State Government’s Power Privatisation Plans: Responses from CVIP Readers
On Thursday 14 February 2008, Reverend the Hon. Dr Gordon Moyes AC MLC asked for feedback from CVIP subscribers on the issue of the State Government’s Power Privatisation Plans. Thank you to all those who responded.
Dear Gordon, Please vote against the proposed sell-off. Regards, David.
Dear Gordon, True “PPP” arrangements should be attractive to private companies even if the infrastructure remains in State control—they do make a profit. If the Bill to privatise is passed, please work to have Telstra-type standards clauses inserted to try and blunt the erosion of informed, experienced maintenance of infrastructure which has occurred due to significant job-shedding in SA. Regards, Stefan Slucki (Seacliff, South Australia).
Dear Gordon, I believe that all businesses should be in private hands unless they are a monopoly or provide a service which is necessary in the public interest and which cannot be profitable. In the case of power generation and distribution I think both these conditions apply. In order to guarantee continuous supply it is necessary to have the capability to oversupply for the peak expected loads. When the power required is much less than peak, surely part of the system should be closed down. If the generators are in private hands and owned by separate companies who is going to forfeit sales, and therefore income, by being the one to cut back on production? It is a principal of business that to increase profits, sales must be maximised by increasing market share and/or by growing the market. How would encouraging customers to use more electricity affect global warming? I cannot understand the concept of competition in retail electrical supply. As I understood the way things used to be; the Electricity Commission generated and distributed power to points from which the local County Council distributed it to the end user. The County Council provided and maintained the wiring to the end user, read the meter, charged the user for their services and passed on the costs of the generation and distribution of power by the Electricity Commission. The service provided by the County Council was a monopoly situation. How can there be competition for retail supply. It is obviously not feasible to run multiple sets of wires down every street, or even send different meter readers to different houses in the street. But if they don’t, what does a retail provider do? So I think power generation should be in public hands because in the interest of the environment over consumption should be discouraged, which is opposite to good business practice, and distribution should be in public hands as to be sensible it is a monopoly, unless they do something good that I don’t know about. Regards, Bruce Johnston.
Dear Gordon, I trust this is not too late to be of use. I am one of those people who oppose privatisation of government enterprises for a simple reason. We paid to develop these enterprises. If they are attractive to private enterprise, it is because they can generate profits. If they can generate profits, then we (the government) should make sure that they do so in the same way as private enterprise would. Those profits can then be used for the benefit of the people who paid for the enterprise in the first place. The history of privatisation is not distinguished in my observation. Many times when an enterprise fails to make a profit in private hands, governments have had to step in and rescue the enterprise with public funds, thus demonstrating the futility of the original plan. Of course, there is a short-term “benefit” in a cash injection. This is attractive to governments with an eye to a coming election, but may not be a long-term economic benefit to the public. As far as a consumer is concerned, a lease arrangement is the same as a sale except in one respect. It has a termination date. It would not be the first time that private enterprise had entered into a lease, and over the period allowed plant to depreciate to the extent that, when the lease expired, the owner was left with a concern worth only a fraction of what it should be. At that time it is once again up to the people to invest the capital required to bring the enterprise to a competitive standard. There is a number of service industries that were set up by the people in the first place as a service, and not expected to make a profit. They were sustained by the people as a service to themselves. That does not mean that we should allow them to become inefficient: quite the contrary. If and when they do make a profit, that profit should be available to the public through the government, rather than the public taking a tax off the profits of a private company that may be able to minimise this contribution to public funds. While I guess you have considered all this, I know that there is a significant body of opinion in the electorate that shares this view. Regards, Paul R. Whiting PhD.
Dear Gordon, I ask you to oppose the State Government’s plans to privatise the electricity retailers and lease out the generators. Privatisation will lead to higher bills, fewer jobs and less service, especially in rural NSW. It will also be harder for NSW to cut its CO2 emissions. The government is doing this without a mandate. Morris Iemma ruled out privatisation before the last election. Now he is claiming he does not even need legislation to make it happen. It seems the people’s elected representatives are going to be ignored, along with the 86 per cent of the public who oppose this bad idea. I urge you to represent the views of your constituents on this important matter and oppose electricity privatisation. I would also like to say that I am one of hundreds of workers whose jobs are threatened by this immoral action of the Iemma government. Most importantly I and my family are horrified by the UNDEMOCRATIC nature of these actions and plead with you to use the power of the Upper House to represent those of us who have no other influence on an arrogant government. Sincerely, Trevor, Lyn and Vaughn Haynes.
Dear Gordon, Just a footnote to mention that my sister, an electrical engineer was asked to a study of power stations, a number of years ago which were in urgent need of repair and concerns overload. While alternatives should be encouraged, the fear is that selling would continue the neglect that would explode with a crisis that the people of NSW would have to pay for. Regards, Karen Pender.
Dear Gordon, I ask you to oppose the state government’s plans to privatise the electricity retailers and lease out the generators. Privatisation will lead to higher bills, fewer jobs and less service, especially in rural NSW. Most importantly for the future generations, it will also be harder for NSW to cut its CO2 emissions. The government is doing this without a mandate. Morris Iemma ruled out privatisation before the last election. Now he is claiming he does not even need legislation to make it happen. It seems the people’s elected representatives are going to be ignored, along with the 86% of the public who oppose this bad idea. I urge you to represent the views of your constituents on this important matter and oppose electricity privatisation. Sincerely, Sue Norman.
Dear Gordon, I am writing to ask you to vote against the NSW Government’s proposed sale of electricity retailing, and the proposed lease of generating facilities for the following reasons: 1. There was no mention that I can recall in any pre-election information from the Premier, government, or candidates, of the intention to sell off any part of the electricity industry/facilities. This issue was not raised in the public arena at all. In fact the Premier is on record, I understand, as declaring that there would be no sale of NSW electricity utilities/industry. The government cannot then claim that it has a mandate to sell? 2. Although there will be increased cost to consumers for electricity supply in the normal progression of time, the cost increases can be expected to be much higher under private ownership. Private ownership is profit based, not service delivery based. The primary objective under private ownership will be to generate profits for the shareholders, rather than the primary objective being to supply an essential service. The argument that private ownership has brought prices down in other countries (?) cannot be held to be relevant unless the true conditions of supply and costing for those other countries is accurately known, and still may not accurately apply in this State. 3. Repair, maintenance, and upgrading of existing infrastructure, and provision of new infrastructure will be required regardless of ownership. It would appear that in wanting to sell off the retail arm, and lease out the generating plants, the Government is walking away from its obligations to supply this essential service and to bring the infrastructure up to required standard. The Government appears to be passing the responsibility and the mess on to someone else to fix up and to bear the criticism and displeasure of the public while it abrogates its responsibilities. 4. It would also appear that the Government has been financially irresponsible both in previous years and in the present in not allocating funds for the above-mentioned repair, maintenance, upgrade of existing infrastructure and provision for new infrastructure – a very arrogant attitude when the government berates Local Government for not keeping local infrastructure up to standard, and demands that Local Government attend to this problem “or we will do it for you”. 5. The condition of existing infrastructure and need for new infrastructure is not an emergency situation which has only just become evident. This situation has been developing for many years and should have been addressed by this, and previous governments, with long-term financial planning many years ago. It is therefore unacceptable be for the government to now walk away from the problem and hand it on to someone else. 6. It would appear that the government has not undertaken any consultation with the industry, suppliers, retailers, unions, and the public to determine the requirements for now and the future, or to develop responsible management strategies for current supply and future demand growth. Yours sincerely, Isabel Strutt.
Dear Gordon, I ask you to oppose the state government’s plans to privatise the electricity retailers and lease out the generators. Privatisation will lead to higher bills, fewer jobs and less service, especially in rural NSW. It will also be harder for NSW to cut its CO2 emissions. The government is doing this without a mandate. Morris Iemma ruled out privatisation before the last election. Now he is claiming he does not even need legislation to make it happen. It seems the people’s elected representatives are going to be ignored, along with the 86 per cent of the public who oppose this bad idea. I urge you to represent the views of your constituents on this important matter and oppose electricity privatisation. Sincerely, Phillip Porter.
Dear Gordon, When I was an apprentice 50 years ago, NSW was having blackouts. We had private companies supplying electricity, Balmain Electricity Light Company, Sydney Electricity, Tamworth Electricity Company. These are some of which I know. The Electricity Commission of NSW was created to buy all of these companies to produce & supply continuous electricity to the householder & industry. New power stations & transmission lines were built & NSW then had a reliable supply of electricity at a reasonable cost. (I think, compared to other counties). Have just read your email & we do have lower prices. But this will increase to match other countries. I believe we pay higher prices for mob phone calls, cars etc .than other countries. We don’t need to pay more for electricity as well. I always thought the price of electricity was a reasonable price. I was told that Japan was to build aluminium smelter plants in NSW & a price of supply of electricity was agreed on. The Electricity Commission of NSW was asked to build & be ready to supply the electricity at a given dated. They went ahead with the plan but the Japanese smelter did not. NSW then had an over supply of electricity & in debit for power stations & transmission lines. Over the years the people have moved on & they have not experienced having frequent blackouts. We are now having problems with the Commonwealth Bank raising interest rates above the Reserve Bank recommended rates. The government does not own it . If the government does not own it. It cannot control prices. We are sort of following the Californian Electricity supply system. But it is not good. The systems we now have are like shares. (Shares always go & up sometimes down but up again.) This is the way it was explained to me. Example only: Company A prices for 100kW say $10 for kW/hour. Company B prices for 100kWsay $15 for kW/hour. Company C prices for 100kW say $20 for kW/hour. The state uses the first 100kW ($10kWh). Company A is paid $10 kW/hour then we move into next 100kW. Company B is paid $15 kW/hour & then also company A is paid $15kW/hour. Then we move onto the next 100kW/hour company C is paid $20kW/hour, then company A&B are also paid $20kW/hour. Also in the early hours of the morning the price of electricity was $0.00 kW/hour. There must be some cost in producing the electricity. Where as before they would draw electricity from the power stations as required. To build a power station it takes years. First is it needed? Then find the land, order the turbines & boilers etc. You don’t just go down to your local hardware store & ask for the bits & pieces. Governments do have the time to do it. It would have been a few ago that the Transmission line between NSW and VIC was interrupted by falling lines. I believe the price of electricity shot up by hundreds of dollars, because NO supply of electricity could be purchased interstate. They take advantage of the situation. In the UK they broke up the Railways & sold it off in different sections to private enterprise. I was just told that they now have just bought back the railway lines & signals because these companies were having accidents. People killed, all because these companies were not doing their maintenance so that they could make profits. This is another example of selling off public property & then having to buy back. Electricity authorities are asking people to install smart meters. These meters record the time when you use the electricity & then they will be asking to pay a different rate at peak periods. The government is asking for information about the distribution of electricity for domestic & industrial use, ready for a sell off. We have just combined the distribution councils across the state & made each one larger, e.g., Energy Australia, Integral Energy & Country Energy etc. When utilities are sold to private enterprise the price will go up because they have to pay a good return to their share holders. As CDP upholds family values & Biblical principles, I ask the Christian Democratic Party to vote against privatization of the power industry. Please Vote “NO”. Thank you, John Cottle.
Dear Gordon, May I firstly say thank you for your hard work, integrity and wisdom. I am thankful to God that you are in our State parliament at present. Please vote no to the privatisation of the electricity supply. The government must not sell off assets to pay for infrastructure but budget wisely. May I plead with the CDP to present a unified front in this regard and work towards being a truly democratic party as the name implies. I know too many people who have lost faith in CDP over recent years due to its stand on a number of divisive issues, like its stand against Islam and the dreadful publications that it produced. Press on with your great work. With Prayer, Andrew Alexander.
Dear Dr Moyes, I do support this motion against the privatisation of our electricity. Regards, Joanne Best.
Dear Gordon, Emphatically NO to the sell-off. It has not helped us at any other sell off to private industry and this would not be any different. If private industry can make it work, so too can the government if there are no ulterior motives. I support that the power generation and distribution should stay in public ownership and operation. I am aware that at Mt. Piper there is space reserved for a duplication of the power station. The infrastructure is there and all that is needed is to build the generation plant. This might apply elsewhere as well. Yes money has to be raised by someone and it might as well be by the State Government as by some overseas consortium. I support your motion. Regards, Denis Colbourn.
Dear Gordon, I agree wholeheartedly with this motion. Regards, Heather Hunter.
Dear Dr Moyes and Rev Nile, Please vote against the sale of our Electricity Generation Utilities. I believe that the sale of our power generation industry will result in huge price increases and a massive loss of reliable power supply. This has been the case in Victoria and New Zealand with the privatisation of their power utilities. Let us not make the same mistake. Regards, Mark Hall.
Dear Gordon, I would welcome a vote against the sell-off of the State Electricity. I think it is a very short term solution to current problems, with very long-term incalculable and potentially serious consequences. Regards, Joanna Warren, CDP member.
Dear Gordon, I support your motion. Essential services should not be exposed to the likelihood or possibility of foreign takeover. Regards, Christina Naylor.
Dear Gordon, I am against the privatisation of electricity. I believe prices will skyrocket and rural people will suffer the most- with black out etc. Regards, Audrey Tremain, Dubbo farmer.
Hello Gordon, On reading your proposed motion in this week’s “A Christian Voice in Politics” – “The Christian Democratic Party supports any proposed move by the State Government to borrow necessary long term funds for the provision of replacement and upgrading of major infrastructure in order that the State retain ownership of the means of electricity generation”, I support it in that I don’t want the Government to sell off the electricity generating assets and so if that means borrowing money to upgrade them, I am more in favour than I am against, if that makes sense! I don’t like the idea of borrowing the huge amounts of money required which means we’ll be paying it off for a long time, but that is preferable to selling them for revenue. Thanks for inviting responses. I’m very glad to be able to ‘have my say’. May God’s Will be done. Regards, Lynette Begg.
Dear Gordon, It appears that despite opposition from within his own party and the public of NSW, Mr. Iemma is going ahead with his plans to privatise NSW’s electricity retailers and leasing of the State’s generators. The last time I checked Australia was a democracy and this should stand for something. Our parliamentary system has two governing levels for a very good reason. This is to ensure checks and balances should rogue politicians like Mr. Iemma decide that they have the power to override the wishes of their constituents. The State government has no mandate to privatise and in fact promised before the last election that there would be no privatisation. The government is acting fraudulently and this should not be condoned. I ask you to oppose any legislation that seeks to privatise NSW’s electricity retailers and lease out the generators. This would be doing your jobs by representing the viewpoints of many of your colleagues and the public of NSW. State assets are not owned by Mr. Iemma or Mr. Costa they are owned by the people of NSW and they should not be sold or leased. Privatisation will not serve anyone’s interest except to prop up the draining coffers of the NSW State Government. The people of NSW should not have to pay for the Government’s mismanagement. Privatisation will lead to higher bills, fewer jobs and reduced services. It will make it harder for NSW to cut its CO2 emissions, at a time when the NSW government should instead be using its control over the electricity industry to transition us to a clean energy future. Better energy efficiencies are the solution which will protect the environment, and keep the lights on. I urge you to represent the views of your constituents on this important matter and oppose electricity privatisation. Sincerely, Mr. and Mrs. Eden MacKenzie.
Dear Gordon, At the Newcastle Branch meeting on 18 May 2008, the following motion was passed unanimously: “That this Branch recommends that the CDP votes AGAINST the sell-off of any section of the Electricity industry in NSW, and that the Rev Fred Nile and Dr Gordon Moyes be informed of this decision so as to encourage them to vote accordingly when the Bill is presented to the Legislative Council.” The reasons for our decision are as follows: 1) That in the supply of such services as water, electricity and postal facilities, the public is better served if the service is in public hands. All of these services supply isolated areas in which it is uneconomic, but highly desirable, to make the services available. 2) Private enterprise has brought many improvements in products where there is genuine competition, e.g. there have been vast improvements in motor vehicles because of the competition between General Motors, Ford, Mitsubishi etc., BUT when the project is homogenous, i.e. electricity, there is little room for a differentiated product. 3) Private enterprise by its very nature has to be run at a profit. This is quite legitimate, but there are many examples where a CEO will cut down on legitimate long-term expenditure to show a short-term profit for a few years, and then leave the company. This would be disastrous for the electricity supply. 4) In the case of manufacturing industries, the opportunity for excess profit or the inflation of high remuneration for executives is limited because of the opportunity consumers have to import from overseas. This does not apply in the case of electricity. 5) The only way in which companies can compete is by an extensive advertising campaign. The public is already plagued by both telephone calls and personal visits by sales people trying to convince them that Optus is better than AAPT, or that Telecom is better than some other service. It would not be good to see this waste of human resources duplicated by another facility. 6) With the deregulation of financial markets, ownership could be influenced by overseas interest whose desire for a return rated higher than the interests of local users. 7) All the vast power generation capacity in NSW has in previous years been financed by funds raised by the NSW Government. The public has not been told why the same system could not continue to finance the marginal increases needed in the future. 
As a democratic organisation we are concerned with the upholding of democracy. When the overwhelming vote at the grass-roots level was against privatisation, it would be wrong to be seen supporting a small group bent on defying the very democratic principles they were elected to maintain. Before concluding this communication, my wife and I would like to wish you the Lord’s blessing and assure you of our prayerful support and appreciation of your services to the Christian community. Yours in Christ Jesus, Ron Gibbins, for the Newcastle Branch.
Dear Gordon, I am writing to you as a concerned NSW resident campaigning to stop the sell off our electricity industry. Privatisation is not the solution to our future power needs but would mean higher prices, less reliable services and fewer local job opportunities. I believe that our electricity is too important to hand over to big multinational companies. I am asking you to stop the sell off and keep the power in our hands. Sincerely, Tony Hollis.
Dear Gordon, Please vote against privatisation of the electricity industry. We will only have control of electricity if we own it. If we maintain ownership at least we have revenue coming in. If it is sold we only get a one off payment which goes not where. Not to mention loss of jobs higher electricity charges and no guarantees what might happen in the long term. Please think carefully before selling of Australian assets. Regards, Veronica Elliot (Country Energy).
Dear Gordon, I am writing to you to express my despair at the expected loss of good local jobs that will be associated with the power sell off and appeal to you to do what you can to prevent this sell off. I love working for Country Energy and do not wish to work elsewhere. The conditions we have at Country Energy are fabulous and I would have liked to keep them. What hope will I have of getting another job in Port Macquarie or Wauchope equivalent to the one I have? I understand that we are to be offered jobs in the private sector with no long term guarantee’s 3 years is not going to see my children through school. I quit a job in the private sector five years ago to come and work for Country Energy thinking that I was building a secure future for myself and my two children. Regards, Dorese Catania.
Dear Gordon, We are strongly opposed to the privatisation of the power industry. Regards, Peter and Kylie Ellis, Muswellbrook.
Dear Gordon, My family and I are totally opposed to the privatisation of the Electricity Industry. The time for sale, if ever one exists, is NOT now! Carbon trading is coming, in the near future, which puts any prospective buyer in a ‘fire sale’ situation. This puts the buyer at an advantage financially. No one really knows what the cost of carbon trading will be yet. We do not want to give our assets away. Michael Costa is the last person I’d trust to look after our assets. He is wanting to sell for the benefit of balancing the books. This asset brings in 1.5 billion dollars a year and Michael Costa and Morris Iemma want to sell us off for 8 billion. What happens when that’s gone? Where will the money come from then? Is water next? Rail? If you let this happen we will end up with no assets whatsoever and then where will our society be? If the government sells our Electricity assets to private industry, it will be shareholder driven and the price will only increase. None of these profits will be returned to the people of NSW, more than likely the profits will go offshore. The way the national energy market is setup, maximum profit is made when capacity is at it’s tightest. This gives NO incentive for private interests to build a power station, which is one of the “reasons” Costa and Iemma are pushing this sale. Please, think of our future generation. Do not sell off our electricity assets. It is in the governments hands to provide the essential services at a reasonable cost to all. Do not let private industry take control of such an important part of our community. We all know that the price of electricity will rise in the future. Please let the profits come back to the community that pays the price. Support our communities, vote AGAINST the privatisation of Power. Yours sincerely, Tracy, Robert, Christopher, and Nathan Pengelly.
Dear Gordon, I agree with the motion “The Christian Democratic Party supports any proposed move by the State Government to borrow necessary long term funds for the provision of replacement and upgrading of major infrastructure in order that the State retain ownership of the means of electricity generation.” Regards, Jeanette Bondfield.
Dear Gordon, Please DON’T vote for the privatisation of the Electricity Industry. It is not yours alone to sell. It is ours and our children’s and we haven’t been asked if we want to sell as yet. So you have no right to sell what is not yours. Regards, Gayle & James Blayney.
Gordon, Michael Costa claims NSW cannot afford a new base load power station. This is when State and Federal Governments are reaping billions of dollars in coal excises associated with the current resources boom. The Federal Government just posted a $24 billion budget surplus. Executives of BHP and Rio Tinto have forecast that these trading conditions will continue for up to 40 years. The NSW Government is fast tracking the sale of its generation and retail electricity assets. Privatisation enabling legislation was tabled last Thursday. It is planned to pass this legislation when Parliament resumes on 2nd June. Not too far away. It would appear that this proposal is driven not by economic need but rather by ideological desire. Privatisation will in fact lead to reduced services and increased costs. This NSW Labor Government was elected on a platform that included retention of electricity assets in public hands. Surveys indicate that 85% of NSW voters favour public ownership of these assets. The proposal was soundly rejected at ALP State Conference by 702 votes to 107. Petitions containing 40,000 signatures were presented at State Conference. The Government claims they have received very little indication from the public that they are opposed to privatisation. This conclusion was reached because MPs have not received to date enough dissenting letters or emails from members of the public! Messrs Iemma and Costa have been ruthless in their treatment of dissenting MPs. They have been threatened with political exile including exclusion from Cabinet positions, pre selection for the next election and even the party. It is saddening to see this great democracy of ours being so openly abused. Where opposing views are suppressed with threats and bullying. The Premier and Treasurer have degenerated into nothing more than dictators. How on earth have we let this happen? This disgraceful and totally inappropriate behaviour has to stop. This government needs to be brought to order immediately. Thank you and best wishes, Stephen Lambley.
Dear Gordon, I am writing to you as a concerned NSW resident campaigning to stop the sell off of our electricity industry. Privatisation is not the solution to our future power needs but would mean higher prices, less reliable customer services and fewer local job opportunities for regional and rural community. I believe that our electricity is too important to hand over to big multinational companies. I am asking you to stop the sell off and keep the power in our hands. Sincerely, Angela Mckechnie.
Hi Gordon, I am opposed to NSW power privatisation, and on a related matter, I am also opposed to current private sector involvement in generation. Since power industry corporatisation, and private sector involvement in the industry, we have seen industry tarrifs sky-rocket (even when drought factors are taken into account), significant increases in regulated tarrifs for domestic customers (in order to make private retailers more profitable), increased brown-outs, a shift away from locally managed county councils to large government business corporations (which has led to power companies possessing a profit focus instead of a community service provision focus) and a shift in state power asset profits to Treasury instead of investment in generation capacity (which has led to lack of base load generation capacity). Privatisation will only make the above trends worsen. Regards, Julian Richards.
Hi Gordon, Thank you so much for your great articles – they are very much appreciated. Cheers, Lynn Goldsmith.
Hi Gordon, Say NO to the sell off. Regards, Brian Shaw.
Dear Gordon, Please vote against the Electricity Industry Restructuring Bill 2008. The proposed reform has been deceitful from the outset. NSW’s AAA credit rating is not at risk from investment into quality infrastructure. The current resources boom is forecast to continue for up to 40 years. There is no urgency to commence building new “base load” plant as recommended by Owen. The NEMMCO Statement of Opportunities report identified a relatively small shortfall in “peak” demand only. Responsible government should retain ownership and control over “essential” services such as electricity and water. The argument that power stations are only to be leased is also a deceitful play on words. Existing base load stations are between 20-40 years old now. Power stations just don’t last 99 years. A lease of the operating licences for this duration is effectively for the life of the station. All that will be left is the site clean up costs. The price achieved for the leases will be diminished greatly due to the uncertainty surrounding the federal governments Carbon Tax initiative. The reforms do not guarantee the delivery of further investment from the private sector into electricity infrastructure or a “continuity of supply”. They in fact make NSW’s energy future “insecure”. Jobs will be forfeited. Regardless of the employment guarantees, call centres will be relocated overseas once the guaranteed employment period elapses, as did occur in Victoria post privatisation. Prices will rise once the proposed price protection period expires purely due to profit taking. This will be on top of existing price rise pressure from the increasing cost of fuel and then any federally imposed Carbon Tax. A triple whammy! You would realise this. The Safety Net provisions announced as a response to the Unsworth Committee are only window dressing at best. Please for our kid’s sake. Vote NO to privatisation. I beseech you. I pray for the Spirit to guide you in your decision. Yours most sincerely, John Bray.
