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Energy: the future is market competition « Previous | |Next »
December 12, 2003

According to an editorial in The Australian national competition policy (NCP) in Australia has been one of the great success stories of the last two decades. It says:

"Deregulating state government-protected industries is one of Australia's great economic success stories. Since the middle 1990s the National Competition Council has worked with the states to end government-inspired monopolies and anti-consumer behaviour in industries ranging from power pricing to dairy farming.
The states win with incentive payments from the federal Government when they co-operate and all Australians benefit from a more productive economy. According to the OECD, household incomes in Australia are $7000 higher thanks to the work of the NCC. But reform is never painless and industries that profitably shelter behind state laws, often generations old, are always ready with warnings of the disasters change will bring."

Such a line conveniently ignores the disaster that is the national electricity market. There is no need for doom and gloom critics to warn of the disastater that pro-market economic change will bring. It is a disaster. Instead of cheaper consumer prices and a more efficient electricity industry, the National Electricity Market has failed the fair and reasonable power price and public accountability test. And the Rann Labor Government has found that it is relatively powerless to deal with the energy price crisis in South Australia.

Writing in The Adelaide Review Bruce Dinham, the former general manager of the former public utility (ETSA) says that:

"The cause of our electricity problems is clear---so is the answer. We need to restore public ownership and control under a single State authority. It is well within the authority of the State to resume the electricity assets at whatever price it deems reasosnable (it has been done before) and to recover controls abdicated under Commonwealth pressure."

The Rann Government's solution is to blame the previous Olsen Liberal Government for privatisation of ETSA, whilst embracing national competition policy with ever more gusto. It says that it is in favour of generating renewable energy programs (solar power and wind farms). Yet it continues to draw ever more energy from the coal fired power stations in the eastern states. Then it says that it is favour of Australia signing the Kyoto agreement and is favour of reeducing global warming.

Kevin Foley, the Treasurer and Deputy Premier is reported by Allan Wood, the neo-liberal commentator in The Australian, as saying that "A lot of the hard stuff has been done - now we're getting to the really hard stuff".

The really hard stuff is not enabling SA to become a key Green energy provider in SA, nor the social or economic effects of deregulation. It is managing the political backlash from pushing for more market competition to allow the energy companies to continue screwing the customer.

The Third Way on energy is a bundle of unsorted contradictions.

| Posted by Gary Sauer-Thompson at 9:47 AM | | Comments (0)