Claims that the sale of the state’s electricity network could boost the state’s capacity for infrastructure spending by more than $50 billion are an enormous exaggeration, demonstrating proponents don’t understand the actual value or current financial position of the publicly owned electricity companies.
The Electrical Trades Union and United Services Union, who are leading a community campaign against the privatisation of the state’s electricity network, said Infrastructure Partnerships Australia and the NRMA needed to look beyond their own spending wish-lists and examine the economic evidence.
“Brendan Lyons, CEO of Infrastructure Partnerships Australia and former staff member to Bruce Baird, is claiming a potential sale could boost infrastructure spending by $50 billion, but when you look at the annual reports of the public energy companies they tell a completely different story,” USU general secretary Graeme Kelly said.
“The four electricity network companies are currently valued at $25 billion best case scenario, but they are also burdened by large debts, currently totalling about $18 billion according to their annual reports.
“This money must be repaid if they are sold, meaning the NSW Government would be left with just $7 billion from the sale of this essential service or the equivalent of 3 years of dividends and government income.
“When you consider that the NSW Government currently receives $2.5 billion a year from these companies through dividends and other income — money that currently funds schools, hospitals and community services — then it becomes clear that a sale does not make economic sense.”
Unions believe the experiences of electricity privatisation in Victoria and South Australia, where they were sold in the 1990s, should also be examined before advocating a sale.
“Following the privatisation of the poles and wires in South Australia that state has among the highest electricity prices in Australia” Mr Kelly said.
“In Victoria, Black Saturday bushfire victims are currently suing the foreign multi-national owner of the electricity network who’s alleged lack of maintenance sparked several of the deadly blazes.
“The transmission network and the poles and wires running down every street across NSW are a natural monopoly, with no possibility for competition, meaning consumers will inevitably lose out.
“History has shown that consumers would pay more for electricity while suffering poorer reliability. Privatisation hasn’t worked elsewhere and it will not work in NSW.