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Issue #1628      February 26, 2014

Public electricity delivers dividends

While the report on energy privatisation by Professor Quiggin (see above) shows how privatisation has failed, a recent report by the NSW Auditor General on the NSW electricity sector reveals the benefits of public ownership. The Auditor General found that publicly owned electricity network businesses are delivering massive dividends to the people of New South Wales.

The Auditor General’s report identified dividends from the four publicly-owned network businesses – Ausgrid, Endeavour Energy, Essential Energy and TransGrid – had grown to almost a billion dollars last year, before other revenue such as tax and interest paid to the NSW government was taken into account.

“The NSW Auditor General’s report demonstrates that the publicly owned electricity networks remain an extremely valuable public asset that benefits the people of NSW and should not be privatised,” Electrical Trades Union (ETU) NSW secretary Steve Butler said.

“In the past 12 months, income from the NSW electricity networks is likely to exceed $2.5 billion in total government revenue, once dividends, tax equivalents and government interest are taken into account.

If the O’Farrell Coalition government goes ahead with its plans to privatise the network, then these profits would flow straight into the coffers of private, possibly foreign, corporations instead of being available to fund public services such as hospitals, schools and transport.

Butler said the Auditor General’s report highlighted the economic weakness of the NSW Treasurer’s support for privatisation. “On one hand we have Treasurer Mike Baird, taking every opportunity to talk up privatising the NSW electricity network, while on the other hand he is using the financial windfall from these companies to claim the budget is back in the black.”

“It’s hypocrisy at its best.

“One thing is crystal-clear from the NSW Auditor General’s report, and that is the NSW electricity businesses continue to make a valuable contribution to the bottom line of the state.

“The quicker the O’Farrell government understands the value of these assets and commits to public ownership and operation the better off NSW residents will be.”

The government could also look at reducing electricity prices, especially for those on lower incomes.

Next article – Save the Devil

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