Australia’s Electricity Privatisation a “Dismal Failure”

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Wednesday, February 26th, 2014
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A new study conducted at the behest of the Electrical Trades Union (ETU) serves as a scathing critique of Australia’s efforts to privatise the energy sector.

The report from Queensland economist Professor John Quiggin was commissioned by the Victorian branch of the Electrical Trades Union, and claims that the upshot of privatisation of the Australian energy sector has been wholly negative.

john Quiggin

John Quiggin

The report entitled Electricity privatisation in Australia: A record of failure, which brings together two decades of research into the privatisation of electricity supply in different parts of Australia, contends that reforms have conferred no benefits to the broader community, and instead resulted in higher prices for consumers as well as major fiscal losses for the public.

Quiggin’s research found that those states which had privatised power networks, such as Victoria and South Australia, suffered from the highest electricity prices, as well as thad he highest rates of consumer complaints.

Quiggin characterised the reforms as a “dismal failure,” and advocated public ownership of power infrastructure as the best means of organising the energy sector.

“I view the reforms as having been fundamentally misconceived, relying on pries to perform a range of incompatible functions, while leaving retail prices largely unrelated to the actual cost of electricity generation and distribution,” said Quiggin.

The conclusion of Quiggin’s research are in marked contrast to the Powering Queensland report which was released by Infrastructure Partnerships Australia in October of last year, which recommended a full privatisation of the state power sector as the most rapid means of diminishing the state’s debt burden, while also leaving enough money for infrastructure investment.

Queensland’s Liberal National government has pilloried the findings of the Quiggin report, calling it a waste of union funds and accusing Quiggin’s research work of being tendentious.

“Professor Quiggin is hardly an objective commentator in this area,” said Queensland’s acting treasurer Scott Emerson.

“The reality is there is a reason why the ETU went to Professor Quiggin – his views are well known on this…they commissioned him to do a report knowing what the answer would be already.”

Energy minister Mark McArdle and Queensland Premier Campbell Newman both said that state-owned operators Ergon, Energex and Powerlink will not be for sale prior to the next election.

The release of the report comes at a fraught time for relations between the ETU and Queensland’s incumbent Liberal National government, with Premier Newman accusing the union of spreading mistruths about the sales of electricity assets, and calling for them to “stop harassing people” in the electorate of Redcliffe prior to a by-election.

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