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Iemma strikes out alone « Previous | |Next »
May 5, 2008

Has the Iemma government left it too late to privatise its electricity assets (generators and retailers)? Though Costa and Iemma suffered a humiliating 702-107 vote against privatisation at Labor's state conference on the weekend, they are determined to proceed with the sale despite entrenched union opposition.

Will the government and the unions keep talking? If they do, the only realistic position is the compromise of some kind of public-private partnership in charge of the industry along with guarantees on jobs and future pricing.

Costa.jpg Moir

Is this standoff a sign that the unions traditional influence over the parliamentary wing, with conference as the supreme policy-making body, is becoming history. What does business require in order to invest in new electricity generation--two new base load power stations and retro fit the old power stations--- under an emissions tradiing scheme?

No doubt we are going to hear a lot from the conservatives about bullying thuggish unions and minority interest groups running the state, along with other clichés such as the ALP conference looking like a rabble. The reality is that the Iemma Govt is a bad and incompetent government that deserves to be dumped. It hasn't because the Liberal Opposition is not politically credible and is even more incompetent.

The other reality is that the traditional form of the ALP is changing as its membership fall, the union's base shrink and it becomes ever more managerial in its ethos.

| Posted by Gary Sauer-Thompson at 7:57 AM | | Comments (12)


It would be a mistake to flog off our electricity assets. If money is needed to build up our infrastructure why not achieve savings in other areas. The cost of multiculturalism is put at about AUD$7.2 billion each year. The NSW spending on that would be significant. There are other areas: Arts, commissions like anti-this and anti-that; the bonus system for senior public servants; and, other areas could offer savings.

its a bad time to privatise electricity assets. With climate change and an emissions trading scheme the value of those assets are falling. Who would buy these old fashioned coal-fired power stations that pump out greenhouse gases

According to Infrastructure Partnerships Australia if electricity reform doesn't happen, the NSW state Budget will be weakened by $26 billion and NSW will lose its AAA credit rating.

NSW is in a difficult position. It has been starved of capital for years and desperately needs a new baseload generator. According to the Owen Report, a new plant needs to be up and running by 2014 if the state is to avert an electricity generation crisis. This would cost $8 billion, along with another $4 billion to retro-fit existing power stations with carbon-reduction technologies.

On top of this, the retail businesses would need up to a further $3 billion or they will "struggle to remain viable" and compete with their private-sector rivals.

$26 billion is a lot of money.

Peter, what you say is 100% correct. To add to your shopping list we’ll need another major hospital in Sydney’s western suburbs to meet the needs of planned development in that area. Roads will be needed to service that area. A rail line would be handy too. The needs are obvious to everyone except the lackwits in State Parliament and their adherence to ivory-towerism. Perhaps a tocsin has been sounded for the future of state governments. If we need to save money or redirect money that is being wasted we need look no further than the desal plant.

We don’t need an Owen Report to tell us that action is needed (it was needed back in 2000 and earlier). We do need politicians who are not in the grip of inertia.

Rumpole QC,
NSW is in a bad way. It's economy is marked by slow growth, its public transport system needs reform, as does its health infrastructure. The Iemma Govt is dragging its feet on these kinds of reforms as well as on water reform. That govt is also facing reduced revenue because of its low economic growth.

The ranks of the Iemma Govt are rampant with cronyism, it is widely suspected of more serious corruption, and it is peopled by the Macquarie Street mafia. The treasurer Michael Costa, personifies everything the NSW voters dislike about Macquarie Street.

Paul Keating makes a good point. He says that Bernie Riordan, the state party president and the Unions NSW secretary, John Robertson,

know that from the day the National Electricity Market, established by the Keating government, went into operation in 1995, there was no economic or commercial reason why any state would retain state ownership of power generating capacity.When lights are turned on in NSW now, much of the electricity is provided by private electricity generators in other states. Indeed, electricity prices in the national grid are priced every 30 minutes, so competitive is the national electricity market.Yet the debate over the weekend was had as if the National Electricity Market, all down the east coast of Australia, does not exist.

Yet the Opposition Leader, Barry O'Farrell, is still refusing to reveal his position on the proposed power sell-of. So much for a viable Liberal opposition. This shows once again the political conservative tradition in Australia is not so successful in the intellectual debate. The wilderness years are something Liberals had better get used to.

it is unclear whether the NSW unions and rank and file Labor members oppose privatisation of electricity assets because:

1. electricity assets should be kept in public hands and electricity run by government
2. job losses and higher prices
3. power privatisation policy was not taken to the people at the last state election.

It is not clear whether 1 is because of 2 given Keating's critique. If so, then that leaves 3 as a matter of principle.

very little is being said by either side about energy and greenhouse in NSW in this debate. It is not a debate about energy reform in the context of global warming at all.

The pollies are (deliberatley) confalting several issues:

ownership neither guarantees efficiency nor price

the Iemma government has used the revenue from electricity generation and never proiperly invested for the future ... silly !

no-one has even mentioned alternatives to new coal-fired power stations: like reduction in consumption, solar hot water, photovoltaics on rooftops, wind, geothermal - there is no ONE solution, nor doe any of these have to provide a total base load - they could all contribute

prices will rise when carbon trading is introduced ... no matter whoi is in power - Liberal or Labor

maybe the real agenda is Costa / Watkins flexing Iemma's muscles to lessen union domination over the government ?

how cynical ....

I'm inclined to agree. There are probably a number of agendas in play.

How depressing to see that somneone of Sauer Thompson's education has fallen for the privatisation apologists nonsense concerning the old MaCarthyist furphy, the bogey-person of "teh unions".
What Iemma was about was naked fascism; the undermining of bottom-up rank and file democracy in favour coporatism, corporate interests and offshore driven agendas.
Howard wanted to destroy "teh unions" as a means of knee capping one of the few remaining points of access into community participation in decision making concerning the community, against the eminence gris of unrepresentative and anonymous big capital.
A last hope of educated people who resisted the total heterogenisation and homogenisation; commodification/reification of humanity by the pathological and mindless "market forces" that will lead the world to a"1984" style denouement at a future date, is ruined by the interference of bought-off political lackeys and press-stooge allies.
Thanks to the lies of the last thirty or forty years nothing was done about environment and sustainability.
Rather we saw a mindless lunge towards property control.
Enough has been written recently about the consequences of this Ostrich head in the sand-ness ordering of priorities, in the example of the mess the planet is in now, wonderfully express ed inthe contrast between inneficient mac mansions and third world poverty.
The comprehensive, studied ignoring of science and reality based economics, in favour of a sort of aristotelian medievalism based on cargo cult consumer fetishism in the West, alibied through neoliberal ideology, still has sway and the public interest and capacity to to resist eroded further by people like Iemma and, apparently, Sauer Thompson.
Evidence of this is apparent in the latest budget, which eschews the real world issues of ecologicalm sustainability and proper economic planning in favour of botoxed corrosive "growth"
at any cost, now accomplished under the benign visage of Rudd, replacing the "ugly" Howard and Costello True Face of consumer capitalism, that even the dolt electorate finally saw through, like the live stock in "Animal Farm".