals.
If implemented to its logical conclusion, this policy would result in the Government selling off the essential government services, one-by-one, in order to fund the remainder. Eventually the only government service left would be the Parliament itself!
The argument also ignores certain "bleeding obvious" facts, for example that taxation revenues are supposed to fund government services, and that if government funding was not directed as subsidies for private health and education there would be a lot more funding available for public schools and hospitals.
Last week Costa also claimed that many firms had told him they would not bid to build a new power station unless the whole industry was sold. However, it beggars belief that no firm would come forward to build a new baseload power station, which is likely to have a price tag of $8 billion.
Green power ignored
Costa has claimed that the government has a responsibility to the people of NSW to "secure" electricity supplies. However, the sale of the electricity system would do the opposite, placing the generation of power, a crucial social necessity, beyond public control.
This is of supreme importance because of the need to meet the challenge of climate change. Coal-fired power stations emit huge amounts of carbon dioxide gas, a major contributor to climate change. Gas fired stations also emit carbon dioxide into the atmosphere, albeit in smaller amounts.
Many of the NSW power stations will reach the end of their working life within the next twenty years, and the construction of a major new power station is therefore a burning question.
However, so far the Iemma government has not even committed itself to building a new station, and has only expressed interest in a coal-fired facility, or possibly natural gas-fired. No consideration appears to have been given by the Iemma government to construction of a renewable energy baseload station, such as the one gigawatt solar thermal facility currently being built in California, ironically using "lost overseas" Australian technology.
The government’s statements indicate clearly that its thinking is in line with the interests of the major mining corporations. However, a few weeks ago one scientist pointed out that the private sector will be very loathe to take over the NSW power system, because of the possibility that the Rudd government will actually introduce a vigorous carbon trading scheme, under which the generation of power in coal-fired, or even gas-fired, power stations would be penalised.
It is entirely possible that the Iemma government will get around this problem by making special allowances and offering certain inducements to the successful bidder, concealed by "commercial in confidence" arrangements, and that the Rudd government will make special arrangements to benefit the owners of coal fired power stations under a new carbon trading scheme.
The defeat of the current electricity privatisation attempt is therefore crucial, but it is only the first stage of the battle for people’s power.
For further information about the campaign against the privatisation visit: www.stoptheselloff.org.au